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°   ÐDefining€Pay-Per-Call€€€€€€€€€€€€€€€€€€€€€€€304ÌCost€Disclosures€&€Consumer€Protections€€€€€388ÌMiscellaneous€Issues€€€€€€€€€€€€€€€€€€€€€€€€506ÌNominal€Cost€Exception€€€€€€€€€€€€€€€€€€€€€€517ÌModifications€to€Preamble€€€€€€€€€€€€€€€€€€€522ÌNew€Technology€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€554Ì€Ì€ÌÐ	   	 œÀ   Ð€€€€€€€€€€€€€€€€€€€FEDERAL€TRADE€COMMISSIONÌ€ÌIn€the€Matter€of:€€€€€€€€€€€€€)ÌWorkshop€on€Pay-Per-Call€€€€€€)ÌRulemaking€€€€€€€€€€€€€€€€€€€€)€Volume€2Ì------------------------------)Ì€€€€€€€€€€€€€€€€€€€€€€€€€Friday,€June€20,€1997Ì€Ì€€€€€€€€€€€€€€€€€€€€€€€€€Room€432Ì€€€€€€€€€€€€€€€€€€€€€€€€€Federal€Trade€CommissionÌ€€€€€€€€€€€€€€€€€€€€€€€€€6th€Street€and€PennsylvaniaÌ€€€€€€€€€€€€€€€€€€€€€€€€€Ave.,€NWÌ€€€€€€€€€€€€€€€€€€€€€€€€€Washington,€D.C.€20580Ì€Ì€€€€€€€€€€The€above-entitled€resumed€on€for€conference,Ìpursuant€to€notice,€at€9:00€a.m.Ì€ÌAPPEARANCES:Ì€ÌòòON€BEHALF€OF€THE€FEDERAL€TRADE€COMMISSIONóó:Ìòò€€€€€€€€EILEEN€HARRINGTONÌ€€€€€€€€ALLEN€HILEÌ€€€€€€€€MARIANNE€SCHWANKEÌ€€€€€€€€MARK€HERTZENDORFÌ€€€€€€€€ADAM€COHNÌÇFROM€THE€INDUSTRY:Ì€€€€€€€€PETER€J.€BRENNAN,€TPIÌ€€€€€€€€R.J.€GORDON,€R.J.€Gordon€&€Co.Ì€€€€€€€€LINDA€A€GOLDSTEIN,€Hall€DicklerÌ€€€€€€€€J.€ALAN€TAYLOR,€Florida€PSCÌ€€€€€€€€BARBARA€MAJESKI,€SNETÌ€€€€€€€€ALBERT€J.€ANGEL,€ICN€LimitedÌ€€€€€€€€JON€W.€SHAUB,€AT&TÌ€€€€€€€€JAMES€H.€BOLIN,€JR.,€AT&TÌ€€€€€€€€DAVE€GILLIS,€NAAGÌ€€€€€€€€JILL€SANDFORD,€NAAGÌ€€€€€€€€REBECCA€G.€BOWMAN,€NAAGÌ€€€€€€€€SUSAN€GRANT,€National€Consumers€LeagueÌ€€€€€€€€KIM€WILLIAMS,€Southwestern€BellÌ€€€€€€€€WALT€STEIMEL,€JR.,€PilgrimÌ€€€€€€€€JOEL€R.€DICHTER,€Klein€ZelmanÌ€€€€€€€€DON€KLUG,€MCIÌ€€€€€€€€RONALD€S.€GOLDBRENNER,€PMAAÌ€€€€€€€€GARRETT€L.€PASSON,€NTS,€Inc.Ì€€€€€€€€PHILIP€MELLO,€Telecompute€Corp.Ì€€€€€€€€IAN€K.€EISENBERGÌóó€Ì€Ì€Ì€ÌÇòò€€€€€€€€€€€€€€€€€€€€P€R€O€C€E€E€D€I€N€G€SÌ€€€€€€€€€€€€€€€€€€€€-€€€€-€€€€-€€€€-€€€€-Ìóó€€€€€€€€MS.€HARRINGTON:€€As€soon€as€the€coffee€is€ready,Ìour€trusty€assistant€is€going€to€give€us€the€thumbs€up,Ìand€we€will€let€you€know,€and€we€can€all€stampede€out€toÌthe€pot.Ì€€€€€€€€Announcements€is€what€the€agenda€says.€€I€don'tÌhave€any.€€Does€anyone€else€have€any€announcements€thatÌthey€would€like€to€make€this€morning?€€Any€birthdays€orÌanything,€anniversaries?Ì€€€€€€€€I€want€to€tell€you€that€our€reporter€said€thisÌmorning€that€you€all€are€doing€an€exceptionally€good€jobÌof€identifying€yourselves€and€speaking€in€a€way€that€sheÌcan€hear€and€get€into€the€record,€so€you€can€be€assuredÌthat€all€of€your€gems€from€yesterday€are€nowÌmemorialized€in€the€official€record€of€this€rulemakingÌexercise.Ì€€€€€€€€This€morning€we€are€on€to€a€subject€that€isÌraised€both€by€the€experience€that€we€have€had€in€theÌlaw€enforcement€area€here€at€the€FTC,€the€experienceÌthat€the€states€and€the€National€Fraud€InformationÌCenter€and€others€have€had,€and€that€is€trying€to€dealÌwith€the€problem€of€defining€pay-per-call€in€an€eraÌwhere€many€different€dialing€patterns€are€used€to€accessÌaudiotext€services.ÌÇ€€€€€€€€As€you€may€know,€in€the€Telecommunications€ActÌof€1996,€the€Congress€gave€the€Federal€CommunicationsÌCommission€the€authority€to€broaden€the€definition€ofÌpay-per-call€if€the€Commission€believed€that€there€areÌother€deceptive€or€problematic€practices€which€should€beÌbought€within€the€definition,€so€that€the€same€kinds€ofÌregime€and€protections€might€be€created€for€those.Ì€€€€€€€€This€is€intellectually€a€hard€issue€for€us.€€WeÌhave€--€before€we€opened€this€rulemaking€--€had€a€numberÌof€conversations€with€a€number€of€you€and€others€whoÌhave€an€interest€in€this€issue€trying€to€learn€ourselvesÌwhat€the€practices€are€and€also€to€understand€whatÌconsumer€experience€is€in€this€area.Ì€€€€€€€€I€think€that€it's€fair€to€say€for€the€record,Ìand€then€we€can€have€some€elaboration€on€it,€but€it'sÌprobably€not€terribly€necessary,€let€me€say€for€theÌrecord€that€consumer€complaints€and€incidences€of€fraudÌusing€other€than€900€number€dialing€patterns€to€accessÌaudiotext€services€have€been€a€very€significant€problemÌfor€consumers€and€for€law€enforcers.Ì€€€€€€€€We€at€the€Federal€Trade€Commission€have€broughtÌenforcement€action€in€actually€a€couple€of€instancesÌinvolving€dialing€patterns€to€international€destinationsÌthat€resulted€in€charges€to€the€consumers€forÌessentially€audiotext€kinds€of€services.€€In€thoseÌÇcases,€we€have€alleged€violations€of€Section€5€of€theÌFTC€Act€and€made€it€very€clear€that€the€CommissionÌbelieves€that€these€sorts€of€deceptive€acts€andÌpractices€are€subject€to€the€Federal€Trade€Commission'sÌjurisdiction€no€matter€where€the€call€is€routed€to.€€IfÌthe€advertisers€of€these€services€come€into€our€market,Ìthey€are€required€to€comply€with€our€law€under€Section€5Ìof€the€FTC€Act.Ì€€€€€€€€At€the€same€time,€because€the€definition€in€theÌTDDRA€of€pay-per-call€service€is€limited€to€900€numberÌdialing€patterns,€in€effect,€the€rule€has€not€applied,Ìand€an€important€question€is€should€it.€€And€if€itÌshould,€how€do€we€alter€the€definition€of€pay-per-callÌservice€to€provide€consumers€with€the€basic€protectionsÌof€disclosure€both€in€advertising€at€the€point€of€saleÌand€with€the€rights€that€consumers€have€to€disputeÌcharges?Ì€€€€€€€€So,€this€morning€we€are€going€to€--€with€thatÌbackdrop€--€focus€on€the€definition€of€pay-per-call.€€IÌam€going€to€be€turning€things€over€to€Allen€Hile€for€aÌtime€this€morning,€because€I€have€another€commitment€inÌthe€building,€and€then€I€will€be€back,€and€we€will€justÌcontinue€to€run€as€we€did€yesterday.€€We€will€take€aÌbreak€when€the€coffee€is€done€very€briefly€so€that€youÌcan€all€stampede€back,€and€then€we€will€sit€back€downÌÇand€take€a€more€formal€break€at€10:45.Ì€€€€€€€€Let's€lead€with€the€first€question.€€How€can€aÌdefinition€of€pay-per-call€be€crafted€that€incorporatesÌservices€that€are€susceptible€to€unfair€and€deceptiveÌacts€or€practices€that€otherwise€are€prohibited€by€theÌcurrent€900€number€rule?Ì€€€€€€€€Alan?Ì€€€€€€€€MR.€TAYLOR:€€Just€for€discussion€purposes,€justÌfor€definition€--Ì€€€€€€€€MS.€HARRINGTON:€€Could€you€speak€right€into€theÌmicrophone,€please?Ì€€€€€€€€MR.€TAYLOR:€€Just€for€discussion€purposes,€IÌtook€the€definition€that's€in€the€Communications€Act,Ìand€as€bureaucrats€tend€to€do,€I€just€did€a€type€andÌstrike€type€thing,€but€basically€reading€the€definitionÌas€it€exists€now,€I€think€--€and€my€--€well,€maybe€someÌof€you€have€the€rule€that€you€can€follow€along€with€me,Ìbut€I€am€looking€at€308.2,€Definitions,€and€the€footnoteÌwhere€the€--€where€the€FTC€says,€"Pay-per-call€serviceÌhas€the€meaning€provided€in€Section€228€of€theÌCommunications€Act,"€and€it€includes€in€its€footnoteÌthat€definition.Ì€€€€€€€€That€definition,€"The€term€per-pay€call€servicesÌmeans€any€service,"€and€so€forth,€down€to€paragraph€B,Ìwhich€says,€"for€which€the€caller€pays€a€per-call€orÌÇper-time€interval€charge,"€strike€the€rest€of€that€partÌB,€except€the€"and,"€and€includes,€"which€includes€theÌuse€of€any€900€number€which€includes€the€prefix€or€areaÌcode,"€strike€the€rest€of€that€or€just€put€a€periodÌthere.Ì€€€€€€€€And€in€paragraph€2,€"Such€term€does€not€includeÌdirectory€services€provided€by€a€common€carrier€or€itsÌaffiliate€or€by€a€local€exchange€carrier€or€itsÌaffiliate."€€Strike€"or€any€service€the€charge€for€whichÌis€tariffed."Ì€€€€€€€€And€then€in€paragraph€--€in€the€followingÌparagraph€(e),€I€would€say,€"Presubscription€orÌcomparable€arrangement€means€a,"€insert,€"writtenÌcontractual€agreement€in€which,"€insert,€"prior€to€theÌcall,€the€service€provider€clearly,"€et€cetera.Ì€€€€€€€€That€would€be€just€for€discussion€purposes.Ì€€€€€€€€MS.€HARRINGTON:€€And€have€you€marked€up€yourÌdocument€with€those€--Ì€€€€€€€€MR.€TAYLOR:€€Yes.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€why€don't€we€--€if€youÌdon't€mind,€why€don't€we€borrow€it€from€you€and€copy€itÌso€that€everyone€--€if€we€are€going€to€discuss€yourÌidea,€then€everyone€can€eyeball€it.€€Would€that€beÌacceptable?Ì€€€€€€€€MR.€TAYLOR:€€Yes,€certainly.ÌÇ€€€€€€€€MS.€HARRINGTON:€€All€right,€we€have€one€proposalÌon€the€table.Ì€€€€€€€€Richard?Ì€€€€€€€€MR.€R.€GORDON:€€If€I€may€--€is€this€working?€€IÌdon't€think€so.€€If€I€may,€I€would€like€to€refer€rightÌnow€to€Ian€Eisenberg.€€Ian€is€with€the€TSIA.€€He€has€to,Ìunfortunately,€leave€to€head€back€to€Seattle€thisÌmorning.€€Ian€is€probably€the€most€expert€person€in€ourÌarena€on€this€issue.Ì€€€€€€€€MS.€HARRINGTON:€€Sure.Ì€€€€€€€€MR.€R.€GORDON:€€And€I€would€like€to€give€him€theÌopportunity.Ì€€€€€€€€MS.€HARRINGTON:€€Good€morning,€Ian.Ì€€€€€€€€MR.€EISENBERG:€€Good€morning.Ì€€€€€€€€One€of€the€fears€of€the€TSIA€is€to€have€any€sortÌof€a€rule€or€to€broaden€the€definition€of€pay-per-callÌso€that€it€affects€other€types€of€telephone€services€itÌis€not€intended€to€affect.Ì€€€€€€€€A€proposal€like€Alan€made€would€also€limit€--€aÌlot€of€newspapers€have€services€where€you€call€up€andÌget€mortgage€rates€or€get€sports€scores,€a€variety€ofÌdifferent€information.€€All€of€these€would€then€fallÌunder,€under€Alan's€proposal,€under€the€definition€ofÌpay-per-call€and€thus€be€somewhat€having€to€abide€by€theÌTDDRA€rules,€which€would€seemingly€force€them€on€to€aÌÇ900€service.Ì€€€€€€€€So,€when€callers€right€now€for€the€vast€majorityÌare€used€to€getting€services€at€a€very€fair€or€veryÌcheap€rate,€like€a€regular€phone€call,€the€industryÌwould€be€forced€to€charge,€you€know,€upwards€of€tenÌtimes€what€they€are€paying€now,€instead€of€a€10€centÌcall,€$1€a€minute€if€it's€a€900-type€of€application.Ì€€€€€€€€If€it's€a€free€call,€there€is€no€way€that€theÌindustry€can€put€the€proper€price€disclosures€in€theÌad.€€If€the€person€is€dialing€a€local€POTS€line,€a€plainÌold€telephone€line,€and€they€are€calling€from€outside€ofÌthat€area€the€newspaper,€so€if€you€have€a€copy€of€TheÌNew€York€Times€and€you're€in€New€Jersey€and€you€want€toÌcall€that€line€to€get€the€mortgage€information€or€theÌsports€scores,€you€are€going€to€have€long€distanceÌcharges€for€that€call.Ì€€€€€€€€There€is€no€way€the€industry€can€--Ì€€€€€€€€MS.€HARRINGTON:€€But€are€those€charges,€Ian,Ìgreater€than€the€charge€for€transmission€of€the€call?ÌGo€ahead.Ì€€€€€€€€MR.€EISENBERG:€€As€I€understand€it,€yeah,€thatÌwould€be€stricken,€and€as€long€it's€the€tariffedÌservice,€it€would€be€part€of€the€definition,€if€IÌunderstood€Alan€correctly.Ì€€€€€€€€MS.€HARRINGTON:€€You're€right.ÌÇ€€€€€€€€MR.€TAYLOR:€€I'm€not€sure€I€agree€with€that,€butÌlet's€get€my€--€my€proposal,€then€let's€talk€about€it.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€Jon?Ì€€€€€€€€MR.€SHAUB:€€Yeah,€I€would€appreciate€it€if€IÌcould€have€someone€sit€in€for€this€part€of€theÌdiscussion,€because€these€discussions€principally€orÌvery€likely€have€implications€on€other€parts€of€AT&T'sÌbusiness.Ì€€€€€€€€MS.€HARRINGTON:€€Sure.Ì€€€€€€€€MR.€SHAUB:€€Mr.€Jim€Bolin,€one€of€our€attorneys,Ìwill€represent€us.Ì€€€€€€€€MS.€HARRINGTON:€€Don€--€Jim,€did€you€want€to€sayÌsomething€right€now?Ì€€€€€€€€MR.€BOLIN:€€Not€at€the€moment.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Don?Ì€€€€€€€€MR.€KLUG:€€I€haven't€seen€Alan's€copy,€but€IÌjust€want€to€clarify€something.€€It€sounds€like€part€ofÌyour€proposed€language€would€require€a€presubscriptionÌassociated€with€pay-per-call,€or€did€I€misunderstandÌthat?Ì€€€€€€€€MR.€TAYLOR:€€Well,€that€language€alreadyÌexists.€€I'm€just€--€the€only€change€I€made€was€toÌsuggest€that€it€be€written€presubscription€and€that€itÌbe€in€effect€or€provided€before€the€call€was€made.ÌÇ€€€€€€€€MS.€WILLIAMS:€€He€is€just€changingÌpresubscription€language.Ì€€€€€€€€MR.€COHN:€€As€I€understand€it,€that€wasn't€aÌchange€to€the€definition€of€pay-per-call,€it€was€aÌsuggested€change€to€the€definition€of€presubscription.Ì€€€€€€€€MR.€TAYLOR:€€I€guess€I€made€two€suggestions.Ì€€€€€€€€MR.€KLUG:€€I€guess€I€will€have€to€take€a€look€atÌit.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€is€the€coffee€done?ÌRichard,€is€the€coffee€done?Ì€€€€€€€€MR.€R.€GORDON:€€Yes.Ì€€€€€€€€MS.€HARRINGTON:€€The€coffee€is€done.€€WhileÌwe're€waiting€for€copies,€why€don't€we€get€some€coffee,Ìsince€no€one€wants€to€speak.€€Come€right€back.Ì€€€€€€€€òò(Pause€in€the€proceedings.)Ìóó€€€€€€€€MS.€HARRINGTON:€€All€right,€we€are€back.Ì€€€€€€€€Kim?Ì€€€€€€€€MS.€WILLIAMS:€€Yeah,€I€think€the€point€that€wasÌraised€about€the€newspaper-type€services€or€I€knowÌanother€point€that€always€comes€up€is€the€local€weatherÌline€services€that€people€call,€and€if€you€tried€to€callÌfrom€another€state,€you'd€get€a€toll€charge€for€it.ÌObviously€that's€one€of€the€problems€with€trying€toÌchange€this€language,€and€somehow€it€seems€like€we€needÌto€be€able€to€include€that€the€provider€of€thatÌÇinformation€is€making€money€off€that€call.€€I€mean,€thatÌto€me€is€the€basic€element.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€we€have€raised€that€inÌthe€second€bullet€under€this€agenda€section.€€That€isÌraised€as€one€possible€limiting€or€defining€term.Ì€€€€€€€€David?Ì€€€€€€€€MR.€GILLIS:€€My€understanding,€though,€from€theÌexample€was€that€the€newspaper€is€getting€someÌconsideration€for€people€calling?Ì€€€€€€€€MR.€EISENBERG:€€In€the€example€like€that,€theÌnewspaper€could€be€getting€consideration€in€one€ofÌseveral€ways.€€One€would€be€they€provide€the€service€asÌa€service€to€the€readers€of€the€newspaper,€but€inÌtoday's€competitive€LEC€environment,€if€you€have€a€bankÌof€phone€lines€with€the€log€traffic€coming€in,€like€theÌfree€sports€information€or€weather,€if€you€go€to€one€ofÌthe€new€LECs,€like€Teleport€or€TCG,€whatever,€it's€veryÌoften€when€you€get€those€lines,€they€will€give€youÌconsideration,€because€they€like€the€high€efficiency€ofÌtheir€network€usage€coming€in€on€those€circuits.€€So,Ìthey€will€give€you€a€discount€in€the€price€of€the€lineÌor€give€you€a€marketing€commission€for€generating€theÌtraffic€over€those€lines.Ì€€€€€€€€While€I€have€--€is€it€okay€if€I€continue?Ì€€€€€€€€MS.€HARRINGTON:€€Sure.ÌÇ€€€€€€€€MR.€EISENBERG:€€What€the€TSIA€would€like€to€seeÌand€I€think€it€addresses€some€of€the€concerns€is€thatÌthe€definition€of€pay-per-call€be€expanded€to€includeÌany€type€of€situation€where€the€IP€is€determining€theÌprice€of€the€call€and€there€is€a€high€premium€placed€onÌit,€regardless€of€the€dialing€pattern.€€If€it's€800Ìline,€if€you're€charging€something€in€excess€of€theÌnetwork€usage,€it€would€be€part€of€pay-per-call,€andÌthis€sort€of€coincides,€I€believe,€with€the€ISA's€deÌminimis€test€of€I€believe€it€was€10€percent€--€5€percentÌ--€over€the€prevailing€dominant€carrier€rates.Ì€€€€€€€€MS.€HARRINGTON:€€But€that€doesn't€deal€withÌMuldova.€€The€IP€is€not€saying€that€the€rate€on€calls€toÌMuldova,€for€example.€€Isn't€that€--€isn't€thatÌcorrect?Ì€€€€€€€€REPORTER€NOTE:€€Setting€that€rate.Ì€€€€€€€€MR.€EISENBERG:€€No,€the€carrier€is€setting€theÌrates€for€calls€to€Muldova,€but€we€do€recognize€thatÌbeing€a€problem,€especially€Muldova,€because€that's€oneÌof€the€--€we€have€been€very€effective€at€moderating€andÌcontrolling€the€advertising€and€adhering€to€TDDRAÌwherever€possible€through€various€associations'€code€ofÌpractices€and€ethics.€€We€have€been€successful€inÌgetting€the€newspapers€and€almost€all€of€the€magazinesÌto€take€out€"free,"€which€was€a€huge€cause€of€concern,ÌÇand€by€regulating€the€advertising,€I€think€thoseÌproblems€will€all€go€away.Ì€€€€€€€€What's€important€from€a€regulatory€standpoint,Ìit€is€very€important€to€make€the€distinction€between€aÌMuldova€and€an€011-dialed€number€and€an€800€redirectÌnumber€that€shows€up€on€the€phone€bill€looking€like€aÌdirect-dial€011€call€but,€in€fact,€is€an€800-originatedÌcall€or€10XXX-originated€call€where€the€caller€is€notÌpaying€the€normal€long€distance,€the€rate€is,€in€fact,Ìbeing€determined€by€the€IP,€and€instead€of€being€chargedÌ50€cents€for€a€call,€they€are€being€charged€$5€perÌminute€for€the€call,€and€I€believe€that's€what€theÌTSIA's€proposal€would€take€care€of.Ì€€€€€€€€MS.€HARRINGTON:€€Jim?Ì€€€€€€€€MR.€BOLIN:€€One€point€I€would€like€to€make€sureÌthat€gets€addressed€here€today,€there€was€a€mention€ofÌLEC€discounts€or€LEC€commissions.€€These€discounts€orÌcommissions€get€paid€out€of€access€charges.€€In€AT&T'sÌview,€this€is€really€nothing€more€than€a€kickback.ÌAccess€charges€are€generally€levied€by€monopoly€LECÌproviders.€€There€is€no€choice€but€to€deal€with€the€LECÌterminating€access€in€those€cases.Ì€€€€€€€€We€think€it's€a€misnomer€to€refer€to€servicesÌthat€are€done€on€this€sort€of€so-called€"commissionÌbasis"€as€free.€€Consumers€eventually€pay€for€them.€€IfÌÇaccess€charges€get€raised€to€pay€for€informationÌservices,€then€LD€carriers€are€going€to€be€forced€toÌraise€long€distance€rates€again.€€We€think€thatÌcommission€type€arrangements€in€situations€not€whereÌreal€savings€or€efficiencies€are€created,€but€whereÌaccess€charges€are€diverted€for€side€payments,€we€don'tÌthink€by€any€reasonable€construction€that€should€beÌconsidered€something€that's€not€a€pay-per-call€service.ÌAll€that€is€is€hiding€a€payment.Ì€€€€€€€€MS.€HARRINGTON:€€Susan?Ì€€€€€€€€MS.€GRANT:€€I'm€wondering€whether€the€concernÌabout€local€calls€and€domestic€long€distance€calls€forÌthings€like€sports€calls€and€so€on€could€be€dealt€withÌby€the€threshold€for€exemptions€under€the€rule,€the€$2Ìthreshold,€or€if€it€was€raised€to€$3,€how€likely€wouldÌit€be€that€those€types€of€calls€would€be€taken€care€ofÌessentially€under€that€threshold?Ì€€€€€€€€MS.€HARRINGTON:€€I€am€going€to€ask€Ian€if€he€hasÌan€answer€to€that.Ì€€€€€€€€MR.€EISENBERG:€€If€I€understand€the€question,Ìthe€question€was€if€by€lowering€the€threshold€of€theÌpermanent€rate?Ì€€€€€€€€MR.€HILE:€€No,€raising€the€threshold€of€theÌcoverage€of€the€rule.Ì€€€€€€€€MS.€HARRINGTON:€€There€is€a€de€minimisÌÇexemption.Ì€€€€€€€€MR.€EISENBERG:€€That's€only€for€the€preamble,Ìthough.€€I€have€heard€two€questions€now.€€I€think€AT&T'sÌcomments€--€let€me€respond€to€those€first,€then€yours,Ìthat€might€clarify€it.Ì€€€€€€€€MS.€HARRINGTON:€€No,€actually,€I€wanted€anÌanswer€to€Susan's€question,€and€I€will€come€back€to€youÌif€you€want€to€respond€to€AT&T's€comments.Ì€€€€€€€€MR.€EISENBERG:€€Okay.Ì€€€€€€€€MS.€HARRINGTON:€€Does€anyone€have€a€comment€onÌSusan's€question?Ì€€€€€€€€MR.€BRENNAN:€€I€do.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Peter,€Warren€and€Allen.Ì€€€€€€€€MR.€BRENNAN:€€That€only€deals€with€the€preambleÌand€to€the€extent€that€the€provider€doesn't€have€toÌprovide€the€preamble.Ì€€€€€€€€MS.€HARRINGTON:€€Would€there€be€a€cost€to€theÌprovider€of€any€significance€in€complying€with€theÌadvertising€requirements€of€the€rule?Ì€€€€€€€€MR.€EISENBERG:€€For€the€newspaper€type€ofÌexample?Ì€€€€€€€€MS.€HARRINGTON:€€Yes.Ì€€€€€€€€MR.€EISENBERG:€€It€wouldn't€be€possible€in€a€lotÌof€cases,€because€if€you're€dialing€a€local€POTS€lineÌand€it€terminates€in€New€York€and€you're€calling€fromÌÇNew€York,€it's€a€measured€service€or€in€most€cities€it'sÌa€free€call,€but€if€you're€dialing€that€from€outsideÌthat€local€calling€area,€the€advertiser€has€no€ideaÌwhere€you€are€calling€it€from€or€who€your€long€distanceÌcarrier€is.€€The€most€they€can€say€is€long€distanceÌrates€apply€or€check€with€your€operator.Ì€€€€€€€€MS.€HARRINGTON:€€Mark?Ì€€€€€€€€MR.€HERTZENDORF:€€But€would€these€servicesÌtypically€be€advertised€to€someone€who€has€to€make€aÌlong€distance€call?€€I€mean,€the€weather€for€Washington,ÌI€am€not€going€to€have€to€call€long€distance€for€that.ÌThere€would€be€some€other€local€number,€wouldn't€there?ÌIt€might€be€different€for€newspapers,€though.Ì€€€€€€€€MR.€EISENBERG:€€In€newspapers,€yes,€you€wouldÌhave€--€some€cities€have€measured€service,€and€even€inÌCalifornia,€if€you're€in€LA€and€you're€calling€a€line€inÌSan€Bernadino,€there€would€be€long€distance€involved.ÌIntrastate€long€distance€is€usually,€as€we€all€know,€isÌusually€more€expensive€than€interstate,€which€makes€itÌvery€difficult€to€put€exact€rates€in€the€advertising.Ì€€€€€€€€MR.€GILLIS:€€I€just€would€like€to€follow€up€withÌthat,€but€in€the€cases€where€you're€using€long€distanceÌto€access€a€local€number,€I€mean,€that's€clearly€theÌcost€of€transferring€the€call.€€The€relationship€whereÌthe€Commission's€involved€is€between€the€local€exchangeÌÇand€the€newspaper.€€So,€there€--€it's€the€local€call€andÌthat€is€the€full€--€so,€the€cost€of€the€long€distanceÌcall€wouldn't€have€to€be€disclosed€under€a€pay-per-callÌscenario.Ì€€€€€€€€MR.€EISENBERG:€€But€it€wouldn't€be€possible€toÌdisclose€the€cost€of€the€call.€€From€an€industryÌperspective,€we€just€don't€know€what€that€call€is€goingÌto€cost.Ì€€€€€€€€MR.€GILLIS:€€What€I€am€saying€is€that€you€areÌholding€out€to€offer€this€service€for€local€--€asÌavailable€through€a€local€call,€and€if€someone€wants€toÌcall€from€the€other€side€of€the€world,€that's€up€toÌthem,€but€the€access€number€that€you're€providing€is€aÌlocal€call,€right?Ì€€€€€€€€MR.€EISENBERG:€€Well,€when€you€advertise€--Ìlet's€go€back€to€the€newspaper€example.€€You€have€to€putÌin€an€area€code,€because€in€New€York,€you€might€be€inÌLong€Island,€you€might€be€in€212,€you€might€be€in€718.ÌSo,€you€have€to€put€in€the€full€ten€digits.Ì€€€€€€€€MR.€GILLIS:€€Is€the€newspaper€getting€anyÌconsideration€related€to€the€long€distance€call€that€wasÌmade?Ì€€€€€€€€MS.€HARRINGTON:€€If€someone€calls€from€outsideÌof€that€area€code€or€in€a€toll€call€situation€to€thatÌnumber?ÌÇ€€€€€€€€MR.€EISENBERG:€€Very€possible,€either€a€directÌmonetary€commission€or€reduced€rates.€€The€--€can€IÌcomment€on€AT&T's€--€AT&T€--€it€is€a€very€timely€commentÌthey€make,€that€it€raises€the€cost€of€the€call€to€theÌconsumer.Ì€€€€€€€€The€way€--€just€so€everybody€understands€it,€theÌway€international€really€started€audiotext€was€AT&TÌviewed€traffic€coming€in€from€Europe€to€the€U.S.,€AT&TÌand€MCI€will€pay€you€a€commission€for€generating€thatÌtraffic,€but€in€a€sense,€by€increasing€that€traffic€andÌthe€efficiency€of€the€network€usage,€it€does€lower€theÌcost€eventually€to€the€consumer.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€we€are€not€going€to€haveÌa€little€dispute€here€about€various,€you€know,€pricingÌschemes€to€--€that€create€incentives€for€usingÌcarriers.€€We€understand€enough€to€know€that€there€areÌvery€many€different€views€of€that€that€relate€toÌcompetition€issues€really.Ì€€€€€€€€Let's€move€on€to€Kim.Ì€€€€€€€€MS.€WILLIAMS:€€I€wanted€to€address€the€issueÌthat€was€brought€up€about€the€800€redirect€and€that€thatÌI€guess€was€what€you€were€concerned€about€addressing€inÌthe€rule€from€the€--€I€guess€the€TSIA€perspective,€but€IÌthink€what€--€when€we€see€that€occur,€when€there€is€anÌ800€redirect€and€what's€really€showing€up€on€the€bill€isÌÇthe€international€number€--€is€that€what€you€are€sayingÌ--Ì€€€€€€€€MR.€EISENBERG:€€Yes.Ì€€€€€€€€MS.€WILLIAMS:€€--€when€really€an€800€call€wasÌdialed,€I€think€that's€a€situation€where€a€provider€or€aÌcarrier€who's€got€a€contract€with€a€LEC€is€doingÌsomething€that€is€not€within€the€rules€of€the€LEC'sÌbilling€contract.€€They€are,€again,€evading€the€contractÌissues.€€I€think€we€heard€a€little€bit€of€it€yesterday,ÌWell,€we€have€to€format€a€call€that€way€because€the€LECÌbilling€system€limits€us.€€Well,€it€limits€them€for€aÌreason,€because€we€don't€want€those€kinds€of€calls€onÌour€bills.Ì€€€€€€€€However,€some€people€circumvent€those€rules€justÌlike€we€see€people€circumvent€the€FCC€and€FTC€rules€toÌtry€to€get€things€on€a€bill.€€So,€I€don't€know€that€--€IÌthink€that's€an€issue€that€needs€to€be€addressed€by€aÌLEC€when€we€see€it€happening,€and€also€I€think€the€lawÌshould€require€that€you€don't€--€you€know,€that€aÌprovider€can't€show€some€other€number€dialed,€that€theyÌhave€to€show€the€number€dialed€to€reach€that€service,Ìand€I€think€the€real€issue€is€should€we€address€--€thatÌwe€need€to€address€is€how€do€we€set€up€these€rules€toÌdeal€with€international€calls.€€When€you€look€at€ATM€andÌthe€rules€to€Guyana,€clearly€they€think€they€are€outsideÌÇof€the€rules€and€the€rules€needn't€be€addressed,€and€IÌthink€those€are€the€rules€that€need€to€be€addressed.Ì€€€€€€€€MS.€HARRINGTON:€€Joel,€you€had€your€card€up,€butÌnow€it's€down.Ì€€€€€€€€MR.€DICHTER:€€But€I€can€comment€on€this€lastÌissue.€€I€think€really€in€dealing€with€these€issues,€youÌreally€do€have€to€be€careful.€€You€can't€just€adopt€aÌdefinition€or€expand€a€definition€to€--€because€youÌperceive€one€matter€that€needs€addressing,€because€whenÌyou€do€that,€you€really€are€affecting€services€that€areÌavailable€--€that€may€be€available€today€or€may€beÌavailable€tomorrow€due€to€changes€in€technology.€€So,Ìyou€do€have€to€be€careful.Ì€€€€€€€€For€example,€if€you€just€said€--€took€out€allÌreferences€in€the€definition€to€any€charge€which€isÌpremium-type€based€services,€you€would€be€affecting€notÌonly€international,€but€you€would€be€affecting€provisionÌof€Internet€access€services,€as€those€are€providedÌthrough€those€types€of€arrangements,€as€well.€€So,€IÌmean,€you€have€to€be€very€careful€in€that€regard.Ì€€€€€€€€There€are€ways€we€believe€to€deal€with€theseÌissues€and€address€them€from€--€really€from€a€disclosureÌstandpoint.€€That€can€be€done,€that€industry€is€willingÌto€do€so€and€is€here€today€to€adopt€codes€to€conform€asÌbest€they€can€to€the€U.S.€regulations,€and€I€know€that'sÌÇsomewhat€down€on€the€agenda,€so€I€won't€go€into€theÌdetails€of€that€now,€but€there€are€ways€that€we€can€dealÌwith€this€Muldova-type€instance.Ì€€€€€€€€If€that€kind€of€matter,€it's€believed€to€be€aÌproblem,€could€come€to€the€ITA,€the€ITA€would€work€toÌaddress€that€situation.€€We€have€come€in,€we€haveÌapproached€the€National€Fraud€Organization,€as€well,€toÌtry€and€relay€those€types€of€comments,€as€well,€and€setÌout€guidelines€--€industry€would€welcome€guidelines€fromÌthe€FTC€and€say€here€are€the€practices€that€you€have€toÌconform€yourself€to,€and€I€think€those€would€beÌeffective.Ì€€€€€€€€It's€not€an€industry€--€you€know,€I€rememberÌback€in€the€early€days€of€900,€and€you€go€to€theÌaudiotext€forum€trade€show,€and€there€would€be€2000Ìpeople€who€would€be€sort€of€looking€to€get€into€theÌbusiness.€€Now€you€go€to€those€same€audiotext€forumÌshows,€and€you€see€a€group€of€a€couple€hundred€people.ÌYou€look€around€this€table,€you€see€the€same€people€youÌsaw€four€years€ago.Ì€€€€€€€€This€is€a€more€mature€industry,€an€industryÌthat's€looking€to€continue€to€be€a€long-term€businessÌand€wants€to€address€these€issues€in€a€way€that€they€canÌcontinue€to€provide€business€in€the€future€and€meet€theÌneeds€rather€than€trying€to€do€quick€fixes.€€TheÌÇindustry€can,€indeed,€and€it€has€taken€certain€measuresÌof€self-regulation,€and€I€think€you€have€to€give€us€anÌopportunity€to€work€together,€to€provide€more€guidanceÌto€the€industry€in€how€to€do€that.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Adam.Ì€€€€€€€€MR.€COHN:€€Well,€so€far,€I€think€we€have€heardÌtwo€proposals€or€type€of€proposals,€one€from€Alan€andÌthe€other€from€the€TSIA,€which€was€basically,€as€IÌunderstand€it,€to€sort€of€hinge€the€definition€onÌwhether€or€not€the€IP€could€determine€the€rate.€€Well,Ìsort€of€on€that€issue,€since€what€the€1996€Act€asks€theÌCommission€to€consider€is€to€try€to€define€pay-per-callÌin€a€way€that€identifies€the€audio-entertainment€andÌaudio-information€services,€which€are€susceptible,€IÌthink€the€quote€is,€susceptible€to€the€unfair€andÌdeceptive€trade€practices€prohibited€by€TDDRA,€and€I'mÌnot€--€I€want€to€put€out€the€question€as€to€how€do€weÌidentify€which€practices€are€susceptible?Ì€€€€€€€€Is€the€correct€approach€to€identify€thoseÌpractices€--€those€services€where€the€IP€can€determineÌthe€rate,€or€is€it€more€that€where€the€IP€profits?€€AndÌI€haven't€--€I€don't€think€either€of€these€suggestionsÌreally€get€at€that€--€at€that,€which€the€Muldova€issueÌis€touched€by,€which€is€that€the€IP€is€profiting.€€HowÌwould€a€definition€be€crafted€that€addresses€that€inÌÇsome€way?Ì€€€€€€€€MS.€HARRINGTON:€€Answers€to€Adam's€question?Ì€€€€€€€€So,€you€are€saying,€Adam,€where€the€IP€has€aÌfinancial€incentive€--Ì€€€€€€€€MR.€COHN:€€I€would€say€that€a€financialÌincentive€may€be€a€key€to€finding€susceptibility€toÌfraud.Ì€€€€€€€€MS.€HARRINGTON:€€Jim,€do€you€have€a€comment€onÌthat?Ì€€€€€€€€MR.€BOLIN:€€I€do.€€I€think€that€that€gets€at€aÌpiece€of€the€puzzle€but€not€all€of€it.€€I'm€not€sure€inÌa€market€changing€as€fast€as€telecom€is€that€anyÌdefinition€is€going€to€capture€any€possible€instance€ofÌfraud€unless€it's€very€flexible.€€A€situation€where€anÌIP€profits€would€potentially€cover,€for€instance,€stateÌand€government€applications€that€have€TSAAs€set€up,Ìbecause€in€that€case,€you€have€a€state€or€governmentÌentity€acting€as€an€access€provider,€AT&T€is€paying€--Ìterminating€access€payments€to€that€entity€rather€thanÌthe€local€LEC.€€That€could€be€defined€as€profit.€€IÌdon't€think€that's€the€sort€of€practice€that€CongressÌintended€to€prohibit€in€this€case.€€I€think€that€asÌmarkets€get€increasingly€competitive€you€are€going€toÌsee€more€and€more€kinds€of€arrangements€like€that€inÌwhich€everybody€benefits,€because€there€are€realÌÇefficiencies€created.Ì€€€€€€€€I€think€that€what€we€need€is€a€standard€thatÌcaptures€whether€or€not€side€payments€are€being€made,Ìwhether€or€not€consumers€or€other€players€in€this€chainÌare€ultimately€paying€more€than€they€would€otherwise,€soÌthat€what€we€have€is€side€payments€to€an€IP.Ì€€€€€€€€On€the€issue€of€whether€or€not€the€IP€determinesÌthe€price,€I€don't€think€that's€adequate,€because€in€theÌMuldova€situation,€an€IP€can€arguably€say,€we€don't€setÌthe€price€for€termination€of€the€call.€€We€don't€dealÌwith€the€a€PTT€that's€determining€what€the€settlementÌrate€is.€€We're€just€taking€a€piece€of€the€settlementÌrate€from€the€PTT.€€So,€I€don't€think€that's€broadÌenough€either,€and€I€think€any€standard€is€going€to€haveÌto€be€flexible,€it€is€going€to€have€to€evolve€over€time,Ìand€I€think€that€although€it's€less€efficient,€there€isÌno€way€to€get€around€a€sort€of€case-by-caseÌdetermination€in€a€lot€of€these€situations.Ì€€€€€€€€MR.€COHN:€€Well,€about€the€--€is€it€TSAA,€isÌthat€what€--€there€are€so€many€abbreviations€going€onÌthere,€I€sort€of€lose€track,€but€the€TSAA€--€now,€whyÌwould€those€not€be€--€I€don't€have€greater€knowledgeÌthan€what€you€put€in€your€comment,€but€why€would€thoseÌnot€be€susceptible€to€the€same€sorts€of€abuses€thatÌconstitute€the€--€if€they€are€not,€is€there€a€way€toÌÇcraft€a€definition€around€situations€that€are€notÌsusceptible?Ì€€€€€€€€MR.€BOLIN:€€We€tried€to€suggest€a€definition€inÌour€comments.€€Let€me€start€with€briefly€explaining€howÌTSAAs€a€work.€€These€are€something€that€I€believe€AT&TÌpioneered€but€other€long€distance€carriers€are€alsoÌoffering€now.Ì€€€€€€€€When€a€long€distance€call€is€transmitted,€theÌinterexchange€carrier€pays€an€originating€access€chargeÌto€the€LEC€on€the€originating€end€of€the€call€and€aÌterminating€access€charge€to€the€LEC€on€the€terminatingÌend.€€In€a€TSAA€arrangement,€the€entity€to€which€theÌcalls€are€being€terminated,€it€can€be€a€catalog€providerÌusing€an€800€number,€a€lot€of€state€colleges€andÌuniversities€have€these€setups.€€I€know€at€least€oneÌstate€government€that€has€this€set€up.€€Many€federalÌagencies€and€federal€entities€use€these€set-ups,€asÌwell.€€They€have€a€high€volume€of€incoming€calls.Ì€€€€€€€€What€we€do,€to€oversimplify,€because€I€don'tÌunderstand€the€full€network€issues€either,€is€we€provideÌa€direct€line€to€that€entity,€bypassing€the€local€LEC,Ìso€that€they€are€no€longer€paying€terminating€accessÌcharges€to€the€LEC€at€the€terminating€end.€€Instead€weÌare€paying,€in€effect,€terminating€access€charges€to€theÌentity€that's€terminating€the€call.ÌÇ€€€€€€€€Now,€under€TSAA€arrangements,€in€all€cases,Ìterminating€access€charges€that€we€pay€are€lower€thanÌthe€charges€we€would€pay€to€the€terminating€LEC.€€So,Ìthere€is€an€efficiency€created,€and€what€we€do€is€we€payÌterminating€access€to€that€entity€that's€receiving€theÌcalls€rather€than€to€the€LEC.€€The€reason€--€I€don'tÌthink€such€a€scheme€could€be€susceptible€to€an€abuse.Ì€€€€€€€€The€reason€TSAA€arrangements€as€practiced€byÌAT&T€and€the€other€carriers€in€the€industry€are€not€isÌthat€the€caller€pays€whatever€the€tariffed€rate€is€forÌthat€call.€€If€the€caller€has€a€10-cent-a-minute€rateÌfrom€AT&T,€the€caller€pays€10€cents€a€minute.€€That'sÌtrue€in€every€case.€€It€makes€no€difference;€the€rate€isÌunaffected.€€The€access€charges€by€the€interexchangeÌcarrier,€in€this€case€AT&T,€is€in€all€cases€lower€thanÌit€would€be€otherwise.Ì€€€€€€€€The€party€that's€receiving€the€call€on€theÌterminating€end€is€receiving€an€access€payment,€butÌagain,€it's€lower€than€would€be€paid€in€any€case.€€So,Ìno€one€pays€more.€€There€is€a€real€efficiency€createdÌthere.€€What€we€have€is€an€innovative€way€around€theÌsystem€of€access€charges€that€I€think€everyone€agreesÌneeds€to€be€reformed,€and€the€FCC€is€in€the€process€ofÌreforming€it.€€So,€I€think€constructed€that€way,€that'sÌa€situation€in€which€everybody€benefits.ÌÇ€€€€€€€€MR.€COHN:€€Would€the€customer€or€would€AT&T'sÌcustomer€profit€--€have€a€greater€amount€of€profit€basedÌon€the€volume€of€calls€that€it€received€and€would€thatÌbe€--Ì€€€€€€€€MR.€BOLIN:€€That's€a€good€question,€and€there€isÌno€way€around€that.€€The€more€calls€that€come€in,€theÌgreater€the€number€of€access€payments€that€are€going€toÌbe€received,€but€I€think€we€also€need€to€consider€thatÌif€we€craft€a€definition€that€prohibits€all€of€theseÌrevenue-sharing€arrangements,€then€a€state€college€orÌuniversity€that€has€a€number€that€you€can€call€in€toÌfind€out€course€schedule€information,€a€state€or€federalÌentity€that€has€information€about€regulations€that€youÌcan€call€in,€in€some€cases€applications€like€techÌsupport€lines€offered€over€800€numbers,€if€there's€aÌTSAA€in€place,€then€I€don't€see€how€these€suddenly€comeÌunder€the€definition€of€pay-per-call,€and€I€don't€seeÌhow€State€University€X€isn't€going€to€have€to€startÌusing€a€900€number€to€convey€these€offerings,€and€I€justÌdon't€think€that's€what€Congress€intended,€and€I€thinkÌif€possible€we€need€to€find€a€way€to€craft€a€definitionÌthat€allows€these€type€of€arrangements,€because€they€doÌcreate€efficiencies.Ì€€€€€€€€MS.€HARRINGTON:€€Question€from€Mark?Ì€€€€€€€€MR.€HERTZENDORF:€€I€was€just€wondering€whetherÌÇthe€idea€of€focusing€on€remuneration€to€the€IP€as€partÌof€the€definition,€would€that€also€be€susceptible€to€theÌproblem€that€there€could€be€vertical€integration€in€theÌfuture,€for€example,€if€Guyana€purchases€--€was€to€startÌproviding€--€if€that€was€the€way€the€definition€wasÌconstructed,€maybe€Guyana€would€just€start€offeringÌtheir€own€information€services?Ì€€€€€€€€MR.€BOLIN:€€I€think€that's€a€great€point,€andÌAT&T€has€already€seen€some€situations€like€thatÌdomestically€in€which€a€LEC€either€owns€or€has€a€veryÌtangled€corporate€relationship€with€an€informationÌprovider€or€with€an€entity€that€purports€to€be€aÌcompetitive€access€provider.€€We€have€had€situationsÌlike€that€cropping€up.Ì€€€€€€€€I€think€unless€something€is€done€by€the€FTC€andÌFCC€to€crack€down€on€this€practice,€it€is€going€toÌbecome€more€common€in€the€future.€€These€schemes€areÌtransparent€to€customers.€€I€mean,€where€there€are€sideÌpayments€made€by€a€LEC,€say,€the€caller€doesn't€pay€anyÌmore€than€he€would€otherwise.Ì€€€€€€€€So,€if€I'm€a€caller€looking€to€call€a€chat€line,Ìsome€other€service,€I€am€going€to€be€more€prone€to€callÌthese€arrangements€where€there€are€side€payments,Ìbecause€I€don't€bear€the€cost€directly.€€It€also€meansÌthat€I€don't€get€the€benefit€of€preambles€and€otherÌÇrequirements€designed€to€protect€consumers.€€So€that€IÌthink€unless€something€is€done€to€try€to€stop€these€sideÌpayment€arrangements,€then€I€think€they€are€scams,€and€IÌthink€we€are€going€to€see€them€proliferate.Ì€€€€€€€€MR.€HERTZENDORF:€€How€is€the€FTC€supposed€toÌdetermine€which€side€payments€are€efficient?Ì€€€€€€€€MR.€BOLIN:€€Well,€the€standard€AT&T€proposed€--Ìand€again,€it€is€going€to€require€some€case-by-caseÌadjudication,€but€I€think€there€is€no€way€around€that,Ìwhere€there€is€remuneration€to€an€IP,€that€should€createÌa€rebuttable€presumption€that€the€call€in€question€isÌpay-per-call.€€We€had€imposed€a€three-part€standard€thatÌcould€be€used€to€examine€these€situations.€€Let€me€seeÌif€I€can€remember€them€all.Ì€€€€€€€€First€we€proposed€at€looking€at€whether€or€notÌsimilar€arrangements€exist€with€non-IPs.€€If€the€sameÌarrangement€exists,€say,€with€the€Federal€Government,Ìthen€I€think€that's€a€fairly€strong€issue€in€favor€ofÌmaintaining€the€arrangement.Ì€€€€€€€€We€proposed€looking€at€whether€or€not€there's€anÌactual€payment€for€a€service€rendered.€€In€the€case€ofÌTSAA,€there€is€a€payment€for€providing€terminatingÌaccess.€€That's€a€service€that€is€not€free.€€We€have€toÌpay€for€it.€€If€we€get€it€from€one€entity€or€another,Ìsomeone€gets€paid€for€terminating€access€under€theÌÇcurrent€regime.Ì€€€€€€€€The€third€issue€we€proposed€examining€is€whetherÌor€not€there€are€real€efficiencies€created,€whether€orÌnot€there€is€a€side€payment€or€there€are€actuallyÌavoided€costs€somewhere€in€the€system€so€that€no€one€isÌpaying€more€and€someone€is,€in€fact,€realizing€someÌsavings.Ì€€€€€€€€Now,€I€think€that€while€I€agree€that€proposingÌthis€sort€of€case-by-case€standard€could€create€someÌheadaches,€I€think€that€one€factor€that's€going€toÌmitigate€against€those€potential€headaches€is€that€it'sÌonly€going€to€be€necessary€to€resolve€disputes€whenÌthere€is€a€complaint,€and€I€don't€believe€anyone€isÌgoing€to€complain€if€the€IRS€sets€up€a€help€line€withÌthe€TSAA€arrangement€with€AT&T€or€another€carrier.€€ItÌseems€very€unlikely.€€I€think€--Ì€€€€€€€€MS.€HARRINGTON:€€If€they€don't€answer€the€phone,Ìthere€might€be€some€complaints.Ì€€€€€€€€MR.€BOLIN:€€That's€a€different€complaint.€€OneÌpoint€I€would€like€to€address,€and€I€am€monopolizing€theÌtime€here,€and€I€apologize,€but€an€issue€that€was€raisedÌfrom€my€right,€at€that€end€of€the€table,€this€issue€ofÌincreasing€traffic€on€the€network€being€of€benefit.ÌThat's€true€to€a€point,€but€if€AT&T€is€providing€aÌ10-cent-a-minute€rate€to€its€customers€and€paying€47ÌÇcents€a€minute€and€terminating€access,€we€don't€makeÌthat€up€in€volume,€and€this€notion€that€I€hear€floatedÌoccasionally€that€while€we're€increasing€traffic€on€yourÌnetwork,€that's€a€good€thing,€that€only€works€to€aÌpoint.€€We€don't€make€up€losing€situations€by€losingÌmore€money.€€So,€I€think€that's€a€point€that€we€need€toÌkeep€in€mind,€that€increasing€volume€is€not€the€answer.Ì€€€€€€€€MS.€HARRINGTON:€€Warren?Ì€€€€€€€€MR.€MILLER:€€Thank€you.Ì€€€€€€€€The€ISA€has€been€spending€about€the€last€twoÌyears€on€this€issue€of€what€it€defines€pay-per-call€longÌbefore€this€proceeding€began,€and€some€--€I€won'tÌcomment€specifically€or€repeat€our€definition,€it's€onÌpage€26€through€28€of€our€filing,€but€I€want€to€respondÌto€some€things€that€have€been€said.Ì€€€€€€€€Yesterday€Susan€Grant€brought€up€that€this€is€aÌconsumer€protection€rule,€and€we€recognize€that€thereÌare€some€unique€circumstances€with€international€callsÌthat€call€for€protection.€€We€also€recognize€the€factÌthat€AT&T€may€be€placed€into€a€position€sometimes€whereÌit's€at€a€disadvantage€because€of€its€inability€toÌnegotiate€in€a€specific€area,€but€we€believe€that's€aÌcomplaint€to€take€up€with€the€FCC.Ì€€€€€€€€The€main€thing€we€are€looking€to€preserve€inÌthis€--€in€this€movement€into€the€area€of€electronicÌÇcommerce€that's€been€so€talked€about€is€--€and€theÌinformation€age€is,€for€example,€Frost€&€SullivanÌpredict€that€interactive€voice€response€equipment€orÌIVRs€will€make€up€a€$5€billion€market€by€the€end€of€thisÌcentury,€and€$5€billion€is€a€number€that's€been€put€outÌfor€all€of€the€900€industry€collected€by€EXEs€and€not.ÌSo,€there€is€a€tremendous€market€for€free€information.Ì€€€€€€€€My€company€just€put€in,€for€example,€a€system,€aÌsystem€for€Target€Department€Stores€to€put€in€freeÌinformation€for€all€of€the€schools€in€the€WashingtonÌmetropolitan€area.€€Now,€a€call€from€Woodbridge€wouldÌcost€some€money.€€The€problem€with€the€proposedÌdefinition€change€from€Florida,€Bell€South€is€relativelyÌan€area€with€flat-rated€calling€plans,€whereasÌAmeritech,€the€opposite€situation€pertains,€and€you€haveÌto€pay€a€message€unit.€€So,€under€that€proposal,€theÌfree€schools€--€the€free€system€for€all€the€schoolsÌwould€become€pay-per-call,€and€we€would€have€to€offer€itÌ900,€and€it€would€cost€a€lot€of€money.Ì€€€€€€€€So,€the€main€thing€we're€looking€at€is€weÌrecognize€--€we€want€to€--€and€Adam€brought€up€the€veryÌkey€point,€which€is€deception.€€In€areas€where€there€areÌexceptions,€where€this€agency€is€not€the€lead€agency,Ìwhere€consumers€are€not€being€deceived€or€are€alreadyÌprotected,€we€think€those€industries€should€be€allowedÌÇto€flourish,€and€there€is€a€lot€of€free€calls€going€onÌout€there€that€would€somehow€get€sucked€into€thisÌdefinition€if€we€aren't€careful.Ì€€€€€€€€MS.€HARRINGTON:€€Adam,€question?Ì€€€€€€€€MR.€COHN:€€Yes,€I€wanted€to€--€in€response€toÌthat€and€also€just€in€response€to€the€generalÌconversation,€I€know€in€the€comment€filed€by€--€I€thinkÌit€was€the€Alliance€of€Young€Families,€they€hadÌmentioned€a€proposal€to€create€a€threshold€payment€toÌthe€IP€as€a€--€as€the€definition€of€pay-per-call€toÌinclude€a€percentage€threshold€or€perhaps€a€per-minuteÌthreshold.€€Would€that€help€to€--€if€there€was€a€lowÌthreshold,€would€those€types€of€numbers€--€presumablyÌthere€would€be€less€risk€of€consumers€being€defrauded€inÌcalling€these€numbers€to€create€a€profit€if€you€had,Ìsay,€some€sort€of€percentage€or€per-minute€thresholdÌunder€which€it€would€not€be€pay-per-call.€€Would€that€beÌa€possible€solution?Ì€€€€€€€€MR.€MILLER:€€Well,€we€are€--€our€definition€asÌproposed€called€for€an€exemption€for€de€minimisÌpayments,€and€that€appeared€to€in€some€ways€confuse€theÌissue€more€than€we€intended.€€We€were€--€we€were€justÌtrying€to€indicate€--€I€think€it's€too€complicated€anÌissue€to€try€to€look€into€everybody's€pocket€in€anÌunregulated€environment€as€to€where€pennies€may€beÌÇexchanged€for€interconnect€agreements,€but€what€we€wereÌtrying€to€accomplish€there€was€if€the€consumer€does€notÌappreciably€pay€more€--€and€we€were€only€trying€toÌstrike€out€a€measure€for€defining€if€they€paid€more.€€IÌ--€we€are€open€to€any€definition€that€adequatelyÌdefines€that.€€If€the€consumer€doesn't€pay€more,€weÌdon't€think€there€is€a€harm,€and€we€don't€think€there€isÌa€need€for€regulation.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€I€would€like€to€hear€fromÌDon€Klug€on€that€question,€and€then€Don,€you€have€beenÌwaiting€for€a€while.Ì€€€€€€€€MR.€KLUG:€€Oh,€I'm€sorry,€I€zoned€out€here.€€I'mÌnot€sure€what€the€question€is.Ì€€€€€€€€MS.€HARRINGTON:€€We€will€come€back€to€you,€Don.Ì€€€€€€€€MR.€KLUG:€€I€do€have€a€comment,€however.Ì€€€€€€€€MS.€HARRINGTON:€€That's€okay.€€I€think€that's€aÌ--€you€know,€there€is€something€to€be€said€for€honestyÌand€candor€here,€and€I€have€to€tell€you,€there€areÌmoments€when€I've€zoned€out€here,€so€does€someone€haveÌan€answer€to€Adam's€question€and€following€up€onÌWarren's€answer?€€Let's€hear€--€Jim,€I'll€come€back€toÌyou,€but€I€want€to€give€some€other€folks€a€chance.Ì€€€€€€€€Kim?Ì€€€€€€€€MS.€WILLIAMS:€€I€don't€know€if€mine's€a€completeÌanswer€as€much€as€it€is€a€question€along€the€same€lines,ÌÇbut€it€seems€that€the€incentive€for€the€IP€is€not€to€setÌup€their€service€in€St.€Louis,€Missouri€where€somebodyÌcan€dial€across€Sprint€and€pay€10€cents€a€minute€or€AT&TÌand€pay€their€15€cents€a€minute.€€The€incentive€is€to€goÌoutside€of€at€least€the€48€states€here€that€are€allÌconnected€where€you€have€to€pay€more,€where€you€can'tÌjust€get€your€10-cents-a-minute€rate.Ì€€€€€€€€I€mean,€is€there€some€way€to€craft€a€definitionÌthat€would€include€those€factors,€that€would€say,€I€canÌgo€across€my€picked€carrier€and€stay€within,€you€know,Ìthe€continental€--€I€don't€know€if€continental€UnitedÌStates€is€the€right€term,€but€stay€within€this€area,Ìthen€it€is€not€--€it€doesn't€fall€under€those€rules?€€IÌmean,€what€kind€of€problems€does€that€present?Ì€€€€€€€€MS.€HARRINGTON:€€Alan?Ì€€€€€€€€MR.€TAYLOR:€€First€of€all,€I€want€to€clear€up€aÌcouple€of€misconceptions.€€I€have€heard€it€said€a€coupleÌof€times€that€my€proposal€would€require€the€use€of€a€900Ìcode,€and€the€way€I€read€it,€it€would€not,€it€says€otherÌcodes.€€The€other€suggestion€--€and€I€don't€want€to€loseÌsight€of€the€fact€that€we€have€the€Muldovas,€and€I€canÌunderstand€and€appreciate€all€the€concerns.€€What€if€weÌsaid€--€left€the€language€in€that€says,€"or€any€serviceÌthe€charge€for€which€is€tariffed€on€an€interstateÌbasis"?ÌÇ€€€€€€€€MS.€HARRINGTON:€€That's€in€2.Ì€€€€€€€€MR.€TAYLOR:€€That€takes€care€of€allÌdomestic-dialed€calls,€it€leaves€the€internationalÌincluded.Ì€€€€€€€€MS.€WILLIAMS:€€I€think€it€needs€to€include,€too,Ìthat€you€can€reach€it€through€your€picked€carrier.€€IÌthink€some€interstate€services€require€that€you€goÌaround€your€picked€carrier€to€get€to€them.€€You€mightÌcall€it€on€a€local€number€and€they€require€a€call€backÌof€some€kind€or€they€require€something€else€to€get€youÌon€their€network€to€use€their€service,€then€it's€theirÌtariffed€rate,€but€--€and€it's€their€interstate€tariffedÌrate,€but€you€are€not€on€your€AT&T€or€your€Sprint€orÌyour€MCI€plan€anymore.€€Sorry,€Don,€sorry€to€keepÌleaving€you€out.Ì€€€€€€€€MR.€TAYLOR:€€I€just€have€one€other€point,€andÌthat€is€that€failing€that,€I€think€Kim's€raised€a€goodÌpoint,€but€failing€that,€I€think€even€the€mom€and€appleÌpie€local€exchange€directory€services€would€seem€to€beÌincluded,€except€that€there€is€an€exception,€and€I€thinkÌmaybe€the€way€to€deal€with€what€we're€talking€about€isÌthrough€an€exception,€if€you€don't€like€anything€I€haveÌsaid€so€far.Ì€€€€€€€€MS.€HARRINGTON:€€We€are€going€to€go€to€Ian€andÌthen€come€back€to€Jill.ÌÇ€€€€€€€€MR.€EISENBERG:€€Southwestern€Bell€is€right€onÌtarget€about€being€able€to€make€the€call€on€your€pickedÌcarrier.€€The€de€minimis€test,€what€we€tried€to€do€withÌthat,€is€to€force€--€you€can't€say€you€have€to€use€yourÌpicked€carrier.€€We€have€all€gotten€things€in€the€mailÌfor€dial-around€service,€little€stickers€to€put€on€yourÌphone.€€It's€an€industrywide€marketing€practice€now€forÌdial-around€long€distance€that's€not€using€your€pickedÌcarrier.€€You€might€want€to€have€AT&T€for€your€pickedÌcarrier€to€call€your€cousin€in€England,€but€you€mightÌwant€to€use€dial-around€to€call€your€friend€out€ofÌstate.Ì€€€€€€€€But€the€de€minimis€test€does€solve€what€you'reÌtrying€to€--€the€same€thing€you're€trying€to€do€withÌforcing€a€person€to€use€a€picked€carrier.€€You€wouldn'tÌbe€able€--€with€a€de€minimis€test,€you€wouldn't€be€ableÌhave€services€any€more€like€collect€call-back,€where€youÌcall€on€an€800€line€or€POTS€line€and€they€call€you€backÌcollect€at€four€times€the€normal€tariffed€rate.Ì€€€€€€€€MS.€WILLIAMS:€€That€would€be€great.Ì€€€€€€€€MR.€EISENBERG:€€In€our€proposal,€it€solves€a€lotÌof€these€problems€that€we€are€trying€to€get€at.€€YouÌknow,€as€an€industry€who€tries€to€self-regulateÌourselves,€we€tackle€and€deal€with€the€same€problems€youÌare.€€We€know€there€are€rogues€out€there€that€haveÌÇservices€that€may€be€in€the€gray€area,€probably€aren'tÌdefinitely€against€the€FTC€rules,€but€they€areÌdefinitely€deceptive.Ì€€€€€€€€Like€Muldova€is€a€great€example,€it€isÌdefinitely€deceptive.€€There€are€no€preambles,€noÌadvertising€disclosures,€clearly€deceptive,€and€we€haveÌtackled€all€these€issues,€and€the€only€thing€we€came€upÌwith€is€if€you€are€charging€more€than€--€if€the€IP€isÌdetermining€cost,€and€by€having€a€collect€call-back€orÌredirect€or€instant€calling€card,€the€IP€is€determiningÌthe€cost.€€So,€it's€not€a€normal€collect€call€from€NewÌYork€to€LA;€it's€a€collect€call€that's€being€charged€atÌfive€times€the€rate.Ì€€€€€€€€I€think€that€our€proposal€does€a€pretty€good€jobÌof€that,€and€by€limiting€POTS€information€services€toÌthe€48€states€or€50€states,€I'm€not€sure€how€you€canÌexclude€industry€from€competing€outside€the€U.S.,€inÌCanada.€€I€mean,€I€live€in€Seattle,€and€you€have€a€lotÌof€companies€that€do€business€back€and€forth€betweenÌSeattle€and€Vancouver€with€information€lines€going€backÌand€forth.€€It's€fairly€common.€€We€have€TV€stationsÌthat€go€to€Seattle€and€Vancouver,€the€same€stations,€andÌit€just€kind€of€worries€me€that€in€the€global€economyÌwhich€we€have€today€that€we€try€to€limit€ourselves€toÌexcluding€the€rest€of€the€world€from€participating€inÌÇthe€information€age.Ì€€€€€€€€MS.€HARRINGTON:€€Jill?Ì€€€€€€€€MS.€SANDFORD:€€I€think€in€taking€a€look€at€thisÌissue,€this€definition€seems€to€raise€even€moreÌquestions€than€we€had€initially€thought€when€weÌsubmitted€our€comments.€€One€of€the€problems€I€have,Ìthough,€with€Ian's€proposal€is€I'm€still€not€satisfiedÌthat€we€can€deal€with€the€Muldova€situation,€and€MarkÌmade€this€point,€that€what€if€the€IP€is€not€setting€theÌrates€and€it's€set€by€the€settlement€agreements?€€WeÌreally€would€be€failing€to€address€a€problem€that€weÌidentified€in€coming€here€today.Ì€€€€€€€€In€our€comments,€we€took€a€stab,€instead€ofÌfocusing€on€the€financial€aspects€of€it,€we€took€anÌapproach€at€the€type€of€conduct€and€not€the€tariff€orÌthe€provider.€€What€our€definition€--€we€looked€at€twoÌsalient€characteristics.€€One€was€the€purported€sale€ofÌgoods€or€services€is€accomplished€by€completing€aÌtelephone€call€to€a€particular€telephone€number€andÌpayment€is€combined€with€the€cost€of€the€transmission€ofÌthe€telephone€call.Ì€€€€€€€€I€have€been€listening€this€morning€to€many€ofÌthe€concerns,€and€government€and€universities€have€beenÌoffered€as€examples€of€where€this€may€beÌover-encompassing.€€I€don't€see€why€certain€entities€canÌÇbe€excluded,€including€government€entities€andÌuniversities,€and€how€we€could€address€thoseÌover-reaching€concerns€by€exempting€those€particularÌentities,€the€way€the€rule€already€exempts€the€directoryÌservices.Ì€€€€€€€€MR.€HILE:€€Joel?Ì€€€€€€€€MR.€DICHTER:€€First€of€all,€on€the€definitionÌthing,€on€the€suggestion€of€limiting€it€to€interstate,€IÌthink€I€should€point€out€that€in€the€Telecom€Act€of€'96,Ìthat€language€concerning€"or€any€service€the€charge€forÌwhich€is€tariffed,"€was€removed€from€the€statute,€andÌthat€was€done€for€a€specific€reason,€and€that€was€to€getÌat€companies€from€filing€tariffs€with€exorbitant€chargesÌthat€would€then€be€the€basis€--€to€bring€it€back€to€whatÌthe€intent€of€Congress€was,€was€to€target€this€towardsÌpremium-based€rates€and€services,€not€at€services€forÌwhich€you€pay€the€normal€transport€rate,€and€I€thinkÌthat€theme€carries€forward€here.Ì€€€€€€€€I€think€when€you€start€trying€to€talk€aboutÌcarving€out€exceptions€for€universities€or€for€companiesÌyou€like€or€don't€like,€you€like€the€content,€you€don'tÌlike€the€content,€then€we€also€have€First€AmendmentÌissues€we€have€to€be€concerned€about€and€discriminationÌramifications€that€one€has€to€consider,€as€well.€€So,€IÌthink€it's€a€very€dangerous€road€to€start€going€downÌÇthat€path.Ì€€€€€€€€For€example,€if€you€carved€out€simplyÌuniversities,€you€could€--€you€would€cut€into€situationsÌlike€Apple€Computers€that€has€a€help€line,€anÌinformation€line€that€is€a€POTS-type€service€where€youÌcall€up€on€a€regular€phone€number.€€In€that€type€ofÌsituation,€they€have€TSAA€arrangements,€they€have€otherÌarrangements€where€they€for€generating€traffic€receiveÌdiscounts€and€stuff.€€So,€it's€not€an€easy€situation.Ì€€€€€€€€I€think€what€you€are€really€looking€at€and€IÌthink€what€Congress€was€looking€at€in€expanding€aÌdefinition€was€to€try€and€find€ways€where€thoseÌpremium-type€services€were€escaping€the€rules€and€tryingÌto€bring€them€back€in.€€I€don't€think€it€was€a€situationÌwhere€they€said€where€you€make€the€call€from€one€placeÌto€another,€and€when€you€are€calling€your€family,€youÌare€calling€an€information€service,€if€those€rates€areÌthe€same,€now€we€should€somehow€rope€that€in€to€theÌdefinition.€€I€do€not€believe€that€was€the€--€you€canÌread€that€into€the€congressional€language.Ì€€€€€€€€I€think€what€you€do€have,€though,€and€you€canÌhave€and€the€FTC€has€done€numerous€times,€I€have€CFRs,ÌCode€of€Federal€Registers€this€long,€and€it's€gotÌguidelines€for€particular€industries€on€ways€to€conformÌitself,€and€those€guidelines€provide€guidance€to€thoseÌÇindustries€on€ways€to€respond€and€ways€to€advertise,Ìways€to€deal€with€various€issues.€€I€think€certainlyÌthat€can€be€done€here,€because€the€FTC,€as€it€has€doneÌin€the€Muldova€incident,€has€enforcement€powers.€€It€hasÌinstances€--€but€I€think€you€will€find€that€if€you€layÌout€ground€rules€for€an€industry€to€follow,€that€you€--Ìthose€incidents€will€be€far€and€few€and€in€between.ÌPeople€will€try€and€comply,€and€where€they€don't,€you€doÌand€will€have€enforcement€powers,€rather€than€putting€inÌplace€provisions€that€prohibit€innovation,€prohibit€useÌof€new€technologies€in€unforeseen€circumstances.Ì€€€€€€€€MR.€HILE:€€Don?Ì€€€€€€€€MR.€KLUG:€€I€think€the€ISA€de€minimis€test€makesÌa€lot€of€sense.€€That€raises€the€question,€though,€howÌdo€you€take€care€of€international€pay-per-call€whereÌthere€is€no€premium€charge?€€And€I€would€suggest€that€inÌthe€FTC€--€and€one€of€the€questions€is€what€are€theÌconsequences€of€restricting€pay-per-call€to€specificÌdialing€patterns.€€I€think€that€the€needs€of€theÌindustry€can€be€accomplished€by€restricting€pay-per-callÌto€the€900€and€800€exchanges€as€provided€in€the€TelecomÌAct€of€'96.€€International€calls€could€be€handledÌthrough€a€900€gateway,€as€they€are€today€in€someÌsituations.Ì€€€€€€€€MR.€HILE:€€Is€that€true?€€Can€900€numbers€beÌÇinternational?Ì€€€€€€€€MR.€KLUG:€€There€is€no€restriction€to€placing€aÌ900€call€and€terminating€it€at€an€internationalÌlocation.Ì€€€€€€€€MR.€BOLIN:€€It€could€only€be€usedÌinternationally€if€the€terminating€PTT€would€agree€toÌassist€in€providing€things€like€free€preambles€and€soÌon.€€Otherwise,€it€would€just€be€an€ordinaryÌinternational€call,€and€I€actually€learned€this€morningÌfrom€one€of€our€international€guys€on€a€phone€call,€andÌall€I€know€is€what€I€learned€this€morning,€but€the€ITUÌis€apparently€currently€working€on€an€internationalÌpay-per-call€arrangement,€pick€an€extension,€899,€999,Ìsomething€like€that,€and€they€would€get€IPs€to€agree€toÌpreambles€and€so€on,€and€it€is€in€the€FCC's€bailiwick,Ìbut€it€is€being€considered.€€Absent€that€kind€ofÌagreement,€there€is€no€way€to€offer€the€900€consumerÌprotection€as€it€exists€now€on€international€calls.Ì€€€€€€€€MR.€KLUG:€€I€respectfully€disagree,€Jim.€€WhyÌcouldn't€you€terminate€a€900€call€in€a€U.S.€gateway€andÌprovide€all€the€preamble€protection€and€then€originateÌoff€the€back€side?Ì€€€€€€€€MR.€BOLIN:€€It€is€technologically€possible,€andÌit€would€cost€a€fortunate,€and€it€would€have€to€be€setÌup€and€someone€would€have€to€pay€for€it.ÌÇ€€€€€€€€MR.€KLUG:€€I€think€we€need€to€set€the€recordÌstraight.€€It€is€technologically€possible,€but€it€is€theÌforeign€PTT's€decision€to€do€that.€€It€is€an€economicÌdecision€and€not€a€technological€decision.Ì€€€€€€€€MR.€BOLIN:€€I€think€economics€becomes€aÌtechnological€issue.€€It€couldn't€practically€be€done€inÌa€way€to€make€the€service€doable,€in€my€opinion.Ì€€€€€€€€MR.€SHAUB:€€It€is€technically€possible€and€weÌthink€it€is€economically€feasible,€I€agree€with€Don,€butÌit€does€he€--Ì€€€€€€€€MR.€KLUG:€€But€we€are€talking€about€consumerÌprotections,€and€there€was€a€lot€of€discussion€yesterdayÌabout€the€Muldova/Guyana€situation,€where€someone€calls,Ìthey€have€no€idea€where€the€call€is€terminating.€€IÌthink€this€proposal€would€provide€equal€protection€forÌconsumers,€at€the€same€time€a€lot€of€calls€beÌterminated.Ì€€€€€€€€MR.€HILE:€€So,€technologically€there€is€nothingÌthat€would€prevent€forcing€all€pay-per-call€through€theÌ900€dialing€code.€€Is€that€what€I'm€hearing€from€peopleÌwho€know€here?Ì€€€€€€€€MR.€BOLIN:€€That's€not€my€understanding.€€JonÌShaub,€who€is€on€the€900€business€side,€disagrees€withÌme.€€The€international€people€tell€me€and€our€commentsÌstate€not.€€Maybe€AT&T€needs€to€clarify€this€and€submitÌÇsomething€further€for€the€record€now€that€there€is€someÌconfusion.Ì€€€€€€€€MR.€HILE:€€Warren,€you€were€just€very€eager€toÌsay€something.Ì€€€€€€€€MR.€MILLER:€€Well,€the€--€it€can€and€it€has€beenÌdone,€and,€in€fact,€more€of€it€is€going€on.€€We€--€twoÌ--€when€Windows€95€was€introduced,€a€company€calledÌStream€International,€which€makes€software€add-ons,Ìwanted€to€provide€a€customer€support€line€for€thatÌapplication,€and€they€wanted€to€use€900€for€it,€but€theyÌdidn't€want€to€bring€support€people€into€the€UnitedÌStates.€€So,€we€just€took€the€900€call€and€sent€it€toÌEngland.Ì€€€€€€€€Now€--€of€course,€it€was€expensive,€and€the€--Ìthe€people€in€the€United€States€that€called€the€numberÌwere€protected.€€They€got€appropriate€disclosures.€€WhatÌDon€and€I€both€learned€at€breakfast€this€morning€is€moreÌand€more€people€are€using€off-shore€terminations€for€theÌeconomies€of€scale,€and€in€--€and€these€--€those€sameÌdiscount€rates€that€we€talked€about€being€reduced€whenÌthe€transfer€payment€rates€are€renegotiated,€they€areÌstill€--€there€are€plenty€of€people€doing€it.Ì€€€€€€€€There€is€--€whether€or€not€--€that's€theirÌbusiness,€whether€they€are€making€any€money€or€not,€butÌit€certainly€can€be€done,€and€the€protections€areÌÇoffered€in€the€United€States€if€they€give€the€preamble.Ì€€€€€€€€MR.€HILE:€€We€have€three€staff€here€that€haveÌquestions.€€Do€they€carry€us€into€different€areas€or€toÌclarify€where€we€are?Ì€€€€€€€€MR.€HERTZENDORF:€€Mine€does€not€carry€us€into€aÌdifferent€area.€€I€just€wanted€to€make€the€point€thatÌeven€if€hypothetically€all€pay-per-call€could€be€forcedÌon€a€900€number€prefix,€dialing€pattern,€that€doesn't€inÌany€way€remove€our€need€to€come€up€with€a€definition€ofÌpay-per-call,€because€we€want€to€know€whether€someone€isÌusing€their€own€prefix€and€throwing€out€the€definition.Ì€€€€€€€€MR.€HILE:€€Marianne?Ì€€€€€€€€MS.€SCHWANKE:€€I€would€just€like€Dave€or€Jill€toÌelaborate€a€little€further€on€their€proposedÌdefinition.€€You€indicate€that€you€would€propose€thatÌone€of€the€characteristics€is€that€there€is€a€chargeÌincluded€with€the€charge€for€transmission€of€the€call.ÌCan€you€explain€whether€that€means€that€there€is€somehowÌa€charge€greater€than€the€transmission€or€how€you€wouldÌdetermine€whether€there€was€a€charge€included€in€theÌcharge€for€transmission?Ì€€€€€€€€MR.€GILLIS:€€We€prepared€the€proposed€definitionÌthat€appears€in€our€comments€based€on€the€informationÌthat€we€have€obtained€in€enforcement€actions€againstÌsome€inter€--€against€an€international€pay-per-callÌÇservice€that€was€advertising€a€job€line€from€theÌDominican€Republic€and€charging€normal€internationalÌrates,€but€the€PP€--€PTT€--€the€foreign€phone€companyÌwas€kicking€back,€according€to€one€report,€$800,000€--Ì$800,000,€I€believe€it€was€a€month,€to€the€pay-per-callÌprovider.Ì€€€€€€€€Our€view€was€that€in€that€situation,€theÌpay-per-call€provider€clearly€had€an€incentive€to€putÌout€deceptive€ads€to€get€people€to€call€about€localÌemployment€opportunities€and€call€the€DominicanÌRepublic.€€We€--€when€we€prepared€the€definition,€I€wasÌnot€familiar€with€the€arrangement€that€--€we€were€notÌfamiliar€with€the€arrangement€that€AT&T€has€advancedÌrelating€to€discounts€on€access€charges€where€theyÌterminate€calls€to€a€university.Ì€€€€€€€€So,€how€you€distinguish€between€the€two€in€theÌcontext€of€that€--€of€a€definition€is€extremelyÌdifficult,€as€we're€finding€today.€€The€problem€withÌhinging€the€definition€on€the€deceptive€--€on€whether€orÌnot€the€ad€is€deceptive,€as€I€seem€to€hear€from€that€endÌof€the€table,€is€that€no€information€provider€is€goingÌto€regard€their€ad€as€deceptive.€€Every€case€that€I'veÌbrought,€I€have€received€an€explanation,€most€everyÌcase,€from€the€advertiser€how€their€ad€is€literally€trueÌand€nondeceptive,€no€matter€how€egregious€it€is.€€So,ÌÇthat's€--€that€type€of€approach€isn't€going€to€work.Ì€€€€€€€€The€--€the€approach€advanced€by€AT&T,€I€think,Ìoffers€some€merit,€because€it€looks€to€the€marketplace,Ìit€tries€to€compare€the€pay-per-call€service€andÌdistinguish€that€from€a€service€that€people€consider€toÌbe€consistent€with€ordinary€usage.€€And€after€all,€oneÌof€the€real€problems€with€pay-per-call€complaints,€oneÌof€the€reasons€that€these€complaints€come€to€attorneysÌgenerals'€offices€is€that€typically€they€involveÌextremely€high€charges,€and€people€don't€expect€theseÌcharges€when€they€use€the€phone.Ì€€€€€€€€Now,€the€difficulty€in€keying€the€definition€toÌprice€is€--€especially€in€this€market,€is€a€realÌproblem,€because€the€market€is€changing,€and€it'sÌchanging€very€quickly.€€I€don't€think,€though,€thatÌthese€problems€should€stop€us€from€trying€to€implementÌwhat€Congress€has€asked€the€Commission€to€do,€because€weÌhave€seen€and€continue€to€see€real€problems€associatedÌwith€international€dialing€patterns€concerningÌpay-per-call€services,€and€these€are€--€result€from€adsÌthat€are€placed€in€the€--€in€the€marketplace,€in€theÌUnited€States,€and€people€are€responding€to€those,€andÌwe€clearly€have€jurisdiction€to€deal€with€those€--€theÌCommission€clearly€has€jurisdiction€to€deal€with€thoseÌissues.ÌÇ€€€€€€€€So,€generally€speaking,€if€we€look€at€theÌdefinition€that€the€attorneys€general€proposed,€it€wasÌan€attempt€to€focus€on€what's€being€offered€by€aÌpay-per-call€service€and€the€financial€gain€that€isÌobtained€from€the€provider.€€I€think€as€it's€currentlyÌset€out,€it€would€include€the€situation€that€AT&TÌpresented€in€its€comments,€and€I€don't€have€a€solutionÌfor€you€right€now€in€how€to€distinguish€it€other€thanÌworking€with€--€I€think€the€idea€of€a€presumption€is€oneÌthat€would€work€at€least€if€you€were€enforcing€it,Ìbecause€I'm€confident€in€the€case€that€we€had€where€weÌwere€dealing€with€a€work-at-home€scheme,€we€could€showÌclearly€that€the€payments€being€made€to€the€providerÌwere€not€consistent€to€standard€arrangements€that€AT&TÌhad€with€others.Ì€€€€€€€€Now,€maybe€that€--€maybe€they€would€beÌconsistent€with€the€arrangements€that€the€DominicanÌRepublic€phone€company€had€with€other€--€I'm€not€certainÌof€that.€€So,€it€presents€real€proof€problems€down€theÌline,€but€that's€the€background€of€the€--€of€theÌdefinition€that€the€attorneys€general€proposed€in€ourÌcomments.Ì€€€€€€€€MR.€HILE:€€Adam?Ì€€€€€€€€MR.€COHN:€€I€have€a€--€I€have€two€questions.ÌOne€is€to€sort€of€follow€up€on€a€question€I€askedÌÇearlier€in€the€context€of€this€rebuttable€presumptionÌidea€raised€by€AT&T.€€Would€a€rebuttable€presumption€--Ìpresumption€of€pay-per-call€rebuttable€by€proving€thatÌthe€payments€were€under€a€certain€threshold,€would€thatÌbe€a€workable€solution?Ì€€€€€€€€And€the€other€question€that€I€had€was€--€alsoÌit's€raised€in€the€agenda,€which€is€what€are€theÌconsequences,€excuse€me,€of€expanding€the€definition€ofÌpay-per-call€to€include€the€international€servicesÌwithout€any€corresponding€exceptions€for€thoseÌservices?€€And€would€that€create€an€incentive€--€a€banÌon€non-900€services€or€how€would€that€work?Ì€€€€€€€€MR.€HILE:€€You€are€directing€your€question€toÌJim?Ì€€€€€€€€MR.€COHN:€€The€second€question€generally€but€theÌfirst€question€about€the€rebuttable€presumption€toÌAT&T.Ì€€€€€€€€MR.€BOLIN:€€I€think€that€the€threshold€will€notÌwork,€and€I€--€the€agenda€is€--€I€think€it€suggests€thatÌAT&T€suggested€a€5€percent€threshold€was€like€TSAA,€andÌwe€don't€think€that's€right.€€A€couple€of€reasons.Ì€€€€€€€€One,€if€you€have€a€5€percent€threshold,€thenÌthat€effectively€blesses€scams€like€these€access€sideÌpayments.€€What€it€says€is€it's€okay€to€gouge€people€asÌlong€as€it's€only€5€percent.€€I€don't€think€that€makesÌÇgood€sense€just€from€a€common€sense€approach.Ì€€€€€€€€I€also€think€it's€inconsistent€with€Section€228Ìof€the€Telecom€Act.€€Congress€enacted€a€standard€thatÌsays€pay-per-call€if€there€is€a€charge€in€addition€toÌcharge€for€transport.€€Now,€arguably,€a€de€minimisÌstandard€is€within€the€FTC's€enforcement€discretion.ÌYou€could€announce€that€as€a€matter€of€your€discretionÌyou€are€not€going€to€enforce€scams€that€are€only€aÌlittle€bit€gouging€--Ì€€€€€€€€MR.€COHN:€€Section€228€is€also€--€the€new€228Ìhas€a€provision€where€the€FTC€can€revise€the€definitionÌof€pay-per-call€entirely.Ì€€€€€€€€MR.€BOLIN:€€I€agree,€and€I€think€you€have€got€--ÌI€think€you€would€withstand€a€judicial€challenge,€andÌI'm€not€proposing€that€that's€not€the€case,€but€I€thinkÌit's€clear€that€Congress€didn't€want€to€enact€a€standardÌthat€allowed€gouging€in€slight€amounts.€€ReasonableÌminds€may€disagree€about€that,€but€I€think€that's€fairlyÌclear.Ì€€€€€€€€MR.€COHN:€€But€if€a€threshold€was€--€I€see€yourÌpoint,€it's€a€good€point,€but€if€the€threshold€was€belowÌa€certain€amount,€presumably€people€would€not€use€themÌfor€those€frauds€anymore,€because€they€couldn't€make€aÌprofit.€€Would€this€threshold€basically€--€I'm€askingÌbasically€would€it€preserve€the€ability€of€universitiesÌÇand€governments€to€use€these€TSAA€agreements€but€thenÌtake€away€the€profit€incentive€for€an€IP€to€abuse€them?Ì€€€€€€€€MR.€BOLIN:€€Well,€in€some€cases€TSAAs€couldÌpotentially€exceed€5€percent€of€the€call.€€You€wouldÌhave€to€do€the€math.€€Rates€varies€so€widely€by€time€ofÌday,€by€carrier,€it€is€awfully€hard€to€say€is€oneÌproblem.Ì€€€€€€€€I€think€a€second€problem€is€don't€assume€5Ìpercent€isn't€enough€incentive.€€If€you€have€someoneÌterminating€a€few€million€minutes€at€25€cents€a€minute,Ìa€million€here,€a€million€there,€pretty€soon€you€areÌtalking€real€money,€as€Will€Rogers€said.€€I€think€5Ìpercent€of€AT&T's€long€distance€revenue€for€a€year€is€aÌcouple€million€dollars,€and€that's€not€peanuts€inÌanybody's€book.Ì€€€€€€€€I€think€the€other€issue€that€you€are€going€toÌhave€with€a€threshold€requirement€is€threshold€based€onÌwhat?€€Every€caller€that€calls€potentially€has€aÌdifferent€rate.€€They€are€going€to€have€a€different€rateÌthrough€their€picked€carrier,€it's€going€to€vary€withÌtime€of€day,€it's€going€to€vary€according€to€whether€orÌnot€they€are€using€a€dial-around€scheme.Ì€€€€€€€€MR.€COHN:€€A€threshold€for€the€amount€of€moneyÌthat€an€IP€makes€per€minute.Ì€€€€€€€€MR.€BOLIN:€€An€absolute€5€percent€threshold?ÌÇ€€€€€€€€MR.€COHN:€€I€don't€have€a€specific€number€inÌmind,€but€would€a€threshold€work€conceivably?Ì€€€€€€€€MR.€BOLIN:€€I€don't€know,€again,€that€that€wouldÌexclude€all€TSAA€arrangements.€€In€some€areas€whereÌaccess€charges€are€high,€it€would€not.€€I€am€not€atÌliberty€to€discuss€specific€TSAA€contracts€with€ourÌcustomers€in€any€event.€€I€also€think€that,€again,€toÌsuggest€5€cents€a€minute€or€10€cents€a€minute,€CongressÌasked€the€FTC€to€revisit€this,€true,€but€I€just€don'tÌsee€anything€in€the€legislative€history€or€in€the€textÌof€the€statute€to€say€that€Congress€wanted€to€createÌthat€kind€of€threshold€above€and€beyond€the€$2€or€$3Ìlimit€that's€in€place€now€for€nominal€cost€calling.€€IfÌwe€left€the€table€today€with€a€5€cent€limit€on€whatÌcharges€could€be€in€terms€of€kick-backs,€then€I€don'tÌthink€AT&T€would€be€too€unhappy€with€that,€but€I€don'tÌthink€it€would€be€consistent€with€Congress'€intentÌhere.Ì€€€€€€€€On€the€international€side,€maybe€I'm€wrong€aboutÌtechnological€issues,€that's€not€what€I€was€told€comingÌinto€the€meeting,€but€I€think€that€the€consequence€ofÌexpanding€pay-per-call€to€international,€if€the€FTCÌcrafted€a€rule€that€said€that€side€payments€were€illegalÌfrom€a€foreign€PTT,€that€would€potentially€put€AT&T€andÌother€interexchange€carriers€in€a€terrible€bind€in€thisÌÇrespect.€€If€a€rule€were€crafted€that€said€that€it'sÌpay-per-call€and€it's€illegal€to€make€these€sideÌpayments,€AT&T€is€bound€under€47€USC€Section€228€not€toÌenter€into€arrangements€that€violate€TDDRA€and€violateÌFTC€regs.€€So,€we€would€be€in€a€situation€where€if€weÌhad€terminating€minutes€or€a€foreign€PTT€were€sharingÌrevenue,€we€arguably€would€be€forbidden€from€makingÌthose€settlement€payments.Ì€€€€€€€€MR.€HILE:€€Jim,€it€is€unlikely€that€that€wouldÌhappen.€€The€more€likely€scenario€would€be€that€the€FTCÌwould€say€this€falls€under€pay-per-call,€not€that€it'sÌillegal.Ì€€€€€€€€MR.€BOLIN:€€What€do€we€do€when€we€have€sixÌmonths€of€terminating€minutes€in€Muldova,€we€find€outÌside€payments€were€being€made?€€If€AT&T€could€beÌpermitted€to€make€the€settlement€payments€or€ordered€notÌto€make€the€settlement€payments€but€then€we€could€avoidÌthe€international€incident€that's€going€to€result,€thatÌwould€be€fine,€but€I€worry€that€you€are€going€to€putÌinterexchange€carriers€in€a€bind,€where€they€are€goingÌto€violate€the€law€if€they€make€settlement€payments€butÌthey€are€going€to€have€a€problem€if€they€don't€makeÌsettlement€payments,€that's€my€concern,€and€I€think€thatÌto€the€extent€that€we€want€to€start€talking€aboutÌsettlement€payment€regimes,€it's€critical€that€the€FTCÌÇand€FCC€coordinate€their€efforts,€because€I€think€that'sÌa€real€potential€for€creating€a€double€line€for€theÌcarriers.Ì€€€€€€€€MR.€COHN:€€Would€those€payments€be€illegal€ifÌthey€were€included€in€the€definition€of€pay-per-callÌnecessarily,€or€would€it€mean€that€people€who€use€themÌhave€to€comply€with€all€the€aspects€of€TDDRA?€€I€mean,Ìhow€would€that€put€AT&T€in€a€bind€if€an€IP€wasn'tÌproviding€--€and€we€know€that€some€of€those€provisionsÌof€TDDRA€probably€are€not€technologically€possible€toÌprovide,€but€how€would€that€put€AT&T€in€a€bind€ratherÌthan€the€IP?Ì€€€€€€€€MR.€BOLIN:€€The€situation€I'm€envisioning€is€oneÌwhere€four€or€six€months€into€operation€of€an€ordinaryÌPOTS€number,€AT&T€learns€that€that€POTS€number€is€beingÌused€to€make€these€side€payments€from€a€foreign€PTT.ÌWhen€it€comes€time€to€make€settlement€payments,€AT&TÌthen€has€a€situation€where€this€was€an€illegallyÌoperated€pay-per-call€scheme€if€it€wasn't€being€offeredÌover€whatever€the€designated€international€pay-per-callÌSAC€was.Ì€€€€€€€€So,€if€AT&T€makes€the€settlement€payment,€it€isÌparticipating€illegally,€depending€on€the€regs,€in€anÌillegal€pay-per-call€scam.€€If€it€doesn't€make€theÌpayments,€we€have€a€hornet's€nest€of€issues€if€--€isÌÇthat€clear?€€Maybe€I€misunderstand€the€question.Ì€€€€€€€€MR.€COHN:€€Maybe€it€is€a€misunderstanding,Ìbecause€I€was€suggesting€that€there€would€not€be€aÌrequired€--€a€required€SAC€but€rather€that€this€would€beÌincluded€in€the€definition€of€pay-per-call€and€theÌobligations€would€be€on€the€IP€and€the€other€parties€toÌuse€proper€advertising.€€So,€the€arrangement€--Ì€€€€€€€€MR.€BOLIN:€€The€arrangement€would€have€to€beÌ900,€wouldn't€it?Ì€€€€€€€€MR.€HILE:€€We€changed€that.€€That's€what€we€wereÌtalking€about.Ì€€€€€€€€MR.€COHN:€€No,€it€would€not€be€required.ÌTypically€it€would€not€be€required€to€be€under€900€butÌjust€that€any€payment,€you€know,€such€as€the€MuldovaÌpayment€system€would€be€included€in€pay-per-call€andÌwould€require€the€preambles€and€require€all€the€otherÌthings.€€Whether€or€not€those€are€provided€is€anotherÌissue,€but€how€would€that€affect€AT&T?Ì€€€€€€€€MR.€BOLIN:€€That€takes€us€back€to€the€sameÌissue.€€If€we€remove€the€SAC€concern,€assume€we€had€aÌPOTS€number€that€wasn't€offering€preambles.€€We€have€gotÌthe€same€situation.€€Four€months€in,€if€we€find€out€thisÌhas€been€going€on,€are€we€prohibited€from€makingÌsettlement€payments€then€or€not?€€If€we€make€settlementÌpayments,€are€we€participating€in€the€scam?€€Does€thatÌÇmake€sense?Ì€€€€€€€€MR.€HILE:€€Jim,€you€still€have€your€thing€up.ÌDid€you€have€other€points?Ì€€€€€€€€MR.€BOLIN:€€I€think€that€takes€care€of€it,Ìthanks.Ì€€€€€€€€MR.€HERTZENDORF:€€Couldn't€these€issues€beÌhandled€by€your€contract€negotiations€with€the€foreignÌcarriers?€€You€sign€a€contract€that€says€--€and€then€ifÌwe€find€out€six€months€later€that€this€number€wasÌoperated€in€violation€of€FTC€rules,€we€are€not€going€toÌdeal?Ì€€€€€€€€MR.€BOLIN:€€I€do€not€do€international,€so€youÌare€taking€me€fairly€far€afield,€but€my€understanding€ofÌthose€negotiations,€they€are€hardly€negotiations€betweenÌequals.€€Foreign€PTTs€in€almost€every€case€areÌmonopolies.€€That's€one€reason€settlement€rates€forÌcalls€in€bound€to€the€U.S.€are€so€much€lower€than€forÌcalls€terminating€--€maybe€I€have€got€that€backwards.ÌAt€any€rate,€there€is€a€settlement€rate€disparity€in€aÌlot€of€cases.Ì€€€€€€€€I€mean,€the€reason€pay-per-call€scams€are€beingÌset€up€in€places€like€Sao€Tome€is€because€of€settlementÌrate€disparities.€€If€it€were€as€easy€as€--€if€contractÌnegotiations€would€fix€that,€it€would€have€been€fixed€aÌlong€time€ago.€€There€are€a€number€of€issues€that€enterÌÇinto€these,€and€in€some€reasons€intergovernmentalÌrelations,€as€well,€because€many€of€these€foreign€PTTsÌare€actually€state€entities,€and€a€lot€of€smallÌcountries€are€using€PTT€revenues€to€fund€their€telephoneÌutilities.Ì€€€€€€€€So,€it's€not€as€simple€as€that.€€I€wish€itÌwere.€€The€FCC€is€trying€to€drive€it€towards€a€moreÌcommercially€reasonable€kind€of€scheme,€but€that's€onÌongoing€process.€€It's€not€going€to€happen€immediately.Ì€€€€€€€€MR.€HILE:€€Todd,€you€have€had€your€tent€up€forÌquite€a€while.Ì€€€€€€€€MR.€LESSER:€€I'm€Todd€lesser€from€the€TSIA,€andÌI€think€we€need€to€look€at€this€from€an€overall€scope€ofÌwhat€the€problem€is,€and€I€think€initially€we€need€toÌlook€at€where€the€attorney€generals,€where€the€FCC€andÌwhere€the€FTC€are€getting€complaints,€and€I€think€partÌof€what€we€touched€on€yesterday€is€that€there€areÌservices€like€800€redirect,€where€calls€are€being€placedÌon€the€bills€that€people€think€are€direct-dial€calls,Ìwhich€truly€are€not.Ì€€€€€€€€I€think€we€can€set€up€some€guidelines€that€stopÌservices€like€that€and€require€a€presubscription.€€So,Ìyou€know,€when€an€attorney€general€has€a€problem€or,€youÌknow,€a€person€at€a€convalescent€hospital,€someone€walksÌup€to€their€phone,€uses€their€phone€for€five€minutes€andÌÇsets€up€a€calling€card,€well,€things€like€that€--€andÌthen€they€go€and€use€phones€elsewhere,€there's€aÌproblem.€€And€then€the€calls€show€up€as€direct€dialed.ÌThe€attorney€generals€don't€know€how€that€call€wasÌreally€made,€and€I€think€we€can€adjust€things€to€stopÌthings€like€that.Ì€€€€€€€€But€--Ì€€€€€€€€MR.€HILE:€€How?Ì€€€€€€€€MR.€LESSER:€€How?Ì€€€€€€€€MR.€HILE:€€How?Ì€€€€€€€€MR.€LESSER:€€Okay,€I'm€glad€you€mentioned€that.ÌBasically€when€we€set€up€--€when€you€set€up€an€800Ìcalling€card€that's€used€for€information-type€services,Ìyou€can€require€a€pre€--€a€written€presubscriptionÌagreement.€€That€would€stop€something€like€that,€youÌknow,€where€the€difference€is€someone€does€not€sit€onÌthe€phone€for€five€hours€in€this€lady's€room€and€makeÌthe€phone€calls.€€You€know,€I€know€that€the€attorneyÌgenerals€are€getting€complaints€as€far€as€a€house€sitterÌcoming€in€and€making€all€these€long€distance€calls€orÌthese€clip-on€frauds.Ì€€€€€€€€Well,€the€thing€is€I€think€we€need€to€look€outÌfor€something€like€that,€but€that€is€not€specificallyÌjust€for€information-type€calls.€€You€know,€I€can€goÌinto€your€house€and€make€phone€calls€to€my€girlfriend€inÌÇLondon€or€I€can€call€New€York.€€I€can€steal€your€TV.€€IÌcan€use€your€power.€€Now,€those€are€different€criminalÌproblems€that€are€not€specific€to€our€industry.€€So,Ìsetting€up€specific€guidelines€for€just€our€industryÌdoesn't€seem€appropriate€where€existing€laws€cover€fraudÌor€cover€theft€of€service.Ì€€€€€€€€And,€you€know,€trying€to€make€informationÌproviders€responsible€for€that,€that€seems€like€going€toÌSony€TV€and€saying,€Look,€this€person's€Sony€TV€wasÌstolen,€you€have€to€replace€it,€or€going€to€Circuit€CityÌand€saying€he€bought€the€TV€at€Sony,€so€you€have€toÌreplace€it.€€But€I€think€the€thing€we€need€to€look€atÌhere€is€over€5€million€information-type€calls€are€madeÌto€the€international€market€every€month.€€The€attorneyÌgenerals,€the€FCC,€are€not€getting€that€many€complaintsÌwhen€you€look€at€the€scope€of€that.€€Forcing€somethingÌto€900€would€be€devastating€to€the€industry.Ì€€€€€€€€For€example,€our€company€uses€software€for€ourÌbackup€software€from€a€New€Zealand€company.€€Now,€toÌmake€us€for€tech€support€--€now,€just€as€AT&T€has€TSAAÌagreements€in€the€U.S.,€maybe€the€foreign€PTT€has€a€TSAAÌtype€of€agreement€on€their€end,€and€now€all€of€a€suddenÌyou€look€at€a€situation€here€where€the€U.S.€is€saying,Ìwell,€we€can€do€it,€but€the€foreign€country€can't.Ì€€€€€€€€I€think€what€we€need€to€do€is€when€we're€lookingÌÇat€a€definition,€as€Congress€is€concerned€when€they€--Ìwhen€the€FCC€states€that€Congress€specifically€sought€toÌend€service€arrangements€in€which€the€telephoneÌsubscribers€are€charged€with€high€prices€for€theÌtransmission€of€calls,€and€so€I€think€where€we€put€in€aÌtest,€where€we€say€--€and€this€won't€address€everything,Ìand€that's€why€the€advertising€guidelines€do€--€is€youÌsay€something,€that€you€can€only€charge€reasonable€andÌcustomary€long€distance€charges.€€That€way€you€don'tÌhave€a€$10€charge€per€minute€to€call,€you€know,ÌMuldova.Ì€€€€€€€€You€know,€but€those€issues€are€something€that€IÌthink€is€a€secondary€thing€that€we€need€to€be€concernedÌwith,€and€where€the€attorney€generals€are€sayingÌdeceptive€advertisement,€we€can't€put€in€guidelines€forÌthat,€I€think€we€have€looked€at€every€other€industry,Ìand€you€can€look€at€people€in€prison,€and€what€everybodyÌsays€is€I€didn't€do€anything€wrong.€€So,€to€not€passÌlaws€saying€that€you€don't€allow€deceptiveÌadvertisement,€it's€not€the€IP€or€the€deceptive€personÌwho€is€placing€that€advertisement€that€chooses€theÌcriteria€that's€deceptive,€it's€the€Federal€Government.Ì€€€€€€€€So,€the€Federal€Government€sets€up€guidelines€ofÌwhat€is€deceptive€advertisement,€and€that's€not€my€areaÌof€expertise,€but€there€are€clearly€rules€of€what€theyÌÇconsider€deceptive€advertising,€and€you€stop€those.€€YouÌare€going€to€reduce€problems.Ì€€€€€€€€We€heard€from€Nick€Loader€that€he€said,€youÌknow,€when€you€set€up€guidelines€for€information-typeÌcalls,€as€industry€guidelines,€when€you€have€preambles,Ìit€stopped€complaints€by€70€percent.€€That's€somethingÌthe€FTC€has€control€on,€rather€than€trying€to€sit€thereÌand€say,€okay,€how€much€money€is€being€paid?€€Maybe€AT&TÌcan€afford€to€only€pay€a€penny€a€minute.€€Well,€a€smallÌlong€distance€carrier€does€not€have€the€huge€overhead€ofÌAT&T,€so€they€can€afford€to€pay€a€penny€and€a€half.Ì€€€€€€€€So,€now€we're€sitting€in€here€getting€into€anÌeconomic€issue,€which€is€really€not€the€core€of€theÌproblem.€€The€core€of€the€problem€is€we€have€gotÌdeceptive€people€out€there€placing€deceptive€ads€for€jobÌlines.€€We€have€people€going€and€breaking€into€people'sÌhomes,€that€doesn't€apply,€but€we€have€people€setting€upÌthese€calling€cards.€€Those€are€the€issues€that€we€needÌto€stop,€and€I€think€that€is€going€to€stop€a€lot€ofÌproblems.Ì€€€€€€€€MR.€HILE:€€Okay,€Peter,€you€have€had€your€tentÌup,€and€then€we€will€hear€from€Kim€and€then€Sue.Ì€€€€€€€€MR.€BRENNAN:€€Thank€you€very€much.Ì€€€€€€€€I€would€like€to€circle€back€and€express€a€pointÌabout€a€few€things€that€were€said€this€morning.€€FirstÌÇof€all,€Muldova€keeps€coming€up.€€Six€months€ago,€mostÌof€us€didn't€know€where€Muldova€was.€€The€--€fraud€isÌfraud,€and€it€--€whether€it€occurs€on€the€phone,€on€theÌInternet,€on€the€street€corner,€in€the€nursing€home,Ìwherever,€fraud€is€fraud,€and€we€--€it's€ambitious€toÌexpect€that€we€are€going€to€be€able€to€solve€everyÌcircumstance€of€fraud€today.€€In€fact,€I'm€not€evenÌconvinced€at€this€point€that€it's€a€settled€matter€as€toÌwhether€or€not€fraud€occurred€in€that€case,€but€I€don'tÌthink€that€this€is€the€place€to€dispatch€that€issue.ÌAnd€so€I€think€what€we€need€to€keep€--€we€need€to€keep€aÌlittle€bit€more€of€a€broader€perspective€about€theseÌissues.Ì€€€€€€€€Secondly,€we€have€been€talking€about€accessÌcharges,€and€it€seems€to€be€the€AT&T€position€thatÌaccess€charges€--€that€it's€a€scam€if€it's€done€byÌsomebody€else,€but€it's€not€if€it's€done€by€AT&T,Ìand€I€--€and€I€am€sure€--€I€would€throw€this€in,€thatÌthis€is€not€the€forum€to€settle€the€access€chargeÌissue.€€We€could€sit€here€all€day,€we€could€sit€here€forÌweeks,€and€there€are€other€people€who€are€charged€withÌthat€responsibility,€but€I€don't€think€this€is€the€forumÌto€do€that.Ì€€€€€€€€And€two€final€things.€€First€of€all,€I€am€goingÌto€borrow€the€prerogative€as€the€chair€of€theÌÇInteractive€Services€Association€for€a€minute€to€try€toÌprevent€a€little€bit€--€present€a€little€bit€of€a€visionÌabout€the€global€--€the€global€business€forÌcommunication,€about€the€fact€--€remind€the€table€of€theÌfact€that€we€live€in€an€increasingly€global€marketplaceÌfor€information€and€for€entertainment€services,€andÌthat's€exemplified€by€what's€happening€on€the€Internet,Ìit€is€exemplified€by€what's€happening€in€--€onÌtelevision€and€other€media€and€exemplified€by€telemedia,Ìand€this€is€a€media,€and€it€is€--€I€would€stronglyÌsuggest€and€advocate€that€we€keep€in€mind€a€--€a€visionÌthat€--€that€allows€for€global€communication,€thatÌallows€for€a€vast€and€rich€array€of€informationÌavailable€to€all€customers.Ì€€€€€€€€MR.€HILE:€€How?€€How,€Peter?Ì€€€€€€€€MR.€BRENNAN:€€Well,€let€me€make€some€--€amplifyÌon€some€suggestions.Ì€€€€€€€€The€ISA€has€advocated€the€de€minimis€and€theÌthreshold€idea,€and€it€has€also€advocated€that€theÌstandards€--€the€TDDRA€standards€be€applied€in€thoseÌcases,€for€example,€in€international€calling.Ì€€€€€€€€MR.€COHN:€€It's€a€different€threshold€than€theÌone€we€are€talking€about€before.€€This€is€where€someoneÌpays€an€additional€amount€of€money€over€the€normal€costÌof€the€call€rather€than€a€threshold€for€how€much€is€paidÌÇto€the€IP.Ì€€€€€€€€MR.€BRENNAN:€€Yes,€that's€correct,€that'sÌcorrect.€€And€if€you€look€at€the€various€protections€ofÌthe€TDDRA,€which€have€been€demonstrated€and€would€work,Ìit€seems€to€me€--€it€seems€to€us€that€there€is€reallyÌone€that€is€problematic€in€an€international€callÌenvironment,€and€that's€the€preamble€because€of€someÌtechnological€restrictions.€€And€--€but€cost€disclosuresÌin€advertising,€appropriate€billing€notice€and€billingÌdispute€procedures€are€all€things€which€could€beÌextended€reasonably€to€international€calls€that€meetÌwhatever€standard,€whatever€threshold€is€--€is€applied.Ì€€€€€€€€MR.€HILE:€€Is€it€the€preamble€that's€a€problemÌor€the€free€preamble€that's€a€problem?Ì€€€€€€€€MR.€BRENNAN:€€The€free€preamble€is€a€problem.ÌThe€preamble€can€certainly€be€offered,€and€if€it'sÌoffered€in€the€first€18€seconds,€then€the€damage€is€--Ìis€lessened€still,€but€the€dispute€resolution€and€inÌterms€of€--€in€terms€of€the€issues€that€have€been€raisedÌabout€knowing€what€the€price€is,€about€being€able€toÌadvertise€a€price€and€the€fact€that€various€carriersÌwill€have€various€prices€for€a€call€to€a€foreignÌcountry,€what€we€suggested€is€that€the€language€in€theÌadvertisement,€where€now€you€say€this€call€will€cost€youÌX€per€minute€or€X€per€call,€say€please€dial€00,€and€yourÌÇcarrier€at€that€point€will€tell€you€what€it€costs€you€toÌcall€wherever€you're€calling.Ì€€€€€€€€So,€it's€--€in€that€--€it's€manageable€as€anÌadvertiser,€that€this€an€advertisement.€€And€frankly,€itÌalso€may€serve€to€train€the€public€to€make€the€publicÌincreasingly€aware€of€the€fact€that€--€that€they€canÌfind€--€find€out€what€calls€are€costing€them€--Ìinternational€calls€are€costing€them€or€just€plain€callsÌto€Grandma€in€Sweden,€as€well.€€So,€this€is€not€aÌperfect€--€a€perfect€solution,€but€I€think€that€in€goodÌfaith€it€is€the€best€that€could€be€done,€and€it€has€--Ìwe€acknowledge€that€it€has€some€limitations,€but€to€takeÌother€more€draconian€suggestions€would€seem€to€beÌthrowing€the€baby€out€with€the€bath€water.Ì€€€€€€€€MR.€HILE:€€Kim?Ì€€€€€€€€MS.€WILLIAMS:€€Yes,€first,€a€couple€of€itemsÌfrom€earlier€when€I€talked€about€the€picked€carrierÌversus€--€you€know,€the€issue€was€brought€up€aboutÌ10XXX.€€I€guess€the€better€term€would€be€the€customer'sÌcarrier€of€choice,€then,€whoever€the€customer€wants€toÌuse€versus€making€them€use€a€particular€carrier€I€thinkÌis€the€difference.Ì€€€€€€€€Also,€I€think€someone€felt€like€I€was€excludingÌinternational€from€playing€in€this€game,€and€I'm€not.ÌI'm€saying€if€it€is€going€to€be€on€the€international€andÌÇif€that's€where€the€incentive€exists€to€put€--€to€driveÌthese€services,€then€that's€where€we€need€to€focus€ourÌrules.Ì€€€€€€€€I€am€concerned,€though,€that€Congress'€intent€--Ìand€that's€what€keeps€coming€up€here,€is€what€was€theÌintent€of€Congress.€€I€don't€think€their€intent€wasÌeverybody€to€jump€ship€on€900€and€go€to€international.ÌI€think€pay-per-call€should€be€on€900€unless€there€is€aÌpresubscription€agreement,€and€it€seems€like€that's€whatÌwe€should€be€trying€to€focus€on,€is€getting€this€stuffÌoff€of€international€if€we€can't€clean€it€up.Ì€€€€€€€€If€we€do€find€a€way€to€clean€it€up,€it€will€justÌgo€somewhere€else€next,€and€it€takes€three€years€ofÌproblems€and€everybody€has€made€all€their€money€off€ofÌall€these€consumers€before€we€get€it€fixed€and€drive€itÌback€to€something€else.Ì€€€€€€€€So,€I€think€the€concern€needs€to€be€with€who,Ìright€or€wrong,€just€may€not€understand€what€$5€bucks€aÌminute€really€adds€up€to€when€they€make€these€calls,Ìand,€you€know,€I€know€that€puts€a€lot€on,€you€know,€onÌthe€people€who€are€providing€these€services,€because€itÌhappens€with€900,€also,€but€a€consumer€doesn't€alwaysÌunderstand€how€much€that's€going€to€add€up€to€until€theyÌget€their€phone€bill.Ì€€€€€€€€MR.€HILE:€€Sue€Grant?ÌÇ€€€€€€€€MS.€GRANT:€€That€was€my€concern,€as€well.€€WeÌhave€to€go€back€to€the€original€intent€of€the€law,€whichÌwas€to€make€sure€that€consumers€understood€how€much€theyÌwere€going€to€pay€for€these€calls€before€they€incurredÌany€charges,€and€the€reason€why€we€have€the€doubleÌprotection€both€in€the€advertising€and€the€free€preambleÌis€to€make€certain€that€people€know€how€much€theseÌcharges€are€going€to€be.Ì€€€€€€€€I'm€wondering€if€we€can€get€some€more€technicalÌinformation€about€the€international€calls.€€Yesterday,Ìwe€learned,€I€think,€if€I'm€remembering€it€correctly,Ìthat€it€is€possible€for€certain€phone€numbers€to€beÌallocated€by€international€carriers€to€be€used€forÌaudiotext€services,€and€if€that's€the€case,€then€itÌseems€to€me€that€IPs€could€be€required€to€use€numbersÌonly€that€were€designated€for€that€purpose,€and€if€aÌcountry€doesn't€offer€that,€then€they€wouldn't€deal€withÌthat€country.Ì€€€€€€€€And€further,€that€if€those€numbers€areÌspecifically€designated,€that€those€--€information€aboutÌwhat€those€particular€numbers€are€could€then€be€madeÌavailable€by€the€IPs€to€the€domestic€long€distanceÌcarriers€at€the€long€distance€carrier's€request€so€thatÌthey€would€know€that€these€are€the€numbers€that€areÌbeing€used€for€audiotext€services,€something€that€theyÌÇsay€they€presently€have€difficulty€knowing.Ì€€€€€€€€We€also€heard€yesterday€that€--Ì€€€€€€€€MR.€HILE:€€Can€I€stop€you€just€--€can€anyoneÌrespond€to€Susan's€point€there€about€the€foreign€phoneÌcompanies€providing€a€list€of€the€numbers€that€--€canÌyou€respond€to€that,€Joel?Ì€€€€€€€€MR.€DICHTER:€€I€can€respond€that€there€is€noÌgeneral€practice€to€my€knowledge€of€that€being€done€orÌspecific€numbers€set€out€--Ì€€€€€€€€MR.€HILE:€€But€could€it€be€done,€could€it€beÌdone€is€the€point.Ì€€€€€€€€MR.€DICHTER:€€I€think€--Ì€€€€€€€€MR.€LESSER:€€It€can't.€€I€mean,€just€for€--Ì€€€€€€€€MR.€HILE:€€Can€or€can't?Ì€€€€€€€€MR.€LESSER:€€Cannot.Ì€€€€€€€€MR.€HILE:€€Why?Ì€€€€€€€€MR.€LESSER:€€Just€by€the€fact€that€we€are€havingÌa€hard€time€defining€what€an€information€call€is.€€Let'sÌassume,€you€know,€there€is€Microsoft€here€in€thisÌcountry,€there€may€be€a€big€software€manufacturer€in€aÌforeign€country.€€Now,€is€that€--€their€tech€support€allÌof€a€sudden€considered€an€information-type€call?ÌBecause€we€are€playing€around€with€that€definition,€itÌcan€continue€to€happen,€and€I€think€forcing€them€to€900,Ìespecially€even€on€our€domestic€market€where€we€don'tÌÇhave€900€portability,€we€don't€have€--Ì€€€€€€€€MR.€HILE:€€That's€not€the€issue.€€The€issue€isÌjust€whether€numbers€that€are€going€to€be€devoted€toÌaudiotext€could€be€supplied€to€the€American€phoneÌcompanies.Ì€€€€€€€€MR.€LESSER:€€No,€no.Ì€€€€€€€€MR.€HILE:€€Okay,€back€to€Susan.Ì€€€€€€€€MS.€GRANT:€€I€don't€understand€why€not.€€If€--Ìand€I'm€talking€about€the€numbers€being€provided€by€theÌIPs,€not€by€the€foreign€carriers.€€The€IP€knows€whatÌnumber€it€is€that€it's€using.€€So,€I€don't€understandÌwhy€that€information€could€not€be€provided,€and€I€do€getÌback€to€Kim's€point,€and€that€is€if€we€can't€solve€thisÌproblem,€I€think€we€just€shouldn't€--€we€shouldn't€allowÌthese€kinds€of€charges€via€international€numbers€atÌall.Ì€€€€€€€€Yesterday,€the€speaker€who€alluded€to€specificÌnumbers€being€designated€said€that€they€were€beingÌdesignated€specifically€for€audiotext€services.€€So,Ìsomeone€is€defining€it.€€I€don't€know€what€theÌdefinition€is,€but€that€would€be€helpful€to€know.Ì€€€€€€€€The€other€point€that€I€was€going€to€inquireÌabout€was€preambles,€because€the€statement€was€also€madeÌyesterday€that€it€is€possible,€in€fact,€to€provide€aÌpreamble€on€an€international€line.€€I€--€the€speakerÌÇdidn't€mention€whether€that's€a€free€preamble€or€not.€€IÌrecognize€that€even€if€it€was€a€free€preamble,€if€thatÌwas€technically€possible€for€designated€numbers,€thatÌthe€preamble€might€not€be€able€to€tell€the€consumer€theÌexact€cost€of€the€call,€because€that€depends€on€whereÌthe€call€is€originating€from€and€how€long€it€is,€butÌcertainly€valuable€information€could€be€provided€in€aÌpreamble€that€would€ultimately€help€the€consumerÌdetermine€whether€or€not€to€go€on€with€the€call.Ì€€€€€€€€A€lot€of€the€complaints€that€we€get€are€fromÌconsumers€who€are€direct-dialing€these€calls,€and€theyÌdon't€know€that€they€are€international€calls.€€When€allÌis€said€and€done,€I€think€it€harkens€back€to€theÌpresumption€that€these€calls€are€more€expensive€thanÌregular€domestic€calls€that€one€might€make,€and€itÌdoesn't€matter€whether€they€are€tariffed€or€not.€€TheÌfact€is€that€the€consumer€suffers€from€bill€shock€whenÌhe€or€she€discovers€how€much€these€calls€were.Ì€€€€€€€€MR.€HILE:€€Walt,€I€think€you€want€to€respond€toÌthat,€and€then€I€want€to€get€Linda€down€here,€becauseÌshe€has€been€waiting€a€while,€then€Joel.Ì€€€€€€€€MR.€STEIMEL:€€Right,€I€have€a€specific€responseÌto€Susan.Ì€€€€€€€€Actually,€it€is€possible€for€foreign€PTTs€toÌdesignate€an€NPA€or€XX€equivalent€that€the€audiotext€isÌÇdriven€to,€and€I€have€specifically€worked€in€a€situationÌin€which€a€country€that€I€won't€name€had€more€than€oneÌPTT.€€They€were€moving€to€a€competitive€marketplace,€andÌall€the€PTTs€designated€a€specific€NPA€and€XX€typeÌequivalent€in€a€numbering€scheme€for€that€country€andÌdrove€all€audiotexts€to€that€particular€number,€and€theyÌhad€to€do€it€for€proportionate€return.Ì€€€€€€€€MCI€and€AT&T€are€requiring€that€to€keep€track€ofÌthe€traffic€going€down€and€the€traffic€coming€back€soÌthat€they€wouldn't€get€hammered€on€the€settlementÌrates.€€So,€it€is€possible,€it€is€being€done€by€some.ÌThe€places€where€I€see€it€being€done,€it's€where€you'veÌgot€a€country€that's€moving€to€a€competitiveÌmarketplace,€you€have€multiple€PTTs€that€are€competing,Ìand€then€you€have€got€audiotext€routing,€and€the€U.S.Ìcarriers€are€trying€to€protect€themselves.€€So,€I€knowÌthat€it€is€being€done€in€some€places€and€it€isÌpossible.€€The€problem€might€be€in€countries€that€onlyÌhave€one€PTT,€they€may€not€be€particularly€responsive€orÌinterested€in€doing€this€sort€of€thing€to€--€to€helpÌyour€concerns€out.Ì€€€€€€€€MS.€GRANT:€€My€response€to€that€would€be€--€I'mÌplacing€the€burden€on€the€IP,€that€the€IP€would€then€notÌprovide€services€through€that€country.Ì€€€€€€€€MR.€STEIMEL:€€Well,€the€--€when€you€have€got€aÌÇproportionate€return€country,€the€IPs€are€forced€by€theÌcarriers€in€that€country€to€go€to€that€audiotextÌexchange,€and€without€being€on€that€exchange,€theyÌcannot€be€paid€the€commissions€by€the€in-boundÌcarriers.€€Whenever€you€have€a€paying€scheme,€you€haveÌto€have€a€tracking€mechanism.€€The€tracking€mechanismsÌare€almost€always€number-based,€and€in€a€country€whereÌyou€have€got€more€than€one€PTT€and€you€have€an€audiotextÌexchange€for€proportionate€return€tracking,€that€is€partÌof€the€transmission.€€Then€the€audiotext€providers€areÌforced€to€comply€with€that,€otherwise€they€can't€getÌpaid€and€it€completely€destroys€the€entire€arrangement.Ì€€€€€€€€MR.€HILE:€€Linda?Ì€€€€€€€€MS.€GOLDSTEIN:€€I€just€really€--€it's€been€upÌfor€a€while,€so€it€may€not€be€that€timely,€but€I€reallyÌwanted€to€go€back€and€respond€to€some€of€the€commentsÌexpressed€by€AT&T€and€really€just€make€a€further€pointÌin€support€of€the€de€minimis€threshold,€that€I€think€weÌreally€have€to€recognize€and€I€think€this€conversationÌillustrates€that€it's€going€to€be€--€it€is€almostÌimpossible€to€craft€a€definition€that€will€cover€everyÌpossible€instance,€but€I€do€believe€that€the€de€minimisÌthreshold€almost€more€than€any€other€solution€I€haveÌheard€is€really€consistent€with€what€Congress€--€withÌwhat€the€intent€was,€which€was€to€target€practices€thatÌÇmay€have€the€potential€for€--Ì€€€€€€€€MR.€BOLIN:€€Can€you€tell€me€what€threshold€youÌare€talking€about?Ì€€€€€€€€MS.€GOLDSTEIN:€€I€am€talking€about€the€ISAÌthreshold.Ì€€€€€€€€MR.€HILE:€€The€ISA's€suggestion€in€its€writtenÌcomments?Ì€€€€€€€€MS.€GOLDSTEIN:€€Yes.Ì€€€€€€€€MR.€HILE:€€That's€what€you€are€speaking€inÌsupport€of?Ì€€€€€€€€MS.€GOLDSTEIN:€€Yes,€because€that€--€if€--€ifÌyou€cap€that€amount,€that€in€--€I€think€it€willÌnecessarily€follow€that€the€potential€for€abuse€wouldÌnot€--€will€be€diminished€significantly,€and€I€thinkÌthat€there€is€precedent€even€in€AT&T's€own€policies€forÌthat€type€of€approach.Ì€€€€€€€€Four€years€ago€when€there€was€a€large€incidenceÌof€abuse€in€the€sweepstakes€industry,€AT&T€went€to€aÌprice€cap€as€a€means,€believing€that€by€imposing€a€priceÌcap,€the€potential€for€abuse€would€be€diminished€andÌthat€the€margin€basically€that€the€IP€could€get€would€beÌreduced.€€So,€I€--€and€I€think€that€history€shows€thatÌthat€did€have€a€significant€impact€in€reducing€abuses€inÌthat€category.Ì€€€€€€€€I€think€the€approach€of€the€ISA€in€terms€of€itÌÇbeing€a€percentage€is€more€appropriate€given€the€natureÌof€that€type€of€transaction,€obviously,€than€aÌparticular€price€cap,€which€certainly€wouldn't€work€inÌthis€instance,€but€I€just€--€just€for€the€record,€IÌwanted€to€indicate€that€I€think€there€is€some€precedentÌfor€that,€and€I€think€history€has€shown€that€that€typeÌof€approach€does€tie€into€a€goal€to€target€abuse.Ì€€€€€€€€I€also€just€wanted€to€make€the€point€that€to€theÌextent€that€we€keep€having€discussions€about€whetherÌall,€quote€unquote,€"pay-per-call"€should€be€directed€toÌa€900€platform,€I€think€that's€a€very€circuitous€routeÌto€take.€€From€a€compliance€standpoint,€we€are€going€toÌbe€back€facing€the€same€issue€of€having€to€determineÌwhat€is€pay-per-call,€and€it€just€seems€to€me€to€be€aÌvery€--€a€very€circuitous€approach€which€will€makeÌcompliance€and€frankly€advising€clients€in€terms€ofÌcompliance€difficult€down€the€road.€€So,€I€would€ratherÌsee€us€focus€on€that€--€on€that€definition.Ì€€€€€€€€MR.€HILE:€€Jim,€I€presume€you€want€to€respond?Ì€€€€€€€€MR.€BOLIN:€€Briefly.Ì€€€€€€€€MR.€HILE:€€And€then€I€would€like€to€get€toÌJoel.Ì€€€€€€€€MR.€BOLIN:€€We€have€been€talking€about€two€deÌminimis€thresholds.€€To€the€extent€we€are€talking€aboutÌthe€proposed€ISA's€comments,€I€would€like€to€state€oneÌÇscenario€that€I€think€points€out€vividly€why€that€won'tÌwork.€€If€I'm€an€AT&T€customer€with€an€AT&T€calling€planÌand€say€I€get€5€cents€a€minute€for€all€my€calls€as€myÌrate,€under€ISA's€proposal,€to€be€able€to€charge€theÌhighest€rate€tariffs€for€that€time€of€day,€one€of€theÌbig€three€carriers,€plus€10€percent,€the€highest€rateÌfor€any€time€of€day€is€usually€the€pay€phone€rate,Ìthat's€usually€55€cents€a€day€--€55€cents€a€minute.ÌThat€spread€is€not€de€minimis€and€that€spread€is€goingÌto€come€as€a€shock€to€consumers€when€they€see€it€onÌtheir€phone€bills.Ì€€€€€€€€If€a€consumer€has€got€a€rate€plan€from€an€AT&TÌor€a€Sprint€as€a€flat€rate€or€that's€a€given€low€rate,Ìthat's€the€rate€they€expect€to€see€for€interexchangeÌcalls,€and€they€are€going€to€come€to€us€when€they€getÌtheir€phone€bill€and€all€of€a€sudden€it's€70€percentÌmore€than€they€expected€to€pay.€€This€so-called€deÌminimis€threshold€in€ISA's€comments€is€not€de€minimis€inÌmy€practice,€can't€be€de€minimis€in€any€practice.€€TheÌhighest€rate€for€any€given€time€of€day€is€going€to€be€aÌhigher€rate€than€the€caller€pays.€€I€would€even€comeÌback€to€say€if€we€say€the€caller's€own€rate€plus€10Ìpercent,€I€don't€think€Congress€wanted€to€put€that€kindÌof€situation€in€the€statute.Ì€€€€€€€€MR.€HILE:€€Joel,€does€your€comment€respond€toÌÇthat?Ì€€€€€€€€MR.€DICHTER:€€Yes.€€I€think€the€point€is€a€goodÌone,€and€it€shows,€once€again,€the€difficulty€one€has€inÌtrying€to€craft€a€specific€limitation€or€prohibitionÌthat€there€are€so€many€different€variations.€€You€know,Ìinternational€is€not€something€--€I€think€there€is€anÌimpression€that€the€900€rules€were€created,€and€thenÌinternational€arose€to€get€around€the€900€rules.€€That'sÌreally€not€the€case.€€International€has€been€aroundÌsince€the€1980s,€before€TDDRA€existed.€€It's€been€aroundÌ--€actually€came€from€AT&T€in€one€respect,€because€AT&TÌhad€an€arrangement€where€calls€from€outside€the€U.S.Ìcame€in€to€the€U.S.,€and€they€paid€a€commission€forÌtracking€that€information€business.€€Other€countriesÌthen€saw€this€and€went€into€create€more€globalÌcompetition€in€this€regard.Ì€€€€€€€€MR.€HILE:€€Was€there€a€--€was€this€a€commonÌthing€before€TDDRA?Ì€€€€€€€€MR.€DICHTER:€€It€was€a€common€thing€beforeÌTDDRA,€yes,€and€you€have€got€to€realize,€also,€thatÌthese€providers,€providers€of€this€traffic€are€notÌspecifically€targeting€U.S.€customers.€€They€target,€youÌknow,€customers€and€IPs€from€around€the€world.€€TheseÌcalls€to€Guyana€and€Sao€Tome€and€others€come€fromÌcountries€all€over€the€world,€not€just€the€U.S.€€Part€ofÌÇthe€problem€you€have€is€that€in€disclosures€is€thatÌregard€and€the€price€of€the€calls€can€come€fromÌdifferent€locations.Ì€€€€€€€€Nevertheless,€I€would€like€to€point€out€that€theÌITA€and€its€members,€including€Guyana,€Sao€Tome€andÌothers,€have€adopted€appendixes€that€set€forth€as€bestÌthey€can€to€comply€with€the€TDDRA€premise.€€There€areÌpreambles€for€most€of€these€services€that€do€advise€ofÌ--€that€it's€an€international€call€and€that€--€asks,Ìyou€know,€parental€permission,€are€you€over€18,€etÌcetera,€as€well€as€advertising€requirements.Ì€€€€€€€€MR.€HILE:€€Are€you€heading€at€all€towardÌworkability€of€the€de€minimis€kind€of€threshold?Ì€€€€€€€€MR.€DICHTER:€€Yes,€we€would€support€that.Ì€€€€€€€€MR.€HILE:€€Warren?Ì€€€€€€€€MR.€MILLER:€€Our€attorney€wanted€to€make€someÌremarks€about€the€de€minimis€threshold.Ì€€€€€€€€MR.€HILE:€€Could€you€identify€yourself?Ì€€€€€€€€MR.€LAVERGNE:€€Ed€LaVergne,€public€policyÌcounsel€for€the€ISA.Ì€€€€€€€€As€the€author€of€the€ISA's€written€comments,€I'mÌa€little€frustrated€with€the€discussion€of€de€minimis,Ìbecause€I€think€there€is€way€too€much€emphasis€on€that.ÌThe€ISA's€position,€which€focused€on€domestic€consentÌcalling,€was€that€the€cost€not€be€higher€than€the€usualÌÇcost€to€the€same€location.Ì€€€€€€€€Now,€we€attempted€in€a€footnote€essentially€toÌdefine€what€that€content€call€cost€is€as€something€thatÌdidn't€exceed€a€de€minimis€amount€over€the€rate€chargedÌby€the€three€major€carriers,€but€we€could€take€that€offÌthe€table.€€Your€point€was€a€good€one,€AT&T's€point,Ìabout€the€fact€that€there€--€there€are€different€rates.ÌThere€are€direct-dialing€rates,€there€are€friends€andÌfamily€rates€that€MCI€has.€€We€can€set€it,€theÌCommission€can€set€it,€we€can€work€together€to€set€it€atÌwhatever€rate€makes€sense,€but€the€de€minimis€is€just€anÌeffort€to€try€to€set,€you€know,€to€try€to€define€thisÌreally.Ì€€€€€€€€And€two€other€points€that€relate€to€that.€€WeÌsegregated€international€away€from€domestic,€becauseÌthere€are€clear€consumer€protection€problems€inÌinternational.€€Domestic,€there€really€have€not€beenÌproblems€that€we€have€identified€from€a€consumerÌstandpoint,€and€I€think€the€only€real€difference€betweenÌthe€ISA€and€AT&T€is€I€think€that€AT&T€has€some€specificÌproblems€with€access€charges,€but€we€think€that's€bestÌan€FCC€issue.Ì€€€€€€€€MR.€HILE:€€Can€you€hold€right€there?Ì€€€€€€€€Would€you€agree,€Dave,€that€there€is€not€aÌproblem€with€domestic€calls,€that€it's€mostly€withÌÇinternational?Ì€€€€€€€€MR.€GILLIS:€€Well,€to€the€extent€that€domesticÌpay-per-call€services€comply€with€the€900€rule€and€doÌnot€permit€access€through€800€numbers€other€than€throughÌpresubscription€that's€concluded€prior€to€initiating€theÌcall,€in€other€words,€if€there€is€compliance€with€theÌlaw,€which€we€haven't€seen,€I€mean,€that€--€part€of€theÌpurpose€of€this€is€to€bring€the€Commission€rules€intoÌconformity€with€the€1996€Act€that€should€we€hope€resolveÌthose€problems,€so...Ì€€€€€€€€MR.€HILE:€€We€are€only€--Ì€€€€€€€€MS.€SANDFORD:€€May€I€add€one€thing€to€that?Ì€€€€€€€€MR.€HILE:€€Sure.Ì€€€€€€€€MS.€SANDFORD:€€I€think€in€addition,€though,€weÌare€seeing€a€problem€with€these€recurring€membershipÌfees€on€consumers'€phone€bills,€and€those€seem€to€be€--Ì€€€€€€€€MR.€HILE:€€Are€these€900€numbers?Ì€€€€€€€€MS.€SANDFORD:€€What's€happening,€they€are€mostlyÌwith€psychic€lines,€where€--€no,€they€are€800€numbersÌwhere€consumers€will€call€up,€they€will€hear€theÌpreamble.€€Often€times€a€consumer€may€even€consent€toÌthe€cost€of€that€particular€call€and€stay€on€the€lineÌbut€are€not€authorizing€these€$9.95€monthly€chargesÌwhich€then€become€recurring€charges€on€a€consumer'sÌphone€bill,€and€I€think€the€rule€has€to€address€thatÌÇproblem,€as€well.€€And€then€there€is€the€issue€of€theÌfailure€to€comply€with€the€800€number€presubscriptionÌagreement.Ì€€€€€€€€MR.€LAVERGNE:€€And€my€comments€do€not€go€toÌthat.€€They€go€to€direct-dial€calls€domestically.Ì€€€€€€€€MR.€LESSER:€€Can€I€just€ask€a€question,€just€toÌkind€of€clarify?€€So,€you€are€saying€but€you€are€notÌhaving€problems€with€domestic€direct-dialed€calls.Ì€€€€€€€€MR.€HILE:€€Are€you€experiencing€consumerÌcomplaints€about€that,€either€you,€Sue€--€is€NIFCÌgetting€that€or€--Ì€€€€€€€€MS.€GRANT:€€By€that€do€you€mean€900€numbers?Ì€€€€€€€€MR.€LESSER:€€No,€just€POTS,€regular€1-plusÌcalls.Ì€€€€€€€€MS.€GRANT:€€I€am€not€familiar€with€any.Ì€€€€€€€€MR.€HILE:€€Domestic€pay-per-call€that's€usingÌsome€other€scheme€besides€--Ì€€€€€€€€MS.€SANDFORD:€€Actually,€we€are€seeing€someÌproblems€with€the€10XXX€where€a€consumer€may€make€thatÌone€phone€call€and€then€is€also€put€in€a€recurringÌcharge€situation.Ì€€€€€€€€MR.€LESSER:€€So,€just€the€recurring€charge,€notÌthe€isolated€1-plus€call€to€a€domestic€number?Ì€€€€€€€€MR.€BOLIN:€€AT&T€does€have€several€complaintsÌpending€at€the€FCC€over€POTS€numbers€from€the€ISC'sÌÇpoint€of€view.Ì€€€€€€€€MR.€LAVERGNE:€€But€from€a€consumer's€standpoint,Ìthat's€what€the€question€was.Ì€€€€€€€€MS.€GOLDSTEIN:€€This€has€come€up€several€time,Ìand€I€know€we€will€get€into€it€later€this€afternoon,€butÌthere€seems€to€be€some€confusion,€and€this€really€--Ìwith€this€lady's€comment€evidencing€it€as€far€as€theÌrecurring€charges,€and€the€recurring€charges€and€theÌmonthly€charge€issue€is€not€really€relevant€to€thisÌdiscussion,€because€the€way€those€plans€work,€thatÌcaller€is€not€being€assessed€any€charge€for€that€call.Ì€€€€€€€€The€charge€that€appears€on€the€bill€is€forÌsomething€other€than€information€that€was€providedÌduring€the€course€of€that€call.€€So,€it's€really€aÌseparate€issue,€and€I€don't€think€it€should€be€confusedÌwith€or€made€a€part€of€this€discussion.Ì€€€€€€€€MS.€SANDFORD:€€However,€I€do€think,€though,€thatÌthe€rule€needs€to€address€these€recurring€charges.Ì€€€€€€€€MS.€SCHWANKE:€€And€I€think€we€plan€on€discussingÌthat€probably€in€connection€with€the€presubscriptionÌagreements€discussion€later€today.Ì€€€€€€€€MR.€HILE:€€We€are€at€the€end€of€the€allottedÌtime€for€this,€but€will€your€question€generate€a€wholeÌnew€round€or€is€it€--Ì€€€€€€€€MR.€HERTZENDORF:€€Well,€I€think€it's€importantÌÇand€it€might€help€to€bring€to€closure,€but€it's€possibleÌit€could€also€generate€other€questions.Ì€€€€€€€€We€have€been€focusing€a€lot€on€international,Ìbecause€that€creates€problems€as€far€as€a€definition,Ìand€before€we€wind€up€crafting€a€new€definition€that€hasÌsome€other€loophole€that€we€didn't€think€about,€it€mightÌbe€helpful€to€sort€of€understand€the€economics€as€to€whyÌinternational€is€profitable.Ì€€€€€€€€I've€seen€one€ad€for€a€service,€I€don't€knowÌwhether€it's€typical€or€not,€but€it€said€that€theirÌremuneration€to€the€IP€was€only€60€cents€a€minute,€and€IÌwas€under€the€impression€that€for€most€domestic€900,€theÌpayments€to€the€IP€tend€to€be€much€higher€than€that,Ìalthough€I€realize€for€maybe€personal€ads€it€might€notÌbe€so€high.Ì€€€€€€€€So,€if€we€--€I'm€just€wondering,€is€thisÌinternational€service,€did€it€arise€to€avoid€costs€ofÌcomplying€with€TDDRA€or€is€it€more€profitable€because€itÌgenerates€so€much€volume€compared€to€domestic€900?€€IfÌwe€knew€the€answer€to€this,€it€might€help€us,€you€know,Ìavoid€future€loopholes.Ì€€€€€€€€MR.€HILE:€€Anyone€care€to€respond€to€thatÌquestion?Ì€€€€€€€€MR.€LESSER:€€Well,€I€think€the€industry€wouldÌappropriately€best€answer€that€--ÌÇ€€€€€€€€MR.€HILE:€€Speak€into€the€microphone.Ì€€€€€€€€MR.€LESSER:€€I€think€the€industry€would€be€theÌbest€to€respond€to€something€like€that.€€I€think€we€needÌto€look€at€that€these€international€calls€have€beenÌaround,€you€know,€prior€to€1988€without€any€TDDRAÌrules.€€So,€it€wasn't€to€get€around€these€applications.ÌThat's€not€to€say€that€some€scam€artists€are€not€usingÌthe€international€to€try€to€get€around€TDDRA€rules,€butÌthat€wasn't€the€core€of€what€international€was€set€upÌfor.Ì€€€€€€€€A€lot€of€times,€as€far€as€information€providersÌ--Ì€€€€€€€€MR.€HILE:€€What€is€that?Ì€€€€€€€€MR.€LESSER:€€International?€€Well,€I€think€theÌbest€thing€to€look€at€is€hearing€that€--€we€hear€that€aÌlot€of€times€they€provide€services€not€just€to€the€U.S.Ìbut€they€provide€them€to€all€countries€around€the€world,Ìand€that's€why€it€also€makes€it€kind€of€difficult€toÌsay,€Well,€we€will€have€an€international€900€number€forÌcalls€from€here€to€New€Zealand,€but€maybe€Chile€cannotÌsupport€their€phone€system,€the€international€900Ìnumber,€so€how€are€you€going€to€have€those€calls?€€So,€IÌthink€there€is€a€lot€of€technical€problems€concerningÌthat.Ì€€€€€€€€Does€that€answer€your€question?ÌÇ€€€€€€€€MR.€HILE:€€Yes,€I€think€so.Ì€€€€€€€€MS.€SCHWANKE:€€Can€I€ask€just€a€follow-up€toÌyour€statement€that€international€calls€were€aroundÌprior€to€TDDRA?€€Do€you€know€what€the€revenues€forÌinternational€calls€were€prior€to€TDDRA€and€what€theyÌare€currently?Ì€€€€€€€€MR.€LESSER:€€Well,€as€far€as€that,€that's€kindÌof€settlement€rates,€and€settlement€rates€have€beenÌcontinuing€to€drop.€€That's€--Ì€€€€€€€€MR.€HILE:€€If€you€have€that€kind€of€information,Ìwould€you€be€willing€to€supplement€the€record?Ì€€€€€€€€MR.€LESSER:€€Sure,€I€mean€--Ì€€€€€€€€MR.€HILE:€€Pre-TDDRA€revenues€for€internationalÌpay-per-call€and€post-TDDRA.Ì€€€€€€€€MS.€SCHWANKE:€€Or€if€anybody€else€does.Ì€€€€€€€€MR.€LESSER:€€There€is€one€other€thing.€€As€farÌas€a€revenue€base,€you€actually€can€make€more€money€forÌ900.€€For€example,€psychic€calls,€you€see€calls€thatÌwere€$3.99€a€minute,€if€you€make€a€ten-minute€call€on€aÌpsychic€line,€that's€$40.€€There€is€a€lot€of€market.ÌAT&T€charges€33€cents€a€minute€for€transport,€10€percentÌfor€billing.€€There's€a€lot€of€mark-up€there.€€When€youÌtalk€about€international,€the€same€psychic€call€may€costÌyou€$6€to€$15,€because€you€could€pay€as€little€as€50Ìcents€a€minute€to€international€companies.ÌÇ€€€€€€€€MR.€HILE:€€I€think€if€we€are€going€to€have€aÌbreak,€we€are€going€to€have€to€take€it€now.€€If€you€haveÌsomething€on€this€topic,€we€can€start€it€in€the€nextÌsession.€€We€will€start€again€at€5€after€11:00Ìpromptly.Ì€€€€€€€€òò(A€brief€recess€was€taken.)Ìóó€€€€€€€€MR.€HILE:€€Could€we€please€reconvene?€€TheÌsubject€for€this€afternoon's€or€the€rest€of€thisÌmorning's€discussion€are€cost€disclosures€and€otherÌconsumer€protections€that€would€be€appropriate€forÌnon-900€number€dialing€patterns.Ì€€€€€€€€The€questions€that€we€have€here€on€the€agendaÌstart€with€what€should€an€advertisement€for€anÌinternational€pay-per-call€service€be€required€toÌdisclose?Ì€€€€€€€€Before€we€get€into€that,€I€think,€Adam,€you€hadÌa€question€about€the€material€that€we€were€finishingÌlast€hour.Ì€€€€€€€€MR.€COHN:€€Yes,€I€did.€€I€wanted€to€sort€ofÌfocus€--€at€least€draw€some€focus€into€the€fact€that,Ìyou€know,€even€though€there€might€not€be€a€tremendousÌproblem€with€1-plus€dialing€domestically€at€this€point,ÌI€think€the€issue€really€is€are€there€services€that€areÌsusceptible€to€the€same€sorts€of€practices.€€Are€thereÌaudio€entertainment€and€information€services€that€areÌÇsusceptible€to€the€same€sort€of€abuses€that€we€saw?Ì€€€€€€€€Even€if€there€aren't€those€abuses€in€hugeÌnumbers€now,€the€issue€is€are€they€susceptible,€are€theyÌpossible.€€And€in€an€effort€to€gather€more€informationÌregarding€that,€I€would€like€to€hear€some€moreÌinformation€specifically€from€AT&T€telling€us€what€theseÌTSAA€agreements€are,€and€if€they€are€proprietary€and€youÌcan't€give€specific€information€on€what€the€paymentsÌare,€then€it€makes€it€very€difficult€for€us€to€craft€aÌrule.€€If€we€were€to€modify€the€rule,€how€could€theÌCommission€change€the€rule€if€we€don't€know€what€theyÌare?Ì€€€€€€€€I€think€I€would€really€like€to€see€specificÌinformation€as€to€what€--€in€terms€of€trying€to€discoverÌwhether€a€threshold€percentage€or€threshold€payment€toÌan€IP€is€feasible,€we€need€to€know€what€those€are,€andÌif€--Ì€€€€€€€€MR.€HILE:€€Are€you€asking€AT&T€to€supplement€theÌrecord€or€are€you€asking€him€to€respond€right€now?Ì€€€€€€€€MR.€COHN:€€I€am€asking€for€both.Ì€€€€€€€€MR.€BOLIN:€€I€can€give€a€brief€response€now.ÌThe€specific€terms€of€our€TSAA€agreements€areÌproprietary€information€with€our€customers.€€I€may€beÌable€to€provide€you€a€sample€black-lined€agreement€toÌgive€you€an€idea€of€how€they€are€structured.€€I€willÌÇlook€into€that.Ì€€€€€€€€MR.€COHN:€€How€about€more€generally?Ì€€€€€€€€MR.€BOLIN:€€I€can€describe€them€more€generallyÌnow.€€I€think€that€in€terms€of€creating€a€threshold,€oneÌreason€that€is€going€to€be€very€difficult€is€the€FCC€isÌseeking€to€drive€access€rates€down€to€competitive€levelsÌnow€and€that€even€if€there€were€a€percentage€thresholdÌthat€would€work€today,€it€may€not€work€next€year.€€ItÌalmost€certainly€won't€work€five€years€from€now,€but€ifÌit€will€help,€I€can€give€you€a€one-minute€description€ofÌTSAAs€again.€€If€it€would€be€better€just€to€supplementÌthe€record,€I€can€do€that.€€Whatever€you€prefer.Ì€€€€€€€€MR.€HILE:€€Why€don't€we€do€that.Ì€€€€€€€€MR.€COHN:€€You€mentioned€a€percentage.€€WhatÌabout€a€per-minute€--€would€a€per-minute€threshold€beÌmore€feasible?€€Could€an€IP€be€discouraged€fromÌcommitting€fraud€if€the€per-minute€payment€was€so€lowÌthat€it€would€just€not€be€feasible?Ì€€€€€€€€MR.€BOLIN:€€The€FCC€is€moving€away€fromÌpermanent€access€fees,€at€least€it€has€proposed€to.ÌThe€SBC€has€just€challenged€it.€€I€don't€know€how€thatÌwill€turn€out,€but€the€way€TSAA€payments€are€calculatedÌis€based€on€a€weighted€average€access€rate€for€theÌterminating€location,€and€then€there€is€a€percentageÌnegotiated€in€terms€of€based€on€that€weighted€average,ÌÇsome€percentage€of€that€weighted€average€will€be€paidÌfor€terminating€access.Ì€€€€€€€€MR.€COHN:€€But€conceivably€a€person€could€--€youÌcould€just€figure€out€afterwards,€you€know,€how€manyÌminutes€were€called€and€how€much€was€paid€to€the€IP.Ì€€€€€€€€MR.€BOLIN:€€Access€rates€vary€from€location€toÌlocation€and€the€agreements€we€have€with€consumers€varyÌfrom€location€to€location.€€So,€in€terms€of€the€kinds€ofÌrates€that€are€being€paid€for€access€under€TSAAs€areÌgoing€to€vary€widely,€the€volumes€of€calls€are€going€toÌvary€widely.€€I€don't€know€the€answer,€but€I€doubt€thatÌyou€could€craft€a€percentage€amount€that€would€captureÌall€of€those.Ì€€€€€€€€MR.€COHN:€€Couldn't€the€TSAA€agreement€includeÌsome€sort€of€floor€or€ceiling?€€Doesn't€that€--€thatÌthere€could€be€no€payment€back€to€the€party€to€the€TSAAÌagreement€that€would€exceed€a€certain€percentage€or€aÌcertain€amount€per€minute?Ì€€€€€€€€MR.€BOLIN:€€We€absolutely€could€craft€them€thatÌway.€€What€I€don't€know€is€whether,€say,€we€picked€5Ìpercent€as€a€threshold,€I€don't€know€if€that€5€percentÌthreshold€would€represent€three€times€what€we€currentlyÌpay€for€access€under€TSAAs€or€1€percent€of€what€weÌcurrently€pay€under€TSAAs,€and€if€it's€the€latter,€thenÌyou€may€suddenly€make€TSAA€uneconomic,€so€you€may€inÌÇeffect€be€killing€them€by€doing€that€anyway.Ì€€€€€€€€MR.€COHN:€€Can€you€provide€us€some€information?Ì€€€€€€€€MR.€BOLIN:€€We€will€provide€what€we€can.Ì€€€€€€€€MR.€HILE:€€Kim,€could€you€give€us€the€last€wordÌon€this€issue€before€we€move€on€to€the€next€issues?Ì€€€€€€€€MS.€WILLIAMS:€€Yes.€€First€I€wanted€to€address€aÌquestion€you€had€posed€earlier€about€complaints€onÌdomestic€traffic.Ì€€€€€€€€MR.€HILE:€€Yes.Ì€€€€€€€€MS.€WILLIAMS:€€We€had€seen€some€for€just€regularÌdomestic€calls€to€Kansas€or€a€few€other€states,€andÌalthough€it€was€at€the€picked€carrier's€rate,€you€know,Ìthere€were€a€lot€of€calls€generated€to€get€into€certainÌinformation€services,€and€I€think€the€money€made€was€inÌselling€them€other€services€once€they€got€on€the€phone,Ìyou€know,€versus€being€made€from€that€call.Ì€€€€€€€€MR.€HILE:€€So,€it€was€more€like€telemarketingÌthan€pay-per-call?Ì€€€€€€€€MS.€WILLIAMS:€€Probably,€or€selling€them€aÌmonthly€fee€once€they€got€there€or€selling€them€aÌvoicemail€service.€€I€would€say€I€was€a€little€lessÌconcerned€about€those,€because€at€least€they€were€at€aÌlow€rate.€€I€don't€have€as€much€sympathy€with€a€customerÌwho€makes€20€calls€to€Kansas€as€opposed€to€customer€whoÌmade€20€calls€to€Guyana€who€didn't€understand€the€rate.ÌÇ€€€€€€€€Secondly,€to€address€the€international€thingsÌthat€have€been€around€for€a€long€time,€back€in€'89,€weÌsaw€a€lot€of€calls€to€the€Netherlands,€but€the€scope€ofÌthe€problem€was€nothing€compared€to€once€TDDRA€wasÌpassed,€and€the€evidence€is€in€the€advertisements.€€IÌhave€looked€at€many€ads€in€many€magazines€that€went€asÌsoon€as€TDDRA€passed€from€900€to€800,€every€ad€in€thereÌjust€about€had€800.Ì€€€€€€€€Once€800€was€fixed,€it€went€to€international.ÌSo,€to€say€that€this€has€been€around€for€a€long€timeÌisn't€quite€true.€€Yes,€it€was€there.€€It€wasn't€usedÌuntil€people€tried€to€in€my€opinion€get€around€theÌrules.Ì€€€€€€€€MR.€HILE:€€Thank€you.Ì€€€€€€€€Okay,€now€we€are€going€to€move€on€to€the€lateÌmorning€set€of€issues,€and€the€first€question€that€I'mÌgoing€to€throw€out€for€discussion,€I€am€going€to€ask€myÌfriends€from€the€states€to€respond,€what€should€anÌadvertisement€for€an€international€pay-per-call€serviceÌbe€required€to€disclose?€€Should€the€rule€requireÌpreambles€for€such€services?€€Do€you€have€thoughts€onÌthat?Ì€€€€€€€€MR.€GILLIS:€€We€do,€and€thank€you€very€much.Ì€€€€€€€€Putting€aside€the€question€of€what€is€anÌinternational€--€how€you€are€going€to€defineÌÇinternational€pay-per-call€service€and€assuming€we€haveÌresolved€that,€we€think€that€an€internationalÌpay-per-call€service€should€disclose€what€a€domesticÌpay-per-call€service€discloses,€and€that€is€the€cost€ofÌthe€call€and€what's€involved€in€that€cost€and€so€on.Ì€€€€€€€€We€do€appreciate€that€there€may€be€someÌtechnical€problems€associated€with€providing€a€freeÌpreamble,€but€we€believe€that€a€preamble€is€important,Ìthat€when€a€--€an€information€provider€is€providingÌpay-per-call€service€at€the€initiation€of€the€call,€thatÌought€to€be€disclosed€and€the€cost€associated€with€itÌand€how€it's€computed.Ì€€€€€€€€We€also€believe€that€if€adult€entertainmentÌservices€are€provided€that€an€appropriate€disclosureÌought€to€be€made€and€that€specific€services€that€areÌdescribed€in€the€rule€relating€to€sweepstakes€promotionÌand€federal€--€federal€employment€opportunities€and€soÌforth,€that€information€providers,€internationalÌproviders,€ought€to€comply€with€those€aspects,€as€well.Ì€€€€€€€€So,€that's€--€the€difficulty,€of€course,€is€inÌdetermining€the€definition.Ì€€€€€€€€MR.€HILE:€€It€definitely€is€in€the€details.Ì€€€€€€€€Marianne,€would€you€like€to€seek€elaborationÌthere?Ì€€€€€€€€MS.€SCHWANKE:€€Yes,€I€would.ÌÇ€€€€€€€€How€would€you€respond€to€some€of€the€commenters'Ìpositions€that€disclosing€the€actual€cost€of€anÌinternational€call€is€virtually€impossible,€because€itÌdepends€on€the€calling€plan€and€other€factors?€€Is€thereÌsome€way€to€disclose€something€that€would€still€beÌvaluable€to€consumers?Ì€€€€€€€€MR.€GILLIS:€€Well,€I€appreciate€that€there€mayÌbe€difficulties€with€that€and€perhaps€with€--€and€thoseÌarise€from€the€reliance€on€now€the€tariffed€rate€forÌinternational€calls€and€the€variations€there.Ì€€€€€€€€I€do€think€that€there€are€disclosures€that€wouldÌcommunicate€useful€information€to€people€that€aren'tÌbeing€made€by€international€pay-per-call€servicesÌcurrently.€€I€do€think€that€the€disclosureÌ"international€toll,"€abbreviated,€doesn't€conveyÌmeaningful€information€to€people,€and€I€have€seen€itÌshorter€than€that.€€So,€there€could€be€formulationsÌother€than€the€total€cost€that's€going€to€be€incurred,Ìbecause€it€varies,€that€could€be€used.Ì€€€€€€€€MS.€SCHWANKE:€€Do€you€think€the€phraseÌcompletely€written€out,€"International€charges€apply,"Ìsomething€along€those€lines,€would€be€helpful?Ì€€€€€€€€MR.€GILLIS:€€I€think€it€would€be€helpful.€€IÌthink€it€is€going€to€depend€upon€the€context,€especiallyÌin€a€newspaper€ad€and€magazine€ad€and€so€forth,€but€IÌÇcertainly€think€that€would€be€useful€and€in€some€casesÌisn't€provided.Ì€€€€€€€€MR.€HILE:€€Do€you€think€it€would€be€enough€toÌjust€say,€"International€rates€apply"?Ì€€€€€€€€MR.€GILLIS:€€Well,€I€--€I€don't€know€if€thatÌalone€is€going€to€be€sufficient€to€put€people€on€noticeÌthat€these€rates€are€going€to€be€much€more€than€theyÌexpect.Ì€€€€€€€€MR.€HILE:€€Adam?Ì€€€€€€€€MR.€COHN:€€I€have€a€question€about€that.€€IÌwanted€to€--€many€people€might€--€here€might€be€familiarÌwith€the€FTC€and€Wisconsin€versus€Daniel€LaBell,€andÌthat€was€actually€under€the€telemarketing€sales€rule,Ìbut€as€far€as€the€FTC,€there€was€a€provision€in€theÌfinal€order€that€provides€for€some€disclosure,€mandatoryÌdisclosure€for€that€defendant.€€I€wanted€to€get€--€well,Ìgenerally€input€on€what€people€thought€about€thoseÌrequirements,€and€if€people€don't€have€copies,€maybe€IÌshould€have€some€copies€made,€but€--Ì€€€€€€€€MR.€LESSER:€€Can€you€just€summarize€what€theyÌare?Ì€€€€€€€€MR.€COHN:€€Basically€it€required€that€aÌstatement€in€ads€that€international€long€distanceÌtelephone€charges€to€blank€apply,€and€the€blank€would€beÌfilled€in€by€the€call€--€the€country€of€the€termination,ÌÇand€either€a€statement€that€this€call€may€cost€you€asÌmuch€as€blank€per€minute,€and€the€blank€being€theÌmaximum€possible€per-minute€charge,€or€in€--€in€lieu€ofÌthat,€a€range€of€possible€costs€for€the€call€where€theÌmaximum€charge€and€the€minimum€charge€are€displayed€withÌequal€prominence,€and€followed€by€a€statement€that€toÌdetermine€your€exact€per-minute€charges,€contact€yourÌlong€distance€carrier.Ì€€€€€€€€MR.€GILLIS:€€Certainly€Wisconsin€supported€this,Ìand€we€think€we€would€be€very€pleased€if€those€wereÌadopted,€and€in€the€case€of€information€providers,€forÌexample,€who€are€--€who€at€least€we€have€experienced€inÌour€enforcement€actions,€that€information€is€readilyÌavailable€to€them.€€They€know€the€length€of€theÌaudiotext€message€that€they€are€furnishing€to€people€toÌreceive€under€the€call,€they€have€an€understanding€ofÌwhat€international€rates€are€going€to€apply.€€They€--Ìall€this€information€is€available€to€them€when€they€setÌup€the€advertising€for€this€service.Ì€€€€€€€€So,€if€we€take€a€step€back€and€we€look€at€this,Ìpart€of€the€difficulty€is€that€the€Federal€TradeÌCommission€is€approaching€the€industry€from€the€outside,Ìthe€state€attorneys€general€have€to€do€that.€€TheÌindustry€has€very€good€access€to€its€costs€and€theÌincentives€associated€with€it.€€Certainly€--€certainlyÌÇinformation€providers€have€that.€€In€the€case€I€referredÌto€earlier€involving€the€job€line€from€--€in€theÌDominican€Republic,€that€was€actually€being€run€out€ofÌLos€Angeles,€and€the€financial€incentives€there€wereÌsignificant.€€We€ought€to€be€able€to€deal€with€theseÌissues€in€a€way€that€should€provide€protection€forÌpeople€who€are€responding€to€these€ads.Ì€€€€€€€€MR.€HILE:€€Kim,€do€you€want€to€respond€to€that?Ì€€€€€€€€MS.€WILLIAMS:€€Yeah,€I€did€want€to€say€that€I€doÌsupport,€at€a€minimum,€what€Adam's€suggesting,€thatÌ"international€dialing€rates€apply"€is€not€enough,€thatÌmost€customers€don't€understand€what€that€means.€€IÌthink€you€have€to€disclose€the€country€being€called,€youÌhave€to€disclose€the€maximum€rate€charged,€at€least,€ifÌnot€saying€a€range,€minimum€to€maximum,€for€customers€toÌunderstand.Ì€€€€€€€€Also,€that€hold€times€mean€--€when€I€have€calledÌany€of€these€international€numbers,€the€hold€times€areÌtremendous,€and€at€$5€or€$6€a€minute,€I€might€have€spentÌ$30€without€even€having€talked€to€anybody,€or€more.€€So,ÌI€think€that€customers€need€to€understand,€if€it's€in€aÌrecording,€that€while€you're€holding,€you're€beingÌcharged€a€certain€amount€a€minute€is€important.€€And,Ìyou€know,€especially€since€there€is€no€preamble€that'sÌfree€on€those€calls,€that€there€is€no€understanding€ofÌÇthat.€€But€I€think€the€rate€disclosures€in€the€ad€is€aÌmust€for€international.Ì€€€€€€€€MR.€COHN:€€Would€you€support€a€nonfreeÌpreamble?€€Would€you€support€a€requirement€that€there€beÌa€preamble,€even€though€it€was€charged?Ì€€€€€€€€MS.€WILLIAMS:€€I€think€they€need€a€preamble€noÌmatter€what.€€If€it€was€free,€it€could€be€better.Ì€€€€€€€€MR.€TAYLOR:€€You€would€think€you€could€do€thatÌwhile€they€are€holding,€right?Ì€€€€€€€€MS.€WILLIAMS:€€You€would€think€so.Ì€€€€€€€€MR.€TAYLOR:€€Make€use€of€the€holding€time.Ì€€€€€€€€MR.€KLUG:€€From€an€IAC€perspective,€I€wouldÌcertainly€support€Kim€and€Dave's€comments.€€I€think€thatÌif€the€industry€is€going€to€continue€to€grow,€that€theÌsame€standards€from€a€customer€perspective€need€to€applyÌto€the€international€calls,€and€that€is€to€disclose€theÌrates€in€a€preamble,€that€the€best€preamble€is€free,€butÌlacking€that,€certainly€a€short€preamble€so€that€while€aÌperson€is€on€hold,€they€aren't€paying€too€much.Ì€€€€€€€€MR.€HILE:€€Is€it€technologically€possible€toÌprovide€a€free€preamble€in€these€international€numbers?Ì€€€€€€€€MR.€KLUG:€€I€don't€believe€so.Ì€€€€€€€€MR.€HILE:€€Peter?Ì€€€€€€€€MS.€SCHWANKE:€€Why€not?Ì€€€€€€€€MS.€WILLIAMS:€€Yeah,€I€was€going€to€ask€that.ÌÇ€€€€€€€€MR.€HILE:€€Sorry.Ì€€€€€€€€MR.€BRENNAN:€€In€terms€of€the€hold€time,€IÌbelieve€that€that€issue€was€kind€of€asked€and€answeredÌin€the€last€proceedings,€and€that€was€that€wasÌconsidered€for€TDDRA,€and€having€to€publish€hold€timesÌis€problematic€from€the€point€of€view€of€some€people€inÌsome€types€of€services€spend€a€little€time€on€theÌservice,€for€example,€in€the€personals,€you€could€spendÌa€few€minutes,€you€could€spend€ten€minutes,€and€again,Ìour€chargebacks€and€level€of€complaints€is€so€small€thatÌI€don't€think€there€is€a€lot€of€dissatisfaction€in€thatÌregard.Ì€€€€€€€€But€I€do€want€to€talk€again€and€reiterate€theÌsuggestion€that€perhaps€wasn't€clear€this€morning€thatÌthe€ISA€and€others€have€made,€and€that€is€that€in€lieuÌof€saying€international€rates€apply,€which€has€beenÌsomewhat€controversial,€I€suppose,€and€given€theÌdifficulties€in€determining€what€the€preciseÌinternational€rate€is€in€every€case,€or€even€what€theÌrange€is,€because€those€are€negotiated€by€a€variety€ofÌcarriers€all€over€the€globe,€and€this€--€that's€justÌproblematic€even€--€even€to€make€the€best€good€faithÌeffort€at€it,€that€what€we€would€suggest€is€to€train€theÌconsumer€and€to€publish€in€the€advertising€that€they€canÌpress€00€on€their€phone,€they€will€be€forwarded€at€thatÌÇpoint€to€the€carrier€that€would€complete€the€call€ifÌthey€picked€up€the€phone€and€dialed€it,€and€they€can€sayÌwhat€is€the€rate€that€I€am€going€to€have€to€pay€to€dialÌblah-blah-blah-blah-blah.Ì€€€€€€€€They€will€get€very€precise€information€aboutÌwhat€the€per-minute€rate€is.€€They€will€understand€thatÌthey€have€this€option€--€over€time,€they€will€understandÌthat€they€have€this€option€not€only€to€get€the€rates€forÌpay-per-call€services€but€for€all€internationalÌservices,€and€the€consumer€will€be€better€served.Ì€€€€€€€€MR.€GILLIS:€€The€problem€with€that€is,€you€mayÌget€immediate€access€to€some€carriers.€€Other€carriers,Ìit€could€take€you€a€long€time€to€get€that€information.ÌI€don't€think€it€satisfies€the€need€that€the€consumerÌhas€to€have€a€clear€understanding€from€the€ad€as€toÌwhat's€involved€in€this€pay-per-call€service€which€heÌwould€get€from€the€disclosures€alluded€to€earlier.Ì€€€€€€€€MR.€BRENNAN:€€What€you€are€saying€is€that€whenÌthey€dial€that€code,€that€someone€is€not€going€to€answerÌthe€phone,€a€carrier€we€are€talking€about,€is€not€goingÌto€answer€their€phone?€€And€if€a€--€and€you€are€assumingÌthat€if€a€consumer€gets€that€far€and€no€one€answers€theÌphone€to€tell€them€what€the€rate€is,€and€we€encourageÌthem€to€check€what€the€rate€is,€and€then€they€don't€getÌ--€they€don't€find€out€what€the€rate€is,€that€they€areÌÇgoing€to€go€and€make€the€call€anyway?€€And€I'd€suggestÌthat€that's€--€doesn't€seem€--Ì€€€€€€€€MR.€GILLIS:€€My€basic€concern€is€that€theÌinformation€ought€to€be€in€the€ad.Ì€€€€€€€€MR.€BRENNAN:€€But€that€information€--€thatÌinformation€is€--€is€problematic,€putting€it€in€the€ad,Ìnotwithstanding€any€good€faith€effort.€€I€think€there€isÌagreement€among€responsible€players€in€the€industry€thatÌpeople€should€know€what€they€are€paying€for.ÌUnfortunately,€the€people€who€disagree€with€that€are€notÌat€the€table,€okay?€€And€those€of€us€who€--€those€of€usÌwho€are€responsible€players€suffer€as€much€from€abuse€ofÌthe€marketplace,€perhaps€more,€than€anyone.Ì€€€€€€€€So,€please€accept€this€as€--€as€a€good€faithÌargument,€but€the€fact€that€there€are€many€carriersÌinvolved,€that€the€rates€change€depending€onÌnegotiations€which€change€on€a€--€on€a€rapid€basis,€andÌthat€the€consumer€--€I€bet€most€consumers€don't€knowÌthat€even€to€find€out€--€I€didn't€until€it€came€up€inÌone€of€our€meetings€--€that€to€find€out€what€your€--Ìwhat€the€rate€is€for€an€international€call,€you€simplyÌpress€00€and€you€ask€your€carrier,€and€if€your€dial€1Ìcarrier€--€if€you€have€used€Joe's€Phone€Company€or€someÌcarrier,€determined€some€carrier€that€does€not€readilyÌgive€you€the€rates,€well,€that's€a€consumer€issue€and€aÌÇconsumer€has€to€make€a€decision€then€whether€or€notÌperhaps€they€should€designate€a€different€carrier,€butÌwe€need€to€--€we€need€to€--€again,€this€is€part€of€aÌglobal€approach€to€better€educating€consumers€in€aÌglobal€environment€for€interactive€media,€and€telephoneÌis€one€of€those.Ì€€€€€€€€MR.€HILE:€€Kim,€I€think€you€had€a€follow-up€forÌwhat€we€had€just€done€before.Ì€€€€€€€€MS.€WILLIAMS:€€Yes,€I€think€I€raised€it€when€IÌ--€I€think€I€just€talked€about€it€a€second€ago,€but€myÌfollow-up€now€is€just€in€response€to€that,€that€I€don'tÌunderstand€about€what€is€so€problematic€about€giving€theÌconsumer€a€range€of€rates,€and€for€the€informationÌprovider€industry€to€educate€the€consumer€through€theirÌads€in€Hustler€magazine€isn't€really€the€way€mostÌconsumers€need€to€find€out€about€how€to€use€theirÌtelephone.€€So,€I€think€a€rate€clearly€displayed€is€whatÌneeds€to€occur.Ì€€€€€€€€MR.€BRENNAN:€€Are€we€--€let€me€make€somethingÌclear.€€Are€we€going€to€pursue€this€discussion€today€onÌa€content-neutral€basis€or€not?€€If€we€are€going€to€getÌinto€distinctions€about€where€advertisements€--Ì€€€€€€€€MR.€HILE:€€I€don't€want€to€squabble€about€thingsÌlike€that,€because€that€will€just€eat€up€our€time.Ì€€€€€€€€Todd,€did€you€have€--ÌÇ€€€€€€€€MR.€LESSER:€€I€think€I€can€kind€of€help€that.ÌFirst€of€all,€our€association€does€support€the€initialÌguidelines€of€the€attorney€general.€€I€think€those€willÌsolve€a€lot€of€our€problems.€€As€far€as€the€overall€--Ìall€these€little€words€is€the€thing€I'm€concerned€about,Ìbecause€the€thing€is€we€don't€want€to€cause€confusionÌwith€the€consumer,€and€when€we€start€putting€in€how€muchÌhold€time€--€I€have€seen€ads€with,€"Hold€times€mayÌvary."€€So,€basically,€you€are€getting€information€thatÌdoesn't€even€apply€and€may€even€confuse€the€consumer.Ì€€€€€€€€When€you€do€range€of€rates,€someone€may€be€in€aÌrural€country€or€town,€and€they€may€have€high€rates,€andÌall€of€a€sudden€you€say€this€call€may€cost€--€if€youÌhave€the€friends€and€family€plan,€it€may€cost€you€50Ìcents,€but€if€you€have€Sprint€direct-dial€rate,€it€mayÌcost€you€$2.99€a€minute.Ì€€€€€€€€Now,€the€problem€is€the€consumer€is€going€to€beÌreally€confused,€but€if€you€say€that€international€tollÌcharges€beyond€that,€you€know,€apply,€you€know,€maybeÌdial€00€for€rates,€you€know,€that's€something€that'sÌclear,€it's€concise,€it's€not€--€I€mean,€clear,€youÌknow,€from€an€advertising€standpoint.Ì€€€€€€€€When€you€put€too€much€information€in€there,Ìpeople€don't€read€the€ad,€you€know,€the€fine€print€is€aÌclear€example€of€that,€but€I€think€if€we€put€things€inÌÇthere€that€are€clear,€that€are€not€upside€down,€some€ofÌthe€existing€guidelines€that€TDDRA€has,€I€think€thatÌsolves€the€problems.Ì€€€€€€€€I€think€one€thing€we€need€to€address€here€isÌinternational€calls€aren't,€you€know,€they€are€not€$5€orÌ$6€a€minute,€and€I€think€as€far€as€the€free€preamble,€itÌis€not€really€technically€possible,€because€manyÌcarriers€can't€support€that,€but€I€think,€you€know,ÌCongress€was€really€concerned€when€there€was€a€$25Ìcall.€€That's€why,€you€know,€for€a€one-minute€call,Ìthat's€why€they€wanted€a€preamble,€but€when€a€call€costsÌ89€cents€to€call€the€Dominican€Republic,€as€long€as€youÌhave€a€preamble,€as€long€as€you€have€advertisementÌguidelines€and€there€is€nothing€deceptive€in€thatÌadvertisement€--Ì€€€€€€€€MR.€HILE:€€So,€you€would€favor€a€preamble?Ì€€€€€€€€MR.€LESSER:€€Oh,€yeah,€wholeheartedly.€€ThatÌstops€the€problems,€you€know,€these€isolated€problemsÌthat€the€FTC€is€already€going€off,€and€that€makes€aÌclear€distinction€instead€of€trying€to€work€with€aÌdefinition€saying,€Hey,€these€guys€many€in€Muldova€areÌnot€having€a€preamble,€hey,€let's€go€after€that.€€Let'sÌstop€trying€to€worry€about€little€financial€issues,€howÌmuch€money€is€being€made.€€Let's€go€for€deceptiveÌadvertisement,€no€preamble,€things€that€are€so€easily,ÌÇreadily€identifiable€that€when€the€FTC€does€want€to€act,Ìthey€can€act€harsh,€get€it€taken€care€of€right€away€andÌstop€consumer€problems.Ì€€€€€€€€MR.€HILE:€€Joel,€do€you€want€to€enlarge€onÌthat?Ì€€€€€€€€MR.€DICHTER:€€Just€quickly€again€on€the€conceptÌof€a€range€and€how€difficult€that€is,€in€that€--€andÌunder€the€new€competitive€regime€at€the€FCC,€you€canÌfile€an€application€to€become€an€international€carrier,Ìthere€are€probably€50€of€those€filed€a€week.€€There€areÌprobably€--€there€are€many€hundreds€and€possiblyÌthousands€of€carriers€all€with€tariffs€on€file,€all€canÌbe€changed€on€one€day's€notice.€€It€makes€with€a€myriadÌof€different€rates,€plans,€time€of€day,€et€cetera,€itÌmakes€it€really€difficult€to€give€any€kind€of€meaningfulÌrange.€€I€think€you€have€to€be€concerned€that€--€I€thinkÌTodd€made€the€point€that€you€don't€want€to€confuse€theÌcustomer€any€more.€€That's€why€I€think€Peter'sÌsuggestion€is€a€good€one,€that€if€you€dial€00€to€getÌthat€information,€it's€available.Ì€€€€€€€€The€ITA€supports€a€preamble€and€requires€aÌpreamble€in€its€code.€€Its€members€generally€comply€withÌthat.€€They€have€a€disclosure€that€in€an€internationalÌcall,€the€ads€would€read,€"International€long€distanceÌrates€apply,"€spelled€out,€and€I€think€these€are€betterÌÇways€that€you€can€put€the€consumer€on€notice€that€heÌknows€he€is€making€an€international€call,€and€it€doesÌhelp€educate€them€in€that€regard€as€to€what€he's€doing.Ì€€€€€€€€MR.€HILE:€€Warren?Ì€€€€€€€€MR.€MILLER:€€I€want€to€support€what€Peter€saidÌand€TSIA€in€that€the€ISA's€position€is€certainly€that€weÌthink€additional€consumer€protections€and€advisories€areÌa€good€thing,€and€to€the€extent€that€they€areÌtechnically€feasible,€they€should€be€provided.€€The€ideaÌof€saying€what€the€exact€price€is€becomes€problematic,Ìbecause,€as€I€was€advised€before€the€session€startedÌtoday€from€someone€in€the€business,€that€more€of€theÌinternational€traffic€is€moving€to€live€operators,€andÌthat€is€not€something€you€can€measure.Ì€€€€€€€€So,€it€would€be€--€it€would€seem€to€be€less€thanÌhelpful€to€put€--€to€populate€ads€with€unfacts€aboutÌwhat€prices€are,€and€I€would€just€point€out€as€an€asideÌthat€you€see€in€an€ad€for€a€McDonald's€promotion€thatÌsays,€"Dealer€participation€may€vary,"€and,€in€fact,Ìthere€is€--€there€would€be€more€information€available€byÌdialing€00€for€free.€€They€are€in€lots€of€ads€for€thingsÌthat€cost€money.Ì€€€€€€€€MR.€HILE:€€What€about€programs€that€can€beÌdetermined€as€far€as€length€goes€in€advance?Ì€€€€€€€€MR.€MILLER:€€Well,€even€if€the€length€isÌÇdetermined,€what€--Ì€€€€€€€€MR.€HILE:€€Like€if€you€listen€to€the€entireÌprogram,€it's€ten€minutes,€for€example.Ì€€€€€€€€MR.€MILLER:€€Oh,€if€it€was€possible€to€say€whatÌthe€total€duration€of€the€program€was,€you€still€--€I'mÌnot€sure€that€would€be€helpful,€because€I€still€won'tÌhave€the€multiplier.€€What's€the€rate?Ì€€€€€€€€MR.€HILE:€€Marianne,€do€you€have€a€question?Ì€€€€€€€€MS.€SCHWANKE:€€Yes,€I€would€like€to€follow€upÌwith€Don€on€something€you€said€earlier.€€Earlier€thisÌmorning€you€indicated€that€it€might€be€possible€to€useÌ900€access€for€international€numbers.€€If€that€were€theÌcase€and€if€--€if€you€did€--€if€that€was€a€way€consumersÌcould€access€international€number,€could€a€free€preambleÌbe€put€on€that€kind€of€call?Ì€€€€€€€€MR.€KLUG:€€Sure,€and€you€also€asked€theÌquestion,€Marianne,€why€free€preambles€couldn't€be€putÌon€international€calls,€I€guess€that's€the€flip€side€ofÌit,€and€the€reason€is€that€the€IXE€carriers€have,€withÌ900€--€who€provide€900€service€today€have€invested€inÌtheir€networks€so€when€a€900€call€is€delivered€to€them,Ìthey€know€that€they€need€to€provide€timing€only€after€aÌpreamble€is€provided.€€If€they€were€to€do€that€on€anÌinternational€side,€first€of€all,€there€would€be€no€wayÌto€differentiate€between€international€pay-per-call€andÌÇsomeone€who€wanted€to€call€their€grandmother€in€Italy.Ì€€€€€€€€MS.€SCHWANKE:€€But€earlier€people€haveÌindicated,€I€think,€that€a€lot€of€countries€haveÌdesignated€certain€area€codes€within€their€country€asÌaudiotext€services.€€So,€if€that's€the€case,€then€whyÌcan't€they€tell?Ì€€€€€€€€MR.€KLUG:€€Okay,€assuming€that€there€wereÌspecific€codes€for€international€pay-per-call€programs,Ìthen€the€EXEs€would€need€to€invest€development€dollarsÌto€handle€that€and€provide€free€preambles€the€same€wayÌthey€do€on€900€today,€and€I€would€just€posit€that€atÌleast€from€an€MCI€perspective,€we€would€not€offer€thatÌservice,€because€we€wouldn't€think€we€would€recover€ourÌinvestment.Ì€€€€€€€€MS.€SCHWANKE:€€So,€is€it€more€of€an€economicÌissue€than€a€technical€issue?Ì€€€€€€€€MR.€KLUG:€€Yes,€to€the€extent€that€specificÌcountries€can€separate€out€--€designate€prefixes€for€900Ìcalls€is€a€technical€issue.Ì€€€€€€€€MR.€HILE:€€Kim,€did€you€have€something?Ì€€€€€€€€MS.€WILLIAMS:€€On€the€issue€of€internationalÌcalls,€first,€I€rarely€see€anything€that's€89€cents€aÌminute,€I€think€more€often€I€do€see€$3€to€$6€a€minute,Ìand€that€is€common.Ì€€€€€€€€MR.€LESSER:€€I€think€I€want€to€directly€addressÌÇthat.€€I€think€that's€something€--€that's€why€it's€veryÌimportant€why€the€TSIA€supports€reasonable€and€customaryÌrates.€€Now,€a€caller€from€Florida€showed€me€a€$95€callÌfor€20€minutes€to€Canada,€that€some€carrier€that€we€haveÌtalked€about€that€filed€a€tariff€rate€charging€$5€aÌminute€to€call€Canada.€€I€know€AT&T€charges€--€I've€gotÌthe€plan,€it€costs€10€cents€a€minute€to€call€Canada.Ì€€€€€€€€MS.€WILLIAMS:€€I€think€some€countries,€though,Ìwhether€AT&T€or€not,€Guyana,€maybe€AT&T's€is€$3€a€minuteÌand€somebody€else's€rate€might€be€$5€a€minute,€but€bothÌrates€are€high€rates€from€the€consumer€perspective,€andÌat€least€in€the€advertisement,€if€they€saw€that€thisÌmight€cost€them€anywhere€from€$3€to€$6€a€minute,€and€youÌcould€include€the€suggestion€to€dial€00€to€check€theÌrate€from€your€carrier,€but€that€price€range€first,€IÌmean,€a€dollar€sign€is€certainly€going€to€attract€aÌcustomer's€attention€in€the€ad,€and€I€think€that'sÌwhat's€important,€is€that€they€see€some€dollar€signÌthere€that€they€understand€that€this€is€going€to€costÌmore€than€what€they€are€used€to€paying€domestically.Ì€€€€€€€€MR.€HILE:€€Adam,€do€you€have€a€question?Ì€€€€€€€€MR.€COHN:€€Yes.Ì€€€€€€€€My€question€is€basically,€we€heard€a€lot€in€theÌcomments€and€also€here€today€and€yesterday€aboutÌtechnological€innovation,€and€I'm€wondering€whether€orÌÇnot€--€and€maybe€we're€trying€to€look€at€the€FTC€tooÌmuch€to€sort€of€determine€what€the€innovation€will€be€orÌshould€be,€you€know,€what€do€people€think€about€theÌnotion€of,€you€know,€creating€a€definition€that's€broadÌenough€to€encompass€all€of€the€problem€areas€that€we€mayÌor€may€not€see,€and€then€leaving€it€up€to€industry€toÌsort€of€figure€out€ways€to€comply€with€the€rulesÌrequired€in€TDDRA,€whether€that€be€cost€disclosures,€andÌnot€making€specific€requirements€for€how€a€disclosureÌlook,€but€--€or€how€a€preamble€should€work€but€sort€ofÌrelying€on€the€industry€itself€to€figure€out€a€way€toÌmake€international€calls€include€a€free€preamble.Ì€€€€€€€€I'm€not€convinced€that€that's€impossible,€youÌknow,€if€all€the€parties€were€notified€in€advance€that€aÌnumber€was€--€was€a€pay-per-call€number,€I'm€not€100Ìpercent€convinced€that€it€wouldn't€be€possible€to€createÌa€free€preamble.€€And€if€industry€can€figure€out€a€wayÌto€do€that,€I€believe,€you€know,€it's€in€the€power€ofÌindustry€to€come€up€with€new€solutions.€€I€mean,€what€doÌpeople€think€about€that,€you€know,€just€sort€ofÌbroadening€the€definition€and€then€leaving€the€door€openÌfor€people€to€figure€out€ways€to€comply€with€TDDRA€as€itÌcurrently€works?Ì€€€€€€€€MR.€HILE:€€Anybody€care€to€respond€to€thatÌspecific€question?ÌÇ€€€€€€€€Peter?Ì€€€€€€€€MR.€BRENNAN:€€I€applaud€the€spirit€of€it,€butÌpossible€and€feasible€are€two€different€things,€andÌthere€is€a€--€you€know,€look,€technology€--€technologyÌis€a€wonderful€thing,€and€technology€can€be€made€to€doÌalmost€anything,€and€I€know€when€a€customer€comes€to€usÌwith€something,€the€first€thing€we€say€is€yeah,Ìtechnologically€we€can€do€it.€€Here's€what€it€willÌcost.Ì€€€€€€€€And€on€a€feasibility€basis,€I€think€we€have€toÌbalance€the€value€of€that€and€the€present€reality,€theÌpresent€state€of€the€technology.€€I€think€on€aÌgoing-forward€basis,€that's€something€we€should€aspireÌto,€but€the€--€but€I'm€not€sure€that€that€would€be€--ÌI'm€not€sure€--€I€don't€know€what€exactly€it€will€takeÌto€insert€the€mechanism€for€a€free€preamble€in€everyÌtelecommunications€company€in€the€world.€€I€don't€knowÌwhat€that€will€take,€or€even€in€the€handful€of€companiesÌ--€of€countries€that€do€this.Ì€€€€€€€€And€I€suggest€that€perhaps€in€the€long€run€thatÌthat€--€although€it's€a€commendable€idea,€that€might€beÌanti-consumer,€because€it€will€cost€more€than€some€ofÌthe€other€solutions€which€would€have€much€the€sameÌeffect.Ì€€€€€€€€MR.€COHN:€€Well,€the€flip€side€to€what€I€wasÌÇsaying€would€be€that€--€that€this€is€sort€of€TDDRA€as€itÌstands€now€was€what€was€determined€to€be€fair€in€the€900Ìnumber€context€in€light€of€the€technology€that€wasÌavailable,€but€why€should€--€why€should€international€orÌother€formats€be€treated€any€differently€merely€becauseÌit's€not€currently€technologically€or€economicallyÌpossible?€€If€this€was€thought€of,€you€know,€three€yearsÌago€as€to€be€a€fair€disclosure€and€a€fair€way€ofÌhandling€this€instant€billing€situation,€why€shouldÌexceptions€be€made?Ì€€€€€€€€I€know€that€--€that€there€may€be€really€goodÌreasons€for€having€international€over€900,€and€I'd€likeÌto€--€I'd€like€to€hear€some,€you€know,€some€reasons€whyÌexceptions€should€be€made€for€specific€new€preambleÌrequirements,€nonfree€preamble€--€you€know,€exceptionsÌfor€international€numbers.€€I€mean,€I€haven't€reallyÌheard€any€--Ì€€€€€€€€MR.€HILE:€€Are€you€basically€saying€what€is€theÌrationale€for€treating€international€pay-per-callÌdifferent€than€900€pay-per-call?Ì€€€€€€€€MR.€COHN:€€Exactly.Ì€€€€€€€€MR.€HILE:€€Anybody€care€to€answer€that?Ì€€€€€€€€MR.€HERTZENDORF:€€Just€ad-libbing,€I€don't€knowÌif€they€are€stating€that€it's€a€particular€advantage€orÌdisadvantage€for€the€pay-per-call.ÌÇ€€€€€€€€MS.€GOLDSTEIN:€€Let€me€comment€that€I€don't€knowÌthat€it's€so€much€creating€an€exception€except€thatÌrecognizing€that€there€are€certain€jurisdictionalÌlimitations€in€terms€of€the€agency's€jurisdiction.€€InÌthe€domestic€arena€--€I'm€sorry.Ì€€€€€€€€In€the€domestic€arena€where€we€didn't€have€theÌtechnological€problems€with€the€preamble,€I€mean,€thereÌwas€certainly€this€discussion€four€years€ago€as€toÌwhether€the€preamble€should€be,€you€know,€dealt€with€inÌthis€particular€rule,€but€we€weren't€faced€with€thoseÌtechnological€problems,€because€we€were€talking€aboutÌthings€happening€here€in€the€United€States.Ì€€€€€€€€I€don't€think€anyone€here€would€disagree€thatÌcertainly€in€terms€of€the€advertising€that'sÌdisseminated€here,€it's€appropriate€for€the€FTC€to€setÌstandards€to€ensure€that€the€advertising€is€notÌmisleading€and€deceptive,€but€I€think€to€try€to€tackleÌthose€technological€problems,€which€seem€to€be€ratherÌsignificant,€coupled€with€the€jurisdictional€issues,€itÌmay€be€a€more€prudent€approach€to€try€to€deal€with€whatÌtechnologically€can€be€done€and€really€what€fits€withinÌthe€framework€of€the€FTC's€jurisdiction,€which€is€reallyÌto€focus€more€on€the€advertising.Ì€€€€€€€€MR.€COHN:€€And€not€on€billing,€billing€for€freeÌpreamble€time?ÌÇ€€€€€€€€MS.€GOLDSTEIN:€€I'm€not€sure€I'm€--Ì€€€€€€€€MR.€COHN:€€You€are€suggesting€that€onlyÌadvertising€is€what's€at€issue,€but€I€would€suggest€--Ì€€€€€€€€MR.€HILE:€€That€is€what€we€have€been€talkingÌabout€so€far,€but€we€are€going€to€have€to€enlarge€theÌdiscussion€to€the€other€aspects€of€the€rule.Ì€€€€€€€€MS.€GOLDSTEIN:€€I€wasn't€suggesting€--€I€wasÌfocusing€on€really€what€we're€discussing€here,€which€isÌshould,€you€know,€the€issue€of€whether€we,€you€know,€theÌindustry€should€be€forced€to€take€the€steps€necessary€toÌtry€to€somehow€impose€free€preambles€--Ì€€€€€€€€MR.€COHN:€€Not€that€they€should€be€forced€butÌthat€they€shouldn't€be€given€an€exception€to€what'sÌalready€required.Ì€€€€€€€€MS.€GOLDSTEIN:€€And€that's€what€I€was€trying€toÌsay.€€I'm€not€--€I€think€it's€an€exception€that€comesÌout€--€that€comes€out€of€almost€necessity.Ì€€€€€€€€MR.€COHN:€€I'm€not€sure€I€understood€yourÌjurisdictional€argument.€€I€just€--€I€mean,€I€know€someÌof€these€calls€are€apparently€--€well,€we€are€led€toÌbelieve€that€they€are€going€to€other€countries,€atÌleast,€but€why€--€why€should€a€billing€issue,€someoneÌwho€is€being€billed€for€preamble€that€in€other€contextsÌis€required€to€be€free,€they€are€being€--€the€bill€isÌbeing€sent€to€an€address€in€the€United€States,€to€aÌÇcustomer€who€lives€in€the€United€States,€and€theÌadvertisements€that€they€see€are€--€are€being€shownÌin€the€United€States,€that€call€is€coming€in€to€theÌUnited€States€stating€something€to€a€consumer€listeningÌon€a€phone€in€the€United€States.€€I€don't€--€how€is€thatÌnot€--Ì€€€€€€€€MS.€GOLDSTEIN:€€Because€I€think€--€and€I'mÌreally€picking€up€on€what€Don€Klug€said,€that€theÌinfrastructure€--€the€infrastructure€to€do€that€wouldÌrequire€--€I€mean,€there€would€be€a€tremendous€amount€ofÌcost€involved€to€implement€that.€€If€that's€not€--€IÌmean,€I'm€building€on€that,€and€I€don't€have€personalÌknowledge€of€that,€but€if€that€is€the€case,€that's€notÌthe€same€situation€that€existed€when€we€were€talkingÌabout€instituting€a€preamble€domestically.Ì€€€€€€€€MR.€BRENNAN:€€It€seems€to€me€that€what€--€whatÌyou€are€proposing€in€terms€of€the€assumption€that€thisÌis€what€was€fair,€what€was€thought€to€be€fair€four€yearsÌago€when€we€went€through€this€before,€and€--€and€the€--Ìthe€extrapolation€to€that€--€to€this€environment€seemsÌto€be€almost€to€me€consistency€for€its€own€sake.Ì€€€€€€€€In€that€environment€four€years€ago,€there€wereÌthose€of€us€who€prior€--€who€prior€to€the€TDDRA,€priorÌto€even€consideration€of€the€TDDRA,€had€offeredÌpreambles€and€always€did,€because€we€thought€it€was€goodÌÇbusiness€and€because€it€was€possible€and€because,€youÌknow,€and€--€but€this€is€not€that€situation€now,€and€inÌterms€of€what€the€problem€is€exactly€that€we're€tryingÌto€solve,€we€might€agree€that€if€there€could€beÌpreambles€if€it€went€--€if€it€weren't€burdensome,€overlyÌburdensome,€that€that€would€be€a€usable€option,€butÌlet's€look€at€the€problem€that€we€are€trying€to€solve.Ì€€€€€€€€If€a€preamble€other€than€a€free€preamble€--€if€aÌpreamble€is€provided,€if€all€of€the€other€stipulationsÌof€the€TDDRA€apply,€cost€disclosure,€billing€notice€andÌbilling€dispute€procedures,€in€a€realistic€sense,€how€isÌthe€customer€or€the€telephone€subscriber€hurt€when€--Ìwhen€with€all€those€billing€dispute€procedures,€theyÌcould€still€charge€back€the€call?€€They€still€haveÌrights€to€all€kinds€of€due€process.€€They€still€haveÌthe€cost€disclosures€in€advertisements€and€in€all€ofÌthose€other€protections.€€The€free€preamble€was€one€partÌof€an€--€of€a€mosaic€of€consumer€protection.Ì€€€€€€€€MR.€LESSER:€€Can€I€amend€what€you€were€saying,ÌAllen,€because€maybe€this€would€work.€€Just€sayÌtechnically€feasible€and€reasonably€enacted,€and€thatÌgives€you€a€little€ability€to€maybe€change€things€andÌmaybe€in€the€future€something€would€be€able€to€beÌadopted,€but€not€any€sort€of€guidelines,€becauseÌtechnically,€would€we€send€a€man€to€the€moon€to€go€get€aÌÇglass€of€milk?€€It€is€not€always€worthwhile€to€do€it,Ìbut€I€think€we€go€from€a€standpoint€of€technicallyÌfeasible€and€reasonably€enacted€and€assume€there€areÌpeople€out€there€to€follow€that.Ì€€€€€€€€MS.€HARRINGTON:€€Susan,€you€have€got€your€cardÌup.€€What€do€you€think€about€that?Ì€€€€€€€€MS.€GRANT:€€What€I€am€really€hearing€is€it€isÌprobably€technically€feasible€to€give€consumers€the€sameÌtypes€of€protections€but€it€is€not€currentlyÌeconomically€feasible,€but€nobody€is€forcing€informationÌproviders€to€use€international€numbers€to€provide€theirÌservices.€€That's€a€choice€that€they€are€consciouslyÌmaking.€€We're€being€asked€essentially€to€countenanceÌthis€choice€to€use€these€numbers€and€to€not€giveÌconsumers€the€same€protections€that€we€felt€so€stronglyÌthey€were€entitled€to€with€900€numbers,€because€it€wouldÌbe€too€expensive€for€the€companies€to€do€so,€resultingÌin€what€--€what€we€have€seen€as€tremendous€harm,Ìeconomic€harm,€to€consumers.Ì€€€€€€€€I€don't€think€that€that's€fair.€€I€don't€thinkÌthat€that€is€in€the€spirit€of€the€law€and€the€--€and€theÌrecent€law€that€is€obliging€us€to€review€the€rule€inÌthat€light,€and€I€would€suggest€that€if€it's€notÌeconomically€possible€at€this€point€to€give€consumersÌthe€protections€that€they€need,€then€those€numbersÌÇshould€not€be€used€to€provide€these€services€until€andÌunless€it€is.Ì€€€€€€€€MS.€HARRINGTON:€€Question€from€Mark?Ì€€€€€€€€MR.€HERTZENDORF:€€Following€up€on€that€point,€aÌquestion€for€the€EXEs,€how€difficult€would€it€be€forÌthem€to€block€access€to€all€international€audiotextÌservices?€€Is€that€feasible?Ì€€€€€€€€MS.€HARRINGTON:€€EXEs,€Don?Ì€€€€€€€€MR.€KLUG:€€We€don't€do€it€today.€€I€guess€weÌcould€do€it.€€I€don't€know€about€costs.€€I'm€not€sure€weÌwould€want€to€do€it.Ì€€€€€€€€MS.€HARRINGTON:€€That's€not€the€question.€€JustÌis€it€feasible?Ì€€€€€€€€MR.€KLUG:€€It€is€feasible.€€I€don't€know€whatÌthe€cost€would€be.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€Jim?Ì€€€€€€€€MR.€BOLIN:€€I'm€sorry,€I€was€talking€withÌsomeone.Ì€€€€€€€€MS.€HARRINGTON:€€The€question€is€is€it€feasibleÌfor€the€EXEs€to€block€access€to€internationalÌaudiotexts.Ì€€€€€€€€MR.€BOLIN:€€Once€we€know€that's€what€they€are,Ìyes.€€If€it's€an€international€POTS€number,€we€can'tÌknow€to€block€it€until€we€get€complaints€coming€in,€andÌÇthat's€actually€what€I€was€just€talking€to€Jon€ShaubÌabout,€until€we€are€getting€complaints,€the€issue€is€areÌwe€operating€in€violation€of€TDDRA,€the€issue€is€couldÌwe€have€known€or€should€have€known,€at€least,€and€theyÌcan€also€migrate€once€they€have€been€identified.Ì€€€€€€€€MS.€HARRINGTON:€€We€are€going€to€go€to€Kim€andÌthen€back€to€Todd€for€his€follow-up€comment€orÌquestion.Ì€€€€€€€€MS.€WILLIAMS:€€The€whole€issue€of€identificationÌof€these€is€a€problem.€€Unless€you€can€identify€themÌwhen€they€are€billed,€then€you€can't€afford€consumersÌany€protections€for€these€numbers.€€I€mean,€I€hate€toÌsay€it,€but€I€know€we're€denying€local€service€forÌnonpayment€of€these€charges€over€and€over€again.€€WeÌdon't€know€what€they€are.Ì€€€€€€€€We€are€getting€used€to€the€countries,€we€areÌgetting€used€to€seeing€the€Guyanas€and€Sao€Tomes,€and€soÌwe€are€probably€a€little€better€at€offering€adjustmentsÌfor€them,€but€I€can't€say€that€it€happens€all€the€time.ÌI€think€we're€holding€customers€responsible€for€paymentÌbecause€these€are€toll€charges€and€not€900€charges.Ì€€€€€€€€MS.€HARRINGTON:€€Todd,€we€are€going€to€get€backÌto€you,€but€I€am€going€to€go€to€Joel€first.Ì€€€€€€€€MR.€LESSER:€€No€problem.Ì€€€€€€€€MR.€DICHTER:€€I€am€really€following€up€toÌÇsomething€that€Linda€said.€€I€think€you€have€to€beÌcareful€here€that€from€an€FTC€perspective,€we€areÌtalking€about€--€this€is€a€law€entitled€the€TelephoneÌDisclosure€and€Dispute€Resolution€Act,€and€we€areÌtalking€about€disclosure€information.€€Can€the€FTC€as€anÌadvertising€agency,€disclosures€you€put€intoÌadvertising,€dispute€resolution,€it€gets€back€that€theÌFTC€jurisdiction€is€not€common€carriers.€€What€we€areÌtalking€about€is€rates€charged,€filed€by€and€billed€byÌinternational€common€carriers,€and€there€is€aÌjurisdictional€problem€there€that€has€to€be€considered.Ì€€€€€€€€Industry€is€willing€to€come€forward€withÌadvertising€guidelines,€provide€more€dispute€resolution,Ìto€provide€more€disclosures€on€costs,€to€try€and€workÌwith€the€agency€on€that,€but€you€have€to€try€and€get€toÌthis€concept€of€it€must€be€our€900.€€It€is€really€aÌnarrow€perspective€and€ignoring€the€fact€that€we€are€inÌa€growing€global€economy,€not€just€for€telephoneÌservices,€for€Internet,€for€everything,€which€obviouslyÌuses€telephone€lines,€and€you€have€to€be€--€you€know,Ìtrying€to€narrow€it€in€or€saying€we€are€going€to€adoptÌregulations€and€it€is€up€to€the€industry€to€figure€outÌhow€to€comply€with€them€is€really€not,€I€don't€think,Ìwhat€Congress€intended.Ì€€€€€€€€It€is€not€what€we€went€through€four€years€ago,ÌÇand€before€TDDRA,€where€there€were€hearings€on€TDDRA€andÌwe€talked€about€these€issues,€and€there€were€discussionsÌabout€900€preamble€and€free€periods€and€where€it€wasÌfeasible€and€wasn't€feasible,€rather€than€enactingÌregulations€and€expecting€someone€to€figure€out€unknownÌcosts€and€unknown€complications€of€how€to€comply€withÌit.Ì€€€€€€€€MS.€HARRINGTON:€€I€think€if€I€may€just€interjectÌwith€the€staff€view,€our€view€is€that€we€absolutely€haveÌjurisdiction.€€The€FTC€is€more€than€an€advertisingÌagency.€€We€have€very€broad€jurisdiction€to€act€toÌprohibit€deceptive€and€unfair€trade€practices,€whetherÌthey€occur€at€the€point€of€sale€or€in€advertisement€orÌin€connection€with€billing€and€collection.€€Our€mandateÌis€to€protect€consumers€from€these€kinds€of€practices,Ìand€our€position€is€that€when€marketers€or€advertisersÌor€sellers€come€into€our€marketplace€using€anyÌtechnology,€that€we€have€jurisdiction€over€thoseÌtransactions€and€the€marketing€activities€and€theÌadvertising€and€the€billing€and€collection€activity.Ì€€€€€€€€Now,€whether€or€not€we€can€reach€companies€thatÌare€based€outside€of€the€United€States€for€purposes€ofÌexecuting€our€judgments,€satisfy€judgments,€is€aÌdifferent€issue,€but€we€would€dispute€any€assertion€thatÌwe€do€not€have€jurisdiction.ÌÇ€€€€€€€€Secondly,€whether€or€not€we€have€jurisdictionÌover€common€carriers,€I€would€submit,€is€an€openÌquestion€in€an€era€when€the€meaning€of€"common€carriage"Ìhas€changed€dramatically.€€And€so€I€don't€think€that€weÌwould€even€concede€on€that,€just€so€you€know,€for€theÌrecord,€where€we're€coming€from€here.Ì€€€€€€€€Finally,€Joel,€I€think€that€several€years€agoÌthe€only€audiotext€services€that€were€widely€availableÌto€consumers€were€available€on€the€900€or€976€platform.ÌI€think€it's€probably€not€quite€accurate€to€say€that€theÌCongress€intended€these€rules€to€apply€only€to€audiotextÌservices€offered€on€900.€€It's€just€that€nobody€knewÌthat€anything€else€was€possible.Ì€€€€€€€€I€think€what€the€Congress€intended€was€forÌUnited€States€consumers€to€have€certain€protections€whenÌthey€purchase€audiotext€services.€€Certainly€that's€whatÌwe€intended.€€I€don't€know€about€the€Congress.€€I€am€notÌin€it,€but€--€but€I'll€just€sort€of,€you€know,€pour€aÌlittle€gasoline€on€by€--€by€saying€that's€the€staffÌview,€and€I€want€to€be,€you€know,€up€front€about€that.Ì€€€€€€€€Now,€we€are€going€to€hear€from€Jim€and€thenÌWarren.Ì€€€€€€€€MR.€LESSER:€€I€think€he€wanted€to€answer€oneÌquick€question.Ì€€€€€€€€MS.€HARRINGTON:€€Or€Joel,€you€still€have€yourÌÇsign€up?Ì€€€€€€€€MR.€DICHTER:€€I€think€we€have€a€dispute€aboutÌthat,€actually.€€I€think€especially€in€dealing€with€whatÌyou€are€saying,€you're€regulating€in€essence€what€theÌtariffed€rates€are€of€AT&T€by€saying€that€there€is€aÌfirst€30€seconds€of€AT&T's€time€is€now€--€is€now€freeÌtime.€€I€think€you€have€a€jurisdictional€problem.Ì€€€€€€€€You€talk€about€blocking€issues,€also,€now€you'reÌtalking€about€not€just€U.S.€telecommunications€laws€butÌinternational€telecommunications€laws€and€providingÌaccess€to€services,€and€I€--€and€I€understand€these€areÌopen€issues€and€issues€for€discussion,€but€that's€justÌsomething€that€I€want€to€put€on€the€table€that€has€to€beÌconsidered.Ì€€€€€€€€MS.€HARRINGTON:€€Todd?Ì€€€€€€€€MR.€LESSER:€€I€just€wanted€to€say€you€know€weÌhave€a€lot€of€carriers€in€our€association,€and€somethingÌas€far€as,€you€think,€as€AT&T€was€saying,€knew€or€shouldÌhave€known,€on€an€information€type€call,€that€definitionÌis€a€little€tough,€is€that€carriers€can€blockÌinternational€calls,€just€specific€numbers€are€a€littleÌbit€harder.Ì€€€€€€€€As€far€as€the€economic€costs,€and€this€isÌsomething€I'm€--€I'd€like€to€try€to€see€what€Adam€wasÌgoing€at,€what€we€are€hearing€a€lot€from€attorneyÌÇgenerals€is€problems€with€economic€costs.€€As€long€asÌthere€is€a€preamble€and€disclosure€in€the€advertisementÌand€people€are€charging€reasonable€rates€and€customaryÌrates,€is€there€going€to€be€such€a€big€economic€cost€ifÌsomeone€calls€a€number€and€goes,€oh,€I€find€out€thisÌcall€is€a€high€number,€I€didn't€read€the€ad€first,€andÌthen€they€hang€up,€and€maybe€they€are€charged€for€aÌ20-second€call€to€Guyana.€€Is€that€as€much€of€an€issue?ÌAren't€you€more€concerned€about€calls€that€are€$100,Ìbecause€they€stay€on€the€phone€beyond€having€no€ideaÌwhat€the€call€costs€at€all?Ì€€€€€€€€MR.€HILE:€€That's€if€you€have€fractional-minuteÌbilling.Ì€€€€€€€€MR.€LESSER:€€Well,€then€a€full€minute,€so€itÌcosts€a€person€even€as€high€as€$3€for€that€firstÌminute.€€Aren't€you€more€concerned,€just€like,€you€know,Ìthey€don't€have€preamble€requirements€for€a€976€LottoÌnumber€in€California,€because€it's€only€a€$2€call?ÌAren't€you€more€concerned€about€the€huge€dollar€volumesÌand€the€complaints,€that's€what€you're€receiving?Ì€€€€€€€€MS.€SANDFORD:€€Todd,€what€we're€concerned€about,Ìwe're€concerned€about€both€a€particular€bill€that€has€aÌvery€large€dollar€amount€but€also€a€volume€of€billsÌwhich€might€have€a€more€de€minimis€amount.€€You€couldÌhave€a€situation€where€an€ad€is€run€in€the€classifiedsÌÇin€The€New€York€Post€and€10,000€people€call€up€or€20,000Ìpeople€call€up,€you€know,€we€have€a€very€high€populationÌarea,€especially€in€the€New€York€metropolitan€area.€€So,Ìeven€though€the€particular€charge€to€an€individualÌconsumer€may€be€low,€the€volume€of€consumers€andÌultimately€the€volume€of€complaints€we€see€may€be€veryÌhigh.€€So,€I€just€wanted€to€be€clear€that€we'reÌconcerned€about€the€scope€of€a€problem€as€well€as€theÌdollar€amount€for€each€individual€consumer.Ì€€€€€€€€MR.€LESSER:€€But€if€Adam's€guidelines€wereÌfollowed,€you€know,€as€far€as€reasonably€trying€to€adoptÌthis€in€the€advertisements,€would€that€be€a€--€I€mean,Ìcould€you€give€me€an€example€--€you€are€giving€anÌexample€of€an€ad€in€The€New€York€Post,€but€if€we€satÌdown€and€had€the€consumer€protections€that€have€beenÌsuggested,€wouldn't€that€stop€not€having€the€slew€ofÌcalls€that€someone€--€there€was€no€deceptiveÌadvertisement?Ì€€€€€€€€MS.€SANDFORD:€€Well,€there€are€differentÌconsumer€protections€that€have€been€proposed€on€theÌtable,€and€I€don't€think€there€is€consensus€at€thisÌpoint€as€to€what€we€believe€and€believe€as€a€group€isÌthe€proper€consumer€protection.Ì€€€€€€€€MR.€LESSER:€€Okay.Ì€€€€€€€€MR.€HILE:€€Jim?ÌÇ€€€€€€€€MR.€BOLIN:€€Just€briefly€to€respond€to€Jill,ÌAT&T€agrees€wholeheartedly€that€a€small€charge€to€a€lotÌof€consumers€makes€consumers€unhappy€and€is€unfair,€andÌa€small€charge€to€AT&T€or€MCI€or€Sprint€over€the€base€ofÌtheir€rate€base€is€not€a€small€charge€in€the€aggregate.ÌSo,€I€think€arguments€about€de€minimis€issues€maskÌwhat's€really€going€on,€but€also€I'd€like€to€say€whileÌI'm€not€going€to€wade€into€the€jurisdictional€argumentsÌin€full,€common€carriers€are€certainly€obligated€toÌensure€that€their€customers€abide€by€the€FTC'sÌrelations.Ì€€€€€€€€So,€in€effect€we€are€going€to€be€able€to€getÌthem€to€comply€with€whatever€the€FTC€promulgates,Ìwhether€or€not€the€FTC€steps€in€directly,€and€the€issueÌI€want€to€dispute,€too,€Jon€Shaub€informs€me€that€on€theÌissue€of€blocking€international€pay-per-call,€we€haveÌthe€technology€to€block€international€lines€certainly.ÌI€think€we€need€to€get€back€to€you€on€whether€or€not€weÌhave€the€network€capability€to€block€all€internationalÌpay-per-call€lines€that€are€out€there€now.€€That's€aÌlarge€volume€and€I€need€to€investigate€whether€we€can€doÌthat.Ì€€€€€€€€MR.€HILE:€€Did€you€want€to€follow€up?Ì€€€€€€€€MR.€HERTZENDORF:€€Yes,€with€regard€to€theÌpreamble,€as€an€economist,€I€would€assume€that€if€theÌÇpreamble€is€free€that€ultimately€the€consumer€is€goingÌto€wind€up€paying€for€it€or€at€least€the€consumers€whoÌ--€who€don't€hang€you€during€the€preamble€are€going€toÌwind€up€paying€for€it,€some€consumers€are€going€to€haveÌto€pay€for€it,€or€maybe€those€costs€will€be€distributedÌout€of€the€profits€of€the€company€and€out€of€theÌconsumers'€costs€for€using€the€service.Ì€€€€€€€€So,€I'm€just€wondering,€from€the€consumers'Ìpoint€of€view,€for€the€ones€who€are€going€to€use€theÌservice,€really€does€it€--€it€may€not€matter€to€themÌquite€so€much€whether€the€preamble€is€free€and€they€payÌa€slightly€higher€charge€per€minute€or€whether€they€payÌa€lower€rate€but€don't€get€the€preamble€for€free.€€So,Ìthe€only€consumers€we€need€to€focus€on,€it€would€seem€toÌme,€would€be€the€consumers€who€want€to€hang€up€on€theÌpreamble.Ì€€€€€€€€So,€I€just€want€to€throw€out€the€alternative€ofÌpossibly€forwarding€chargebacks€for€maybe€the€smallestÌincrement€you€bill€for,€you€know,€if€you€bill€inÌone-minute€increments,€is€it€possible€to€say,€well,€ifÌthe€consumer€hung€up€during€the€first€minute,€we€areÌgoing€to€forward€that€chargeback€all€the€way,€you€know,Ìto€Guyana?€€Do€you€follow€that?€€Because€only€theÌconsumers€who€hang€up€are€--€I€think€those€are€the€onesÌwho€are€really€benefitting.ÌÇ€€€€€€€€MR.€BOLIN:€€Technologically€feasible,Ìidentifying€which€of€those€calls€should€be€subject€toÌthat€chargeback,€coming€up€with€those€is€difficult.ÌMost€difficult€of€all€is,€you€know,€again,Ìjurisdictional€issues€aside,€how€we€or€the€FTC€canÌenforce€a€judgment€in€Guyana€against€a€pay-per-callÌprovider€there.€€Effectively€what€you€would€be€doing,€IÌthink,€is€ordering€EXEs€to€eat€that€charge€in€mostÌcases.€€AT&T€has€a€few€chargeback€arrangements,€they€areÌfar€from€universal.€€I€doubt€we€could€ever€make€themÌuniversal.Ì€€€€€€€€MR.€HILE:€€Warren,€and€then€Linda.Ì€€€€€€€€MR.€MILLER:€€Yeah,€I€was€just€passed€someÌinformation€that€is€specific€as€to€some€of€the€generalÌthings€that€were€mentioned€before.€€We€believe€inÌeducating€and€empowering€the€consumer,€and€TSIAÌmentioned€that€international€call€blocking€isÌavailable.€€I€have€a€printout€here€from€the€BellÌAtlantic€web€page,€and€they€have€a€product€calledÌCallgate.€€It€allows€international€calls€to€be€blocked.ÌSo,€I€would€suggest€that€--Ì€€€€€€€€MR.€HILE:€€All€international€calls€orÌselectively?Ì€€€€€€€€MR.€MILLER:€€All€international€calls.€€That'sÌwhat€it€says.€€The€--ÌÇ€€€€€€€€MR.€BOLIN:€€That's€not€a€free€service,€either,Ìis€it?Ì€€€€€€€€MR.€MILLER:€€No,€it€is€not€a€free€service.€€TheÌsuggestion€is€that€--€well,€in€talking€to€Bell€Atlantic,Ìfor€example,€on€another€matter,€more€of€this€kind€ofÌindividual€empowerment€at€the€local€level€will€beÌavailable€as€the€AIA,€Advanced€Intelligence€Network,Ìrolls€out,€and€I€would€invite€the€other€LECs€here€to€sayÌwhat€they€can€do€about€this.Ì€€€€€€€€MR.€HILE:€€Linda,€did€you€want€to€addÌsomething?Ì€€€€€€€€MS.€GOLDSTEIN:€€No.Ì€€€€€€€€MR.€HILE:€€Barbara?Ì€€€€€€€€MS.€MAJESKI:€€Yes,€I€just€wanted€to€respond€toÌthe€blocking€issue.€€The€LECs€currently€have€institutedÌan€international€blocking€option€in€their€network,€butÌthis€only€applies€to€direct-dial€international€callsÌonly,€and€it€blocks€all€international€calls.€€It's€not€aÌselective€pay-per-call€--€in€other€words,€you€can'tÌblock€selective€pay-per-call€services.Ì€€€€€€€€MR.€HILE:€€Is€it€truly€all€or€none?€€In€otherÌwords,€can€you€block,€say,€all€calls€to€Guyana?Ì€€€€€€€€MS.€MAJESKI:€€No,€no,€it's€all€internationalÌcalls.Ì€€€€€€€€MR.€HILE:€€You€have€to€block€all€countries?ÌÇ€€€€€€€€MS.€MAJESKI:€€Right,€and€one€other€thing.€€TheÌblock€is€good€for€only€direct-dial.€€Callers€that€accessÌinternational€services€through€800€number€or€10XXX€willÌbypass€the€LEC€blocking€option.Ì€€€€€€€€MR.€HILE:€€I€see.Ì€€€€€€€€Jill?Ì€€€€€€€€MS.€SANDFORD:€€Yes,€I€just€want€to€address€theÌblocking€issue.€€Often€times€when€we€see€consumerÌcomplaints€on€900€numbers€as€well€as€internationalÌcalls,€we€will€advise€the€consumers€of€the€blockingÌoption.€€In€terms€of€900€numbers,€the€consumers€say,€oh,Ìthat's€great,€we€don't€want€to€make€900€number€calls,€weÌdon't€want€calls€being€made€from€our€phone.Ì€€€€€€€€The€problem€is€that€it€is€an€all€or€nothing€inÌthe€international€arena,€and€in€New€York,€we€do€have€aÌdiverse€ethnic€population,€and€people€want€the€abilityÌto€make€those€international€calls,€and€so€internationalÌcall€blocking€is€really€not€an€option€for€many€peopleÌwho€enjoy€and€like€making€international€calls.Ì€€€€€€€€And€I€was€also€going€to€highlight€the€problem€ofÌcircumventing€the€block.€€We€have€seen€for€thoseÌconsumers€who€have€opted€for€the€international€blockÌthat€they€are€still€getting€international€calls€beingÌbilled€to€them€because€of€the€800€redirect€problem.Ì€€€€€€€€MR.€HILE:€€Kim?ÌÇ€€€€€€€€MS.€WILLIAMS:€€Yeah,€just€to€further€that,€and€IÌcan't€speak€for€Pacific€on€this,€only€for€SouthwesternÌBell,€but€we€don't€even€offer€international€blocking€toÌend€users.€€I€know€we€were€--€we€have€to€affirm€anÌaccess€site,€and€I€don't€know€enough€about€it€to€speakÌto€it.€€I€just€know€that€a€regular€residential€end€userÌor€business€end€user€cannot€subscribe€to€internationalÌblocking€from€Southwestern€Bell.€€We€don't€have€it.Ì€€€€€€€€MS.€MAJESKI:€€Just€as€a€follow-up,€I€just€wantedÌto€mention€the€international€block€does€not€block€callsÌto€Canada,€the€Caribbean€and€I€believe€Mexico.€€So,Ìthese€are€problematic€areas€for€pay-per-call,€which€areÌnot€covered€under€the€international€block.Ì€€€€€€€€MS.€SCHWANKE:€€Do€you€--Ì€€€€€€€€MR.€HILE:€€Joel,€and€then€I€would€like€to€haveÌJim.Ì€€€€€€€€MS.€SCHWANKE:€€May€I?Ì€€€€€€€€MR.€HILE:€€Go€ahead.Ì€€€€€€€€MS.€SCHWANKE:€€Do€you€know€why€that's€the€case?ÌIs€it€because€it's€a€different€--€you€can€dial€an€areaÌcode€to€get€to€the€Caribbean€and€not€011?Ì€€€€€€€€MS.€MAJESKI:€€It€is€covered€under€a€different€--Ìthey€call€them€world€zones.Ì€€€€€€€€MR.€BOLIN:€€It€is€the€North€American€Zone,€youÌjust€dial€a€regular€area€code.ÌÇ€€€€€€€€I€just€wondered€while€we€are€on€this€subject,Ìdoes€the€international€block€work€for€dial-arounds?€€CanÌyou€dial€around€and€still€get€international€calls€out?Ì€€€€€€€€MS.€MAJESKI:€€No,€right,€right.Ì€€€€€€€€MR.€HILE:€€Joel,€the€floor€is€yours.Ì€€€€€€€€MR.€DICHTER:€€Just€in€response€to€something€JillÌsaid,€I€think€that's€an€example€where€they€said€theyÌwanted€to€be€able€to€make€international€calls€and€beÌable€to€block€international€audiotexts.€€It's€anÌinstance€there€where€the€consumer€is€an€educatedÌconsumer.€€He€knows€what€an€international€call€is.€€HeÌknows€that€an€international€call€costs€money€and€can€--Ìand€has€that€information€available€to€them.€€ItÌshouldn't€come€as€a€surprise€to€them.Ì€€€€€€€€MR.€COHN:€€So,€only€the€uneducated€consumerÌwould€need€to€call€their€phone€company€and€billÌinternational€collect€calls?€€Is€that€--Ì€€€€€€€€MR.€DICHTER:€€I'm€not€talking€about€thatÌinstance.€€In€other€instances,€globally,€internationalÌblocking€is€available.Ì€€€€€€€€MR.€HILE:€€Jill?Ì€€€€€€€€MS.€SANDFORD:€€But€those€people€who€makeÌinternational€calls€regularly€may€also€have€a€particularÌcalling€plan€with€a€carrier€at€rates€much€less€thanÌthese€pay-per-call€rates.ÌÇ€€€€€€€€MR.€DICHTER:€€But€those€--Ì€€€€€€€€MR.€HILE:€€And€they€may€have€children€who€areÌnot€as€sophisticated€about€international€calls.Ì€€€€€€€€MR.€DICHTER:€€I€was€going€to€point€out€on€thoseÌcalling€plans€you€would€pay€the€calling€plan€rate€to€theÌinternational€carrier.€€For€example,€there€are€specialÌrates€that€AT&T€has€under€its€Reach€Out€--€what's€itÌcalled,€Reach€Out€Worldwide€--Ì€€€€€€€€MR.€BOLIN:€€We€have€country-specific€callingÌplans,€as€well.Ì€€€€€€€€MR.€DICHTER:€€That's€right.Ì€€€€€€€€MR.€HILE:€€Adam,€do€you€have€a€question?Ì€€€€€€€€MR.€COHN:€€Yeah,€I€wanted€to€make€sure€thatÌbefore€this€discussion€closed€that€we€had€someÌdiscussion€about€other€aspects€of€the€--€of€the€ruleÌother€than€the€free€preamble€and€the€advertisingÌrequirements.€€TDDRA€requires€a€lot€more€than€just€that,Ìand€the€rule€requires€a€lot€more€than€just€that.€€So,€IÌwant€to€make€sure€that€when€we're€talking€aboutÌinternational€audiotexts€and€whether€the€rule€shouldÌapply€or€can€apply,€that€we€also€discuss€these€otherÌaspects,€you€know,€including€billing€disputeÌresolution.Ì€€€€€€€€We€have€heard€a€lot€about€the€LECs,€at€least,Ìneeding€to€know€in€advance€that€a€call€is€anÌÇinternational€audiotext€and€whether€that€was€feasible.ÌI'm€curious€as€to€--€to€know,€if€there€really€was€someÌsort€of€way€to€notify€in€advance€the€LECs€of€everyÌinternational€call€that€was€audiotext,€would€it€beÌfeasible€to€--€to€create€blocking€and€create€all€theÌother€protections€of€TDDRA,€including€a€free€preamble€orÌthe€billing€block€option€that€was€suggested€by€one€ofÌthe€commenters?Ì€€€€€€€€MR.€HILE:€€What€about€the€dispute?Ì€€€€€€€€MR.€COHN:€€Including€the€dispute€--Ì€€€€€€€€MR.€HILE:€€In€other€words,€instead€of€going€backÌto€the€advertising€and€preamble,€let's€enlarge€this.Ì€€€€€€€€Kim?Ì€€€€€€€€MS.€WILLIAMS:€€If€I€were€--€if€the€calls€wereÌidentified€to€me€on€the€bill,€meaning,€you€know,Ìinternational€would€all€be€sent€in€on€a€particular€EMIÌrecord,€I€could€at€least€afford€consumers€someÌprotections€as€far€as€denial€of€service€and€issuingÌadjustments€goes.€€As€far€as€providing€blocking€andÌwhether€it's€technically€feasible,€I€don't€think€we€haveÌthe€network€capacity€to€provide€it€on€aÌper-dialing-pattern€basis.Ì€€€€€€€€I€mean,€I€think€it€--€even€with€900,€you€know,Ìit's€an€all€or€nothing€kind€of€thing,€and€you€take€up€soÌmuch€network€capability,€and€I'm€--€I€know€very€littleÌÇabout€this,€but€the€little€bit€I€do€know€is€it's€veryÌdifficult€to€keep€creating,€you€know,€a€new€kind€ofÌblocking.€€If€it€were€all€international,€that's€oneÌthing,€but€to€say€different€dialing€patterns€onÌinternational,€that's€I€think€nearly€impossible.Ì€€€€€€€€MR.€HILE:€€Barbara,€would€you€like€to€respond?Ì€€€€€€€€MS.€MAJESKI:€€I€just€wanted€to€go€back€to€theÌFCC€1992€order€allows€involuntary€blocking€for€carriers,ÌEXEs€and€IPs,€for€900€number€type€calls.€€I'm€wonderingÌif€this€type€of€involuntary€blocking€would€be€applicableÌhere.Ì€€€€€€€€MR.€HILE:€€Do€you€want€to€respond€to€thatÌquestion,€anyone?Ì€€€€€€€€MR.€LESSER:€€What€specific€question€was€that,€asÌfar€as€the€involuntary€blocking?Ì€€€€€€€€MS.€MAJESKI:€€Um-hum.Ì€€€€€€€€MR.€LESSER:€€One€thing€I€just€wanted€to€--€youÌknow,€I'm€a€little€concerned€with€difficulty€toÌenforce.€€You€know,€basically€we€can€have€a€foreign€PTTÌthat€moves€a€number€as€soon€as€we,€you€know,€a€carrierÌfinds€out€about€it,€and€that's€why€I'm€more€emphasizingÌtrying€to€stop€it€rather€than€trailing€behind€potentialÌfraud€problems.Ì€€€€€€€€And,€you€know,€second,€as€it€comes€down€to€theÌdefinition,€as€a€child€--€maybe€that's€why€I€got€in€theÌÇphone€industry€--€I€ran€a€dial-a-joke€line€for€free.€€IÌgot€six€lines,€got€thousands€of€calls€a€day.Ì€€€€€€€€If€I'm€in€a€foreign€country€and€that€number€gotÌout€in€the€U.S.,€I€could€have€theoretically€gottenÌthousands€of€calls€from€there,€or€Europe.€€So,€itÌbecomes€a€muddled€issue€where€I€think€we€should€reallyÌconcentrate€our€attention€on€the€fraud€or€theÌadvertising€control,€and€I€really€can't€answer€yourÌquestion,€because€I€didn't€hear€the€full€question.Ì€€€€€€€€MS.€MAJESKI:€€Well,€I€said€in€the€1992€FCC€orderÌfor€900,€the€FCC€allowed€EXEs€and€IPs€the€option€toÌinvoke€involuntary€blocking€for€consumers€thatÌconstantly€abused€the€service€or€were€deemed€not€toÌpay.€€I'm€wondering€if€that€type€of€solution€would€beÌapplicable€here.Ì€€€€€€€€MR.€LESSER:€€There€are€clearly€carriers€on€aÌregular€basis€who€do€involuntary€blocking.€€If€they€haveÌsomeone€--€I'm€sure€AT&T€has€a€lot€of€abusive€peopleÌthat,€you€know,€they€love€the€phone€but€don't€want€toÌpay€that€bill,€so€AT&T€blocks€them€from€their€network,Ìso€clearly€that€has€happened.€€A€lot€of€carriers€we€haveÌhave€carrier€limits€that,€you€know,€I€will€give€anÌexample.€€Sprint,€did€a€good€job,€had€a€calling€cardÌthat€I€hadn't€used€for€about€a€year.€€I€made€a€$1€call,Ìand€they€cut€me€off,€because€they€interpreted€that€wasÌÇhigh€fraud,€because€they€saw€a€huge€percentage€increase,Ìand€that's€what€they€did,€and€a€lot€of€carriers€areÌdoing€that.€€As€the€economy€and€there€is€moreÌcompetition€and€rates€are€dropping,€we€have€to€come€upÌwith€these€technologically€advanced€systems,€because€theÌmargins€are€so€little.€€So,€we€are€going€to€see€a€lotÌmore€of€that.Ì€€€€€€€€MR.€HILE:€€Joel?Ì€€€€€€€€MR.€DICHTER:€€A€couple€of€things.€€On€theÌbilling€dispute,€again,€that's€handled€by€the€carrier,Ìand€the€carriers€have€become€much€more€responsive€on€theÌinternational€issue,€as€have€the€foreign€telephoneÌcompanies€in€handling€the€--€passing€back€theÌchargebacks,€which€is€happening€more€and€more,€whichÌthen€has€resulted€in€the€--€in€the€internationalÌexchange€carrier€being€more€forgiving€on€it,€as€well.ÌSo,€you€have€a€method,€you€have€someone€to€deal€with€whoÌcan€answer€--€who€will€answer€the€phone.Ì€€€€€€€€On€the€--Ì€€€€€€€€MR.€HILE:€€I'm€sorry,€I€don't€fully€understand.ÌWhat's€your€point?Ì€€€€€€€€MR.€DICHTER:€€The€point€is€that€when€you€areÌcharged€for€international€audiotext€that€appears€on€yourÌtelephone,€you€can€contact€your€carrier€and€dispute€thatÌcharge,€and€you€can€resolve€that€dispute€with€them.€€YouÌÇhave€a€mechanism€for€responding€to€it,€and€the€carriersÌhave€become€much€better€in€dealing€and€handling€thoseÌand€recognizing€those€and€giving€people€forgiveness€to€aÌgreat€extent€for€when€they€dispute€those€charges.Ì€€€€€€€€I€was€also€going€to€say,€also,€on€the€otherÌside,€I€think,€you€know,€when€we€had€this€four€years€agoÌand€we€came€through€this,€as€Eileen€said,€we€cameÌthrough€with€really€almost€a€consensus€position€at€theÌend,€which€really€helped€to€address€many€of€theseÌthings.€€Here€we€have€had€a€willingness€really€aroundÌthe€table€really€to€talk€specifically€about€advertisingÌdisclosures,€to€make€sure€the€consumer€when€he€sees€anÌad€for€an€international€call€or€other€call€hasÌinformation€available€to€make€a€decision€on€that.Ì€€€€€€€€You€know,€if€we€have€that€information€and€weÌhave€no€objection€I€have€heard€to€a€preamble,€to€thisÌpreamble,€so€if€we€have€clear€advertising€and€we€haveÌthis€preamble,€then€you€have€an€informed€consumer,€andÌyou€have€a€way€to€deal€with€the€situation.Ì€€€€€€€€MR.€HILE:€€You€also€have€a€consumer€who€has€paidÌfor€a€preamble,€perhaps€on€the€basis€of€a€misleadingÌad.Ì€€€€€€€€MR.€DICHTER:€€But€the€point€is,€there€is€not€anÌobjection€--Ì€€€€€€€€MR.€HILE:€€How€do€you€handle€the€chargeback?ÌÇ€€€€€€€€MR.€DICHTER:€€--€but€there€is€not€an€objectionÌto€having€clear€advertising€disclosure€which€wouldÌprovide€the€consumer€with€the€information€that€it€is€anÌinternational€call,€and€under€Peter's€suggestion,Ìadvising€him€how€to€find€out€immediately€what€the€ratesÌare€for€the€call.€€If€you€provide€all€that€informationÌto€the€consumer€and€the€consumer€decides€to€still€makeÌthe€call€at€that€point€in€time,€then€that's€a€choice€ofÌthat€consumer.€€It's€not€something€that€we€all€should€beÌsaying€let's€undo.Ì€€€€€€€€MR.€HILE:€€Kim,€and€then€Barbara.Ì€€€€€€€€MS.€WILLIAMS:€€Well,€I€--Ì€€€€€€€€MR.€HILE:€€And€then€Sue.Ì€€€€€€€€MS.€WILLIAMS:€€--€I€think€as€far€as€that€disputeÌresolution€process€goes,€again,€the€LEC€is€in€the€darkÌon€what€charges€are€these€pay-per-call€international€andÌwhich€ones€aren't.€€There€is€also€an€issue€of,€again,Ìand€I€think€Alan€brought€it€up,€kids€using€theseÌservices,€and€unfortunately,€it's€a€very€real€problemÌthat€a€lot€of€consumers€thought€they€took€care€of€whenÌthey€subscribed€to€900€blocking,€and€although€I€wouldÌhave€never€made€a€1-plus€call€when€I€was€a€kid€withoutÌmy€father's€permission,€plenty€of€them€do€today,€andÌtheir€kids€get€access€to€services€that,€you€know,€reallyÌthey€shouldn't€have€access€to,€and€I€think€we€don't€haveÌÇa€good€answer€for€those€consumers,€that€they€have€toÌexperience€it€at€least€once€before€they€block€it,€youÌknow,€we€are€back€where€we€were€several€years€ago€beforeÌwe€had€900€blocking.Ì€€€€€€€€MR.€HILE:€€Barbara?Ì€€€€€€€€MS.€MAJESKI:€€Just€to€address€the€billingÌdisputes,€900€numbers€are€clearly€separated€from€regularÌdirect-dial€calls.€€The€LEC€billing€system€alsoÌgenerates€the€message€that€failure€to€pay€for€theseÌcharges,€the€consumer€will€not€be€disconnected.€€WhenÌthey€are€lumped€in€with€every€other€direct-dial€call,€weÌhave€no€way€of€knowing€which€are€legitimate€calls€andÌwhich€are€pay-per-calls.€€I€mean,€someone's€grandmotherÌmust€live€in€Sao€Tome.€€So,€there€may€be€legitimateÌcalling€to€these€areas,€but€until€we€get€customerÌcomplaints,€and€many€customers€for€one€reason€or€anotherÌdon't€complain,€just€refuse€to€pay€the€bill,€andÌsuddenly€they€are€disconnected.Ì€€€€€€€€MR.€HILE:€€You€are€disconnecting€consumers€whoÌrefuse€to€pay€these€international€charges?Ì€€€€€€€€MS.€MAJESKI:€€Well,€we€have€no€way€ofÌidentifying€them€as€being€any€different€than€aÌdirectly-dialed€called€to€their€grandmother€in€Italy€orÌwhatever.Ì€€€€€€€€MR.€HILE:€€Marianne,€you€want€to€ask€aÌÇquestion?Ì€€€€€€€€MS.€SCHWANKE:€€I€would€like€to€follow€upÌdirectly€on€what€Barbara€just€said€and€what€Kim€had€saidÌearlier.€€If,€as€was€suggested€earlier€today,€thatÌinternational€calls€could€be€accessed€through€900Ìnumbers,€would€that€solve€the€problem€of,€number€one,ÌLECs€being€able€to€identify€that€they€are€internationalÌ--€that€they€are€pay-per-call,€therefore,€they€couldÌseparate€them€on€the€bill,€not€disconnect€for€failure€toÌpay€and€also€maybe€block€access?Ì€€€€€€€€MS.€WILLIAMS:€€Definitely.€€I€mean,€that€900€toÌme€is€an€answer.Ì€€€€€€€€MS.€SCHWANKE:€€Barbara,€do€you€have€a€response?Ì€€€€€€€€MS.€MAJESKI:€€No,€that's€fine.€€Even€if€--€evenÌif€international€or€--€international€pay-per-calls€canÌbe€identified€by€a€specific€record€type,€the€same€asÌ900,€our€billing€systems€can€recognize€that€and€billÌthem€on€a€separate€page,€even€though€they€are€notÌlabeled€as€such.Ì€€€€€€€€MS.€WILLIAMS:€€True,€right.Ì€€€€€€€€MR.€HILE:€€Sue?Ì€€€€€€€€MS.€GRANT:€€I€just€wanted€to€point€out€that€it'sÌbeen€our€experience€that€the€long€distance€carriers€haveÌbecome€less€forgiving€of€disputed€international€callsÌthan€more€forgiving.€€For€instance,€MCI€was€initiallyÌÇjust€removing€the€total€amount€of€those€charges,€andÌrecently€adopted€a€policy€of€splitting€them€with€theÌconsumer.€€And€that€was€because€of€--€as€I€was€told€byÌMCI€--€because€of€the€tremendous€losses€that€the€companyÌwas€suffering€because€of€consumers'€demands€that€--€thatÌthe€charges€be€adjusted.Ì€€€€€€€€MR.€HILE:€€Do€you€have€a€follow-up€question?Ì€€€€€€€€MR.€COHN:€€I€do€have€a€follow-up€to€that.€€ThisÌsort€of€--€this€brings€me€back€to€something€that€came€upÌyesterday,€which€was€are€the€IP€--€aren't€the€IPs€--€whyÌare€the€phone€companies€suffering€from€--€from€theÌchargeback€problem?€€I€mean,€in€900€numbers,€it's€clearÌthat€when€--€when€there€is€a€chargeback,€it€goes€back€toÌthe€IP,€the€IP€eventually€suffers,€perhaps€more€thanÌthey€should€be,€but€that's€another€issue,€but€when€aÌconsumer€refuses€to€pay€one€of€these€internationalÌnumbers,€why€aren't€the€IPs€--€why€isn't€it€going€backÌto€the€IP?€€Why€does€MCI€have€an€incentive€to€stopÌgiving€refunds€when€a€consumer€has€been€defrauded€andÌtricked€into€calling€a€number€they€didn't€know€wouldÌcost€them€money?Ì€€€€€€€€MR.€HILE:€€Jim,€can€you€respond€to€that?Ì€€€€€€€€MR.€BOLIN:€€In€these€international€pay-per-callÌschemes€that€are€done€over€ordinary€POTS€lines,€there€isÌno€direct€payment€from€the€carrier€to€an€IP.€€If€theÌÇcall€is€completed€over€AT&T's€network€to€Sao€Tome,€weÌnever€write€a€check€to€the€IP,€so€we€can't€withholdÌmoney€from€the€IP.€€What€we€do€is€we€eventually€have€aÌsettlement€payment€that€we€have€to€make€to€the€foreignÌPTT,€and€then€the€PTT€kicks€back€some€percentage€of€thatÌmoney€to€the€IP.€€We€don't€know€what€that€percentage€is,Ìand€we€have€other€obligations€to€pay€the€settlementÌpayments.Ì€€€€€€€€So,€the€issue€becomes€then€if€--€if€consumersÌhave€a€right€to€just€write€off€international€chargesÌthat€are€deemed€to€be€pay-per-call,€and€right€now€weÌforgive€these€on€a€case-by-case€basis,€if€you€do€that,Ìyou€make€EXEs€ultimately€the€folks€who€bear€the€chargesÌin€the€last€resort,€unless€--€unless€and€to€the€extentÌthat€they€can€negotiate€recourse€arrangements.Ì€€€€€€€€MR.€COHN:€€Could€you€just€correct€me€if€I'mÌwrong,€then,€in€saying€that€if€a€--€if€theoretically€youÌhad€a€900€number€call€that€was,€say,€$2.50€a€minute€andÌa€number,€just€random€number,€if€the€IP€were€making€aÌprofit€on€that€of€let's€say€25€cents€a€minute€and€theÌconsumer€charged€that€back,€my€understanding€is€that€theÌ--€the€IP€suffers€the€whole€$2.50€cost,€because€theyÌstill€have€to€pay€all€the€charges€that€they€are€requiredÌto€pay,€and€they€lose€their€25€cent€profit,€but€if€youÌhave€a€$2.50€international€call€and€there€is€a€25€centÌÇfee€going€to€an€IP,€that€the€IP€is€only€really€losing€25Ìcents€and€other€parties€are€losing€the€remainder€ofÌthat.€€Is€that€right?Ì€€€€€€€€MR.€SHAUB:€€I€think€that's€essentially€correct.Ì€€€€€€€€MR.€BOLIN:€€I€think€that's€right.€€That€soundsÌcorrect€to€me.Ì€€€€€€€€MR.€COHN:€€Or€some€people€are€saying€that€theyÌwouldn't€be€--€the€IP€wouldn't€be€losing€anything€onÌthat€chargeback.Ì€€€€€€€€MR.€SHAUB:€€They€may€not€be.Ì€€€€€€€€MR.€COHN:€€But€assuming€they€did€lose€somethingÌon€the€chargeback,€it€would€only€be€the€25€cents?Ì€€€€€€€€MR.€BOLIN:€€In€the€international€context?€€Well,Ìthe€payment€to€the€IP€is€whatever€payment€they€areÌgetting€from€the€PTT.€€The€cost€of€transport€is€AT&T€toÌthe€PTT.Ì€€€€€€€€MR.€COHN:€€Other€parties€are€bearing€the€cost€ofÌthat€--Ì€€€€€€€€MR.€HILE:€€The€American€telephone€companies€areÌbearing€the€cost.€€Is€that€right?Ì€€€€€€€€MR.€BOLIN:€€Right,€and€another€thing€to€keep€inÌmind,€the€interexchange€market€is€very€competitive,€andÌwhen€you€add€costs€on€to€the€system,€they€are€ultimatelyÌborne€by€the€consumers.€€There€is€not€a€lot€of€fat€toÌcut€out€at€this€point.€€I€think€that's€a€considerationÌÇto€keep€in€mind.€€In€a€competitive€market,€ultimatelyÌthe€costs€get€borne€by€the€folks€who€buy€the€services.Ì€€€€€€€€MR.€HILE:€€Am€I€hearing€that€there€is€no€wayÌthat€AT&T€and€its€counterparts€can€actually€reverseÌthese€charges€back€to€the€--€to€an€IP?€€You€can'tÌwithhold€the€money€from€the€IP,€because€you€don't€payÌthe€IP?Ì€€€€€€€€MR.€BOLIN:€€In€the€international€context?Ì€€€€€€€€MR.€HILE:€€And€you€have€got€to€pay€the€foreignÌtelephone€company?Ì€€€€€€€€MR.€BOLIN:€€I€don't€know€the€specific€regimeÌgoverning€settlement€payments.€€That's€not€really€myÌbailiwick.€€And€I€don't€know€what€repercussions€exactlyÌwould€be€felt€if€we€withheld€settlement€payments.€€I€canÌfind€that€out€and€get€some€more€information€for€you.Ì€€€€€€€€MR.€COHN:€€But€even€if€you€did€withholdÌsettlement€payments,€aren't€you€still€incurring€costs?ÌI€mean,€I€think€that€--€from€what€I€understand,€I€hopeÌsomeone€will€correct€me€if€I'm€wrong,€but€that€in€a€900Ìnumber€context,€the€entire€cost,€everything,€is€borne€byÌthe€IP€if€someone€refused€to€pay€a€charge,€let's€sayÌlegitimately€refuses€to€pay€a€charge,€and€if€someoneÌlegitimately€refuses€to€pay€a€charge€in€an€internationalÌcontext,€no€matter€what,€as€far€as€settlement€payments,Ìsomeone€else€is€bearing€the€cost.ÌÇ€€€€€€€€Is€there€ever€a€circumstance€where€a€person€hasÌpaid€$2.50€for€an€international€call,€they€don't€have€toÌpay€that€anymore€because€the€costs€are€forgiven,€and€theÌIP€itself€suffers€the€entire€cost€of€that€$2.50Ìchargeback?Ì€€€€€€€€MR.€BOLIN:€€I€don't€think€so,€barring€someÌarrangement€between€the€IP€and€PTT€that€AT&T€wouldn't€beÌinvolved€in.€€I€think€that€in€the€instance€of€--€if€AT&TÌwere€to€withhold€settlement€payments,€AT&T€would€stillÌbe€on€the€hook€for€the€cost€of€transcript.€€I€think€theÌdifference€is€that€these€schemes€would€dry€up€prettyÌfast,€because€there€is€no€margin€in€it€for€the€IPÌanymore.€€So,€there€would€still€be€some€losses€to€theÌinterexchange€carrier.€€I€think€that€they€would€be€--Ìthey€would€fairly€quickly€start€to€trail€off.Ì€€€€€€€€MR.€COHN:€€But€the€disincentive€for€fraudÌcreated€by€chargebacks,€we€heard€yesterday€fromÌTele-publishing€that€a€low€chargeback€rate€is€anÌindication€in€some€circumstances€that€--€of€true€andÌcorrect€advertising,€the€incentive€to€create€true€andÌcorrect€advertising€is€reduced€to€the€extent€that€youÌdon't€--€that€that€IP€does€not€suffer€the€fullÌconsequences€of€a€chargeback.€€That's€a€question.€€IfÌI'm€wrong€about€that,€I€hope€someone€will€correct€me.Ì€€€€€€€€MR.€BOLIN:€€That€strikes€me€as€a€penetratingÌÇanalysis.Ì€€€€€€€€MR.€HILE:€€Joel,€you€don't€have€your€tent€up.Ì€€€€€€€€MR.€DICHTER:€€I€think€if€the€IP€can't€get€paid,Ìhe€is€not€going€to€have€any€incentive€to€do€anyÌadvertising€that's€improper,€and€again,€I€mean,€it€stillÌcomes€back€to€having€advertising€that€is€proper€andÌworking€it€from€that.€€I€think€the€solution€of€MarianneÌof€going€through€900,€then€let's€face€it,€you€haveÌclosed€off€the€international€methodology€as€an€option,Ìas€a€way€of€doing€things.€€Maybe€that's€what€you€want€toÌdo,€but€I€don't€think€that's€the€proper€way€to€do€it.Ì€€€€€€€€What€you€are€doing€is€resulting€in,€in€essence,Ìa€double€charge€to€the€consumer,€going€through€the€900Ìnumber,€paying€for€the€900€number,€then€forwarding€theÌcall€international,€there€is€another€cost€for€that.€€So,Ìyou€have€raised€costs€for€consumers€in€that€context€toÌreach€the€international€destination,€rather€thanÌproviding€the€advantages€of€international,€which€manyÌtimes€are€lowering€rates€to€consumers€and€providingÌglobal€access€to€information.Ì€€€€€€€€MR.€HILE:€€Marianne?Ì€€€€€€€€MS.€SCHWANKE:€€Well,€it's€just€that€I€haven'tÌheard€any€solutions€for€protecting€consumers€byÌproviding€things€like€blocking,€by€ensuring€that€phoneÌservice€won't€be€disconnected€for€failure€to€pay,€forÌÇproviding€free€preambles.€€I€mean,€I'm€open€to,€youÌknow,€other€dialing€patterns,€but€I€would€like€to€hearÌsome€ways€that€we€can€address€a€lot€of€those€consumerÌprotection€issues,€and€I€haven't€heard€any€realÌsolutions€yet,€I€don't€think.Ì€€€€€€€€MR.€HILE:€€Sue?Ì€€€€€€€€MS.€GRANT:€€I€just€want€to€remind€people€thatÌit's€not€only€the€domestic€long€distance€carrier€who€isÌtaking€a€hit,€it's€the€consumer,€because€consumersÌcannot€legally€at€this€point,€since€they€are€not€coveredÌunder€the€rule,€dispute€these€charges€without€fear€ofÌlosing€their€phone€service,€and€if€a€company€like€MCIÌmakes€them€pay€half€of€that€bill€or€if€AT&T€deals€withÌit€on€a€case-by-case€basis€and€they€don't€come€to€someÌagreement,€the€consumer€loses€a€lot€of€money€by€havingÌto€pay€for€these€charges.Ì€€€€€€€€MR.€HILE:€€But€if€the€consumer€doesn't€have€toÌpay€it,€then€the€American€phone€company€eats€it.€€IsÌthat€right,€Jim?Ì€€€€€€€€MR.€BOLIN:€€That's€right.Ì€€€€€€€€MR.€HILE:€€Kim?Ì€€€€€€€€MS.€WILLIAMS:€€I€just€wanted€to€address€theÌissue€of€900€again€that€--€I€mean,€I€would€think€if€it'sÌmore€expensive€to€route€the€call€from€900€through€to€theÌinternational€country,€and€if€you€don't€think€a€customerÌÇis€going€to€call€that€number,€then€you€are€probablyÌgoing€to€find€a€way€to€lower€your€rates,€meaningÌterminate€in€the€U.S.€or€whatever€it€takes.€€You€wantÌcustomers€to€call€your€number€and€pay€the€bill.€€TheyÌcan€block€the€900.€€There€must€be€some€incentive€onÌinternational€to€keep€customers€calling€it,€even€ifÌthere€are€some€chargebacks€taking€place.€€Obviously€moreÌcustomers€are€paying€it.Ì€€€€€€€€MR.€DICHTER:€€Do€we€really€want€to€be€in€theÌposition€of€isolating€the€United€States?€€I€mean,€if€youÌwant€to€provide€audiotext€services,€you€must€be€in€theÌUnited€States€or€you€must€only€be€able€to€access€--Ì€€€€€€€€MS.€WILLIAMS:€€They€don't€have€to€be.€€It'sÌtheir€choice.Ì€€€€€€€€MR.€DICHTER:€€If€you€limit€it€through€900,Ìthat's€in€essence€the€results.Ì€€€€€€€€MR.€COHN:€€Joel,€isn't€it€only€natural€that€itÌshould€cost€more€to€call€another€country?€€In€theÌmarketplace€of€calling€your€grandmother,€as€the€exampleÌis€often€used,€it€does€cost€more€to€call€yourÌgrandmother€in€another€country€than€if€she€lives,€youÌknow,€next€door.€€Why€--€why€is€it€cheaper€to€call€anÌaudiotext€service€that's€located€supposedly€in€MuldovaÌrather€than€one€that's€right€across€the€street?€€I€mean,Ìif€you€do€--€if€everything€was€under€900€and€it's€moreÌÇexpensive€to€call€international€numbers,€that€doesn'tÌsurprise€me€at€all.Ì€€€€€€€€MR.€DICHTER:€€I€think€you€have€restrictedÌcompetition€for€one€thing.€€If€you€have€competition€--Ì€€€€€€€€MR.€COHN:€€How€is€it€a€restriction€ofÌcompetition?€€It€is€only€natural€that€--Ì€€€€€€€€MR.€DICHTER:€€Because€you€have€competitionÌbetween€900€and€other€methods€--€other€dialing€patternsÌthat€will€result€if€you€took€them€away€and€have€it€onÌ900,€you€would€have€a€limitation€then€on€that€and€relateÌit€to€the€cost€structure€of€900.Ì€€€€€€€€MR.€COHN:€€Maybe€I€should€try€to€rephrase€thatÌas€a€question.€€Why€should€--€wouldn't€it€be€natural€toÌexpect€that€a€900€--€that€a€900€number€call€or€anÌinternational€audiotext€call€should€be€more€expensiveÌthan€a€domestic€one,€and€isn't€it€the€market€itself€thatÌdetermines€that€rather€than€--€rather€than€governmentÌregulation,€and€wouldn't€it€on€the€converse€of€that,Ìwouldn't€it€also€be€the€case€that€if€you€had€lesserÌrestriction€or€lesser€disclosure€requirements€or€otherÌrequirements€on€international,€so€that€the€costs€couldÌbe€cheaper€than€domestic,€the€government€in€a€senseÌwould€actually€be€interfering€with€the€naturalÌmarketplace,€which€would€be€domestic€cheaper€thanÌinternational?ÌÇ€€€€€€€€MR.€DICHTER:€€No,€it€would€be€mandating€domesticÌas€opposed€to€international,€where€in€turn€if€yourÌassumption€is€correct,€that€you€would€expect€domestic€toÌbe€less€expensive€than€international,€and€you'veÌdisclosed€to€the€consumer€the€international€nature€ofÌthe€call,€then€you've€notified€the€customer€that€toÌexpect€a€charge€that€will€be€more€than€if€he€made€a€callÌacross€the€street€or€across€the€country,€for€thatÌmatter.Ì€€€€€€€€MR.€COHN:€€That€doesn't€--€I'm€not€sure€that'sÌreally€addressing€the€question€that€I€had,€because€IÌhear€an€assertion€that€the€government,€the€FTC,€would€beÌinterfering€with€the€national€marketplace€if€we€were€toÌapply€the€same€rules€across€the€board,€where€it€seems€toÌme€that€the€opposite€would€actually€be€the€truth,€thatÌif€you€apply€different€rules€to€different€groups,€youÌwould€actually€be€interfering€with€the€naturalÌmarketplace,€which€in€all€other€contexts€has€alwaysÌmeant€that€domestic€is€cheaper€than€international.Ì€€€€€€€€MR.€HILE:€€Warren?Ì€€€€€€€€MR.€MILLER:€€Yeah,€I€want€to€answer€theÌquestion,€and€I€don't€want€this€to€be€perceived€as€anÌanti-consumer€answer,€we€are€very€much€pro-consumer,€butÌthere€is€complete,€as€AT&T€attested,€completeÌcompetition€in€the€international€market,€and€in€the€900ÌÇmarket,€there€is€not€complete€and€full€competition.€€TheÌportability€has€been€restricted,€and€so€there€are€twoÌsides€to€that€issue.Ì€€€€€€€€One€is€in€the€900€business,€the€carrier€paysÌwhen€it's€billed,€and€then€if€they€don't€collect,€theyÌtake€it€back.€€I€am€presuming€--€we€are€not€in€theÌinternational€business,€but€I'm€presuming€in€theÌinternational€they€get€paid€when€they€get€paid.€€So,€theÌlosses€are€the€same,€so€information€providers,€whetherÌyou€rent€the€money€and€give€it€back€or€whether€you€justÌdon't€get€the€money,€you€still€don't€get€the€money.Ì€€€€€€€€MR.€HILE:€€When€you€say€they€get€paid€when€theyÌget€paid,€what€do€you€mean?€€You€mean€it€takes€longer,Ìand€it€is€not€paid€until€it's€collected?Ì€€€€€€€€MR.€MILLER:€€I€don't€know,€but€I'm€saying€in€theÌ900€business,€you€only€got€that€money€as€an€advanceÌagainst€expected€payment€anyway.€€So,€the€differenceÌbetween€being€temporarily€paid€and€being€not€paid€to€meÌas€far€as€I'm€concerned€are€the€same€thing.Ì€€€€€€€€MR.€HILE:€€Is€that€really€the€choice?€€It€seemsÌto€me€the€choice€is€between€getting€paid€and€maybeÌlosing€some€of€it€back€in€chargebacks€on€the€domesticÌ900€number€side,€or€getting€paid€and€getting€to€keep€itÌon€the€international€side.Ì€€€€€€€€MR.€MILLER:€€Well,€he€was€talking€about€if€aÌÇrefund€is€made,€that€the€--€that€the€loss€to€the€IP€wasÌsomehow€less€in€the€international€business.€€I'm€justÌsuggesting€not€paid€is€not€getting€paid,€whether€it's€--Ìthere€is€an€advance€payment€that€comes€back€or€whetherÌthere€is€not€any€advance€payment.€€Not€payment€is€notÌpayment.Ì€€€€€€€€MR.€COHN:€€But€under€900,€you€still€have€a€lotÌof€costs€that€the€IP€would€have€to€cover€that€he€wouldÌnot€have€to€cover€in€international.Ì€€€€€€€€MR.€MILLER:€€And€that's€why€people€are€usingÌinternational,€because€it's€a€more€efficient€medium.Ì€€€€€€€€MR.€COHN:€€And€someone€else€is€bearing€thoseÌcosts?Ì€€€€€€€€MR.€MILLER:€€No,€because€prices€are€artificiallyÌhigh,€because€there€is€no€portability,€and€prices€forÌlabor€are€less€offshore€from€the€United€States.€€Now,€itÌmay€be€true€that€some€of€these€countries€were€attractedÌto€high€rates,€but,€in€fact,€they€say€now€that€some€ofÌthem€are€attracted€because€of€low€labor€rates,€and€if€85Ìpercent€of€the€traffic€is€live,€you€can€see€why€theyÌmight€expect€to€pay€someone€less€in€a€foreign€country.Ì€€€€€€€€MR.€HILE:€€Is€this€a€labor-intensive€industry?Ì€€€€€€€€MR.€MILLER:€€That's€what€I'm€told.Ì€€€€€€€€MR.€COHN:€€Warren,€I€think€your€point€is€veryÌimportant,€that€there€may€be€some€arguments€that€900ÌÇnumbers€are€not€working€in€a€--€you€know,€are€not€theÌopen€and€fair€market€that€would€bring€down€their€costs,Ìbut€I€would€like€to€know€if€anyone€else€has€opinionsÌabout€the€question€that€I€had€asked€before,€you€know,Ìand€on€that€issue€that€Warren€raised,€that,€you€know,Ìthat€different€rules€for€different€--€for€the€differentÌservices€and€whether€that€--€whether€that's€fair€orÌwhether€it's€more€fair€to€have€a€--€the€same€rule€applyÌand€whether€that€would€be€fair€to€international€numberÌusers.Ì€€€€€€€€MR.€HILE:€€We€are€rapidly€drawing€close€to€theÌend€of€this€morning's€session,€but€I€would€like€to€giveÌthose€who€have€their€tents€up€a€chance€to€go.€€So,€let'sÌdo€--€Walt,€you€haven't€had€much€to€say,€so€let's€goÌwith€you€first€and€then€Kim€and€then€finish€with€--Ì€€€€€€€€MR.€STEIMEL:€€One€of€the€things€I'm€seeing€hereÌis€Congress€set€up€a€scheme€where€you€can€have€variousÌdomestic€dialing€patterns,€800,€800€writtenÌpresubscription,€800€calling€card,€credit€card,€and€onÌthose,€the€FTC€and€FCC€knows€who€the€providers€are,€theyÌare€here€in€the€United€States,€there€is€no€question€ofÌjurisdiction.€€You€can€call€them€at€any€time.€€They€haveÌto€give€free€preambles,€the€chargebacks€get€--€they€getÌhit,€the€IP€or€the€IXE,€whoever€is€providing€theÌparticular€audiotext€service€gets€hit€with€that.ÌÇ€€€€€€€€It's€clear€what€all€the€consumer€rights€andÌresponsibilities€are,€and€you€all€can€change€those€rulesÌwhenever€you€want€to€and€call€carriers€and€IPs€in.€€OnÌinternational,€you€know,€what€I'm€hearing€and€what€itÌseems€like€Todd€was€saying€earlier€is€let's€restrict€allÌdomestic€900,€but€let's€not€touch€international.ÌInternational,€the€consumer€has€to€pay€for€the€preamble,Ìthe€IP€in€most€situations€--€and€I€have€done€someÌinternational€work€before€--€in€most€situations,€the€IPsÌget€paid€no€matter€what,€and€someone€like€AT&T€ends€upÌeating€the€bill€when€the€consumer€doesn't€have€to€--Ìdoesn't€have€to€eat€the€bill.Ì€€€€€€€€The€consumer€gets€cut€off€all€the€time€becauseÌSouthwestern€Bell€can't€figure€out€what's€audiotext€andÌwhat's€not.€€If€you€have€dialing€--€U.S.€dialingÌpatterns,€whether€they€are€800,€900€or€whatever€else€andÌyou€provide€blocking€options,€you€provide€all€theÌblocking€information€through€LIDB€and€require€the€EXEsÌand€IPs€to€check€that€information€before€clearing€theÌcalls,€and€the€local€exchange€carriers€know€that€it'sÌall€audiotext,€it€--€that's€an€easily€containableÌprogram€that€you€can€manipulate,€massage,€to€protectÌconsumers,€but€the€international€scheme€is€completelyÌoutside€of€that,€and€you're€basically€setting€up,€and€ifÌyou're€not€careful,€you€are€going€to€set€up€anÌÇarrangement€in€which€more€and€more€IPs€are€going€to€goÌto€international,€because€hey,€it's€a€great€deal.Ì€€€€€€€€We€are€outside€of€the€United€States,€we€alwaysÌget€paid,€we€don't€have€to€give€free€preambles.€€I€mean,Ìas€you€go€down€the€line€--€and€then€we€have€also€gotÌdeniable€billing€that€the€LECs€can't€figure€out€if€it'sÌreally€supposed€to€be€deniable€or€not.€€It's€a€greatÌdeal.€€If€we€are€too€restrictive€on€the€domestic€side,Ìeventually€everything€is€going€to€be€international,€andÌthere€just€won't€be€any€900€or€800€or€any€otherÌpay-per-call€in€the€United€States.€€It€will€all€beÌoverseas,€and€I€would€actively€encourage€my€clients€toÌgo€overseas€and€handle€someone€else€to€handle€thoseÌarrangements€for€them€from€now,€because€it's€a€greatÌdeal.Ì€€€€€€€€MS.€WILLIAMS:€€I€never€thought€the€day€wouldÌcome,€but€I€agree€with€Walt.€€I€think€what€Adam€saidÌearlier€is€right,€that€there€is€not€a€level€playingÌfield€if€you€continue€to€allow€international€under€theÌrules€that€they€are€under€today,€which€is€basically€noÌrules,€and€that€that€has€to€be€leveled€out.€€And€I€alsoÌdon't€buy€the€agreement€of€portability€--€portabilityÌbeing€the€issue€on€900,€because€it's€always€been€thatÌway,€and€nobody€--€international€was€not€the€big€placeÌto€be€before€TDDRA.ÌÇ€€€€€€€€So,€I€still€think€portability€isn't€really€theÌissue,€and€I'm€not€saying€I€don't€support€portability.ÌI€do€if€you€are€going€to€use€it,€but€if€you€are€notÌgoing€to€use€it€and€you€are€just€going€to€go€toÌinternational€because€900€has€all€the€protections€thatÌthe€consumer€needs€and€international€doesn't,€then€whyÌmake€it€portable?Ì€€€€€€€€MR.€HILE:€€Todd,€you€get€the€last€word€on€this.Ì€€€€€€€€MR.€LESSER:€€Okay,€perfect.Ì€€€€€€€€First€thing€I€just€wanted€to,€you€know,€stressÌhere€is€that€I€think€Adam's€concern€that€the€informationÌprovider€does€not€benefit€from€the€fraud,€and,€you€know,Ìit's€come€to€my€attention€that€there€has€been€over€theÌlast€15€months€$2€million€in€chargebacks€that€AT&T€hasÌpassed€on€to€the€Dominican€Republic€firm.€€So,€inÌsituations€like€that,€the€IP€is€not€benefitting€whenÌthere€is€a€chargeback.€€They€are€the€ones€--Ì€€€€€€€€MR.€BOLIN:€€Assuming€the€$2€million€is€right,Ìwhich€I€have€no€idea,€do€you€know€what€percentage€ofÌactual€charges€that€represents,€because€that's€a€numberÌto€throw€around,€but€what€does€it€really€mean?Ì€€€€€€€€MR.€LESSER:€€That's€important,€too,€but€when€youÌare€talking€about€the€number€of€calls€out€there€to€theseÌdirect-dial€international€where€they€are€not€set€up€inÌsome€sort€of€strange€dialing€scheme,€that€there€aren'tÌÇthe€number€of€complaints,€you€know,€and€when€you€look€atÌsomething€as€far€as€portability€with€900€and€the€cost€toÌthe€consumer,€which€does€bear€a€cost€when€you€look€atÌthe€overall€disadvantages€here,€I€gave€the€example€of€aÌ$40€psychic€call€would€usually€cost€$6€to€maybe€$10€orÌ$15€if€it€was€done€on€international€direct€dial.€€So,Ìthere€is€a€direct€incentive.Ì€€€€€€€€Now,€I€realize€AT&T€and€a€lot€of€domesticÌcarriers€would€like€it€on€--€on€the€domestic€market,Ìbecause€one,€it€stops,€like,€foreign€countries€to€beÌable€to€have€a€single€number€that's€advertisedÌnationwide.€€It's€just€only€available€to€route€it,€youÌknow,€you€have€to€have€the€worldwide€market€and€you€haveÌto€have€the€U.S.€market,€and€then€a€situation€where€likeÌAT&T€has€a€domestic€monopoly€on€900,€there€is€noÌportability.€€I'm€sure€a€lot€of€carriers€would€likeÌthat,€you€know,€but€I€think€once€portability€isÌaddressed,€you€are€going€to€have€lots€of€problems€likeÌthat,€and€as€international€accounting€rates€drop,€thisÌis€going€to€have€less€of€an€impact.Ì€€€€€€€€As€we€have€seen,€the€long€distance€rates€alone€IÌhad€heard€--€the€last€statistic€had€dropped€40€percentÌsince€the€breakup€of€AT&T.€€Competition€works.€€That'sÌeven€before€you€saw€all€this€10€cents€a€minute.€€So,€IÌthink€international€rates€are€going€to€drop,€it€is€goingÌÇto€be€less€and€less€of€a€problem,€and€there€are€TDDRAÌproblems€that,€you€know,€I€think€the€industry€shouldÌattempt€to€be€reasonably€possible€can€adopt.€€Some,€ofÌcourse,€can't,€but€the€impact€of€that,€of€trying€to€makeÌthem€and€force€them€to€do€everything,€would€be€so€greatÌthat€it€would€be€--€the€few€people€it€would€help,€itÌwould€end€up€hurting€most€people,€just€for€the€reasonÌthat€we€have€direct-dial€calls.Ì€€€€€€€€Now,€obviously€if€we€didn't€have€direct-dialÌcalls€and€had€to€go€through€an€operator€for€every€singleÌcall,€I'm€sure€there€wouldn't€be€any€problems,€like€anyÌtime€you€wanted€to€make€a€call€to€New€York,€an€operatorÌcame€on€and€says,€you€know,€do€you€really€want€to€callÌyour€grandmother€now,€do€you€know€how€much€it€willÌcost?€€Yes,€but€the€cost€of€doing€that€would€be€tooÌgreat,€and€it's€sort€of€our€industry's€policy€that€ifÌyou€set€up€guidelines,€you€punish€the€people€up€front,Ìalthough€they€didn't€get€the€money.€€Those€people€thatÌdid€this€thing,€their€money€was€frozen.Ì€€€€€€€€So,€when€you€have€got€situations€like€that,€hereÌthe€FTC€was€going€after€them€criminally,€then€theirÌmoney€was€frozen,€you€are€going€to€tell€me€people€areÌgoing€to€benefit€from€fraud?€€I€don't€think€so.Ì€€€€€€€€MR.€HILE:€€Well,€that's€going€to€be€the€lastÌword.€€We€have€gone€five€minutes€over,€so€we€will€startÌÇfive€minutes€late€at€1:35€sharp,€unless€the€boss€saysÌthat€we€are€going€to€start€at€1:30.Ì€€€€€€€€MS.€HARRINGTON:€€No,€no,€no,€we€need€a€full€hourÌfor€lunch.Ì€€€€€€€€òò(Whereupon,€at€12:35€p.m.,€a€lunch€recess€wasÌtaken.)ÌÇ€€€€€€€€€€€€€€€€€€€€AFTERNOON€SESSIONÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€(1:40€p.m.)Ìóó€€€€€€€€MR.€HILE:€€The€subject€for€the€first€discussionÌthis€afternoon€is€presubscription€agreements,€but€beforeÌwe€get€into€that,€I€was€having€a€side€discussion€withÌWalt€during€the€break,€and€he€had€some€interestingÌinformation€or€interesting€thoughts€on€900€numberÌblocking€that€I€asked€him€to€share€with€the€group€here.ÌI€am€going€to€ask€him€to€put€that€in,€and€if€anybody€hasÌany€response€to€go€ahead€before€we€start€with€theÌpresubscription€agreement€discussion.Ì€€€€€€€€MR.€STEIMEL:€€Thank€you.Ì€€€€€€€€In€addition€to€other€problems€that€we€have€notedÌbefore€about€1-900€blocks€and€the€reasons€why€we€wouldÌlike€to€see€them€available€in€LIDB,€it€dawns€on€me€thatÌcurrently€and€even€more€so€as€we€go€more€to€competitionÌin€the€local€exchange,€1-900€blocks€will€become€less€andÌless€effective€and€less€and€less€available.Ì€€€€€€€€The€1-900€block€only€works€if€you€are€at€yourÌhome€telephone€number,€pick€up€the€phone,€you€have€900Ìblocking,€the€software€is€operational€in€the€CO€theÌmoment€you€make€the€call,€and€you€make€the€call€throughÌyour€LEC€CO€out€on€just€traditional€900€dialing.€€That'sÌthe€only€time€it€works.Ì€€€€€€€€There€are€a€variety€of€other€dialing€patternsÌÇunder€which€the€block€does€not€work.€€Some€carriers€haveÌ0-900€access.€€I€do€not€believe€that€the€block€works€onÌthe€0-900€access.€€We€have€CLECs,€competitive€localÌexchange€companies.€€They€will€be€picking€up€their€ownÌcalls€and€taking€them€out€on€the€network,€and€they€won'tÌknow€about€the€900€blocks.€€So,€if€you€have€a€CLEC€asÌyour€local€exchange€carrier,€the€block€won't€beÌeffective.Ì€€€€€€€€I€don't€believe€it€works€on€10XXX€dialing.€€IfÌyou€use€10XXX€to€get€to€your€long€distance€carrier€andÌthey€permit€you€to€dial€900,€you€can€get€on€the€platformÌthere€without€blocking.€€There€is€nothing€illegal€aboutÌcarriers€providing€dial€tone€off€800,€such€as€1-800€callÌAT&T,€Pilgram€has€one,€1-800-duck€AT&T,€it's€aÌcollect-calling€platform,€and€--€or,€you€know,€a€numberÌof€other€platforms,€1-800-operator.Ì€€€€€€€€Those€don't€go€through€the€1-900€block,€and€alsoÌwith€all€the€new€Internet€phone€possibilities,€you€canÌmake€Internet€phone€calls,€those€will€not€go€through€theÌblock.€€So,€we€are€developing€more€and€more€platforms,Ìall€of€which€we€don't€have€that,€and€it€seems€like€anÌeasy€way€to€solve€part€of€this€problem€is€to€have€anÌinformation€service€or€a€--€allow€consumers€the€optionÌto€say€no,€I€do€not€want€premium€services.€€I€only€wantÌbasic€telephone€service.€€I€don't€want€any€premiumÌÇbilled€services.Ì€€€€€€€€So,€you€would€have€a€premium-billed€serviceÌindicator€that€would€be€like€a€900€block€that€would€goÌonto€LIDB,€and€then€there€would€be€regulations€thatÌwould€require€the€EXEs€and€the€information€providers€toÌpull€that€LIDB€digit€for€completing€and€billing€any€ofÌthese€calls.Ì€€€€€€€€You€could€also€have€another€digit€in€there€forÌpeople€that€said€I€don't€want€any€adult€services,Ìhowever€we€want€to€define€adult€services,€so€peopleÌcould€decide€if€they€wanted€premium€billing€but€noÌpremium€adult€billing,€if€they€had€children€in€the€homeÌor€something€like€that.€€So,€I€think€those€are€optionsÌthat€maybe€we€should€look€at€and€resolve€some€of€theseÌproblems€at€least€on€the€domestic€side.Ì€€€€€€€€MR.€TAYLOR:€€I€join€Kim€and€would€agree€withÌWalt€for€the€first€time.Ì€€€€€€€€MR.€BOLIN:€€I€don't€know€to€what€extent€we€wantÌto€go€into€this,€but€I€think€a€few€of€those€are€redÌherrings.€€I€think€that€CLECs€are€going€to€offer€900Ìblocking,€unless€it€will€be€technologically€prohibited.Ì€€€€€€€€MR.€HILE:€€CLEC€is€competitive€local€exchangeÌcarrier,€so€that€--Ì€€€€€€€€MR.€STEIMEL:€€Right,€they€just€won't€have€theÌinformation.ÌÇ€€€€€€€€MR.€HILE:€€They€will€be€going€into€the€territoryÌnow€held€by€Bell€Atlantic.Ì€€€€€€€€MR.€BOLIN:€€I€think€they€will€have€theÌinformation.€€So,€when€you€sign€up€with€service€with€aÌCLEC,€they€are€going€to€ask€you€if€you€want€blockingÌpresumably.€€So,€I€don't€think€that€one€is€a€realÌissue.Ì€€€€€€€€MR.€STEIMEL:€€But€then€you€are€not€going€to€haveÌthe€same€blocking€--€I€still€think€it's€a€problem,Ìbecause€then€you€have€multiple€blocking€platformsÌanyway.€€Why€not€just€put€it€all€in€one€place?Ì€€€€€€€€MR.€HILE:€€That€place€should€be€LIDB,€is€thatÌwhat€you€are€saying?Ì€€€€€€€€MR.€STEIMEL:€€I€think€LIDB€makes€the€mostÌsense.€€It€is€easily€polled.€€All€the€interexchangeÌcarriers,€companies€like€Pilgrim,€they€have€to€poll€LIDBÌanyway,€and€it€gives€you€that€measure€of€privacy.€€WeÌwere€concerned€about€privacy€yesterday.€€On€LIDB,€a€callÌis€coming€in,€they€screen€LIDB,€and€it€is€not€like€theyÌare€going€to€screen€every€phone€combination€in€theÌcountry€and€take€down€all€this€LIDB€information€andÌbuild€their€data€base.€€LIDB€is€not€generally€availableÌthat€way.Ì€€€€€€€€MR.€HILE:€€Does€every€phone€call€go€throughÌLIDB,€every€900?ÌÇ€€€€€€€€MR.€STEIMEL:€€No,€they€have€nothing€to€do€withÌthat.Ì€€€€€€€€MS.€WILLIAMS:€€LIDB€was€set€up€for€calls€as€farÌas€what€the€receiving€party€has€blocked,€whether€aÌcalling€card€is€a€good€card,€a€LEC-issued€calling€card,Ìthat's€what€really€LIDB€started€as,€and€that€was€theÌissue€I€was€concerned€about€yesterday,€when€you€areÌtalking€about€dialing€out€from€that€number€and€making€aÌ1-plus€call€out,€there€is€no€LIDB€query€usually€done.Ì€€€€€€€€I€had€talked€to€our€LIDB€person€last€night,€andÌalthough€every€LEC€is€not€at€this€stage,€I€thinkÌSouthwestern€Bell€is€one€of€the€few€that€are,€we€haveÌsomething€in€LIDB€called€OLNS,€which€is€a€different€typeÌof€query,€which€tells€you€whether€that€line€will€receiveÌcertain€types€of€calls,€versus€--€no,€can€make€certainÌtypes€of€calls€versus€receive€certain€types€of€calls,Ìand€I€don't€think€we€would€be€opposed€to€adding€900€toÌit.Ì€€€€€€€€I€think€our€concern€is€do€we€go€to€all€that€costÌand€expense€to€add€it€if€nobody€is€required€to€use€it.ÌI€think€that€would€be€what€we€would€like€to€see€first,Ìbefore€you€require€all€the€LECs€to€spend€the€money€to€doÌthis,€that€you€also€require€every€900€or€everyÌpay-per-call€or€information€service€provider€toÌvalidate.ÌÇ€€€€€€€€MR.€STEIMEL:€€I€clearly€think€those€would€haveÌto€go€hand€in€hand,€the€requirement€and€then€evenÌlooking€at€industry€funding€of€the€cost€for€the€query.Ì€€€€€€€€MR.€HILE:€€Is€there€any€more€that€you€wanted€toÌadd€on€that?Ì€€€€€€€€MS.€WILLIAMS:€€I€don't€--€I€know€the€FCC€isÌlooking€at€the€issue€right€now€with€the€other€LECs,€andÌI€think€they€are€looking€at€requiring€LECs€to€provideÌall€of€this€information€for€free,€and€I€think€that'sÌwhere€there€is€a€stand-off€right€now€between€the€LECsÌand€everybody€else.€€That's€why€I€think€no€other€LEC€hasÌgotten€into€the€OLNS€piece€of€it€yet,€because€they€don'tÌwant€to€spend€the€money€to€develop€it€if€nobody€is€goingÌto€pay€the€charge€to€query€it€to€start€with.Ì€€€€€€€€MR.€BOLIN:€€Two€quick€points.€€The€first€is€thatÌyou€have€got€to€decide€what€it€is€you€are€going€toÌmarket€LIDB€as.€€You€still€have€to€define€pay-per-call,Ìwhich€is€what€has€occupied€most€of€the€day.€€The€secondÌissue€is€the€LIDB€solution€has€some€promise,€but€I€thinkÌbefore€the€FTC€took€any€action€like€that,€there€is€a€fewÌmore€technical€issues€to€be€explored,€because€I€think€aÌnumber€of€the€issues€that€were€just€suggested€are€redÌherrings,€and€on€the€technical€side,€I€think€there€areÌother€issues€that€none€of€us€here€are€really€competentÌto€address.€€I€would€just€encourage€someone€to€look€intoÌÇit€before€something€like€that€were€mandated.Ì€€€€€€€€MR.€R.€GORDON:€€Excuse€me€--Ì€€€€€€€€MR.€COHN:€€I€am€going€to€pass€around€a€copy€ofÌ701€of€the€1996€Act,€which€modified€Section€228.Ì€€€€€€€€MR.€HILE:€€Richard,€did€you€have€something?Ì€€€€€€€€MR.€R.€GORDON:€€Yes,€I€want€to€comment€on€theÌsuggestion€about€LIDB,€if€I€may.Ì€€€€€€€€MR.€HILE:€€Sure.Ì€€€€€€€€MR.€R.€GORDON:€€I€think€Eileen€said€it€aboutÌfour€times€yesterday,€maybe€five€times.€€We're€here€toÌfind€some€common€ground€and€some€common€solutions,€andÌone€of€the€things€that's€very€beneficial€out€of€aÌmeeting€like€this€is€that€we€get€to€intellectuallyÌexchange€ideas,€perspectives,€concepts€and€things€ofÌthis€sort.Ì€€€€€€€€I€agree€with€AT&T€that€I€don't€know€that€we€atÌthis€table€are€technologically€astute€enough€to€look€atÌall€the€ramifications€of€the€LIDB€solution;€however,€IÌcan€tell€you€from€the€TSIA€perspective€what's€comingÌacross€to€us€very€loud€and€clear€is€that€we€do€need€toÌhave€some€form€of€a€central€source€of€information€--Ìagain,€I'll€probably€get€nailed€for€it,€but€I€am€goingÌto€thank€the€Attorney€General€from€Wisconsin€--€teachingÌus€about€our€customer.€€We€need€to€know€as€much€as€weÌcan€about€our€customer€and€then€serve€that€customerÌÇaccordingly.Ì€€€€€€€€This€morning,€there€was€a€lot€of€dialogue€on€theÌinternational€issue,€and€I€believe€that€the€solution€forÌa€lot€of€the€problem€with€the€international€issue€is€inÌhand,€and€it's€here€today,€the€technology€is€available,Ìbut€we€have€restrictions€from€the€carriers€who€do€notÌwant€to€provide€us€as€an€industry€with€the€informationÌwe€need€to€know€our€customer.Ì€€€€€€€€At€lunch€I€had€the€opportunity€to€talk€withÌseveral€of€the€major€international€carriers,€and€theyÌwould€love€to€be€able€to€have€access€to€the€ANI€that€isÌmaking€the€call,€because€if€we€had€that€information€andÌwe€knew€that€that€ANI€was€someone€that€wanted€a€900Ìblock€or€had€prior€problems,€then€that€call€would€beÌdenied€right€on€the€spot.Ì€€€€€€€€That€technology€is€here.€€I€understand€the€majorÌcarriers€do€not€want€to€release€the€ANI,€and€one€of€theÌthings€I'd€like€to€do€would€be€to€have€the€CommissionÌlook€at€whether€or€not€that's€something€that€we€shouldÌreally€have€as€a€method€to€further€reduce€fraud€andÌabuse€in€the€industry.Ì€€€€€€€€MR.€HILE:€€I€don't€want€to€spend€any€more€timeÌon€this€issue.€€If€you€have€something€really€quick€--Ì€€€€€€€€MR.€BOLIN:€€Very€briefly.Ì€€€€€€€€MR.€HILE:€€Then€I€want€to€move€on€toÌÇpresubscription€agreements.Ì€€€€€€€€MR.€BOLIN:€€Again,€just€a€plea€that€I€don'tÌthink€that€there€is€enough€information€in€the€record€toÌmake€an€informed€decision€here.€€CPNI€and€privacy€issuesÌare€covered€extensively€in€FCC€regs,€it's€a€very€complexÌregime,€and€I€would€encourage€working€with€the€FCC€inÌexploring€this€further€before€any€kind€of€data€sharingÌis€mandated€by€the€FTC.Ì€€€€€€€€MR.€HILE:€€Thank€you.Ì€€€€€€€€Okay,€it€seems€to€me€that€there€was€a€fairlyÌbroad€consensus€in€the€comments€that€the€FTC€--€that€theÌrule€ought€to€be€brought€into€conformity€with€what€theÌFCC€is€doing€now€and€have€them€in€writing.€€So,€ifÌanyone€would€like€to€start€sharing€views€on€that.Ì€€€€€€€€Dave?Ì€€€€€€€€MR.€GILLIS:€€Our€comments€certainly€supportÌhaving€written€presubscription€agreements€beÌincorporated€as€part€of€the€FTC€rule.€€The€NationalÌAttorneys€General€Association€has€long€advocated€thatÌcharges€should€not€be€imposed€for€calls€to€800€numbersÌwithout€a€written€presubscription€agreement.€€We€furtherÌsupport€or€urge€that€the€Commission€require€thatÌsubscribers,€the€person€who€is€going€to€be€billed€forÌthe€call,€receive,€be€provided€a€copy€of€the€writtenÌpresubscription€agreement.€€We€believe€that€--€I€thinkÌÇit's€consistent€with€the€Act€that€the€agreement€has€toÌbe€provided€before€any€charges€are€--€appear€on€aÌsubscriber's€phone€bill.Ì€€€€€€€€I€would€like€to€point€out€two€things€in€additionÌto€general€support€for€that€that€are€somewhat€of€aÌconcern€with€respect€to€presubscription€agreements€andÌ800€number€usage.€€The€first€is€some€of€the€commentsÌseem€to€suggest€that€there€remains€a€mechanism€forÌinformation€providers€to€impose€charges€on€callers€forÌcalls€to€800€numbers€without€a€presubscription€agreementÌin€place€in€advance€of€the€call.€€And€it's€the€state'sÌposition€and€I€believe€it's€consistent€with€the€Act€thatÌfor€a€charge€to€be€placed€on€an€800€number€call,Ìassuming€implementation€by€the€Commission,€there€must€beÌin€place€a€presubscription€agreement.Ì€€€€€€€€Now,€the€other€thing€is€that€we€have€hadÌcomplaints€with€respect€to€800€numbers€where€a€personÌwho€has€called€an€800€number€for€a€pay-per-call€serviceÌhas€asked€whether€or€not€they€have€a€credit€card,€and€onÌthe€basis€of€an€affirmative€response,€in€this€case€--€inÌthe€complaint's€case€from€a€minor€--€this€is€the€secondÌpoint€--€the€pay-per-call€service€provided€the€serviceÌand€proceeded€to€charge€the€subscriber€--€presumablyÌusing€ANI€--€for€that€call.Ì€€€€€€€€In€other€words,€they€were€reading€--€as€weÌÇunderstood€their€position,€they€said€that€what€they€hadÌto€do€to€comply€with€the€law€was€make€certain€that€theÌcaller€had€a€credit€card€number,€and€then€they€billedÌthe€telephone€--€they€submitted€the€charge€on€theÌtelephone€bill€for€that€call.€€I€think€the€proper€way€toÌconstrue€the€law€is€to€say€if€you're€going€to€acquireÌpay-per-call€services€using€a€credit€card,€the€chargeÌought€to€appear€on€the€credit€card.€€If€you're€going€toÌrequire€pay-per-call€services€using€a€calling€card,€itÌought€to€be€consistent€with€the€requirements€for€theÌcalling€card.Ì€€€€€€€€So,€in€summary,€we€support€--€strongly€supportÌthe€adoption€of€a€written€presubscription€requirementÌthat€is€communicated€to€the€subscriber€so€that€noÌcharges€appear€on€phone€bills€without€such€an€agreementÌin€place.Ì€€€€€€€€MR.€HILE:€€I€notice€that€you€say€"communicatedÌto€the€subscriber."€€I€presume€that€you€say€that€becauseÌyou€would€allow€electronic€--Ì€€€€€€€€MR.€GILLIS:€€Yes.Ì€€€€€€€€MR.€HILE:€€--€presubscription€agreements?Ì€€€€€€€€MR.€GILLIS:€€Well,€so€that€the€subscriber€wouldÌbe€able€to€obtain€the€agreement,€could€download€theÌagreement€and€have€a€copy€of€it,€have€access€to€it.Ì€€€€€€€€MR.€HILE:€€Richard,€I€believe€you€were€next.ÌÇ€€€€€€€€MR.€R.€GORDON:€€Thank€you.Ì€€€€€€€€The€TSIA€is€in€basic€accord€with€the€attorneyÌgeneral€here€in€that€provided€that€the€billing€is€goingÌto€be€via€the€official€phone€bill,€the€phone€bill€thatÌhas€the€basic€service€attached€to€it,€we€support€thisÌposition.€€The€thing€that€we€want€to€make€sure€about€isÌthat€other€forms€of€billing,€where€the€billing€data€isÌgenerated€from€the€ANI€but€not€specifically€added€to€theÌphone€bill,€i.e.,€a€private€bill.Ì€€€€€€€€Many€of€our€members€have€extensive€customerÌlists€of€people€that€have€done€business€with€them€forÌyears,€and€they€offer€a€private€billing€arrangementÌwhere€they€are€extending€credit€directly€to€thatÌparticular€individual.€€Those€bills€are€not€submitted€byÌthe€phone€company,€they€are€not€submitted€via€any€of€theÌclassical€billing€systems.€€They€produce€an€invoice,€andÌit's€a€commercial€transaction€between€the€informationÌprovider€and€the€consumer,€and€we€do€not€believe€thatÌthose€should€be€or€are,€in€fact,€covered€by€the€embraceÌof€the€presubscription€rule.Ì€€€€€€€€MR.€HILE:€€Richard,€what€role€does€the€ANI€playÌin€that€scenario?Ì€€€€€€€€MR.€R.€GORDON:€€It€identifies€the€source€of€theÌcall.€€Many,€many,€many€of€our€members€have€people€callÌin,€the€first€time€they€call,€they€are€asked€for€theirÌÇname,€address,€their€telephone€number,€their€age.€€ThereÌis€--€many€of€our€members€go€through€doing€SocialÌSecurity€verifications.€€They€want€to€know,€again,€inÌsupport€of€what€--€what€my€colleague€from€WisconsinÌsaid,€they€want€to€know€as€much€as€they€can€about€theÌcustomer.Ì€€€€€€€€In€those€instances€where€they€--€where€theÌinformation€provider€or€the€service€provider€wants€toÌmake€the€service€available€on€a€credit€basis,€a€directÌcredit€basis,€they€will€--€many€of€them€establish€aÌthreshold,€$50€or€$100€or€$200,€and€as€soon€as€thatÌthreshold€is€reached,€a€an€invoice€is€sent,€and€it€isÌtracked€just€like€your€Woodward€&€Lothrop€card€or€yourÌSears€card.€€Many€of€them€extend€revolving€terms,€etÌcetera.€€In€those€situations,€again,€we€do€not€believeÌthat€that€should€require€a€written€presubscription.Ì€€€€€€€€MR.€HILE:€€In€that€scenario,€what€is€theÌsecurity€device€that€is€used€to€keep€somebody€who€is€notÌthe€subscriber€from€making€calls€on€that€line€if€the€ANIÌis€used€as€the€basis€for€billing?Ì€€€€€€€€MR.€R.€GORDON:€€The€ANI€is€used€--Ì€€€€€€€€MR.€HILE:€€I€understand€it€is€not€on€the€phoneÌbill,€but€I€want€to€know€what€--Ì€€€€€€€€MR.€R.€GORDON:€€There€is€no€more€security€thanÌthere€is€in€a€credit€card€transaction,€okay?€€SomebodyÌÇcould€pick€up€a€credit€card€number€--€the€waiter€fromÌlunch€could€have€picked€up€the€credit€card€number€andÌused€a€pay€phone€to€make€a€call;€however,€what€we€haveÌis€we€have€a€direct€merchant-consumer€relationship.ÌThere€is€--€it's€clear,€because€there€is€no€thirdÌparties€in€between€who€have€to€take€the€call€and€say,ÌWell,€I€don't€have€the€data.€€No,€you€have€to€go€call€soÌand€so,€and€then€so€and€so€says€you€have€to€callÌsomebody€else.€€This€is€a€direct€commercialÌrelationship.Ì€€€€€€€€MR.€HILE:€€Adam,€do€you€have€a€question€toÌclarify?Ì€€€€€€€€MR.€COHN:€€Yes,€I€have€a€question€specificallyÌon€that.€€If€it's€a€direct€relationship€between€theÌmerchant€and€the€consumer€who's€being€billed€and€youÌhave€an€agreement€of€some€sort,€there€doesn't€seem€to€beÌany€potential€for€a€problem,€but€--€but€my€question€is,Ìhow€does€that€--€how€does€--€how€would€you€deal€with€theÌsituation€where€a€person€comes€into€someone€else'sÌhouse,€signs€out€someone€else€for€one€of€these€separateÌagreements,€not€on€the€phone€bill,€and€from€that€pointÌforward€proceeds€to€bill€the€--€the€subscriber€to€thatÌline.Ì€€€€€€€€MR.€R.€GORDON:€€They€would€have€to€be€in€theÌhouse€using€the€phone.€€This€is€not€a€calling€card.ÌÇ€€€€€€€€MR.€COHN:€€Right,€wait,€wait,€let€me€justÌfinish.€€I€mean,€in€the€other€circumstance€where€theÌphone€bill€is€actually€the€bill€for€that€service,€whereÌpresumably€you€believe€that€a€presubscription€agreementÌwould€be€required€in€writing,€at€least€if€this€rule€wasÌchanged,€then,€you€know,€there€are€arguments€to€be€madeÌthat€any€call€made€from€the€house€is€subject€to€thatÌagreement,€but€now€you're€talking€about€something€thatÌhas€--€apparently€you€believe€has€nothing€to€do€with€theÌrule,€has€nothing€to€do€with€the€presubscriptionÌagreement€requirement,€has€nothing€to€do€with€900Ìnumbers.Ì€€€€€€€€How€could€a€person€come€into€someone€else'sÌhouse€and€make€an€agreement€in€their€name€and€then€haveÌa€bill€come€to€them€just€because€they€used€their€phone?ÌI€mean,€if€you€are€not€using€the€--€the€telephone€billÌsystem€to€bill€someone,€how€could€a€third€party€make€anÌagreement€in€my€name€and€legitimately€have€charges€comeÌto€me?€€Why€couldn't€the€unauthorized€use€just€be€anÌabsolute€excuse€to€payment€on€something€like€that€in€allÌcircumstances?Ì€€€€€€€€MR.€R.€GORDON:€€I'm€sorry,€I€don't€understandÌyour€question.€€I€mean,€I€think€it's€a€rather€far-outÌsituation€where€someone€is€going€to€come€into€yourÌhouse,€set€up€an€account,€and€then€every€time€they€wantÌÇto€use€it€the€call€has€to€come€from€your€home.Ì€€€€€€€€MR.€COHN:€€If€someone€were€to€come€into€my€houseÌand€make€an€unauthorized€call€to€a€900€number,€we€allÌknow€the€problems€associated€with€that,€but€if€someoneÌwere€to€come€into€my€house€and€make€a€call€to€one€ofÌthese€800€numbers€and€sign€me€up€in€my€name€for€aÌservice€that€is€not€going€to€be€billed€on€my€phone€billÌand€make€a€lot€of€charges€in€my€name€and€then€you€wereÌto€send€the€bill€to€me€on€the€basis€of€the€fact€that€itÌwas€my€ANI€and€my€phone€and€the€person€gave€my€name,Ìunder€what€basis€am€I€being€billed€for€that?€€Under€whatÌauthority€--€no€one€can€--€I'm€not€--Ì€€€€€€€€MR.€HILE:€€What€you€are€saying€is€it's€notÌauthorized.Ì€€€€€€€€MR.€COHN:€€It's€not€authorized.€€How€can€you€--Ìhow€can€anyone€do€that,€bill€me€for€something€likeÌthat?Ì€€€€€€€€MR.€R.€GORDON:€€Well,€again,€I€have€to€say€IÌthink€it's€a€pretty€far-out€exception,€but€the€sameÌthing€as€Pay-Per-View.€€How€about€somebody€breaks€intoÌyour€house€and€orders€down€a€movie€--Ì€€€€€€€€MR.€COHN:€€It€is€not€the€same€thing,€but€if€itÌwere€pay-per-call,€if€it€was€a€presubscription€agreementÌand€it€was€appearing€on€my€phone€call,€then€I€canÌunderstand€there€may€be€an€argument€in€favor€of€me€beingÌÇheld€responsible€for€that,€but€if€it's€not€--€you€saidÌit's€a€completely€separate€transaction€between€aÌmerchant€and€a€consumer.€€How€can€a€third-party€consumerÌhold€me€liable€for€--Ì€€€€€€€€MR.€R.€GORDON:€€A€third-party€consumer?Ì€€€€€€€€MR.€COHN:€€How€can€a€third€party€cause€aÌcontract€to€arise€between€me€and€you,€the€merchant,€thatÌwould€make€me€liable€for€something€just€because€he€usedÌmy€telephone€if€you€are€not€using€the€telephone€bill?Ì€€€€€€€€MR.€R.€GORDON:€€The€industry€standard€was€if€youÌwere€to€say€I€didn't€make€that€call,€there€would€be€aÌcredit€issued,€the€invoice€would€be€cancelled,€and€youÌwould€never€get€another€call€through€the€company€thatÌyou€did€that€with.€€I€mean,€we€recognize€that€there€isÌan€occasional€opportunity€for€this€to€happen,€but€withÌthis€type€of€a€private€billing€arrangement,€it's€theÌsame€thing€as€somebody€coming€in€and€ordering€CODÌmerchandise.€€I€mean,€if€you€pick€up€the€phone€and€youÌcall€Land's€End€and€you€order€a€pair€of€slacks€COD,€theyÌare€reading€your€ANI,€they€are€confirming€that€you€areÌyou,€they€are€using€the€same€data€bases€that€theÌindustry€is€using,€saying,€okay,€the€name€that€I€haveÌgot€is€the€same€name€that€I'm€pulling€up€in€thisÌinformational€data€base,€so€I'm€probably€doing€businessÌwith€a€legitimate€customer€here.€€When€those€pants€comeÌÇin€COD€and€you€say,€I€didn't€order€these,€I€never€didÌthis,€they€are€going€to€give€you€credit.€€That's€the€wayÌthe€industry€has€responded.Ì€€€€€€€€MR.€COHN:€€But€the€merchandise€would€be€returnedÌin€that€situation.Ì€€€€€€€€MR.€HILE:€€Richard,€in€the€scenario€that€you'reÌdescribing,€is€there€a€LIDB€dip€performed€so€that€youÌknow€you€are€not€dealing€with€a€hospital€or€a€school?Ì€€€€€€€€MR.€R.€GORDON:€€Most€of€the€people€in€theÌindustry€do€do€a€LIDB€dip,€yes.Ì€€€€€€€€MR.€HILE:€€I€would€like€to€go€to€Alan€TaylorÌnow.Ì€€€€€€€€MR.€TAYLOR:€€Okay,€basically€I€want€to€supportÌthe€written€and,€in€fact,€the€signed€agreement,€and€I'dÌbe€happy€to€share€an€example€of€why,€and€we€will€makeÌcopies€later.€€Basically€one€of€those€occasionalÌproblems€happened€when€a€doctor€found€it€necessary€toÌcommunicate€with€us€that€apparently€his€son€or€some€ofÌhis€son's€friends€called€a€number€late€at€night,€and€loÌand€behold,€on€his€phone€bill,€he€is€charged€for€allÌthese€services.€€I€think€clearly€that€in€that€caseÌperhaps€the€billing€entity€involved€here€or€the€providerÌassumed€they€were€dealing€with€Dr.€whatever€his€name€is,Ìbut€apparently€not.€€They€were€dealing€with€a€guest€inÌhis€home€or€perhaps€his€son.ÌÇ€€€€€€€€And€I€think€it's€wrong€for€the€subscriber€to€beÌheld€responsible€in€this€case€just€because€the€callÌoriginated€from€his€phone,€and€I€continue€to€waitÌanxiously€for€Pilgrim€to€provide€me€the€cite€where€anyÌsubscriber€is€obligated€to€pay€for€every€call€from€--Ìeven€unregulated€pay-per-calls€from€their€home.Ì€€€€€€€€MR.€R.€GORDON:€€You€did€say€phone€bill,€though.ÌDid€you€mean€phone€bill,€sir?€€Was€this€billed€on€theÌphone€bill?Ì€€€€€€€€MR.€TAYLOR:€€Yes.Ì€€€€€€€€MR.€R.€GORDON:€€I€am€talking€about€a€privateÌbill.Ì€€€€€€€€MR.€TAYLOR:€€I€thought€we€were€talking€about€aÌphone€call.Ì€€€€€€€€MR.€R.€GORDON:€€No,€I€am€talking€about€a€privateÌbill.Ì€€€€€€€€MR.€WILLIS:€€Alan,€where€in€the€rule€--€when€IÌread€the€prohibition€concerning€billing€a€caller€for€anÌ800€number,€it€doesn't€say€those€prohibitions€only€applyÌif€it's€billed€on€a€LEC€bill.€€Of€course,€my€concern€isÌonly€if€they€are€billed€on€a€LEC€bill,€but€when€I€readÌthis,€I€don't€see€what€you€are€referring€to€hereÌanywhere.€€It€says€in€any€manner€that€would€result€in€aÌcharge€from€calling€the€800€number,€you€have€to€have€aÌpresubscription€agreement€first.ÌÇ€€€€€€€€MR.€R.€GORDON:€€And€that's€what€we€are€trying€toÌget€clarification€on,€because€we€think€that€it's€overÌreaching€if€that€is€the€interpretation,€if€somebodyÌwants€to€set€up€a€commercial€relationship€and€they€agreeÌto€pay€for€something€outside€the€telephone€billingÌsystem.€€I€mean,€the€basic€fundamental€concept€here€isÌpay-per-call€is€being€regulated€by€the€Federal€TradeÌCommission€because€we€don't€want€people€to€lose€theirÌlifeline€basic€service.€€We€don't€want€to€abuse€a€veryÌvaluable€asset,€which€is€an€instantaneous€communicationÌsystem.€€This€is€completely€outside€that€system.Ì€€€€€€€€MR.€COHN:€€We€also€don't€want€people€to€beÌbilled€for€services€they€didn't€ask€for.€€That's€anotherÌconcern.Ì€€€€€€€€MR.€R.€GORDON:€€I€understand€that,€but€IÌchallenge€the€Commission€to€identify€any€significantÌinstance€of€fraud€or€of€complaints€in€this€venue.€€ThisÌis€--€this€is€--Ì€€€€€€€€MR.€HILE:€€You€mean€in€the€area€of€800€numberÌpay-per-call?Ì€€€€€€€€MR.€R.€GORDON:€€In€the€area€of€800€numberÌpay-per-call€where€the€customer€has€entered€into€anÌoral,€private€agreement€for€billing€not€going€throughÌthe€LEC.€€It€just€--€we€just€don't€see€it€as€an€areaÌthat€there€are€complaints€in.€€We€may€have€missedÌÇsomething,€we€may€be€wrong,€but€we€don't€hear€of€that.Ì€€€€€€€€MR.€HILE:€€What€concerns€me€is€that€we're€sortÌof€riding€over€one€of€the€elements€of€a€presubscriptionÌagreement€here,€which€is€that€the€service€providerÌprovides€the€use€of€an€identifying€number€or€other€meansÌto€prevent€unauthorized€access€to€the€service€byÌnonsubscribers,€and€that's€the€same€thing€that's€lurkingÌat€the€back€of€Adam's€question€here,€is€what€are€weÌdoing€to€prevent€people€who€are€not€--€not€--€the€ANIÌalone€is€not€sufficient€to€prevent€fraud.€€Billing€byÌANI,€whether€it€be€on€the€phone€bill€or€whether€it€be€byÌsome€other€separate€bill,€is€still€not€tough€enough€toÌhave€this€kind€of€additional€security.Ì€€€€€€€€MR.€R.€GORDON:€€So,€let€me€just€understand€theÌquestion.€€Is€what€you€are€saying€you€would€beÌcomfortable€if€there€was€a€PIN€code€associated€withÌthis?Ì€€€€€€€€MR.€HILE:€€Well,€that's€what€the€ruleÌcontemplates,€I€think.Ì€€€€€€€€MR.€R.€GORDON:€€I€don't€--Ì€€€€€€€€MR.€HILE:€€It€contemplates€the€use€of€anÌidentifying€number€or€other€means€to€preventÌunauthorized€access€to€the€service€by€nonsubscribers.ÌThe€ANI€is€going€to€get€the€subscriber.€€It€is€notÌnecessarily€going€to€get€some€third€party€using€theÌÇsubscriber's€number.Ì€€€€€€€€MS.€WILLIAMS:€€I€think€I€--Ì€€€€€€€€MR.€HILE:€€We€had€a€case€that€--€that€rested€onÌthis€problem€here€with€American€Telenet,€the€firstÌenforcement€case€under€the€900€number€rule.Ì€€€€€€€€MS.€WILLIAMS:€€Wasn't€there€an€additionalÌconcern€about€800€and€preserving€the€toll-free€nature€ofÌ800€and€that€consumers€understand€that€normally€an€800Ìcall€is€free,€and€if€there€is€an€understanding€outsideÌof€that,€meaning€they€understand€they€are€going€to€beÌcharged€for€whatever€service€they€are€getting€over€thatÌ800€number,€if€that€presubscription€arrangements€exists,Ìthen€it's€okay€to€charge€them?€€Isn't€that€what€theÌbasis€of€the€whole€800€piece€of€this€was?Ì€€€€€€€€MR.€HILE:€€I€don't€think€I€better€respond€toÌthat.€€I€think€I'll€just€let€someone€else.Ì€€€€€€€€Jim?Ì€€€€€€€€MR.€BOLIN:€€I€think€it€is€also€important€thatÌthe€800€presubscription€requires€it€to€be€in€writing.€€IÌmean,€an€oral€agreement€doesn't€meet€the€plain€terms€ofÌSection€228,€unless€the€FTC€is€prepared€to€change€itsÌrules.€€I€think€Congress€clearly€contemplated€thatÌservices€wouldn't€be€billed€over€800.Ì€€€€€€€€MS.€GRANT:€€I€wanted€to€point€out€that€we€doÌreceive€complaints€from€consumers€who€are€beingÌÇdirect-billed€usually€by€billing€aggregators€for€callingÌ800€numbers€that€they€said€that€they€did€not€know€thatÌthere€would€be€a€charge€for,€and€to€me,€it's€justÌcreating€another€means€of€identity€theft,€which€we€haveÌall€been€concerned€about€for€some€time€and€whichÌlegitimate€industry€members€are€concerned€about,€becauseÌthey€end€up,€if€they€have€to€make€adjustments,€losingÌmoney€on€the€deal.Ì€€€€€€€€Since€we€have€been€spending€so€much€time€talkingÌabout€knowing€your€customer,€I'm€confused€by€why€youÌwouldn't€want€to€take€modest€steps€to€ensure€that,€inÌfact,€you€are€dealing€with€somebody€who's€--€the€personÌwho's€prepared€to€pay€the€bill€by€at€least€confirming€inÌwriting€the€agreement€before€any€charges€can€be€made.Ì€€€€€€€€MR.€R.€GORDON:€€If€I€may,€that's€not€a€modestÌstep€in€the€world€of€electronic€commerce,€where€peopleÌseek,€want€and€demand€immediate€fulfillment.€€That's€theÌproblem€here.€€This€is€an€instantaneous€type€of€consumerÌservice.Ì€€€€€€€€MR.€COHN:€€Aren't€presubscriptionsÌinstantaneous?€€I€thought€you€had€to€presubscribe€toÌit.€€How€can€it€be€instantaneous?€€How€is€itÌdistinguished€from€900€numbers€if€a€presubscriptionÌagreement€is€instantaneous?€€I€thought€the€whole€notionÌwas€you€had€an€agreement€ahead€of€time€to€sort€of€planÌÇout€the€billing€situation.Ì€€€€€€€€MR.€R.€GORDON:€€You€don't€have€to€do€that€if€youÌuse€a€credit€card,€as€an€example,€and€if€you€dial€an€800Ìnumber,€you€went€to€your€credit€card€number,€and€underÌthe€Helms€amendment,€that's€an€authorized€transactionÌright€there,€and€you€know€that€you€are€paying€for€theÌinformation€or€the€entertainment€you're€receiving.ÌYou're€not€paying€for€the€800€call,€per€se;€you'reÌpaying€for€the€value€in€addition€to€the€transport€thatÌyou're€receiving.Ì€€€€€€€€The€way€that€a€private-billed€transaction€is€anÌinstantaneous€service€is€exactly€the€same€thing.ÌInstead€of€hitting€16€digits€and€the€pound€sign,€thenÌhitting€08€and€97,€the€pound€sign,€an€operator€comes€onÌand€says,€"May€we€have€your€name,€address€and€your€dateÌof€birth?"€€It's€a€live€situation.€€Because€there€areÌdata€bases€commercially€available€where€we€know€the€nameÌand€address€that's€associated€with€that€ANI,€they€willÌconfirm€that,€and€then€they€will€say,€"Thank€you€forÌcalling€us,€we€are€going€to€give€you€up€to€$50€worth€ofÌservices,€an€invoice€will€be€received€at€your€homeÌwithin€14€days."Ì€€€€€€€€Those€invoices,€when€they€are€received,€alertÌyou€to€the€fact€that€somebody€--€and€we€think€that€it'sÌyou€in€most€instances€--€has€used€your€telephone€toÌÇobtain€services.€€If€you€disagree€with€that,€you€callÌthe€800€number€there,€you're€dealing€directly€with€theÌmerchant€at€that€point€in€time.€€There€is€no€thirdÌparty.€€You€say,€this€wasn't€me,€I€didn't€do€this,€trustÌme,€that€merchant€is€going€to€turn€your€ANI€off,€becauseÌat€that€point€in€time,€someone€--€maybe€it€wasn't€you€--Ìbut€somebody€has€used€that€ANI€fraudulently.€€It's€aÌvery€clean,€simple€transaction.Ì€€€€€€€€MR.€HILE:€€Jim,€did€you€want€to€--€sorry,€Jill,Ìgo€ahead.Ì€€€€€€€€MS.€SANDFORD:€€Be€more€assertive€here.ÌActually,€what€I€was€planning€on€saying€Kim€has€alreadyÌunderscored.€€First,€I€don't€see€anything€in€here€thatÌdistinguishes€between€LEC€billing€and€other€third-partyÌcollection€or€direct€collection€on€the€part€of€the€IP.ÌI€don't€think€that€distinction€should€be€made.€€I€thinkÌthat's€a€dangerous€distinction€to€make.Ì€€€€€€€€The€intent€was€if€an€IP€is€going€to€use€an€800Ìnumber€that€there€be€a€presubscription€agreement.€€IfÌyou€take€a€look€at€our€comments€and€the€appendix€to€ourÌcomments,€we€do€include€examples€where€consumers€believeÌthat€if€they€are€calling€an€800€number,€it's€free.ÌThat's€an€overwhelming€belief€among€the€public,€and€if€aÌconsumer€wants€to€partake€in€a€pay-per-call€serviceÌwhere€there€is€an€800€number,€there€should€be€aÌÇpresubscription€agreement,€regardless€of€the€billing.Ì€€€€€€€€In€terms€of€the€direct€billing,€one€of€theÌproblems€we€have€seen€is€direct€bills€that€mirror€what€aÌlocal€phone€company's€bill€looks€like,€deceptive€billsÌthat€create€the€implication€that€they€are€coming€fromÌthe€local€telephone€company,€and€along€with€that,€theÌimpression€that€if€a€consumer€fails€to€pay€the€bill,Ìthat€their€local€service€will€be€terminated.Ì€€€€€€€€So,€the€whole€area€of€direct€billing€isÌtroublesome,€and€it€has€been€ripe€for€certain€deceptiveÌpractices€and€should€not€be€wholesale€excluded€fromÌconsideration€under€the€rule.Ì€€€€€€€€MR.€HILE:€€We€hear€next€from€Linda,€thenÌBarbara,€then€Jim.Ì€€€€€€€€MS.€GOLDSTEIN:€€I'm€back€a€point.€€I€really€wasÌjust€--€had€put€up€my€tent€to€respond€to€the€additionalÌcomment€that€the€presubscription€agreement€also€needs€toÌbe€signed,€and€we€would€--€we€would€strongly€oppose€thatÌrequirement€for€a€number€of€reasons,€most€significantlyÌits€inconsistent€with€the€current€FCC€rules,€and€thatÌissue€was€very€seriously€considered€at€the€time€thoseÌrules€were€promulgated.€€I€think€it€would€wreak€someÌhavoc€on€the€industry€to€have€inconsistent€rules.Ì€€€€€€€€And€secondly,€even€in€the€context€of€theÌtelemarketing€sales€rule,€there€was€a€lot€of€discussionÌÇconcerning€the€difficulties€associated€with€requiring€anÌagreement€to€be€signed€and€sent€back,€and€the€failure€ofÌsomeone€to€sign€and€send€back€an€agreement€is€notÌnecessarily€indicative€of€a€lack€of€desire€to€utilizeÌthe€service.€€So,€while€we€support€harmonizing€the€FTC'sÌrule€with€that€of€the€FCC,€we€would€oppose€theÌimposition€of€a€signed€requirement.Ì€€€€€€€€MR.€HILE:€€Barbara?Ì€€€€€€€€MS.€MAJESKI:€€Just€to€address€Adam's€concerns,Ìthe€FCC€has€defined€that€a€presubscription€agreement€isÌa€contractual€agreement,€one€that€can€only€be€enteredÌinto€by€the€billed€party€to€that€telephone€service,Ìsomeone€who€has€to€be€18€years€or€older,€and€all€theÌpanoply€of€rules€that€apply€to€contracts€apply€toÌpresubscription€agreements.Ì€€€€€€€€MR.€HILE:€€Jim?Ì€€€€€€€€MR.€BOLIN:€€I€would€say€first€I€agree€that€noÌsignature€requirement€should€be€imposed.€€I€thinkÌSection€228€is€pretty€clear€about€that€in€allowingÌelectronic€form€agreements.€€I€do€think€it€requiresÌagreements€to€be€in€writing,€though.Ì€€€€€€€€On€the€issue€of€direct€billing,€I€think€thatÌanother€issue€working€here,€the€intent€to€analogizeÌdirect€billing€and€credit€card€billing€again€is€alreadyÌaddressed€in€the€Act.€€It€allows€credit€card€billing€butÌÇprovides€specific€requirements€for€credit€card€billing.ÌFor€direct€billing,€you€are€going€to€enter€into€someÌsort€of€written€agreement€with€your€customer.€€CreditÌcard€billing,€presumably€there€is€already€an€underlyingÌagreement€that€sets€up€a€credit€card,€and€if€it's€aÌcredit€card,€it's€generally€applicable€to€the€FairÌCredit€Act,€as€well,€so€you€have€requirements€there.€€IÌdon't€think€it's€fair€to€make€that€analogy.Ì€€€€€€€€MR.€HILE:€€Peter?Ì€€€€€€€€MR.€BRENNAN:€€Thank€you.Ì€€€€€€€€I€would€just€make€a€couple€of€observations.ÌThose€of€us€who€rely€on€800€numbers€because€800€numbersÌsupport€a€large€part€of€the€service€that€we€do,€and€theyÌare,€in€fact,€free,€as€800€numbers€or€888€numbers,€wouldÌamplify€the€concern€that€the€intention€going€back€wasÌthat€the€numbers€which€were€intended€to€be€understood€asÌfree€should€be€free.Ì€€€€€€€€On€the€issue€of€signatures€being€required,€IÌwould€just€remind€us€that€in€every€case€that€I'm€awareÌof,€you€don't€need€to€sign€a€document€in€order€to€haveÌtelephone€service€at€all.€€You€don't€need€to€subscribeÌto€telephone€service€unless,€perhaps€in€SouthwesternÌBell€they€require€it€--Ì€€€€€€€€MS.€WILLIAMS:€€I€agree€with€you.Ì€€€€€€€€MR.€BRENNAN:€€--€but€you€do€not€need€to€have€it,ÌÇand€in€terms€of€making€--€of€the€ANI€being€used€as€anÌidentifier€and€the€phone€number€being€used€as€anÌidentifier,€I€know€the€other€night€when€I€ordered€aÌpizza,€the€minute€they€answered,€they€said€Mr.€Brennan,Ìwould€you€have€the€pepperoni€you€had€the€other€night?ÌThey€are€obviously€using€my€ANI.€€I€know€when€I€calledÌto€have€the€carpets€cleaned€in€my€apartment€while€I'mÌhere€this€week€in€Boston,€which€will€cost€me€$300€orÌsomething€like€that,€that€will€be€done€on€the€basis€ofÌan€agreement€made€over€the€telephone€with€no€signedÌagreement€whatsoever.Ì€€€€€€€€MR.€BOLIN:€€I'm€not€so€sure€the€statute€appliesÌto€carpet€cleaning,€unfortunately,€but€--€Section€228Ìdoesn't€apply€to€carpets,€so€--Ì€€€€€€€€MR.€BRENNAN:€€Unfortunately.Ì€€€€€€€€MR.€BOLIN:€€The€rule€might€be€broadened,Ìthough.Ì€€€€€€€€MR.€HILE:€€Mr.€Alan€Taylor?Ì€€€€€€€€MR.€TAYLOR:€€Let€me€just€say€that€I€have€noÌproblem€with€the€ordering€of€the€pizza.€€I€am€sure€thatÌthe€University€of€Florida€has€no€problem€with€Domino'sÌdelivering€pizza€to€its€students€based€on€the€ANI€andÌthe€address.€€What€they€have€a€problem€with€is€thatÌstudents€dialing€an€800€number€and€the€university€beingÌbilled.ÌÇ€€€€€€€€Now,€if€you€were€billing€the€university€for€theÌpizza,€therein€lies€the€problem,€and€that's€why€I€thinkÌa€signed€agreement€is€--€is€appropriate,€becauseÌobviously€there€are€many,€many€ANIs€that€are€out€there,Ìand€people€are€using€those€phones€who€are€not€authorizedÌto€incur€pay-per-call€services€or€other€services.Ì€€€€€€€€MR.€HILE:€€Jill,€and€then€Marianne,€I€think€youÌhave€a€question.Ì€€€€€€€€MS.€SANDFORD:€€I€just€want€to€respond€toÌsomething€Richard€said.€€I€don't€think€it's€a€fairÌanalogy€to€use€a€credit€card€analogous€to€an€ANI.€€IÌmean,€ANIs€--€this€is€published€in€the€phone€book.€€ThisÌinformation€is€out€there.€€Obviously€you€can€have€creditÌcard€fraud€with€a€waiter€in€a€restaurant,€but€where€elseÌdo€you€have€a€situation€where€account€numbers€forÌconsumers€are€so€readily€available,€and€then€relying€onÌthat€information€without€having€authorization€from€theÌconsumer€becomes€very€troublesome.Ì€€€€€€€€MR.€R.€GORDON:€€I€think€we€may€have€a€solution.ÌWe€were€just€--Ì€€€€€€€€MR.€HILE:€€Go€ahead.Ì€€€€€€€€MR.€R.€GORDON:€€We€were€just€caucusing€back€hereÌfor€a€moment,€and€the€issue€is€--€is€really€the€billing,Ìas€I€understand€it,€that€we're€discussing€here.€€I'dÌlike€to€open€dialogue€on€the€concept€of€the€industryÌÇwants€to€provide€services€immediately.€€So,€in€yourÌcase,€Adam,€you€call€--€somebody€comes€into€your€house,Ìcalls€in,€gives€your€name,€gives€your€identification,Ìand€the€call€is€made.€€How€about€if€a€minimum€of€fiveÌbusiness€days€before€a€bill€was€sent€you€received€aÌwritten€presubscription€agreement€in€the€mail€thatÌdidn't€require€your€acceptance€but€did€require€yourÌimmediate€notification€to€deny€billing?Ì€€€€€€€€MR.€COHN:€€Sort€of€a€negative€option?Ì€€€€€€€€MR.€R.€GORDON:€€Sort€of€a€negative€option,€butÌlaying€out€all€of€your€rights,€saying€a€call€has€beenÌplaced€from€your€phone€at€11:32€p.m.€on€such€and€such€aÌnight€for€nine€minutes.€€There€will€be€a€charge€renderedÌunless€you€call€and€say€that€this€was€not€you.Ì€€€€€€€€MR.€COHN:€€That's€a€very€interesting€suggestion,Ìand€it€seems€to€address€a€lot€of€the€concern,€but€IÌstill€have€a€problem€with€the€idea€that€what€if€I€didn'tÌenter€that€--€I€mean,€I€just€--€the€basic€problem€I'mÌhaving€is€I€don't€think€that€under€any€circumstances€IÌwould€want€someone€else€to€be€able€to€make€a€contract€inÌmy€name,€just€because€they€made€a€phone€call€from€myÌphone.€€I€understand€that€900€numbers€are€a€specialÌarrangement€and€that€there€is€a€certain€thing€behind€900Ìnumbers,€but€I€just€--€I€just€as€a€personal€view,€I€justÌhave€a€problem€that€somebody€else€could€make€a€contractÌÇin€my€name,€but€receiving€something€in€the€mail€would,Ìyou€know,€be€better€than€not€--€that€the€--Ì€€€€€€€€MR.€R.€GORDON:€€Before€the€billing,€so€there€isÌnotice€prior€to€billing.Ì€€€€€€€€MR.€HILE:€€Dave,€would€you€like€to€respond€toÌthat?Ì€€€€€€€€MR.€GILLIS:€€The€--€what€we're€dealing€here€withÌis€charges€for€calls€placed€to€800€numbers.€€SomeoneÌwants€instantaneous€access€to€pay-per-call€service,€youÌcan€provide€that€through€a€900€number,€noÌpresubscription€requirement.€€They€can€pay€for€it€with€aÌcredit€card.€€We're€dealing€here€with€charges€to€900Ìnumbers.€€What€Congress€has€said,€before€you€chargeÌanyone€for€an€800€number€call,€you€have€to€have€aÌpresubscription€agreement.€€An€agreement€means€a€meetingÌof€the€minds€between€the€service€provider€and€the€personÌthat€is€acquiring€the€service.Ì€€€€€€€€MR.€HILE:€€And€paying€for€it.€€And€paying€forÌit.Ì€€€€€€€€MR.€GILLIS:€€--€and€paying€for€it.€€You€have€toÌhave€that€in€place€before€you€charge€people€for€callingÌ800€numbers.€€This€industry,€this€--€this€recent€Act€ofÌCongress,€just€doesn't€come€from€no€place.€€It€comesÌfrom€a€track€record€that€this€industry€has€had€whereÌpeople€keep€on€getting€exorbitant,€high€charges€forÌÇcalls€that€they€thought€were€supposed€to€be€withoutÌcharge,€and€now€you€have€the€reaction€that€you€do,€whereÌthere€--€as€I€read€the€law,€and€it's€pretty€clear€to€me,Ìthere€ought€not€be€a€charge€for€a€call€to€an€800€numberÌunless€there€is€a€presubscription€agreement€in€placeÌbefore€the€call€is€made.Ì€€€€€€€€MR.€R.€GORDON:€€I€guess€that's€where€I'm€havingÌdifficulty.€€Does€it€say€before€the€call€is€made€orÌbefore€the€charge€is€rendered?Ì€€€€€€€€MR.€HILE:€€The€part€of€the€rule€that€we'reÌtalking€about€is€308.5-I,€"Prohibition€concerning€aÌtoll-free€number.€€Any€person€is€prohibited€from€usingÌan€800€or€other€telephone€number€advertised€as€or€widelyÌunderstood€to€be€toll-free€in€a€manner€that€would€resultÌin€(1)€the€calling€party€being€assessed,€by€virtue€ofÌcompleting€the€call,€a€charge€for€the€call;€(2)€theÌcalling€party€being€connected€to€an€access€number€for,Ìor€otherwise€transferred€to,€a€pay-per-call€service,€(3)Ìthe€calling€party€being€charged€for€information€conveyedÌduring€the€call€unless€the€calling€party€has€aÌpresubscription€or€comparable€arrangement€to€be€chargedÌfor€the€information;€or€(4)€the€calling€party€beingÌcalled€back€collect€for€the€provision€of€audio€or€dataÌinformation€services,€simultaneous€voice€conversationÌservices,€or€products."ÌÇ€€€€€€€€MR.€R.€GORDON:€€And€I€guess€not€trying€to€splitÌhairs€what€the€industry€does€try€to€do€is€to€demonstrateÌto€the€consumers€what€the€services€are,€and€I€believeÌmost€of€the€companies€in€the€industry,€in€a€good€faithÌeffort,€would€be€prepared€to€give€away€a€free€phone€callÌto€someone€in€order€to€attract€them€to€the€service€if,Ìat€the€end€of€that€call,€they€got€a€notice€that€said€inÌthe€mail,€a€call€was€made€for€ten€minutes,€12€minutes,Ìfrom€a€certain€phone€number,€at€a€certain€time,€withÌspecifics.€€If€you€did€not€make€this€call€or€if€you€doÌnot€want€to€pay€for€this€service,€please€dial€theÌfollowing€800€number,€free,€and€automatically€the€billÌwill€be€stopped.Ì€€€€€€€€MR.€HILE:€€Do€you€have€something€further?Ì€€€€€€€€MR.€GILLIS:€€I€just€want€to€point€out€again€thatÌ900€numbers€are€available€for€that,€and€the€concern€isÌwith€the€integrity€of€the€800€number€and€people'sÌexpectation€that€no€charges€flow€from€that€absent,€clearÌunderstanding€of€a€presubscription€agreement.Ì€€€€€€€€MR.€R.€GORDON:€€The€problem€with€900€numbers€--Ìand€I€know€this€was€discussed€this€morning,€so€I€won'tÌmake€a€big€issue€of€--€until€there€is€portability,€thereÌhave€been€tens€of€millions€of€dollars€lost€byÌinformation€providers€and€service€bureaus€whose€carrierÌsuddenly€decided€to€change€their€practices,€and€thenÌÇthere€is€not€even€a€transfer€available€when€a€carrierÌdecides€to€turn€a€900€number€off.€€It's€dead.Ì€€€€€€€€There€is€not€even€a€referral€to€another€number.ÌSo,€millions€and€millions€of€dollars€of€good€will€andÌadvertising€are€lost.€€That's€the€reason€portability€isÌan€issue,€and€that's€the€reason€that€people€need€to€haveÌaccess€in€the€industry€other€than€an€800€--€other€than€aÌ900€platform.Ì€€€€€€€€MR.€HILE:€€Jim,€do€you€want€to€respond€to€that?Ì€€€€€€€€MR.€BOLIN:€€Just€briefly.€€The€FCC€hasÌconsidered€portability€in€the€past€and€has€declined€toÌgrant€it.€€Portability€is€not€an€issue€for€the€FederalÌTrade€Commission,€and€nothing€in€Section€228€directs€theÌFederal€Trade€Commission€to€assess€the€existence€orÌnonexistence€of€portability€in€issuing€consumerÌprotection€legislation.€€Portability€is€just€not€on€theÌtable€here.Ì€€€€€€€€MR.€R.€GORDON:€€I€was€responding€to€his€questionÌas€to€why€900€is€not€the€only€platform€that€works€here.Ì€€€€€€€€MR.€BOLIN:€€I€don't€know€why€the€FTC€should€haveÌto€take€that€into€account.€€Congress€didn't€ask€themÌto.€€I€don't€think€that€structure€is€relevant€to€theÌapplication€of€the€statute€in€this€instance.Ì€€€€€€€€MR.€HILE:€€Alan€Taylor?Ì€€€€€€€€MR.€TAYLOR:€€Just€going€back€for€a€moment€toÌÇAdam's€concerns,€I€don't€think€the€sending€of€a€noticeÌthat€charging€is€going€to€begin€in€the€mail€isÌnecessarily€adequate.€€The€same€folks€that€--€who€wouldÌsurreptitiously€use€the€telephone€might€also,€you€know,Ìtake€the€mail€from€the€--€or€the€information€provided,Ìtoo.€€So,€I€still€advocate€written€and€signedÌpresubscription€agreements.Ì€€€€€€€€MR.€HILE:€€Carol,€did€you€have€a€question€thatÌyou€wanted€to€add€here?Ì€€€€€€€€MS.€DANIELSON:€€Yeah,€and€it's€right€on€point.ÌI,€too,€would€oppose€I€think€a€written€notice€in€theÌmail,€but€for€slightly€different€reasons.€€We€justÌfinished€bringing€a€whole€series€of€cases€that€dealtÌwith€magazine€subscription€sales,€and€in€many€of€thoseÌinstances,€the€magazine€sales€company€would€send€someÌtype€of€a€verification€through€the€mail€to€the€consumerÌwith€a€negative€option.Ì€€€€€€€€Unfortunately,€the€--€those€particularÌverifications€would€sometimes€be€lost€in€the€mail,€theyÌwouldn't€arrive€until,€you€know,€two€weeks€after€theÌtime€period€that€the€consumer€had€been€allowed€toÌcancel.€€There€is€a€whole€bunch€of€problems€in€providingÌthat€type€of€a€notice€with€a€negative€option.€€So,€thatÌkind€of€thing€just€I€don't€think€would€work.Ì€€€€€€€€MR.€HILE:€€Sue€Grant?ÌÇ€€€€€€€€MS.€GRANT:€€And€it€also€shifts€the€burden€ontoÌthe€consumer€to€defend€his€or€herself€against€a€billÌthat€he€or€she€didn't€think€that€they€were€going€to€getÌto€begin€with€for€an€800€number€call,€and€the€reason€whyÌthere€is€such€strict€prohibitions€on€--€and€requirementsÌin€the€original€act€and€the€rule€is€because€of€theÌspecial€nature€of€800€number€calls€of€800€numbers.Ì€€€€€€€€MR.€HILE:€€Marianne?Ì€€€€€€€€MS.€SCHWANKE:€€Before€we€finish€this€discussion,ÌI€would€just€like€to€get€to€the€issue€of€monthly€chargesÌthat€have€been€appearing€on€consumers'€bills,€and€IÌwonder€whether€the€presubscription€agreement€is€a€way€toÌdeal€with€that€kind€of€charging€arrangement.Ì€€€€€€€€MR.€HILE:€€Jill?Ì€€€€€€€€MS.€SANDFORD:€€Well,€to€answer€your€question,ÌMarianne,€I€think€a€presubscription€agreement€needs€alsoÌto€have€the€terms€and€conditions€of€the€contract€betweenÌthe€consumer€and€the€IP.€€Included€in€that€would€beÌwhat,€if€any,€recurring€charges€will€there€be,€what€areÌthe€permanent€rates,€if€that€is€the€billing€structure.ÌSo,€the€presubscription€agreement€needs€to€fully€exploreÌthe€terms€and€conditions€of€the€agreement,€and€hopefullyÌthat€will€alleviate€what€we€see€with€these€recurringÌmembership€fees.Ì€€€€€€€€I€mean,€the€problem€we€have€been€seeing€with€800ÌÇnumbers€is€a€consumer€believing€that€the€call€is€free,Ìwill€make€the€800€number€call.€€As€a€result€of€thatÌcall,€may€now€incur€monthly€membership€fees,€often€timesÌit's€psychic€lines€but€not€exclusively.€€We€see€quite€aÌbit€in€$9.95,€and€I€know€we€have€included€that€as€anÌappendix€to€our€comments.€€And€having€theÌpresubscription€agreement€that€spells€out€theÌobligations€of€the€contract€hopefully€would€addressÌthose€issues.Ì€€€€€€€€MS.€SCHWANKE:€€Are€there€any€services€providedÌin€connection€with€these€monthly€fees?Ì€€€€€€€€MS.€SANDFORD:€€That's€a€question€we've€alwaysÌwondered,€you€know,€what€are€these€fees,€and€I€wouldÌactually€be€curious€if€industry€spoke€to€that.Ì€€€€€€€€MR.€HILE:€€Kim?Ì€€€€€€€€MS.€WILLIAMS:€€Yeah,€I€can€address€at€least€theÌones€that€have€been€presented€to€me.€€Many€of€them€areÌsimply€provided€discounted€rates€on€a€900€call€that€isÌmade.€€So,€for€instance,€some€of€the€psychic€linesÌyou're€talking€about,€for€$10€a€month,€the€consumer€isÌsupposed€to€be€getting€a€$2€a€minute€rate€instead€of€aÌ$4€a€minute€rate€when€they€dial€the€900€psychic€line.Ì€€€€€€€€MS.€SANDFORD:€€So,€is€that€debited€off€of€the€$9Ìor€the€$9€just€entitles€them€to€the€lower€rate?Ì€€€€€€€€MS.€WILLIAMS:€€Just€entitles€them€to€the€lowerÌÇrate,€and€my€understanding€of€many€of€these€is€that€theyÌcompare€it€to€a€calling€plan€for€regular,€traditionalÌlong€distance.€€So,€I€think€that's€how€most€of€them€areÌoccurring,€but€I€would€say€most€of€them€or€none€of€themÌthat€I€know€of€have€any€kind€of€an€arrangement,€aÌpresubscription€arrangement.Ì€€€€€€€€MS.€SCHWANKE:€€And€the€monthly€charges€haveÌresulted€from€a€call€dialed€to€an€800€number.Ì€€€€€€€€MS.€WILLIAMS:€€Some€yes,€some€no.€€Some€I€thinkÌresult€from€a€call€to€a€900€number.€€I€think€a€lot€ofÌthem€I've€seen,€you€call€the€900€psychic€line€andÌsomehow€start€being€billed€the€monthly€fee.€€I€don'tÌknow€if€you€agree€to€it€on€that€initial€call,€to€beÌhonest,€I€don't€know,€but€I€know€supposedly€you€areÌgetting€this€better€rate€when€you€do€continue€to€call.ÌMany€of€the€consumers,€though,€that€I€have€seenÌcomplaints€from€don't€make€any€further€calls,€they€haveÌonly€made€the€one€call,€and€all€of€a€sudden€they€areÌbeing€hit€with€a€monthly€fee€for€that€call.Ì€€€€€€€€MR.€HILE:€€Linda?Ì€€€€€€€€MS.€GOLDSTEIN:€€I€did€want€to€make€a€number€ofÌcomments€relating€to€this€issue.€€The€first€is€thatÌthere€--€I€think€there€has€been€some€confusion€and€nowÌmight€be€the€appropriate€time€to€clarify€it€in€terms€ofÌwhat€happens€with€the€recurring€monthly€charges,€and€itÌÇis€--€it€is€distinct€from€a€call€to€an€800€number€whichÌresults€automatically€in€the€consumer€being€charged.€€AtÌleast€in€the€recurring€charge€situations€that€I'mÌfamiliar€with,€that€call€to€the€800€number€is€moreÌanalogous€to€any€direct€response€call€to€an€800€number,Ìmeaning€the€call€to€that€number€itself€is€free,€andÌduring€the€course€of€that€call,€the€consumer€is€askedÌwhether€they€want€to€enroll€in€the€club,€and€only€ifÌthey€respond€affirmatively€to€the€request€to€be€enrolledÌin€the€club€do€they€then€become€obligated€to€pay€theÌmonthly€fee.Ì€€€€€€€€And€I€say€that€because€I€think€while€we€wouldÌnot€have€any€objection€to€a€requirement€and,€in€fact,Ìthe€clubs€that€I'm€familiar€with€do€follow€this€practiceÌof€sending€a€written€confirmation€to€the€personÌexplaining€all€of€the€terms€and€conditions,€you€can'tÌwholesale€adopt€the€presubscription€requirements€as€theyÌcurrently€exist€or€as€they€exist€under€the€FCC€rules€toÌthe€club€billing€arrangement.Ì€€€€€€€€The€necessity€for€the€unique€PIN€number€may€beÌdifferent,€again,€because€the€consumer€is€not€beingÌbilled€for€information€services€on€the€call.€€It'sÌreally€a€different€type€of€service.€€It's€a€monthly€--Ìit's€a€club€membership,€and€I€am€sure€--€I€don't€thinkÌwe€can€generalize€about€--€I'm€sure€that€there€are€manyÌÇclubs€out€there,€and€they€may€all€differ€in€terms€ofÌwhat€they€offer,€but€typically€most€club€membershipsÌwill€offer,€in€addition€to€discounted€rates€off€of€900,Ìwhich€I€would€submit€still€has€a€legitimate€value,€IÌmean,€it€is€not€uncommon€in€any€club€membershipÌsituation€to€have€a€members-only€rate,€and€that's€a€veryÌlegitimate€club€benefit,€but€they€will€also€typicallyÌhave€newsletters,€may€have€premiums,€may€have€otherÌpremium€items€or€information€--€written€information€orÌmaterials€that€go€along€to€the€member€with€each€month€ofÌthe€membership.Ì€€€€€€€€And€in€our€view,€as€long€as€the€terms€of€thatÌagreement€are€set€forth,€first€of€all,€on€the€call€whenÌthe€consumer€is€asked€whether€they€wish€to€enroll,€andÌthen€secondly,€in€a€written€document€that€is€sent€to€theÌsubscriber€before€they€are€actually€billed,€I€think€thatÌshould€be€sufficient.€€So,€my€short€summary€would€justÌbe€that€I€think€we€have€to€be€a€little€bit€careful€aboutÌwholesale€adopting€the€presubscription€rules€as€theyÌexist€currently€to€this€situation,€because€it€is€aÌslightly€different€animal€from€a€consumer€calling€an€800Ìnumber€and€being€billed€for€information€servicesÌdelivered€during€that€call.Ì€€€€€€€€MR.€HILE:€€Marianne?Ì€€€€€€€€MS.€SCHWANKE:€€How€do€--€I€assume€the€chargesÌÇappear€on€a€telephone€bill.€€How€do€the€charges€appearÌon€the€phone€bill?€€What€does€it€say€on€the€phone€bill?Ì€€€€€€€€MR.€HILE:€€How€does€it€look€on€the€phone€bill?Ì€€€€€€€€MR.€TAYLOR:€€Turn€to€page€4€on€the€handout€IÌgave€you,€and€you€will€see€some€of€these€charges€forÌwhat€appear€to€be€services.€€Here€I€would€point€out€toÌyou€that€here€it's€responsibility€that€we€need€to€beÌconcerned€about.€€You€cannot€obligate€the€subscriber€ofÌthe€telephone€to€these€services.€€You€know,€it€is€oneÌthing€if€you€want€to€bill€them€on€a€credit€card,€butÌit's€another€thing€if€you€want€to€bill€them€on€the€phoneÌbill€of€somebody€else's€phone.Ì€€€€€€€€MR.€HILE:€€Your€position€would€be€that€they€needÌa€presubscription€agreement€in€order€to€do€that?Ì€€€€€€€€MR.€TAYLOR:€€Yes.€€I€see€no€reason€why€Dr.ÌStewart€should€pay€for€messaging,€dial-up€and€telephoneÌuse€if€he€didn't€order€it.Ì€€€€€€€€MR.€HILE:€€Kim,€and€then€this€is€the€last€onÌthis,€because€we€were€scheduled€for€a€break€five€minutesÌago.Ì€€€€€€€€MS.€WILLIAMS:€€I€commented€a€little€bitÌyesterday,€these€monthly€fees€are€submitted€on€aÌparticular€type€of€record€different€from€the€callÌrecords.€€Our€company€had€stopped€billing€for€them,€andÌagain,€we€saw€them,€900€calls€being€sent€in€just€to€getÌÇthe€monthly€fee€bill,€versus€sending€them€in€on€theÌrecord€type€that€we€didn't€want€to€receive€them€on.Ì€€€€€€€€And€I€would€question,€under€presubscription€or,Ìexcuse€me,€under€the€pay-per-call€definition,€I€wouldÌthink€that€you€could€apply€presubscription€to€theseÌmonthly€fees.€€The€customer€is€receiving€entertainmentÌor€access€to€entertainment€services€on€a€per-time-Ìinterval€basis.€€If€it's€monthly,€it's€$10€a€month€andÌthey€get€access€to€pay-per-call€type€services.Ì€€€€€€€€And€I€guess€another€issue,€just€to€question€it,Ìon€presubscription€is€how€do€you€actually€get€aÌcustomer's€agreement€if€they€don't€respond€somehow€toÌwhat€you've€mailed€them?€€I€mean,€if€--€just€because€youÌmail€them€a€written€agreement,€where's€the€agreement€onÌthe€customer's€point?€€You€don't€start€charging€untilÌyou€have€got€the€customer's€agreement.€€How€do€you€getÌthat€if€he€doesn't€respond?Ì€€€€€€€€MR.€HILE:€€Do€you€have€a€response€down€there?Ì€€€€€€€€MS.€GOLDSTEIN:€€Yeah,€I€have€a€--€I€have€two€--ÌI€would€first€--€I€would€--€I€would€disagree€with€theÌconclusion€that€the€membership€fee€is€itself€aÌpay-per-call€service,€because€that€--€the€$9.95€fee€isÌnot€for€the€information€services.€€The€informationÌservices€themselves€are€accessed€generally€via€a€900Ìnumber,€and€to€the€extent€that€the€consumer€makes€thatÌÇcall,€they€are€being€charged€accordingly,€and€all€of€theÌpay-per-call€protections€would€apply.Ì€€€€€€€€In€terms€of€ensuring€that€the€person€has,€inÌfact,€agreed€to€accept€the€service,€let€me€back€up€firstÌand€say,€again,€you€have€to€look€first€at€what€happensÌon€the€call.€€The€person€is€not€simply€by€virtue€ofÌplacing€the€call€to€an€800€number€enrolled€in€thisÌmonthly€club.€€They€have€to€affirmatively€assent€on€theÌtelephone€to€be€enrolled€in€that€club.Ì€€€€€€€€Now,€I€--Ì€€€€€€€€MR.€HILE:€€But€that€assent€falls€short€of€a€fullÌpresubscription€agreement?Ì€€€€€€€€MS.€GOLDSTEIN:€€That€may€not€--€you€may€notÌnecessarily€have€the€person€on€the€phone€who€is€theÌsubscriber€to€the€phone€bill.€€One€of€the€problems€isÌthat€the€--€what€I€have€been€told€is€that€theÌinformation€provider€cannot€get€access€to€the€billingÌname€and€address€for€about€60€days.€€If€the€LECs€wouldÌagree€to€expedite€that€process,€I€think€we€could€come€toÌsome€agreement€whereby€the€information€providers€wouldÌagree€to€send€the€written€confirmation€directly€to€theÌsubscriber€if€they€can€get€access€to€that€information€onÌa€timely€basis,€but€right€now,€the€information€I€have€isÌthat€that€information€is€not€available€for€about€aÌ60-day€period,€but€certainly€--€I€mean,€but€there€is€aÌÇfulfillment€packet€that's€sent.Ì€€€€€€€€That€packet€does€contain€all€of€the€informationÌabout€how€to€cancel€if€you€want€to€get€out€of€theÌprogram,€and€the€customer€is€not€billed€--€billing€doesÌnot€appear€generally€for€the€first€30€days.€€So,€theÌbilling€does€not€appear€until€after€the€writtenÌconfirmation€is€sent.Ì€€€€€€€€MR.€HILE:€€I€misspoke€a€moment€ago.€€We€don'tÌreally€have€a€break€scheduled€now,€but€if€everyone€wouldÌlike€to€just€stand€up€for€a€moment€before€I€turn€thisÌover€to€Eileen€and€take€up€some€miscellaneous€issues€forÌthe€rest€of€the€afternoon.Ì€€€€€€€€òò(Pause€in€the€proceedings.)Ìóó€€€€€€€€MS.€HARRINGTON:€€Let's€sit€down,€please.€€WeÌreally€just€meant€to€stand€up€and€stretch.€€Kim€has€toÌleave€to€catch€a€plane,€and€I€want€to€thank€you€veryÌmuch€for€your€participation.Ì€€€€€€€€MS.€WILLIAMS:€€Thank€you.Ì€€€€€€€€MS.€HARRINGTON:€€The€rest€of€you€are€--€none€ofÌthe€rest€of€you€may€leave.€€We€are€now€heading€down€theÌfinal€stretch€and€everybody€looks,€you€know,€prettyÌgood.€€Pupils€are€not€red€and€dilated.€€This€is€a€veryÌgood€sign.€€We€are€going€to€deal€with€some€what€we€callÌmiscellaneous€issues,€which€doesn't€suggest€that€theyÌare€not€important,€but€they€are€kind€of€not€exactlyÌÇclosely€related€either.Ì€€€€€€€€And€I€am€going€to€really€watch€the€time€on€this,Ìbecause€we€do€have€a€break€scheduled,€and€it€will€--€andÌit€is€very€important€to€us€that€we€have€some€fullÌdiscussion€in€the€last€45€minutes€on€the€impact€of€newÌtechnology.€€We€really€want€a€record€on€this.€€So,€if€weÌcan€sort€of€breeze€through€these€miscellaneous€issues,ÌI'd€appreciate€your€help.€€That€gives€us€more€time€toÌtalk€about€new€technology€and€drink€coffee.Ì€€€€€€€€So,€let's€start€first€with€the€issue€that'sÌlisted€first,€and€that€is€should€additional€measures€beÌtaken€to€protect€consumers€from€misleading€sweepstakesÌoffers€which€use€pay-per-call€services€as€basically€aÌmethod€of€entry.€€And€then€we€ask€a€series€of€questionsÌabout€specific€alterations€that€might€be€made.Ì€€€€€€€€Does€anyone€want€to€talk€about€that?€€DoesÌanyone€have€to€say€about€that?€€Linda?Ì€€€€€€€€MS.€GOLDSTEIN:€€I€was€--€I€was€just€going€to€beÌresponsive,€but€we€can€make€it€real€quick€if€everyone€isÌin€agreement€that€we€should€keep€the€rules€as€is.€€I€amÌhappy€to€move€on.Ì€€€€€€€€MS.€HARRINGTON:€€Your€answer€to€that€is€no?Ì€€€€€€€€MS.€GOLDSTEIN:€€My€answer€to€that€is€no.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€Dave?ÌÇ€€€€€€€€MR.€GILLIS:€€Becky€Bowman€from€Maryland€OfficeÌof€Attorney€General€is€going€to€represent€NAAG€for€theÌmoment.Ì€€€€€€€€MS.€BOWMAN:€€I€just€want€to€add€for€the€record,Ìin€Maryland€currently€it€is€prohibited€to€offer€any€kindÌof€a€sweepstakes€or€tell€anybody€they€are€eligible€toÌwin€anything€if€they€have€to€pay€any€money€in€order€toÌdo€that,€and€we€would€certainly€take€the€position€inÌMaryland€--€and€I€think€other€states€may€do€similarly€--Ìthat€a€900€number€charge€in€order€to€enter€into€aÌsweepstakes€would,€in€fact,€be€prohibited€under€ourÌstate€law.Ì€€€€€€€€And€just€to,€you€know,€just€for€the€purpose€ofÌletting€you€all€know€that,€in€terms€of€whether€thatÌshould€be€incorporated€nationwide€or€not,€obviously,€isÌnot€our€decision,€it's€yours,€but€it's,€you€know,Ìsomething€that€we€certainly€would€see€as€consistent€withÌour€understanding€of€the€law.Ì€€€€€€€€MS.€HARRINGTON:€€Susan?Ì€€€€€€€€MS.€GRANT:€€We€noted€in€our€comments€that€of€900Ìnumber€calls,€which€have€gone€down€overall,€we€continueÌto€get€--Ì€€€€€€€€MS.€HARRINGTON:€€Complaints€you€mean?Ì€€€€€€€€MS.€GRANT:€€Right,€sorry,€complaints,€weÌcontinue€to€get€complaints€from€consumers€aboutÌÇsweepstakes,€and€it€does€appear€from€their€calls€asÌthough€they€still€think€that€they€need€to€call€theÌnumber€to€--€to€enter€and€that€the€free€method€of€entryÌis€not€clear€to€them.Ì€€€€€€€€MS.€HARRINGTON:€€Is€there€anything€about€theÌrule€that€needs€to€be€changed,€do€you€think,€or€is€thatÌan€issue€that€can€be€dealt€with€under€ordinary€authorityÌto€deal€with€deception?Ì€€€€€€€€MS.€GRANT:€€We€suggested€that€the€rule€make€moreÌclear€some€guidelines€for€disclosure€of€the€no-entry-feeÌoption,€especially€in€print€solicitations,€which€isÌwhere€we€see€this€the€most.€€We€suggested€that€the€factÌthat€you€can€enter€without€having€to€call€the€number€beÌprominently€disclosed€right€adjacent€to€the€numberÌitself€and€not€on€the€back€of€these€things,€which€isÌwhere€you€would€usually€find€it.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Linda,€and€then€aÌquestion€from€Adam.Ì€€€€€€€€MS.€GOLDSTEIN:€€One€--€two€responses€to€bothÌcomments.€€First,€as€to€the€Maryland€comment,€PMAA€willÌwillingly€concede,€I€don't€think€there€is€any€questionÌthat€any€promotion€that€would€require€a€call€to€a€900Ìnumber€is€illegal€under€both€federal€and€virtually€allÌstate€lottery€laws.€€So,€I€don't€believe€there€is€--Ìthere€is€any€issue€there,€and€I€don't€think€there€areÌÇany€changes€to€the€rule€that€would€be€necessary€toÌreinforce€that€point.€€That's€established€federal€andÌstate€lottery€law.Ì€€€€€€€€As€far€as€disclosure€of€the€alternate€method€ofÌentry,€to€be€candid,€we€don't€really€see€this€as€a€--€asÌa€problem€with€our€members,€all€of€whom€generally€followÌthe€principle€that€the€alternate€method€of€entry€needsÌto€be€clearly€and€conspicuously€disclosed.€€That€is,Ìagain,€required€just€under€general€advertisingÌprinciples.Ì€€€€€€€€Most€states€now,€frankly,€over€36€states€nowÌhave€specific€prize€and€gift€notification€statutes,€manyÌof€which€specifically€address€that€requirement€--€in€aÌmore€detailed€fashion€than€we€would€probably€want€to€getÌinto€in€this€rulemaking.Ì€€€€€€€€I€will€offer,€however,€because€I€don't€thinkÌthis€is€something€that€would€be€inconsistent€with€whatÌPMAA€members€would€do€in€the€ordinary€course€ofÌbusiness,€that€the€rule€currently€provides€that€the€freeÌmethod€of€entry€can€be€disclosed€either€in€the€preambleÌor€in€the€advertising.€€If€the€Commission€sought€toÌrevise€the€rule€to€require€that€the€alternate€method€ofÌentry€be€disclosed€in€the€advertising€and€not€afford€theÌoption€to€have€it€disclosed€only€in€the€preamble,€thatÌis€something€that€we€would€not€object€to.ÌÇ€€€€€€€€MS.€HARRINGTON:€€How€about€the€other€wayÌaround?Ì€€€€€€€€MS.€GOLDSTEIN:€€That€we€would€object€to.Ì€€€€€€€€MS.€HARRINGTON:€€Require€that€it€be€disclosed€inÌthe€preamble?Ì€€€€€€€€MS.€GOLDSTEIN:€€We€would€object€to€that.Ì€€€€€€€€MS.€GRANT:€€I€was€going€to€say€or€both.Ì€€€€€€€€MS.€GOLDSTEIN:€€We€would€object€to€that,€too.€€IÌmean,€I€--€we€just€don't€really,€to€be€honest,€see€thisÌas€a€continuing€problem.€€Most€of€our€members€that€--Ìthat€utilize€900€numbers€in€connection€with€aÌsweepstakes€see€a€fairly€high€rate€of€response€via€theÌmail-in€entry,€which€would€suggest€that€consumers€doÌunderstand€that€there€is€a€free€method€of€entry.Ì€€€€€€€€To€the€extent€that€there€have€been€abuses,€itÌmay€have€to€do€with€other€issues€that€may€fall€justÌunder€general€deceptive€and€misleading€advertisingÌprinciples€but€aren't€really€unique€to€the€use€of€900Ìnumbers.Ì€€€€€€€€MS.€HARRINGTON:€€I'm€sorry,€Adam,€you€had€aÌquestion,€but€could€you€wait€until€Becky€responds€toÌLinda?Ì€€€€€€€€MS.€BOWMAN:€€Just€a€question,€and€that€is€whatÌwould€the€objection€be€to€requiring€it€in€the€preamble?ÌWhat's€the€problem€from€the€industry€point€of€view€fromÌÇputting€it€in€the€preamble?Ì€€€€€€€€MS.€GOLDSTEIN:€€I€think€there€are€really€two.ÌOne€is€that€it€is€already€difficult€at€this€point€toÌdeliver€the€preamble€with€the€proper€cadence€and€speedÌand€include€the€information€that's€got€to€be€disclosedÌup€until€this€point.€€I€think€the€repetition€of€the€factÌthat€no€purchase€is€necessary€at€that€point€would€makeÌit€--€would€increase€the€difficulty€of€keeping€theÌpreamble€within€the€time€limit€and€delivering€theÌinformation€in€a€--€in€a€proper€speed,€but€secondly,€IÌjust€don't€see,€again,€from€our€own€data€that€there€hasÌreally€been€an€abuse€or€a€consumer€misunderstanding€onÌthis€issue,€and€the€advertising€is€what€drives€theÌconsumer€to€pick€up€the€call.Ì€€€€€€€€The€purpose€of€the€preamble€was€to€makeÌdisclosures€relative€to€the€use€of€the€900€number,€theÌcost€of€the€call,€the€parental€advisory€to€make€sureÌthat€the€consumer€knows€that€they€have€reached€theÌcorrect€information€provider.€€The€alternate€method€ofÌentry€is€something€that€is€not€a€unique€issue€to€900.ÌIt's€--€it€transcends€any€type€of€a€sweepstakesÌregardless€of€the€medium€in€which€it's€advertised,€andÌindustry€practice€has€been€that€the€alternate€method€ofÌentry€should€be€disclosed€clearly€and€conspicuously€inÌall€advertising,€and€I€don't€see€any€reason€to€treat€900ÌÇdifferently€in€that€regard.Ì€€€€€€€€MS.€HARRINGTON:€€Adam€had€a€question.Ì€€€€€€€€MR.€COHN:€€I€just€had€a€question€regardingÌsweepstakes€and€900.€€What€is€the€--€is€the€serviceÌbeing€promoted€or€--€I€have€never€actually€called€one€ofÌthese€myself,€so€I€don't€know.€€What€is€the€serviceÌthat's€being€promoted€in€a€sweepstakes€call?€€IÌunderstand€that€when€you€get€the€Ed€McMahon€packet,€youÌare€being€asked€to€subscribe€to€magazines,€and€theÌsweepstakes€is€to€encourage€you,€but€what€is€the€serviceÌthat€is€actually€being€promoted€by€the€sweepstakes?Ì€€€€€€€€MS.€GOLDSTEIN:€€I€mean,€that€depends€on€who€theÌinformation€provider€is.Ì€€€€€€€€MR.€COHN:€€For€example.Ì€€€€€€€€MS.€GOLDSTEIN:€€You€can't€really€generalize.ÌFor€example,€last€year,€Burger€King€ran€a€900€numberÌsweepstakes€which€was€part€of€a€multi€media€campaign.ÌAlso,€tied€into€the€NC€--€it€was€one€of€the€--€it€wasn'tÌthe€NCAA,€it€was€a€different€basketball€tournament.ÌSo,€obviously€the€purpose€there€was€to€drive€viewershipÌof€the€tournament€and€also€drive€traffic€to€BurgerÌKing.Ì€€€€€€€€It€really€depends€on€who€the€service€provider€isÌand€what€the€nature€of€their€product€or€service€is.€€So,ÌI€couldn't€really€answer€that€in€an€abstract.ÌÇ€€€€€€€€MR.€COHN:€€Are€there€services€that€--€are€thereÌsweepstakes€on€900€where€there€is€not€a€service€beingÌsold€and€the€only€service€is€the€sweepstakes?Ì€€€€€€€€MS.€GOLDSTEIN:€€If€you€gave€me€an€example€of€aÌsweepstakes,€I€could€try€to€answer€that€question,€but€IÌthink€there€are€some€sweepstakes€where,€yes,€where€theÌprimary€source€of€revenue€has€been€derived€from€the€900Ìnumber€as€opposed€to€the€sale€of€some€other€product€orÌservice,€but€the€question€of€whether€there€is€anotherÌproduct€or€service€being€promoted€has€been€a€questionÌthat€has€been€very€much€at€the€heart€of€the€issue€ofÌthose€programs.€€So,€I€wouldn't€presume€to€provide€anÌanswer€to€that.€€I€don't€think€that€would€be€fair€to€theÌindividual€providers.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Mark,€you€had€aÌquestion.Ì€€€€€€€€MR.€HERTZENDORF:€€Yeah,€two€quick€ones.€€I€wasÌwondering,€Linda,€if€you€could€be€a€little€bit€moreÌspecific€in€terms€of€the€high€rate€for€the€mail-inÌreturn,€the€alternate€means€of€entry,€if€you€could€be€aÌlittle€more€specific€on€that.Ì€€€€€€€€I€was€also€wondering€whether€you€thought€thatÌputting€the€alternative€means€of€entry€in€the€preamble,Ìwhether€that€would€serve€sort€of€as€an€invitation€toÌhang€up€and€if€that€was€a€concern€of€yours.ÌÇ€€€€€€€€MS.€GOLDSTEIN:€€I'm€sorry,€what's€--€someoneÌjust€passed€me€a€note.€€What€was€the€first€part€of€yourÌquestion?€€Oh,€the€response.Ì€€€€€€€€I€have€seen€it€range€anywhere,€frankly,€from€35Ìpercent€up€to€65€percent,€and€it€really€--€it€reallyÌdepends€on€the€nature€of€the€offer,€the€medium€in€whichÌit's€advertised,€the€nature€of€the€price.€€Frankly,€inÌmany€cases,€it€will€depend€on€whether€the€sweepstakes€isÌpicked€up€by€one€of€the€publications,€like€ContestÌnewsletter€or€something€like€that,€which€will€promoteÌthe€mail-in€entry€as€opposed€to€the€900.€€So,€it€willÌreally€vary€by€promotion,€but€I€can€tell€you€that€I€amÌnot€aware€of€any€instances€of€900€number€sweepstakesÌprograms€where€there€have€been€virtually€no€mail-inÌentries.Ì€€€€€€€€As€to€--€and€your€second€question?Ì€€€€€€€€MR.€HERTZENDORF:€€I€was€just€wondering€if€maybeÌyou€were€concerned€that€if€you€had€to€put€theÌalternative€means€of€entry€in€the€preamble€that€youÌmight€have€a€hard€time€selling€the€900€number€call,Ìbecause€it€kind€of€serves€perhaps€as€an€invitation€toÌhang€up.€€You€are€trying€to€get€them€to€enter€theÌsweepstakes€by€paying,€and€if€you€tell€them€how€they€canÌdo€it€right€while€they€are€on€the€phone€in€suchÌproximity€to€the€point€where€they€have€to€start€paying,ÌÇmaybe€it€serves€as€an€invitation€for€the€consumer€toÌhang€up.€€I€was€wondering€if€that€was€one€of€yourÌconcerns.Ì€€€€€€€€MS.€GOLDSTEIN:€€Well,€I€don't€think€--€I€don'tÌthink€we€have€any€data€for€me€to€speak€on€that,€becauseÌI'm€not€aware€of€any€preambles€in€which€it's€currentlyÌincluded.€€I€will€say€that€at€the€point€that€theÌconsumer€is€already€calling,€it€could€potentially€beÌconfusing€to€just€say€no€purchase€or€telephone€callÌnecessary€once€the€person€is€on€the€phone,€particularlyÌif€you've€got€a€multi-purpose€call,€where€theÌsweepstakes€is€part€of€an€information€service€or€thereÌare€other€things€being€offered,€perhaps€a€premium.Ì€€€€€€€€There€are€many€--€there€are€various€900€numberÌsweepstakes€which€are€overlaid€with€a€premium,€and€thereÌmay€be€no€purchase€necessary€to€enter€the€sweepstakes,Ìbut€there€may€be€a€purchase€necessary€to€obtain€theÌpremium.€€So,€I€think€just€sort€of€throwing€that€out€inÌthe€preamble,€which€is€a€very€short€statement€by€itsÌnature€and€doesn't€give€you€the€opportunity€to€get€intoÌa€lot€of€explanation,€could€be€potentially€confusing.Ì€€€€€€€€MR.€HERTZENDORF:€€Okay.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€the€coffee€is€done,€and€IÌwould€invite€you€to€grab€a€cup€quickly,€because€we€haveÌsome€very€compelling€additional€issues€to€talk€aboutÌÇduring€the€short€time€that€we€have€here.€€I'd€likeÌeveryone€to€think€about€this€nominal€call€question,Ìbecause€we€would€like€to€move€through€that€very€quicklyÌand€get€to€this€free€time€issue,€which€I€think€isÌprobably€the€one€that€is€deserving€of€the€most€timeÌduring€this€particular€segment.€€So,€get€coffee,€comeÌright€back,€please.€€Thank€you.Ì€€€€€€€€òò(Pause€in€the€proceedings.)Ìóó€€€€€€€€MS.€HARRINGTON:€€Now,€let's€talk€about€nominalÌcost€exemption.Ì€€€€€€€€Mark?Ì€€€€€€€€MR.€HERTZENDORF:€€Do€you€want€me€to€just€startÌoff€firing€questions?Ì€€€€€€€€MS.€HARRINGTON:€€Yes,€I€want€you€to€just€startÌoff.Ì€€€€€€€€MR.€HERTZENDORF:€€I€have€four€questions.€€I€willÌask€two€at€a€time.€€Question€one,€is€the€most€commonÌapplication€that€falls€under€the€nominal€cost€exemptionÌa€polling€application?Ì€€€€€€€€And€the€next€question,€which€is€directed€towardÌISA,€is€the€chargeback€rate€for€polling€applications€24Ìpercent€as€indicated€in€attachment€1€to€Exhibit€B€toÌISA's€comment?Ì€€€€€€€€MR.€MILLER:€€Well,€the€answer€to€the€firstÌquestion€is€predominantly,€yes.€€My€company€--€one€of€myÌÇcompanies,€a€publishing€group,€maintains€a€data€base€ofÌall€900€numbers.€€Of€the€40,000€900€numbers€that€areÌthere,€we€only€found€740€under€two€bucks,€andÌpredominantly€those€are€polling.€€There€are€a€fewÌapplications€for€one-trick€ponies,€like€I€can€get€oneÌlottery€number€only€or€things€like€that.Ì€€€€€€€€The€other€part€of€your€question,€I€cannot€--€IÌcan't€answer€specifically.€€Everybody€believes€that€theÌlower€the€price,€the€lower€the€chargebacks,€but€I€have€aÌprogram€that's€35€cents,€and€it€gets€chargebacks.€€It'sÌa€polling€program€for€the€TV€station€--€an€NBCÌaffiliate,€and€if€there€are€people€who€won't€pay€35Ìcents,€which€is€the€lowest€you€can€charge€and€not€loseÌmoney€with€AT&T,€there€are€people€who€charge€backÌanything.€€Generally€they€are€lower.Ì€€€€€€€€MR.€HERTZENDORF:€€Does€anyone€else€have€anyÌinformation€about€their€chargeback€rates€for€nominalÌcost€calls€and€any€other€examples€of€applications?Ì€€€€€€€€MR.€ANGEL:€€Albert€Angel,€ICN€Limited.Ì€€€€€€€€We€provide€lottery€results€for€four€or€fiveÌstates€as€the€official€lottery€provider,€and€in€manyÌinstances,€these€charges€are€50€cents€or€75€cents,€andÌthe€chargeback€ratios€rarely€exceed€1€or€2€percent.Ì€€€€€€€€MR.€HERTZENDORF:€€I€guess€an€open-endedÌquestion,€then,€for€everyone€at€the€table,€do€you€haveÌÇany€thoughts€about€how€high€the€nominal€cost€exemptionÌshould€be€and€why?Ì€€€€€€€€Okay€--Ì€€€€€€€€MS.€HARRINGTON:€€Warren?Ì€€€€€€€€MR.€MILLER:€€Yes,€we€do,€and€I€want€to€answerÌthat€in€a€--€in€some€of€the€points€that€the€CommissionÌseems€to€be€concerned€about,€I€want€to€address€twoÌparticular€issues.Ì€€€€€€€€One€is€legislative€history,€and€the€other€isÌcost€to€consumers.€€The€--€as€I€understand€it,€theÌlegislative€history€of€what€constitutes€a€nominalÌamount,€both€$2€and€$3€were€discussed,€and€one€cannotÌargue€with€taking€a€more€conservative€position€inÌestablishing€the€rule.Ì€€€€€€€€Our€response€to€that€--€what€we€have€learnedÌover€the€last€four€years€is€there€isn't€any€mischiefÌgoing€on€at€$2.€€We€have€also€--€we€also€do€know€that€itÌcosts€12€cent€to€deliver€a€preamble,€and€by€way€ofÌexample,€I€want€to€show€you€how€a€program€that€we€do€forÌThe€Washington€Times€costs€consumers€more€money€that€itÌneeds€to.Ì€€€€€€€€We€have€a€program€called€the€mortgageÌcalculator,€99€cents€a€minute,€average€transaction€takesÌtwo€minutes.€€Now,€sometimes€people€might€want€to€doÌanother€mortgage€calculation€--€it's€principal€andÌÇinterest€using€your€touch€tone€phone.€€They€want€to€doÌone€more€calculation,€in€which€case€they€would€have€--Ìif€we€timed€it€out€under€--€at€two€minutes,€they€wouldÌhave€to€hang€up€and€call€again€and€incur€anotherÌcharge.€€So,€we€have€to€give€that€preamble.Ì€€€€€€€€But€since€the€average€call€is€two€minutes,€it'sÌpretty€easy€to€see€that€it's€costing€my€customers€and€meÌ6€cents€a€minute.€€So,€if€I€could€reduce€my€price€by€6Ìcents€a€minute,€the€average€customer€could€get€the€sameÌthing,€and€those€people€who€wanted€to€stay€on€longerÌcould€stay€on€--€the€few€people€that€wanted€to€be€onÌthree€minutes€could€stay€on€and€get€another€reading€forÌthe€same€lower€price,€and€there€doesn't€seem€to€be€anyÌevidence€whatsoever€that€there€is€any€mischief€going€onÌat€under€the€$2€rate.Ì€€€€€€€€MR.€HERTZENDORF:€€Is€the€preamble€reducingÌchargebacks,€though,€for€these€calls?€€Are€most€of€themÌfirst-time€callers€or€repeat€calls?€€You€said€that€--Ì€€€€€€€€MR.€MILLER:€€Well,€as€we€said,€it€doesn't€evenÌ--€well,€people€will€charge€back€anything€given€theÌright€opportunity.€€The€--€I€don't€think€there€is€aÌpreamble€--€one€thing€we€do€know.€€We€did€some€researchÌbefore€the€preamble€was€required,€my€company€did€someÌresearch€long€ago,€and€we€found€that€with€the€identicalÌmaterial€and€the€identical€market,€the€identicalÌÇadvertising,€identical€product,€you€will€get€a€17Ìpercent€higher€hangup€rate€with€a€preamble€than€withoutÌa€preamble.€€The€only€thing€you€can€be€absolutely€sureÌof,€a€preamble€at€low-cost€rates,€is€it€causes€moreÌpeople€to€hang€up.Ì€€€€€€€€MR.€HILE:€€Would€those€people€who€hang€up€turnÌinto€chargebacks?Ì€€€€€€€€MR.€MILLER:€€Well,€no,€because€they€are€notÌcharged.Ì€€€€€€€€MR.€HILE:€€That's€what€I'm€saying.€€With€theÌpreamble,€they€hang€up.€€If€they€didn't€have€theÌpreamble,€they€would€go€through€it.€€Would€they€be€moreÌlikely€to€ask€for€a€chargeback?Ì€€€€€€€€MR.€MILLER:€€There€isn't€any€indication€that€atÌthe€--€you€are€talking€about€not€only€notification€butÌprice€elasticity€of€demand€at€the€lower€levels,€and€theÌother€work€that€we€have€done€shows€that€it€is€relativelyÌinelastic€at€the€lower€price€levels,€and€consequentlyÌthere€is€very€little€remorse€and€there€is€very€littleÌcorrelation€between€the€notification€and€theÌchargeback.Ì€€€€€€€€MR.€HERTZENDORF:€€Are€you€willing€to€putÌsomething€on€the€record€regarding€that,€the€chargebackÌrate€and€the€hangup€rate€--Ì€€€€€€€€MR.€MILLER:€€It's€a€long€time€ago€I€did€it,€itÌÇwill€have€to€be€an€approximation.Ì€€€€€€€€MS.€HARRINGTON:€€That's€fine,€if€you€couldÌsupplement€the€record.Ì€€€€€€€€Anything€else€on€this€issue?Ì€€€€€€€€Okay,€let's€go€on€to€the€next€one,€and€thatÌconcerns€the€issue€whether€there€are€neededÌmodifications€to€the€preamble€requirements€to€deal€withÌoffers€of€free€time€should€an€IP€have€to€provide€a€toneÌor€other€signal€which€informs€the€consumer€when€freeÌtime€has€expired.Ì€€€€€€€€Warren?Ì€€€€€€€€MR.€MILLER:€€Yes,€there€are€two€causes€forÌconcern€here.€€One€is€there€are€members€who€would€useÌfree€time€as€a€marketing€--€as€a€marketing€tool,€and€IÌknow€that's€an€area€of€concern€for€the€Commission.€€OurÌposition€is€an€informed€consumer€is€a€good€customer,€andÌeducating€consumers€to€look€at€their€watch€and€thingsÌlike€that€do€set€the€tone€and€enable€our€society€to€moveÌinto€an€electronic€transfer€of€payments€kinds€ofÌsociety,€and€I€will€let€others€speak€to€that€issue€as€toÌhow€specifically€they€want€to€do€that.€€We€think€thatÌthere€is€probably€a€place€for€them€to€do€that.Ì€€€€€€€€The€other€area€I€want€to€address,€though,€is€theÌportion€of€the€market€that,€once€again,€that€would€beÌclosed€out,€that€could€be€closed€out€by€a€specific€ruleÌÇthat€required€the€tone.€€And€here€I'm€referring€to€aÌproduct€--€AT&T€offers€a€product€called€Express,€andÌit's€a€local€delivery€900€service,€and€my€company€doesÌthe€same€thing€through€another€trade€name,€but€weÌredeliver€the€900€call€to€professionals€to€consult,Ìwhether€they€be€doctors,€lawyers,€auto€repairmen.€€WeÌdid€one€for€car€wash€repair,€how€to€unstuck€the€hot€waxÌbutton€or€whatever.Ì€€€€€€€€So,€any€way,€they€were€using€the€900€forÌsupport.€€These€people€had€the€physical€plant€installedÌat€1700€locations€in€the€country,€and€there€wereÌengineers€working,€and€when€a€call€would€come€in€on€900,Ìwe€would€relay€it€to€then,€and€they€would€tell€peopleÌhow€to€unstick€the€hot€wax€button.Ì€€€€€€€€Now,€the€thing€about€this€low-tech€solution€isÌthat€we€liked€to€give€a€free€time€option€to€allow€themÌto€find€the€representative,€and€the€fastest-growing€areaÌin€per-per-call€is€consumer€in€business,€and€these€areÌthe€ones€that€are€nonentertainment,€they€are€provided€byÌsingle€operators,€they€have€the€most€numbers.€€In€otherÌwords,€instead€of€in€the€entertainment€side,€you€mightÌhave€a€single€operator€operate€a€hundred€numbers,€in€theÌlow€end,€you€have€a€single€number€and€a€single€operator,Ìand€they€may€be€a€small€business€or€a€professional.Ì€€€€€€€€There€is€not€a€lot€--€they€can't€afford€a€lot€ofÌÇtechnology.€€They€rely€on€this€system€to€bill.ÌSometimes€they€rely€on€the€system€just€to€convert€peopleÌover€to€a€regular€package€of€support€services€forÌsoftware.€€But€my€point€being,€if€you€--€if€you€want€toÌgive€this€free€time€option€and€you€want€to€give€people€aÌreasonable€period€to€know€that€they€are€not€paying€butÌthey€are€paying€later,€it€means€that€they€would€have€toÌgo€through€--€they€wouldn't€be€able€to€use€Express,€theyÌwouldn't€be€able€to€use€any€other€services.Ì€€€€€€€€They€would€have€to€employ€a€technology€thatÌinvolves€supervision,€which€means€the€tone€would€beÌinserted€and€so€forth.€€And€I'm€not€trying€to€cloud€theÌtwo€issues.€€I€know€they€are€two€separate€issues.€€OneÌis€using€it€for€marketing€with€those€people€who€have€theÌtechnology,€but€there€is€a€group€of€people€who€don'tÌhave€the€technology€that€are€not€doing€any€harm.Ì€€€€€€€€MS.€HARRINGTON:€€I€just€want€to€comment€that€I'mÌthe€director€of€marketing€practices,€and€I€likeÌmarketing.€€We€think€it's€a€good€idea,€marketing,€inÌresponse€to€your€comment,€Warren.Ì€€€€€€€€Walt,€and€then€Linda?Ì€€€€€€€€MR.€STEIMEL:€€Right,€I€was€just€going€toÌmention,€this€reminds€me€of€your€recent€letter€that€IÌbelieve€was€the€Cohn€letter€about€the€three-second€tone,Ìand€some€parties€that€are€--€I€have€had€some€clientsÌÇthat€were€providing€some€period€of€free€time€that€wasÌlonger€than€three€seconds,€and€the€problem€is€the€wayÌtechnologically€they€handled€that,€especially€when€theyÌhave€got€multiple€people,€like€this€gentleman'sÌsituation,€that€they€hand€the€call€off€to€for€servicing,Ìonce€they€release€it,€there€is€no€way€to€get€that€callÌback€to€insert€the€tone€at€two€minutes.Ì€€€€€€€€And€so€what€they€have€had€to€do€was€follow€theÌother€suggestion€in€your€letter,€for€the€first€couple€ofÌminutes€are€a€penny€each€or€some€ridiculous€number,Ìwhere€I€don't€see€where€that€really€serves€any€purpose,Ìand€it€causes€additional€timing€and€costing€problems€andÌI€think€probably€additional€confusion€for€the€consumer.Ì€€€€€€€€I'm€not€sure€that€any€purpose€is€served€byÌrequiring€three€seconds€or€letting€you€have€variableÌbilling€where€it's€one€penny€and€then€it€goes€up€to€theÌnormal€rate€after€the€first,€you€know,€minute€or€twoÌminutes€or€whatever,€but€the€problem€from€the€industryÌside,€from€my€client's€side€has€been€when€they€have€theÌcalls€coming€in€on€one€platform€that€services€it€andÌthen€they€hand€the€call€off€to€another€location,€is€theyÌcan't€get€the€call€back€later€to€insert€the€tone,€and€soÌthere€is€a€technical€problem€there€that€at€least€thoseÌclients€would€like€to€see€some€other€solution€that€makesÌa€little€more€sense.ÌÇ€€€€€€€€MS.€HARRINGTON:€€Linda,€and€then€Jill?Ì€€€€€€€€MS.€GOLDSTEIN:€€We€wanted€to€really€address€itÌfrom€the€marketing€perspective€and€pick€up€the€debateÌthat€began€with€the€exchange€of€letters€in€the€spring.ÌReally€three€points€I'd€like€to€make.€€The€first€is€thatÌwe€really€continue€to€believe€--€I'm€sorry€--€we€reallyÌcontinue€to€believe€that€an€offer€of€some€period€of€freeÌtime€as€a€marketing€technique,€whether€it's€to€goÌthrough€a€sampling€program€or€simply€because€theÌinformation€provider€wants€to€provide€some€additionalÌincentive€to€a€consumer€to€try€their€service€as€opposedÌto€someone€else's€by€making€some€free€offer€of€timeÌavailable,€is€not€--€without€placing€a€tone€at€the€endÌof€that€free€time€is€not€inconsistent€with€the€currentÌrules,€and€I€would€--€I€would€refer€you€again€to€SectionÌ308,€308.5,€Subsection€3,€which€basically€says€that€theÌpreamble€informs€the€caller€that€charges€for€the€callÌbegan€and€that€to€avoid€the€charges,€the€call€must€beÌterminated€three€seconds€after€a€clearly€discernibleÌsignal€or€tone€indicating€the€end€of€the€preamble.Ì€€€€€€€€And€what€that€says€to€us€is€that€the€intent€hereÌwas€to€have€a€tone€indicating€the€end€of€the€preambleÌbut€that€that€does€not€necessarily€mean€that€anyÌadditional€offer€of€free€time€likewise€has€to€have€aÌsecondary€tone.€€We€think€that€there€is€an€importantÌÇdistinction€between€the€free€introductory€message€and€aÌfree€period€of€time€which€may€be€offered,€which€reallyÌis€just€simply€the€equivalent€to€free€product€orÌservice.€€It's€simply€an€additional€incentive€that€theÌmarketer€has€elected€to€make€available€to€a€consumer.Ì€€€€€€€€Where€I€do€think,€perhaps,€the€Commission€mightÌwant€to€focus€its€direction€and€is€something€we€wouldÌnot€oppose€is€to€be€certain€that€the€advertising€that'sÌdirecting€the€consumer€to€call€the€number€and€that€isÌcontaining€the€advertising€of€free€time€not€beÌmisleading€or€deceptive.€€There€may€be€some€advertisingÌpractices€out€there€that€may€not€fit€within€traditionalÌFTC€and€other€state€law€requirements€regarding€use€ofÌthe€term€"free,"€and€if€the€Commission€wanted€to€look€atÌadditional€requirements€in€the€rule€that€would€regulateÌuse€of€the€term€"free"€to€ensure€that€it's€not€beingÌused€in€a€misleading€manner,€that's€something€that€weÌwould€not€oppose€and€would,€in€fact,€welcome€theÌopportunity€to€work€with€the€Commission€on€that.Ì€€€€€€€€I€think,€for€example,€that€there€is€a€realÌdifference€between€advertising€that€may€simply€indicateÌthat€you€can€get€the€service€for€free€without€indicatingÌa€time€limitation€and€advertising€that€indicatesÌprecisely€what€period€of€time€is€being€offered.€€If€youÌ--€if€you€tell€a€consumer,€for€example,€that€by€callingÌÇthis€number,€they€will€get€two€or€three€minutes€of€freeÌtime,€then€I€think€a€reasonable€consumer€knows€that€theÌfree€time€period€they€are€getting€is€a€very€shortÌduration,€and€I€don't€think€any€information€providerÌhonestly€is€offering€that€free€time€with€the€expectationÌor€hope€that€the€consumer€simply€is€going€to€take€thatÌfree€time€and€hang€up.Ì€€€€€€€€Obviously,€it's€the€information€provider'sÌdesire€to€have€the€consumer€stay€on€the€line,€and€thatÌfree€time€is€really€an€added€incentive€to€the€consumerÌto€choose€that€sponsor's€product€over€someone€else's€byÌvirtue€of€getting€something€additional,€much€as€whenÌProctor€&€Gamble€adds€25€percent€more€to€the€bottle€ofÌPrell€for€the€same€price,€they€are€hoping€that€theÌconsumer€will€pick€that€bottle€rather€than€a€competitor,Ìbecause€now€they€are€getting€more€value€for€their€money,Ìand€that's€really€the€purpose€that€we're€trying€toÌpreserve€behind€the€request€that€there€not€be€additionalÌtechnical€restrictions€on€the€use€of€this€free€time,€andÌwe€don't€think€it's€inconsistent€with€the€spirit€of€theÌrule€to€require€the€information€provider€to€tell€theÌconsumer.Ì€€€€€€€€When€that€free€period€of€time€is€up,€as€long€asÌthe€advertising€clearly€indicates€to€the€consumer€whatÌthe€length€--€what€the€duration€of€the€free€time€periodÌÇis€and€indicates€that€again€in€the€preamble,€we€don'tÌthink€it's€an€unnecessary€burden€on€the€consumer€at€thatÌpoint€to€keep€track€of€the€time.Ì€€€€€€€€I€also€think€it's€consistent,€frankly,€with€theÌrecent€multi-state€decision€in€connection€with€the€lineÌservice€providers,€and€there€is€also€a€concern€that€theÌtone€at€that€point€might€be€confusing€to€consumers,€asÌwell.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Linda.Ì€€€€€€€€Jill?Ì€€€€€€€€MS.€SANDFORD:€€The€basis€of€our€comments€andÌconcerns€are€derived€from€the€consumer€complaints€thatÌour€offices€receive,€and€this€use€of€the€free€time€isÌsomething€that€has€cropped€up€in€our€complaints.€€TheÌarea€we€particularly€see€it,€it€seems€to€be€in€theÌpsychic€lines€and€the€entertainment€services.€€ConsumersÌwill€respond€either€to€a€written€solicitation,€aÌnewspaper€advertisement€or,€as€I've€seen€on€late-nightÌTV,€you€know,€free€psychic€reading,€call€this€number.Ì€€€€€€€€Now,€the€consumers€will€call€and€later€on€thenÌhave€a€significant€charge€for€a€call€that€they€were€ledÌto€believe€was€free.€€I€am€actually€encouraged€by€someÌof€the€things€Linda€has€just€mentioned,€because€I€thinkÌsome€of€the€problem€does€lie€in€the€deceptive€marketingÌand€advertising€of€these€services,€and€I'm€furtherÌÇencouraged,€Linda,€with€your€observations€that€if€theÌinformation€provider€discloses€the€amount€of€timeÌprovided€in€the€free€service,€the€consumer€can€then€beÌaware€of€when€the€clock€starts€to€be€running.€€And€thatÌis€consistent€with€some€of€our€online€discussions€thatÌare€ongoing€and€some€of€the€agreements€that€have€alreadyÌbeen€signed€by€the€states€with€the€online€providers.Ì€€€€€€€€I€don't€see,€however,€if€there€is€already€theÌrequirement€for€the€tone€after€the€preamble,€at€whichÌpoint€the€clock€starts€to€be€running,€why€there€couldn'tÌbe€another€tone.€€I€still€don't€see€why€the€expenseÌwould€be€that€much€greater€to€have€a€secondary€tone€whenÌthere€already€is€the€requirement€to€have€a€tone€afterÌthe€preamble,€which€it€seems€you've€just€explained.Ì€€€€€€€€MS.€HARRINGTON:€€Linda,€do€you€want€to€quicklyÌrespond€to€that?Ì€€€€€€€€MS.€GOLDSTEIN:€€Yeah,€I€mean,€you€--€if€you€tookÌ--€if€you€take€that€analysis€to€its€conclusion,€oneÌcould€argue€that€maybe€there€should€be€a€tone€at€the€endÌof€every€minute€or€at€the€end€of€every€two€minutes€toÌbegin€to€tell€the€consumer,€you€know,€so€they€can€keepÌtrack€of€how€much€time€they€are€spending.€€I€think€--€IÌthink€the€point€is€that€in€drafting€rules,€we€have€toÌagree€on€concepts€and€principles.Ì€€€€€€€€The€principle€of€the€preamble€is€that€that's€aÌÇdisclosure€message.€€It's€free€to€the€consumer.€€TheÌpurpose€of€the€tone€there€is€to€let€the€consumer€knowÌthat€that€free€introductory,€that€disclosure€message,€isÌover,€and€the€information€which€they€have€subscribed€toÌby€virtue€of€placing€the€call€is€now€beginning.Ì€€€€€€€€I€think€the€logic€of€our€position€is€underscoredÌby€the€fact€that€if€you€charge€a€penny€after€that€tone,Ìno€additional€--€after€the€preamble,€no€additional€toneÌwould€be€required.€€And€certainly,€a€consumer€is€notÌunduly€burdened€by€having€to€pay€--€there€is€not€aÌsignificant€difference€between€a€penny€and€zero.€€So,€inÌour€view,€once€that€preamble€is€over,€you€are€basicallyÌat€a€zero€cost.€€It's€a€variable€cost€call,€zero€for€theÌfirst€whatever€time,€and€then€continues€on€thereafter.Ì€€€€€€€€And€I€would€go€back€to€the€position,€and€I€thinkÌyou€really€reinforced€the€position€that€we're€taking,Ìwhich€is€that,€yes,€if€an€--€if€the€advertising€simplyÌsays,€you€know,€free€reading,€free€reading,€free€readingÌand€the€consumer€calls€expecting€that€the€wholeÌtransaction€is€going€to€be€for€free,€well,€I€think€underÌgeneral€advertising€principles€there€may€be€a€problem,Ìbecause€the€short€time€limit€on€the€free€--€on€the€freeÌoffer€is€a€material€term€and€condition,€and€FTC€rulesÌrequire€that€any€material€terms€or€restrictions€on€theÌuse€of€a€free€offer€need€to€be€disclosed.ÌÇ€€€€€€€€On€the€other€hand,€if€an€information€providerÌfreely€discloses€in€the€advertising€that€they€areÌoffering€two€free€minutes,€that's€the€same€thing€as€anÌAOL€saying€ten€hours€free€or€one€month€free€or€whateverÌit€is.€€The€consumer€knows€when€they€place€the€call€thatÌit's€for€a€limited€duration,€and€if€they€truly€expect€toÌget€a€full€psychic€reading,€they€know€by€virtue€ofÌseeing€that€advertising€that€they€are€going€to€have€toÌbe€incurring€some€costs.Ì€€€€€€€€MS.€HARRINGTON:€€Mark,€question?Ì€€€€€€€€MR.€HERTZENDORF:€€Yes,€this€just€is€directedÌtowards€NAAG€and€National€Consumers€League.€€Are€thereÌany€examples€of€complaints€where€a€company€advertised,Ìsay,€two,€three€minutes€of€free€time€but€maybe€onlyÌoffered€consumers€one€minute€of€free€time?Ì€€€€€€€€MR.€GILLIS:€€Well,€I€do€recall€a€complaint€thatÌwe€received€or€I€reviewed€where€the€offer€was€for€threeÌminutes€of€free€time,€and€the€customer€said€they€wereÌtiming€themselves,€and€they€were€billed€for€chargesÌrelated€to€that.€€Now,€I€don't€know€whose€clock€wasÌwrong,€but€the€--€I€think€the€problem€is€that€if€theÌfree€offer€is€being€used€to€attract€someone€to€make€theÌcall,€there€ought€to€be€clear€notification€to€the€callerÌwhen€they€are€going€to€incur€charges.Ì€€€€€€€€MS.€GRANT:€€I€don't€have€any€data€on€that.ÌÇ€€€€€€€€MS.€HARRINGTON:€€Gary?Ì€€€€€€€€Linda,€is€your€sign€up?Ì€€€€€€€€MS.€GOLDSTEIN:€€No,€I€just€forgot€to€put€itÌdown.Ì€€€€€€€€MR.€PASSON:€€A€number€of€people€in€ourÌassociation€do€use€this€as€a€marketing€tool,€and€thereÌis€a€fair€amount€of€experience€that's€gone€back,€andÌcertainly€anything€that's€done€by€anybody€is€subject€toÌabuse.€€I€mean,€I€think€that€almost€goes€without€saying,Ìbut€I€think€really€this€issue€somewhat€pivots€on€at€whatÌpoint€do€we€presume€consumers€to€be€somewhat€responsibleÌfor€what's€going€on€here.Ì€€€€€€€€Presuming€that€there€is€clear€and€conspicuousÌterms€that€are€provided€to€the€consumer€in€itsÌadvertising€and€in€the€preamble,€whether€you're€AOL€for,Ìyou€know,€use€that€for€ten€hours€or€you're€aÌpay-per-call€for€use€after€three€minutes,€it€seems€to€meÌthat€it's€not€unreasonable€for€them€to€take€someÌresponsibility€in€this€specific€issue.Ì€€€€€€€€We€have€been€running,€you€know,€free€lines€atÌour€own€company€for€years€--€not€free€lines,€but€givingÌaway€free€minutes€as€part€of€marketing€incentives€to€getÌusers,€and€to€the€best€of€our€knowledge,€we€have€neverÌhad€a€single€complaint€on€that€issue,€but,€you€know,€weÌare€very€conspicuous.€€At€the€end€of€the€three€minutes,ÌÇyou€know,€we€always€use€per-minute€billing,€and€it€seemsÌlike€it's€working€pretty€well.€€So,€I€would€hope€weÌwouldn't€expand€this,€you€know,€to€the€point€where€we'reÌ--€where€we're€thinking€the€consumers€really€aren'tÌcapable€of€taking€some€responsibility€for€their€calls.Ì€€€€€€€€MS.€HARRINGTON:€€Adam,€question?Ì€€€€€€€€MR.€COHN:€€I€just€wanted€to€ask,€to€clarify,€itÌsounded€like€most€of€the€objections€to€the€tone€wereÌtechnological€objections€about€the€feasibility,€but€itÌdidn't€sound€like€there€was€much€objection€--€in€fact,Ìit€sounded€like€you€were€at€least€endorsing,€Linda€wasÌendorsing,€the€idea€that€there€should€be€in€the€case€ofÌfree€offers€some€additional€requirement€in€the€rule€thatÌthat€be€spelled€out€in€more€particularity.€€Am€IÌcorrect?Ì€€€€€€€€MS.€GOLDSTEIN:€€You€are€half€right€and€halfÌwrong.€€The€objection€to€the€tone€is€not€just€from€aÌtechnological€perspective.€€The€objection€to€the€tone€isÌ--€really€goes€to€the€motivation€of€making€any€kind€ofÌa€free€offer.€€Purely€from€a€marketing€perspective,€andÌI€think€this€is€somewhat€distinct€from€the€scenario€thatÌWarren€described,€but€typically€when€a€marketer€offersÌsome€additional€product€or€service€for€free,€it's€doingÌso€not€because€it,€you€know,€the€marketer€is€Santa€ClausÌand€wants€to€distribute€free€items€all€over€the€place.ÌÇ€€€€€€€€It's€doing€that€as€an€incentive€to€get€theÌconsumer€either€to€try€the€product€or€service€orÌpurchase€the€product€or€service€versus€a€competitor'sÌproduct€or€service,€because€it's€a€better€value.€€TheÌfree€offer€--€the€free€time,€no€matter€how€you€cut€it,Ìmakes€the€offer€a€better€value,€because€the€total€costÌto€the€consumer,€the€net€total€cost,€will€be€less€thanÌit€would€be€without€the€free€offer.Ì€€€€€€€€The€tone,€to€the€extent€that€it€may€provide€anÌadditional€reminder€and€perhaps€encourage€people€to€hangÌup,€is€contrary€to€the€marketing€purpose€behind€the€freeÌoffer€of€time,€and€I€don't€think€there€is€anythingÌsinister€about€wanting€to€make€this€kind€of€offer€or,Ìfrankly,€admitting€candidly€that€you're€making€the€offerÌbecause€you€hope€the€consumer€will€stay€on€and€purchaseÌthe€product.Ì€€€€€€€€I€think€the€issue€is€has€the€consumer€beenÌmisled€at€any€point€along€the€way.€€As€long€as€theÌconsumer€clearly€understands€the€terms€of€the€offer,€IÌdon't€think€there€is€a€necessity€to€take€that€additionalÌresponsibility€and€say€to€the€consumer,€now€let€me€tellÌyou,€your€free€time€is€up,€so,€you€know,€please€let€usÌencourage€you€to€hang€up€now.€€We€have€already€got€thatÌhappening€once€at€the€preamble€stage,€and€if€theÌconsumer€has€been€sufficiently€motivated€to€make€theÌÇcall,€I€guess€to€be€--€to€be€candid,€we€would€oppose€theÌadditional€potential€of€encouraging€the€consumer€at€thatÌpoint€to€hang€up€and€not€continue€with€the€product€orÌservice.Ì€€€€€€€€MS.€HARRINGTON:€€Allen,€question?Ì€€€€€€€€MR.€HILE:€€But€you€are€reluctant€to€rely€on€theÌproduct€to€sell€itself,€because€if€the€free€sampleÌreally€does€the€job,€the€consumer€would€willingly€stayÌon€after€the€tones.Ì€€€€€€€€MS.€GOLDSTEIN:€€That's€not€necessarily€true,Ìbecause,€you€know,€one€experience€that€we€have€heardÌaround€this€table€is€that€some€solutions€that€we€adoptedÌin€1992€to€solve€certain€problems€also€led€to€certainÌconsumer€abuses,€and€yes,€there€will€be€consumers€whoÌmay€call€up€ten€times€to€get€the€two€free€minutes€withÌno€intention€of€becoming€a€customer€of€the€sponsor,€butÌthey€simply€want€to€keep€taking€the€free€time,€the€freeÌtime,€the€free€time.€€We're€not€saying€they€can't.Ì€€€€€€€€I€mean,€if€a€consumer€wants€to€do€that,€theyÌcan,€and€they€can€certainly€keep€track€of€their€watch,Ìbut€I€don't€think€that€the€marketers€should€be€requiredÌto€structure€their€program€in€a€way,€frankly,€that€mayÌencourage€that€type€of€conduct.Ì€€€€€€€€MR.€COHN:€€What€about€the€second€half€of€theÌquestion,€which€was€the€requirement€--€my€understandingÌÇwas€that€you€were€accepting€the€notion€of€additionalÌrequirements,€disclosures,€perhaps,€in€the€advertising?Ì€€€€€€€€MS.€GOLDSTEIN:€€What€I'm€saying€is€that€--€IÌdon't€feel,€frankly,€that€there€is€anything€additionalÌthat€needs€to€be€done.€€I€feel€based€on€the€rule€--€IÌthink€the€rule€is€clear€that€the€tone€relates€back€onlyÌto€the€preamble,€and€I€don't€read€the€rule€as€requiringÌa€tone€at€the€end€of€the€offer,€but€what€I'm€saying€isÌif€the€Commission€feels€that€some€additional€regulationÌin€this€area€is€necessary,€we€would€propose€that€it€beÌaddressed€through€advertising€rather€than€require€thatÌan€additional€tone€be€placed€in€the€call.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Peter€and€then€Jon.Ì€€€€€€€€MR.€BRENNAN:€€Thank€you.Ì€€€€€€€€In€the€interest€of€an€overall€healthy€businessÌand€marketing€environment€in€the€industry,€it'sÌTele-publishing's€position,€A,€that€the€use€of€the€wordÌ"free"€in€advertising€should€be€closely€guarded€andÌshould€--€and€should€be€closely€monitored,€and€I€cite€anÌexample€in€our€marketplace€where€an€advertisementÌregularly€appears€in€the€Boston€newspapers€for€aÌ550-free€service,€it's€called€550-free,€but€550€costsÌyou€money,€but€it's€called€--€they€ordered€the€numberÌthat€gets€you€550-free,€and€that's€--€and€that's€notÌfair€and€that's€deceptive€and€that€activity€hurts€usÌÇall.Ì€€€€€€€€But€also€in€the€interest€of€a€fair€marketplace,ÌI€don't€think€it's€unfair,€and€I€think€it's€positive,Ìfor€us€to€expect€and€for€us€to€try€and€encourageÌconsumers,€wherever€we€can,€to€watch€their€watch€whenÌthey€are€using€any€of€these€services,€whether€the€firstÌfew€minutes€are€free€or€whether€they€cost€or€whetherÌthere€is€a€price€differential€for€the€first€minuteÌversus€subsequent€minutes,€and€I€don't€think€that€that'sÌan€unreasonable€--€an€unreasonable€expectation,€youÌknow,€in€terms€of€building€a€healthy€marketplace€goingÌforward.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Peter.Ì€€€€€€€€Jon?Ì€€€€€€€€MR.€SHAUB:€€Just€to€answer€a€question€that€wasÌasked€earlier,€one€of€the€things€that€led€us€to€look€atÌthat€interpretation€that€was€in€use€late€last€year€wereÌsome€complaints€from€people€coming€into€the€inquiryÌcenter€who€felt€they€had€not€gotten€the€free€period€thatÌthey€had€--€that€had€been€advertised.Ì€€€€€€€€Upon€investigation€of€those,€they€had,€in€fact,Ìgot€the€proper€free€period.€€It€was€one€of€awareness.ÌThe€situation€that€was€typically€used€was€a€callÌtermination€to€a€point€and€then€a€call€forwardingÌarrangement.€€The€call€forwarding€arrangement€can€add€aÌÇhalf€a€minute€or€even€up€to€a€minute,€depending€on€ringÌtime€and€everything,€and€the€timing,€in€fact,€the€freeÌperiod€started€when€they€had€--€at€the€end€of€the€tone,Ìwhen€they€went€to€the€first€termination.Ì€€€€€€€€Some€of€the€--€some€of€the€customers€calling€theÌlines€assumed€that€the€free€period€started€when€theyÌactually€connected€to€the€live€party.€€So,€you€know,€itÌwas€technically€done€correctly.€€There€was€noÌmisleading,€but€there€was€a€perception€of€incorrectÌtiming,€and€that's€what€led€us€to€question€it.€€ThereÌwas€some€degree€of€confusion.Ì€€€€€€€€MS.€HARRINGTON:€€Walt?Ì€€€€€€€€MR.€STEIMEL:€€Yeah,€I€just€wanted€to€ask€NAAG,Ìdid€you€want€me€to€go€into€the€technical€reason€of€whyÌthe€insertion€of€the€tone€is€a€problem?€€There€seemed€toÌbe€some€reason€of€technically€why€it's€difficult€forÌsome€parties€to€do€that.€€The€situations€I've€been€awareÌof€--Ì€€€€€€€€MS.€HARRINGTON:€€I€think€that€was€Adam'sÌquestion€or€observation.Ì€€€€€€€€MR.€STEIMEL:€€Yeah,€the€situations€that€I'veÌbeen€aware€of,€the€party€advertised,€you€know,€you€getÌtwo€free€minutes.€€They€told€you€that€when€you€firstÌdialed€in,€and€then€because€I€think€a€lot€of€consumersÌhave€gotten,€especially€like€these€chat€and€interactiveÌÇor€--€calls,€they€get€in€and€they€don't€like€the€serviceÌor€there€are€long€delays€where€nothing€happens.€€TheÌclient€group€wanted€to€let€consumers€know€that,€yeah,Ìthat€they€are€actually€going€to€get€conversation€orÌwhatever€it€is,€you€know,€psychic€readings,€whateverÌthey€are€calling€in€for€when€they€get€on,€and€they€giveÌthem€the€first€two€minutes€free€to€let€them€interact€andÌdecide€whether€they€like€the€service€and€then€begin€toÌcharge€them.Ì€€€€€€€€The€problem€is€they€are€buying€900€transportÌfrom€someone€like€AT&T€or€MCI.€€It€comes€in€to€them,Ìthey€give€the€preambles,€it€says€if€you€hang€up€in€threeÌseconds,€you€won't€be€charged,€your€first€two€minutesÌare€free,€and€they€forward€the€call.€€When€they€forwardÌthe€call,€they€don't€have€the€call€anymore€at€all.€€ItÌis€not€in€the€switch,€they€have€no€idea€how€long€theÌcall€goes€on,€and€it€is€transferred€at€that€point.Ì€€€€€€€€From€that€point€in€time,€the€call€is€going€fromÌthe€consumer€straight€over€to€Marianne€and€she€isÌtelling€them€about€trade€production,€and€she€hangs€up.ÌAt€the€end€of€the€month,€the€person€who€has€theÌplatform,€who€inserts€the€disclosure€and€the€tone,€theyÌget€a€call€timing€tape€from€the€carrier€saying€here€areÌall€the€calls€that€completed€through€your€platform,Ìhere's€how€long€they€are.€€They€take€the€first€twoÌÇminutes€off,€take€the€preamble€time€off,€the€first€twoÌminutes€off,€because€they€are€free,€and€just€bill€theÌremainder€of€the€time.Ì€€€€€€€€And€if€they€are€required€to€have€variableÌbilling€instead,€then€what€--€then€instead€of€having€theÌfirst€two€minutes€free,€they€just€can't€provide€any€freeÌtime€at€all.€€They€have€to€insert€a€penny€a€minute€orÌwhatever€for€the€first€--€for€what€would€have€been€theÌfree€period€--€free€time€period,€but€technologically,Ìthey€just€lose€the€call,€so€they€can't€go€out€and€grabÌthat€call€back€and€put€the€tone€in.€€That's€theÌproblem.Ì€€€€€€€€MR.€HILE:€€So,€what€you€are€saying€is€a€consumerÌwho€calls€is€not€really€getting€free€time.€€They€areÌgetting€switched€around€for€a€certain€amount€of€time.Ì€€€€€€€€MR.€STEIMEL:€€No,€no,€they€get€free€time.€€Let'sÌsay€you€call€me€--Ì€€€€€€€€MR.€HILE:€€Not€the€free€time€that€they€have€beenÌpromised.Ì€€€€€€€€MS.€HARRINGTON:€€Are€they€getting€freeÌinformation€service?Ì€€€€€€€€MR.€STEIMEL:€€No,€no,€then€they€switch€to€theÌother€side,€and€it€stays€wherever€they€are€going€for€twoÌminutes,€and€there€is€no€charge€for€the€first€twoÌminutes€they€are€connected€someplace€else.ÌÇ€€€€€€€€MS.€HARRINGTON:€€Do€they€get€any€value€for€thatÌtwo€minutes?€€Do€they€get€audiotext€services?Ì€€€€€€€€MR.€STEIMEL:€€They€get€dropped€straight€on€theÌaudiotext€line.€€I€hit€the€conference€button.Ì€€€€€€€€MS.€HARRINGTON:€€It€just€wasn't€clear.Ì€€€€€€€€MR.€STEIMEL:€€I€hit€the€conference€button,€theÌperson€comes€on€the€line€and€starts€chatting,€I€hit€theÌconference€button€again,€and€I€drop€off€directly.€€I'mÌnot€in€anymore.Ì€€€€€€€€MS.€HARRINGTON:€€Mark,€question?Ì€€€€€€€€MR.€HERTZENDORF:€€A€few€questions.€€If€thisÌforwarding€is€messing€up€the€timing,€does€that€suggestÌthere€needs€to€be€maybe€some€grace€period€for€some€ofÌthese€--€some€of€these€free€--€offers€of€free€time?ÌThat's€one€question.Ì€€€€€€€€The€second€question€would€be,€are€all€theseÌoffers€of€free€time€in€conjunction€with€a€service€whereÌsomebody€is€forwarded€to€a€live€conversation€or€are€someÌof€them€offered€in€the€context€of€a€tape€recordedÌmessage?€€And€in€the€case€--€I€assume€there€is€noÌobjection€to€offering€a€beep,€except€that€it€mightÌencourage€people€to€hang€up.Ì€€€€€€€€The€third€question,€is€there€any€empirical€dataÌabout€the€degree€to€which€inserting€a€tone€willÌencourage€people€to€hang€up?€€And€lastly,€I€just€make€aÌÇpoint.€€It€would€seem€to€me,€except€for€theÌtechnological€difficulties,€which€could€be€prettyÌsignificant€in€some€cases,€that€it€would€be€moreÌefficient€to€have€the€computer€equipment,€which€isÌreceiving€the€call,€to€do€the€timing€than€to€have€10,000Ìpeople€grab€a€stopwatch€when€they€make€one€of€theseÌcalls.Ì€€€€€€€€MS.€HARRINGTON:€€Any€responses€to€Mark'sÌobservations?Ì€€€€€€€€Warren€and€then€Peter€in€response,€and€then€weÌare€going€to€go€to€Susan,€Jill€and€Allen€--€not€Allen,Ìhis€card€is€down.Ì€€€€€€€€MR.€MILLER:€€In€response€to€both€his€andÌAllen's,€I€want€to€just€clear€up€one€point€in€that€thisÌperception€that€maybe€somebody's€not€getting€what€theyÌpay€for,€it's€--€because€of€these€transfers€--Ì€€€€€€€€MR.€HILE:€€Not€what€they€paid€for,€what€theyÌwere€promised.Ì€€€€€€€€MR.€MILLER:€€Well,€one€of€the€ways€in€which€thisÌworks€is€the€supervision€is€the€term,€and€it€works€aÌlittle€bit€like€three-way€calling.€€In€order€to€put€theÌtone€on€the€call€after€it's€gone€to€a€live€person,€thereÌhas€to€be€the€equivalent€of€a€line€--€another€line€open,Ìand€that's€the€technical€requirement€that€it€takes€moreÌexpense€and€a€higher-level€bureau€involvement€than€callÌÇforwarding€would,€for€example,€to€send€--€to€send€theÌcall€to€somebody€else€to€let€them€take€it.Ì€€€€€€€€Now,€one€of€the€ways€that€--€in€the€example€IÌexplained,€there€is€no€intention€of€--€of€shortingÌanybody€of€their€time.€€In€fact,€what€we€would€like€toÌbe€able€to€do€is€to€say,€calling€--€charges€will€begin€aÌminute€from€now.€€So,€we€had€30€seconds€and€then€someÌextra€time€to€send€them€off€to€this€guy€on€the€car€washÌline.€€Rather€than€suggesting€it's€free,€we€just€like€toÌsay,€it€is€going€to€take€some€time€to€get€to€the€placeÌyou€want€to€go,€and€that's€when€billing€will€begin,€butÌif€it's€already€transferred,€we€can't€supervise€thatÌcall.Ì€€€€€€€€MS.€HARRINGTON:€€Quickly,€Peter,€and€then€weÌwill€come€back€to€Susan€and€Jill€and€then€move€on.Ì€€€€€€€€MR.€BRENNAN:€€Perhaps€you€misunderstood€myÌpoint.€€It€may€indeed€be€more€efficient€for€one€centralÌplace€to€keep€track€of€the€timing€and,€of€course,€we€do,Ìbecause€the€billing€is€based€on€that,€the€carrier'sÌbilling.Ì€€€€€€€€The€point€I€was€making€is€it€seems€to€us€to€beÌreasonable€that€--€to€expect€consumers€to€be€aware€ofÌthe€time€that€they€are€spending€and€be€aware€of€theÌmoney€they€are€spending,€just€as€you€would€in€any€otherÌmercantile€environment,€any€other€commercialÌÇenvironment.€€You€would€want€people€to€know€what€theyÌare€spending€as€they€are€spending€it.Ì€€€€€€€€Furthermore,€the€idea€of€--€whether€a€beepÌtone's€needed€every€minute€was€considered€at€greatÌlength€the€last€time€around€in€these€hearings,€and€theÌCommission,€I€think,€in€its€wisdom€decided€that€thatÌwasn't€appropriate.Ì€€€€€€€€MS.€HARRINGTON:€€Susan?Ì€€€€€€€€MS.€GRANT:€€I€have€to€confess€to€being€reallyÌconfused€here.€€If€you're€calling€a€service€whereÌinevitably€you're€going€to€be€connected€to€somebody€andÌit's€a€question€of€who€the€right€person€is€to€connectÌyou€to,€you€would€think€that€there€would€be€an€averageÌtime€that€you€all€would€know€that€that€would€take€andÌthat€that€would€be€built€into€the€cost€of€the€callÌrather€than€considering€some€initial€part€of€the€call€toÌbe€free.€€So,€I€really€don't€understand€why€that€wholeÌcall€is€not€just€treated€as€a€normal€pay-per-callÌsituation€where€the€cost€is€averaged€ought€over€--€overÌthe€length€of€the€--€the€foreseeable€length€of€theÌcall.Ì€€€€€€€€For€a€recorded€situation,€which€a€lot€of€theseÌseem€to€be,€if€the€freeness€of€it€is€described€as€someÌsort€of€bonus€or€extra€added,€you€know,€you€areÌultimately€going€to€pay€less€for€this€than€you€wouldÌÇhave€otherwise,€I€don't€understand€why€the€free€timeÌwouldn't€be€added€on€the€back€end€rather€than€theÌbeginning,€for€things€where€it's€a€sample,€whereÌessentially€you€get€to€sample€it€for€a€while,€and€thenÌcharges€are€going€to€start.Ì€€€€€€€€It's€kind€of€like€going€into€the€supermarket€andÌbeing€handed€a€little€sample€of€something€to€eat€toÌdecide€whether€or€not€you€want€to€go€and€buy€the€wholeÌthing.€€You're€not€invited€to€just€kind€of€take€a€biteÌof€it€and€then€depending€on€how€large€of€a€bite€youÌtook,€you€know,€you€are€sort€of€required€to€--€toÌpay.Ì€€€€€€€€I€mean,€I€just€really€don't€understand€what€theÌproblem€is€for€part€of€the€preamble€to€explain€that,€youÌknow,€initially€X€amount€of€minutes€is€going€to€be€free,Ìand€then€you€will€hear€a€tone€that€will€signal€you€thatÌ--€that€the€charges€will€start,€and€I€still€don'tÌreally€understand€what€the€problem€with€that€is.Ì€€€€€€€€MS.€HARRINGTON:€€Jill?Ì€€€€€€€€MS.€SANDFORD:€€First€off,€what€I've€learned€fromÌthis€conversation€concerning€the€transfer€and€hold€timesÌbeing€accountable€as€part€of€the€free€time€I€findÌdisturbing.€€The€implication€to€me€is€when€the€consumerÌis€told€that€there€is€free€time€that€it's€free€audiotextÌservices.ÌÇ€€€€€€€€Also,€Linda€said€something€that€I€foundÌinteresting€that€everybody€knows€that€a€psychic€readingÌtakes€more€than€two€or€three€minutes€--Ì€€€€€€€€MS.€GOLDSTEIN:€€That's€not€exactly€what€I€said.Ì€€€€€€€€MS.€SANDFORD:€€I€didn't€--€I€was€not€aware€ofÌthat,€and€one€of€the€concerns€I€have€is€the€freeÌrepresentation€made€specifically€with€the€psychicÌservices€on€cable€television€and€newspaper€implies€aÌcompleted€service,€that€you€will€get€a€sample€of€aÌcompleted€reading,€and€what€I'm€hearing€is€that€theÌconsumer€will€call€up€but€only€get€the€partial€reading,Ìand€the€representation€is€made€to€the€consumer€that€theyÌwill€get€a€full€reading€and€get€to€sample€the€service.ÌAnd€then€going€farther,€if€they€on€another€occasionÌwould€like€further€readings,€they€can€become€aÌsubscriber€or€part€of€that€service.Ì€€€€€€€€And€I€think€that's€deceptive€when€a€service€isÌpromised€in€completion€when,€in€fact,€it's€just€a€smallÌpiece,€and€the€consumer€needs€to€stay€on€the€line€andÌpay€for€the€service€to€receive€what€the€consumerÌbelieves€they€are€getting€for€free.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€we€are€going€to€hearÌWarren€and€Linda,€and€I€would€ask€you€both€to€keep€yourÌcomments€very€brief,€because€that's€the€end€on€thisÌissue.€€We€are€going€to€get€into€--€well,€we€are€justÌÇgoing€to€hear€from€Warren,€then.Ì€€€€€€€€MS.€GOLDSTEIN:€€No,€no,€no,€since€you€hadÌrecognized€me.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€MILLER:€€Okay,€I€will€try€to€be€brief.Ì€€€€€€€€Susan€had€a€lot€of€that€right€about€what€weÌshould€know€and€the€ability€to€measure€and€how€long€doesÌit€take,€but€she€doesn't€--€I€think€what€we€want€toÌavoid€is€the€unintended€consequences€of€what€I€think€isÌgoing€to€be€the€next€subject€now,€and€we€can€know€thatÌit's€going€to€take€us€around€30€seconds€to€transfer€theÌcall€to€the€guys€on€the€car€wash€line,€and€AT&T€now€hasÌa€feature€called€a€free-time€option.€€It€wasn'tÌavailable€when€the€law€was€originally€enacted,€but€youÌcan€tell€the€carrier€how€much€free€time€you€want.Ì€€€€€€€€So,€we€know€it's€going€to€take€30€seconds,€soÌI'll€tell€AT&T€to€give€me€another€--€give€me€a€fullÌminute€of€extra€free€time€that's€not€going€to€show€up€onÌthe€bill.€€So,€I'm€forced€then€to€--€if€I€want€to€--€ifÌI€--€what€I€would€like€to€be€able€to€say€is€this€call€isÌgoing€to€take€about€30€seconds€to€connect,€and€it'sÌgoing€to€take€--€you€are€not€being€billed€for€thatÌwhatsoever,€just€take€time€to€transfer€the€call,€andÌplease€stand€by,€something€like€that.Ì€€€€€€€€Instead,€I€have€to€say,€to€avoid€violating€theÌÇrule,€billing€will€begin€in€three€seconds€when,€in€fact,Ìit's€not€beginning€at€all,€and€then€it€can€be€misleadingÌto€the€customer.€€The€customer€thought€billing€wasÌbeginning€in€three€seconds,€it€took€30€more€seconds€toÌtransfer,€I€was€gypped€out€of€something.€€He€wasn'tÌgypped€out€of€anything,€because€we€gave€him€the€minuteÌfor€free,€but€we€can't€tell€him€that.Ì€€€€€€€€MS.€HARRINGTON:€€Linda?Ì€€€€€€€€MS.€GOLDSTEIN:€€First€of€all,€I€wanted€toÌclarify€that€I€don't€think€I€meant€or€I€didn't€mean€toÌsay€that€everybody€knows€how€long€a€particular€readingÌwill€take.€€I€think€that€that's€a€very€individualizedÌissue€based€on€the€consumer's€understanding€of€thatÌparticular€reading€and€how€long€it€will€take,€but€IÌdon't€--€I€again€think€it€gets€back€to€the€advertising.ÌIf€the€advertising€properly€represents€that€you're€goingÌto€get€a€certain€amount€of€time€free€--Ì€€€€€€€€MS.€HARRINGTON:€€Yeah,€that€--€I€think€we€haveÌmade€that€point€in€this€session.Ì€€€€€€€€MS.€GOLDSTEIN:€€What€I€want€to€say€--€what€IÌwanted€to€say€is€that€irrespective€--€even€if€there€isÌsome€hold€time,€and€I€am€told€that€on€average€it€may€beÌ20€to€30€seconds,€there€is€still€a€value€to€that€freeÌtime.€€It's€--€it's€really€virtually€analogous€to€theÌcovenant€laws€on€free,€which€is€just€as€you€can'tÌÇinflate€the€price€of€an€underlying€product,€I€wouldÌagree€that€if€an€information€provider€artificiallyÌinflated€the€hold€time€to€eat€up€the€free€time,€thatÌwould€be€a€deceptive€practice,€irrespective€of€thisÌrule,€but€if€the€hold€time€is€constant€but€in€essenceÌyou're€getting€two€minutes€free,€it's€still€a€value€toÌthe€consumer.€€It's€like€a€discounted€rate€really€isÌwhat€it€is.€€It's€costing€you€less€than€it€otherwiseÌwould€without€that€offer.Ì€€€€€€€€MS.€HARRINGTON:€€Now,€in€terms€of€deception€andÌtime,€we€said€at€this€time€we€were€going€to€beginÌdiscussing€the€impact€of€new€technology,€but€we€stillÌhave€one€issue€remaining,€and€Mark,€these€were€yourÌquestions,€I€think.Ì€€€€€€€€MR.€HERTZENDORF:€€All€right,€we€will€do€thisÌquickly.€€I€just€want€to€know€--€I'm€not€asking€anyoneÌto€implicate€themselves€or€anything€--€but€what€is€theÌtypical€industry€practice€with€regard€to€the€parentalÌpermission€admonition€when€an€adult€services€--€adultÌservice€is€being€offered?€€Is€it,€like,€99€percent€ofÌthe€services€are€saying,€you€must€be€18€to€use€thisÌservice,€if€you€are€under€18,€get€your€parents'Ìpermission,€is€that€what,€like,€99€percent€of€the€adultÌservices€are€doing,€or€is€there€--€are€there€a€largeÌfraction€of€services€which€are€just€saying€you€need€toÌÇbe€18€and€if€you're€not€hang€up?Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€quick€answers€on€this.Ì€€€€€€€€Gary?Ì€€€€€€€€MR.€PASSON:€€There€is€a€lot€of€services€doingÌboth,€but€I€think€the€strict€reading€of€the€rules€wouldÌrequire€you€to€say€at€this€point,€if€you're€under€18,Ìplease€get€parental€permission.€€I€think€that€that,€inÌfact,€is€the€area€where€I€think€a€number€of€players€areÌsaying€leads€to€confusion,€because€it€might€imply€toÌsomeone€under€18€that€possibly€they€really€could€useÌthis€service.€€I€think€there€is€a€general€feeling€that€aÌmuch€stronger€single€statement,€you€know,€you€must€be€18Ìto€use€this€service,€stands€by€itself€as€a€betterÌsolution€than€having€the€parental€advice€admonition.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Peter?Ì€€€€€€€€MR.€BRENNAN:€€With€the€caveat€in€the€questionÌthat€when€I€am€referring€to€adult€services€in€thisÌsection,€I€am€talking€about€services€which€are€gearedÌand€promoted€to€people€above€the€age€18,€not€necessarilyÌservices€that€might€be€construed€as€obscene,€indecent,Ìsalacious€in€any€way,€because€those€are€the€bulk€of€theÌservices€that€make€up€the€most€successful€application,Ìwhich€is€personals,€which€we€have€some€experience€in.Ì€€€€€€€€In€our€experience,€what€we€have€been€compelledÌto€do,€after€making€specific€inquiry€to€the€Commission,ÌÇis€say,€you€must€be€18€--€to€say€--€we€want€to€say,€youÌmust€be€18€to€use€these€service.€€What€we€are€compelledÌto€say,€but€you€also€must€have€parental€permission€ifÌyou€are€not€18.€€Clearly,€on€its€face,€that€is€an€abuseÌof€consumers,€because€it's€confusing.€€It's€an€abuse€ofÌus.€€We€have€a€very€valuable€18€seconds€--€and€I€amÌtrying€not€to€take€any€longer€than€18€seconds€when€IÌanswer€this€question€--€a€very€valuable€18€seconds€withÌwhich€to€dispatch€this€preamble,€and€we€hope€that€youÌwill€advocate€with€us€for€a€change.Ì€€€€€€€€MR.€HERTZENDORF:€€Is€there€any€indication€thatÌthis€confusing€preamble€message€encourages€minors€toÌhang€on€the€line?Ì€€€€€€€€MR.€BRENNAN:€€I€have€nothing€statistical,€but€IÌcan€tell€you€anecdotally€that€in€circumstances€where,Ìfor€example,€parents€have€called,€typically€a€--€in€--Ìin€the€inquiry€process,€when€it's€rooted,€and€in€myÌcompany,€when€we€get€inquiries€that€come€to€my€desk€orÌmy€assistant€on€days€when€I€am€not€there,€like€today,Ìand€I€have€had€conversations€with€parents,€and€I€say,Ìlet€me€play€for€you€the€preamble.€€Let€me€tell€you€firstÌof€all€your€son€or€daughter€who€may€have€been€a€minorÌhas€called€the€service€for€the€personal€ads€in€TheÌMilwaukee€Journal,€for€example,€and€I€call€the€MilwaukeeÌJournal,€and€we€play€for€them€the€preamble.€€And€theyÌÇsay,€You€just€said€they€could€do€it€if€they€had€myÌpermission.€€And€I€say,€No,€sorry,€it's€a€dumb€law,ÌCongress€decided€that€we€have€to€do€this.€€So,€it€isÌconfusing,€and€I€can€relate€that€on€an€anecdotal€basis.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Peter.Ì€€€€€€€€Warren?Ì€€€€€€€€MR.€MILLER:€€Just€the€same€thing.€€We€haveÌservices€that€are€nonsexually€explicit€that€are€targetedÌat€adults,€in€some€cases€might€even€have€fulfillmentÌwhere€some€material€has€to€be€sent€afterwards€that's€forÌan€adult,€and€we€would€like€to€encourage€those€peopleÌnot€to€waste€everybody's€time€if€the€service€is€notÌtargeted€there,€and€we€would€like€to€see€a€change€in€theÌlaw.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€let€me€just€quickly€ask€aÌquestion.€€Would€anyone€object€to€the€kind€of€change€inÌthe€rule€that€Peter€has€suggested€so€that€the€message€isÌhang€up€instead€of€you€have€to€get€your€parents'Ìpermission?Ì€€€€€€€€Okay,€the€record€reflects€that€no€one€raisedÌtheir€hand€to€object.Ì€€€€€€€€Now,€we€have€moved€on€to€the€4:45€--€Mark,€areÌwe€done€with€that?Ì€€€€€€€€MR.€HERTZENDORF:€€Yeah,€we're€done.Ì€€€€€€€€MS.€HARRINGTON:€€Good,€we're€only€five€minutesÌÇbehind,€and€we€are€going€to€make€it€up€now€by€talkingÌquickly.Ì€€€€€€€€We€are€very€interested€in€this€next€discussion,Ìand€so€even€if€you're€not,€we€would€really€like€you€toÌhumor€us,€because€we€want€to€do€a€forward-looking€job€onÌwhatever€modifications€we€make,€and€so€we€would€like€toÌhave€some€record€indicating€what€kinds€of€technologyÌwe're€likely€to€see€in€the€near€future€that€are€going€toÌextend€opportunities€for€audiotext€services.Ì€€€€€€€€We€would€like€any€guidance€that€you€have€for€usÌon€how€we€can€craft€a€rule€that€has€provisions€that€areÌbroad€enough€to€avoid€becoming€obsolete€as€newÌtechnologies€are€developed,€and€likewise,€that€don'tÌcompletely€hinder€or€even€partially€hinder€or€chill€theÌdevelopment€of€new€technologies.€€We're€concerned€bothÌways,€and€the€floor€is€open€for€discussion€on€this.Ì€€€€€€€€Peter?Ì€€€€€€€€MR.€BRENNAN:€€I'm€sorry,€my€flag€was€up€from€theÌlast€time.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€I€thought€you€wereÌhumoring€me.Ì€€€€€€€€Gary?Ì€€€€€€€€MR.€PASSON:€€I€think€there€is€two€areas€that€I'dÌsuggest€you€all€want€to€take€a€look€at.€€One€of€them,€ofÌcourse,€is€Internet€telephony,€the€ability€from€yourÌÇcomputer€desktop€to€essentially€connect€to€audioÌservices,€while€today€is€probably€not€technically€a€veryÌgood€product€and,€you€know,€but€I'm€sure€there's€a€lotÌof€people€testing€in€that€specific€area,€and€someday€itÌwill€become€a€good€product,€and€just€like€for€longÌdistance€it's€a€challenge,€later€on€in€the€market,€it€isÌgoing€to€become€much€more€useful.Ì€€€€€€€€MS.€HARRINGTON:€€Now,€when€Internet€telephonyÌbecomes€a€viable€means€of€accessing€audiotext€services,Ìshould€we€have€a€similar€type€of€advertising€point€ofÌsale€disclosure€regime€for€it?Ì€€€€€€€€MR.€PASSON:€€There€is€going€to€be€a€lot€ofÌdiscussion€on€that.€€You€know,€the€medium€is€veryÌdifferent,€you€know,€it's€not€a€television€set,€it's€notÌa€--€it's€not€a€magazine,€it's€not€a€newspaper.€€So,€myÌsuspicion€is€that€it€really€needs€to€be€looked€at€in€itÌ--€in€its€context,€and€rules€that€seem€consistent€andÌcommon€sense€for€that€medium€should€be€applied.Ì€€€€€€€€I€think€to€just€broad€brush€say€it€has€to€beÌexactly€the€same€is€probably€premature.€€I€think€anotherÌset€of€sessions€and€seminars€with€people€that€are€more,Ìyou€know,€that€are€more€attuned€to€the€specifics€of€thatÌwould€be€more€valuable€than€trying€to€lock€it€in€at€thisÌpoint.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Peter?ÌÇ€€€€€€€€MR.€BRENNAN:€€We€are€one€of€the€companies€thatÌdoes€offer€in€some€areas€exactly€the€same€service€on€theÌInternet€that€you€can€receive€on€the€telephone,€and€weÌalso€--Ì€€€€€€€€MS.€HARRINGTON:€€How€does€that€work?Ì€€€€€€€€MR.€BRENNAN:€€Well,€the€way€it€works€is€that€ifÌ--€if,€for€example,€you€were€a€personals€advertiser€inÌone€of€the€newspapers€in€Washington,€and€you€had€a€voiceÌreading€on€a€file€that€one€could€access€using€a€900Ìnumber€and€dialing€it,€we€provide€it€on€the€Internet.ÌWe€take€the€--€that€voice€file,€make€it€available,€whenÌyou€click€a€real€audio€button€on€the€Internet.€€We€don'tÌcharge€for€it€on€the€Internet.Ì€€€€€€€€What€we€charge€on€the€Internet€for€is€for€usersÌto€respond€to€you,€respond€to€your€ad,€because€theÌInternet€is€a€different€marketplace,€because€the€--€theÌ--€the€time€--€the€time€to€base€charges€on€the€InternetÌin€general€--€well,€the€time€to€base€charges€on€theÌInternet€are€problematic€from€the€point€of€view€that€youÌcan't€with€any€legal€specificity€or€regularity€predictÌhow€long€it's€going€to€take€to€download€a€file,€forÌexample,€depending€on€how€fast€a€computer€you€have€orÌhow€much€traffic€there€is€on€your€network€or€what€isÌgoing€on€at€the€server€at€the€time€you're€making€theÌtransaction,€and€a€whole€myriad€of€other€complications.ÌÇ€€€€€€€€So,€we€have€offered€this€--€many€of€the€sameÌservices€in€just€--€with€just€an€entirely€differentÌregime,€and€typically€we€bill€those€by€a€credit€card,Ìalthough€we€do€advertise€a€900€number€that€you€can€callÌto€buy€time€or€you€can€call€to€buy€a€stamp,€which€is€theÌcoin€of€the€realm€in€our€Internet€product,€like€a€bookÌof€stamps,€and€then€for€me€to€send€you€an€E-mail€costs€aÌstamp,€which€is€50€cents.Ì€€€€€€€€And€if€--€in€fact,€it€works€out€in€--€in€thisÌparticular€product,€it€works€out€to€be€less€expensiveÌfor€consumers€to€communicate€with€each€other€than€itÌdoes€--€than€do€900€numbers€in€general.€€That€is€to€say,Ìyou€could€communicate€with€more€people€buying€stampsÌmore€cheaply€than€you€could€on€the€telephone,€reallyÌbecause€of€the€high€rates€of€--€high€transmission€ratesÌand€the€high€cost€of€provisioning€900€number€service.Ì€€€€€€€€MS.€HARRINGTON:€€A€question€from€Allen?Ì€€€€€€€€MR.€HILE:€€Could€you€just€elaborate€a€little€bitÌabout€the€stamps?€€I€don't€know€what€you€mean€by€that.Ì€€€€€€€€MR.€BRENNAN:€€Yes.€€What€we€do€is€when€youÌbecome€a€member€of€the€personals€online€network,€theÌpersonals€network€dot€comm,€please€don't€hesitate,€theÌ--€you€have€a€number€of€things€which€you€can€do€forÌfree.€€You€can€browse€ads.€€You€can€place€a€profile.ÌYou€can€say€I'm€a€single€man€who's€35€years€old€and€goodÌÇlooking€and€this€is€my€educational€background€and€thisÌis€what€I'm€seeking,€and€you€can€go€through€many€of€theÌsame€sorting€criteria€that€we€also€provide€on€theÌtelephone€and€on€the€telephone€for€free,€by€the€way,Ìokay?Ì€€€€€€€€So,€you€can€place€your€profile€there.€€And€thenÌwhen€you've€sorted€through€and€you€have€found€someone€toÌwhom€you€would€like€to€respond,€who€you€would€like€toÌsend€an€E-mail€to,€you€press,€I€want€to€send€an€E-mail,Ìand€the€system€tells€you,€well,€now€you€have€to€buy€aÌstamp€or€you€have€to€buy€--€you€have€to€buy€a€stamp.ÌYou€can€buy€stamps€a€number€of€ways.€€You€can€buy€themÌwith€a€credit€card,€you€can€send€us€a€check,€you€canÌcall€our€live€operators,€you€can€buy€them€using€a€900Ìnumber.€€And€those€stamps€then€are€credited€to€yourÌaccount,€and€you€have€an€accounting€of€those,€and€youÌcan€spend€them€--Ì€€€€€€€€MR.€HILE:€€They€are€electronic€stamps?Ì€€€€€€€€MR.€BRENNAN:€€Yes,€yes,€and€you€can€spend€themÌon€the€net.€€You€can€use€them€--€you€can€send€stampsÌcollect,€so€that€--€I€could€have€Jill€respond€to€my€adÌif€I€wanted€to,€send€her€collect.€€You€can€use€them€in€aÌvariety€of€ways.Ì€€€€€€€€MR.€HILE:€€It's€E-money.Ì€€€€€€€€MR.€BRENNAN:€€Yes.ÌÇ€€€€€€€€MR.€HILE:€€Electronic€script.Ì€€€€€€€€MR.€BRENNAN:€€Yes.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you.Ì€€€€€€€€Dave?Ì€€€€€€€€MR.€GILLIS:€€In€discussing€this€issue€with€ourÌcolleagues,€there€are€two€points€that€we€wanted€to€makeÌin€the€context€of€this€proceeding.Ì€€€€€€€€First,€charges€associated€with€800€numbers€oughtÌto€be€prohibited€unless€there€is€a€presubscriptionÌagreement.€€That's€in€the€context€of€pay-per-callÌservices,€also€in€the€context€of€other€services,€onlineÌservices.Ì€€€€€€€€MS.€HARRINGTON:€€Ought€to€be€prohibited€by€meansÌof€this€rule?Ì€€€€€€€€MR.€GILLIS:€€We€believe€that€the€prohibitions€--Ìyeah,€the€prohibitions€with€respect€to€charging€for€800Ìnumber€services€apply€to€online€services,€as€well.Ì€€€€€€€€MS.€HARRINGTON:€€So,€if€there€is€a€charge€for€aÌcall€on€an€800€service€number,€is€that€what€you€have€inÌmind,€for€example?Ì€€€€€€€€MR.€GILLIS:€€Yes,€yes.Ì€€€€€€€€MS.€HARRINGTON:€€That€ought€to€be€prohibited€byÌthe€pay-per-call€rule?Ì€€€€€€€€MR.€GILLIS:€€I€don't€think€that€the€pay-per-callÌ--€I€don't€think€you€have€to€do€anything€other€thanÌÇconform€the€pay-per-call€rule€to€the€--€to€theÌTelecommunications€Act,€and€I€think€it€covers€it,€but€IÌwanted€to€make€explicit€that€our€view€is€that€chargingÌfor€800€number€calls€would€be€prohibited€if€they€relateÌto€online€services,€as€well.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€MR.€GILLIS:€€Second€point€is€that€furtherÌelaboration€of€the€clear€and€conspicuous€requirement€mayÌbe€appropriate€but€we€believe€should€be€the€focus€of€aÌ--€of€a€further€proceeding€dealing€directly€with€theÌonline€medium.€€So,€we're€not€prepared€in€thisÌproceeding€and€it's€not€our€position€that€that€should€beÌfurther€defined€for€pay-per-call€services€that€areÌadvertised€online.Ì€€€€€€€€MS.€HARRINGTON:€€It€sounds,€Dave,€as€thoughÌyou're€agreeing€with€what€Peter€said€about€the€need€forÌa€separate€forum€to€discuss€online€issues€and€theÌapplication€of€relevant€law€to€them.Ì€€€€€€€€MR.€GILLIS:€€Yes,€right.Ì€€€€€€€€MS.€HARRINGTON:€€Gary,€I'm€sorry,€what€were€youÌsaying?Ì€€€€€€€€MR.€PASSON:€€That€was€actually€my€comment.Ì€€€€€€€€MS.€HARRINGTON:€€Oh,€I'm€sorry,€that€was€Gary'sÌsuggestion,€but€Peter€thought€it€was€a€good€idea,€too.Ì€€€€€€€€MR.€BRENNAN:€€I€thought€it€was€a€good€idea,€if€IÌÇmay.Ì€€€€€€€€MS.€HARRINGTON:€€Sure.€€Let€me€just€make€sureÌthat€Dave€was€finished.€€Are€you€finished?Ì€€€€€€€€MR.€GILLIS:€€Yes.Ì€€€€€€€€MR.€BRENNAN:€€Regarding€the€clear€andÌconspicuous,€the€reason€for€that€is€that€unlikeÌtelevision€where,€you€know,€there€is€a€requirement€thatÌthe€type€must€be€adjacent€and€half€the€size,€on€theÌInternet,€it€is€not€as€possible€to€do€that€because€ofÌvariances€in€browsers€and€the€technology,€some€have€theÌtext-only€browser€and€may€format€text€differently,€so€itÌis€a€technological€issue,€not€a€philosophic€one.Ì€€€€€€€€MS.€HARRINGTON:€€All€right,€Alan?Ì€€€€€€€€MR.€TAYLOR:€€I€just€want€to€perhaps€ask€a€dumbÌquestion,€but€if€I€understand€what€you're€saying,€theÌonly€charges€that€will€in€any€way€end€up€on€a€telephoneÌbill€will€be€generated€if€you€purchase€these€electronicÌstamps€through€a€900€number.€€Presumably,€there€is€notÌgoing€to€be€any€charge€to€dad€because€the€son€is€usingÌAOL€or€whatever,€and€in€any€case,€it's€not€going€to€comeÌback€to€the€AOL€account,€or€will€it?€€And€if€it€doesn'tÌgo€to€the€AOL€account,€it's€not€going€to€come€back€toÌthe€telephone€bill€just€because€a€kid€is€connected€toÌAOL€through€the€telephone€number,€is€it?Ì€€€€€€€€MR.€BRENNAN:€€All€that's€correct.€€We€don't€doÌÇthat€kind€of€business€with€AOL€at€this€point.Ì€€€€€€€€MR.€TAYLOR:€€Or€anybody.Ì€€€€€€€€MR.€BRENNAN:€€Or€any€online€--€actually,€we€doÌon€Prodigy.€€Yeah,€the€transaction€for€the€payment€ofÌthe€stamps€is€entirely€different€from€whateverÌarrangement€you€have€made€to€reach€the€Internet.€€YouÌare€paying€for€your€Internet€access€however€you€areÌpaying€for€it,€depending€on€what€your€circumstancesÌare.Ì€€€€€€€€MS.€HARRINGTON:€€Jim?Ì€€€€€€€€MR.€BOLIN:€€I€just€had€a€question€for€theÌattorney€general.€€I€wonder€if€you€could€clarify€whatÌyou€mean€about€the€prohibitions€on€800€numbers€whenÌonline.€€I€can€imagine€a€couple€of€meanings€on€that.€€IÌwondered€if€you€could€clarify.Ì€€€€€€€€MR.€GILLIS:€€Well,€the€concern€would€be€whereÌyou€are€accessing€a€server€through€an€800€number€andÌsubsequently€you're€charged€for€that€call€on€your€phoneÌbill,€and€that€call€has€been€placed€without€aÌpresubscription€agreement€having€been€reached€inÌadvance.Ì€€€€€€€€MR.€BOLIN:€€Are€you€thinking€in€terms€ofÌInternet€providers€that€are€using€800€access€but€stillÌcharging€a€monthly€fee€or€I€think€in€some€cases,ÌWorldnet,€AT&T's€service€actually€charges€a€higher€feeÌÇfor€800€access€than€non-800€access.€€I€think€we€have€aÌsubscription€agreement€and€are€fully€compliant,€but€isÌthat€the€situation€you€are€thinking€of?Ì€€€€€€€€MR.€GILLIS:€€Yes,€that€is€the€type€ofÌsituation.Ì€€€€€€€€MS.€SANDFORD:€€If€I€could€just€add€--Ì€€€€€€€€MS.€HARRINGTON:€€Jill?Ì€€€€€€€€MS.€SANDFORD:€€--€this€issue€really€has€eruptedÌwithin€the€last€six€months.€€What€happened€and€why€weÌfeel€so€strongly€about€this€issue€does€relate€to€the€AOLÌsituation.€€When€consumers€started€having€accessÌproblems€at€the€end€of€last€year€to€AOL,€particularly€inÌNew€York,€and€actually€this€was€on€the€front€page€of€TheÌNew€York€Times,€people€discovered€that€using€800Ìnumbers,€they€were€able€to€get€on€AOL€where€their€localÌaccess€numbers€were€not€allowing€them€access€to€AOL.ÌAnd€kids€were€telling€their€friends,€colleagues€wereÌtelling€each€other,€here€is€this€800€number,€and€you€canÌget€on€AOL.Ì€€€€€€€€And€because€there€is€this€tremendous€presumptionÌon€the€part€of€consumers€that€an€800€number€equalsÌtoll-free,€equals€free,€you€literally€had€thousands€ofÌconsumers€accessing€AOL€via€this€800€number€who€wereÌthen€subsequently€charged€for€the€call€on€a€pay-per-callÌbasis.€€So,€I€think€what€Dave€is€saying€is€we€don't€feelÌÇthat€for€the€800€number€presubscription€agreement€thereÌshould€be€any€distinction€or€exception€because€it's€anÌInternet€provider,€that€if€it's€an€800€number€call,Ìthere€should€be€a€presubscription€agreement,€whether€itÌis€to€access€the€Internet€or€whether€it€is€to€access€anyÌother€pay-per-call€service.Ì€€€€€€€€MS.€HARRINGTON:€€And€is€it€the€attorneysÌgeneral's€reading€of€the€current€regulation€and€theÌTDDRA€that€that€is€what€the€law€requires?€€Do€you€readÌthe€current€regulation€to€incorporate€that€position?Ì€€€€€€€€MS.€SANDFORD:€€Yes,€we€do.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€Jim?Ì€€€€€€€€MR.€BOLIN:€€Just€briefly€again,€I€actuallyÌforwarded€that€front€page€article€from€The€New€YorkÌTimes€to€my€Worldnet€clients,€too,€believe€me.€€We€haveÌmade€an€effort€to€make€our€presubscription€agreementÌcompliant€with€TDDRA€because€of€this€gray€area.€€OneÌrequest€I€would€make€of€the€FTC€in€crafting€itsÌregulations,€arguably€the€definitions€of€pay-per-callÌnow€could€be€applied€to€the€Internet€in€a€number€ofÌrespects.€€AT&T€wouldn't€oppose€the€attorneys€general'sÌproposition€about€800€numbers€and€accessing€the€InternetÌvia€800.Ì€€€€€€€€We€would€ask,€though,€that€to€the€extent€theÌÇregulations€address€the€Internet€in€the€context€ofÌpay-per-call€that€the€Commission€make€very€clear€what€itÌis€intending€to€cover€and€what€it's€not€intending€toÌcover,€because€I€think€right€now€that€could€break€eitherÌway€depending€on€how€the€rule€gets€crafted,€and€I€wouldÌrather€not€have€it€a€gray€area,€because€I€think€theÌInternet€is€gray€enough€right€now.Ì€€€€€€€€MS.€HARRINGTON:€€A€question€that€we€have€had€isÌwhether€the€video€advertising€disclosure€requirements€inÌthe€current€rule€apply€to€solicitations€for€900€numberÌcalls€on€the€Internet.Ì€€€€€€€€Dave,€were€you€going€to€comment€on€that?Ì€€€€€€€€MR.€GILLIS:€€No,€I€was€going€to€ask€anotherÌquestion.Ì€€€€€€€€MS.€HARRINGTON:€€Do€you€want€to€ask€yourÌquestion€before€I€ask€my€question?€€I€will€take€myÌquestion€back.€€Dave€has€a€question.Ì€€€€€€€€MR.€GILLIS:€€You€had€mentioned€various€scenariosÌwhere€the€800€number€could€come€into€play,€and€I'mÌinterested€in€what€other€situations€might€presentÌthemselves.Ì€€€€€€€€MR.€BOLIN:€€Well,€I€haven't€thought€it€throughÌfully.€€I€was€thinking€of€800€number€access€for€issuesÌlike€AOL€and€Worldnet.€€Is€everyone€clear€on€why€thereÌare€charges€in€that€situation?€€I€mean,€for€800€accessÌÇto€those€services?Ì€€€€€€€€MS.€HARRINGTON:€€I'm€not.Ì€€€€€€€€MR.€BOLIN:€€I€can't€speak€for€AOL.€€In€the€caseÌof€Worldnet,€we€have€local€access€numbers€in€a€varietyÌof€places.€€If€like€me€you€live€in€a€very€rural€area,Ìlike€I€do,€where€Worldnet€may€not€come€for€the€nextÌhundred€years,€I€have€the€option€of€dialing€in€via€800,Ìbut€800€isn't€really€free,€somebody€pays€for€it.€€TheÌcalled€party€pays€for€it.Ì€€€€€€€€Worldnet's€arrangement,€and€it€is€spelled€out€inÌour€presubscription€agreement,€fully€compliant€withÌTDDRA,€the€way€the€agreement€works€is€that€becauseÌaccess€via€800€costs€AT&T€X€amount€of€dollars,€we€areÌessentially€passing€that€cost€on.€€We€are€tellingÌconsumers€we€will€give€you€a€way€to€access€it€so€itÌwon't€show€up€on€your€phone€bill,€you€can€use€all€theÌservices,€it€is€an€800€charge,€we€are€giving€customers€aÌway€to€dial€in€to€Worldnet,€but€it€is€not€cost-free€toÌus,€so€we€can't€make€it€cost-free€for€our€consumers.Ì€€€€€€€€We€have€made€every€effort€to€make€those€costsÌexplicit,€and€my€understanding€is€where€consumers€areÌconfused€by€that,€we€are€forgiving€the€charges.€€InÌterms€of€where€else€it€might€apply,€I'm€not€sure€I€canÌgive€another€example.€€I€am€thinking€of€bulletin€boardsÌand€other€types€of€services€on€the€Internet.€€I€amÌÇreally€not€conversant€enough€in€the€online€world€to€giveÌyou€any€other€specifics€in€the€area.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Gary?Ì€€€€€€€€MR.€PASSON:€€Well,€I€think€one€of€the€areas€thatÌwe€really€should€look€at€very€quickly€on€the€InternetÌthough€is€really€advertising,€and€I€think€you€touched€onÌit€a€minute€ago,€whether€the€video€rolls€or€print€rollsÌor€radio€rolls,€because€on€the€Internet€we€have€allÌthree€of€these€media€to€actually€communicate€to€the€endÌuser.Ì€€€€€€€€So,€you€know,€I€think€our€--€we€have€talkedÌabout€this€a€lot€in€our€industry,€and€I€think€we€feelÌthat,€you€know,€there€--€maybe€what€needs€to€be€done€isÌlooking€at€the€elements€of€the€Internet€and€applying€theÌrules€based€on€how€the€information€is€presented€to€theÌconsumer.€€If€it's€presented€to€the€consumer€in€a€videoÌframe,€then€maybe€it€should€meet€the€television€class€ofÌcommunication€rules.€€If€it's€a€more€static€picture€andÌthe,€you€know,€the€price€should€be€maybe€displayed€in€aÌconsistent€manner€to€the€print€world.€€See€if€it€comesÌacross€in€an€audio€stream,€coming€out€of€an€InternetÌterminal,€then€maybe€it€should€meet€those€radio€rules.Ì€€€€€€€€For€the€want€of€being€able€to€come€up€with€aÌbetter€definition€or€a€starting€point,€we€--€I€think€weÌthink€in€the€industry€that€that€might€be€a€good€place€toÌÇgo€until€we€have€had€a€chance€to€have€this€moreÌsubstantive€meeting€that€focuses€more€on€that€as€aÌmedium€in€its€totality€at€this€particular€point€inÌtime.€€That,€at€least,€I€think,€would€provide€to€theÌconsumers€the,€you€know,€set€of€--€the€set€ofÌinformations€and€disclosures€consistent€with€what€theyÌhave€today€if€they€weren't€using€the€Internet.Ì€€€€€€€€MS.€HARRINGTON:€€Peter?Ì€€€€€€€€MR.€BRENNAN:€€The€problem,€with€due€respect,€theÌproblem€to€that€is€that€those€of€us€who€are€puttingÌservices€on€the€Internet€don't€have€control€or€evenÌawareness€in€most€cases€as€to€what€your€particularÌbrowser€can€be€--€is€set€at€and€how€you€are€going€to€seeÌthat€information.€€So,€while€we€would€wholeheartedlyÌsupport€a€very€rigorous,€clear€and€conspicuous€standard,Ìwe€--€we€would€suggest€that€you€don't€get€much€moreÌspecific€than€that,€because€it's€not€going€to€beÌworkable.Ì€€€€€€€€I€mean,€we€are€--€philosophically,€that'sÌexactly€the€right€place€to€be,€and€as,€you€know,€as€aÌplayer€in€the€900€industry€who€wants€to€learn€from€theÌtransgressions€of€not€--€not€of€mine€but€of€my€industryÌcounterparts€from€that€era,€nothing€is€more€important€toÌus€in€developing€Internet€interactive€television€andÌinteractive€radio€technologies,€all€of€which€we€areÌÇinvolved€in,€than€to€see€that€the€consumers€fairlyÌunderstand€and€advertising€is€clear€and€conspicuous,€butÌto€be€--€to€deal€with€any€level€of€specificity,€even€theÌway€that€the€law€does€about€the€television€rule,€theÌtype€has€to€be€half€the€size€and€adjacent€to,€is€aÌproblem,€because€we€don't€know€what€browser€you€areÌgoing€to€be€using.€€Philosophically€it's€good,€but€--Ì€€€€€€€€MS.€HARRINGTON:€€The€Commission€recentlyÌproposed€an€order€in€a€case€that€basically€said€that€forÌSection€5€purposes,€a€clear€and€conspicuous€disclosureÌon€the€Internet,€among€other€things,€has€to€beÌunavoidable.€€That€is,€the€consumer,€you€know,€mustÌunavoidably€come€across€that€disclosure€in€a€clear€--Ìand€it€has€to€be€displayed€in€a€--€in€an€otherwise€clearÌand€conspicuous€manner.Ì€€€€€€€€Would€that€kind€of€flexible€standard€forÌpurposes€of€900€number€pay-per-call€disclosures€workÌthat€are€--€that€are€solicited€on€the€Internet?€€WouldÌthat€--Ì€€€€€€€€MR.€BRENNAN:€€Certainly.Ì€€€€€€€€MS.€HARRINGTON:€€--€contemplate€your€--€ratherÌthan€making€an€analogy€to€is€it€radio,€is€it€television,Ìis€it€print€--Ì€€€€€€€€MR.€BRENNAN:€€Yes,€the€unavoidable,€yes,Ìabsolutely,€and€if€I€understand€it,€and€I'm€--€you€haveÌÇ--€you€are€a€little€beyond€me,€but€to€the€extent€that€IÌunderstand€the€question€you're€asking€me,€yes,€it€--Ìyes,€it€would,€and€--€and€we€would€--€and€we€wouldÌsupport€that.Ì€€€€€€€€There€are€--€also,€there€are€nuances€that€willÌneed€to€be€in€the€--€in€the€subsequent€discussion,€thereÌare€nuances€that€are€going€to€need€to€be€taken€intoÌaccount€based€on€how€it€is€that€people€--€how€it€is€thatÌpeople€relate€to€information€over€the€Internet.Ì€€€€€€€€For€example,€some€marketing€data€would€suggestÌthat€users€generally€don't€read€a€lot€of,€you€know,€aÌlot€of€material,€you€know,€more€than€a€page.€€I€mean,Ìour€rule€of€thumb€in€marketing€a€service€when€you'reÌexplaining€its€--€its€advantages€is€not€to€do€--€not€toÌhave€more€than€a€screen€there,€because€people€clickÌthrough€it.€€So,€I€think€when€we€get€to€that€discussion,Ìwhat€we€will€want€to€do€is€we€will€want€to€look€at€thoseÌissues€and€say€realistically€how€can€we€present€this€inÌsuch€a€way€that€it's€concise€enough€so€that€people€willÌread€it€and€be€affected.Ì€€€€€€€€MS.€HARRINGTON:€€Linda?Ì€€€€€€€€MS.€GOLDSTEIN:€€Yeah,€I€was€just€really€--Ìsimilar€to€Peter's€point,€I€--€I€don't€think€any€of€usÌfrom€the€industry€side€are€philosophically€opposed€toÌthe€concept€of€clear€and€conspicuous,€nor€would€we€wantÌÇthe€Internet€to€become€the€next€haven€for€whereÌaudiotext€services€can€be€advertised€without€theÌconsumer€disclosures€and€the€consumer€protections,Ìbecause€that€would€obviously€undermine€everything€that'sÌhappened€over€the€last€four€years.Ì€€€€€€€€Our€more€global€concern€is€that€because€thereÌhas€been€such€a€--€really€a€lack€of€definite€standards,ÌI€mean,€the€whole€question€of€what€constitutes€clear€andÌconspicuous€disclosure€of€advertising€on€the€InternetÌand€how€certain€other€regulations€with€specific€typeÌsize€and€placement€requirements€that€have€been€adoptedÌin€other€contexts€can€now€be€applied€to€the€Internet€hasÌimplications€beyond€audiotext,€but€it€comes€up€in€otherÌareas,€as€well,€and,€you€know,€our€concern€is€thatÌperhaps,€you€know,€were€we€to€just€wholesale€importÌthese€requirements€to€this€medium,€it€might€have€anÌunintended€precedential€impact.€€Other€regulatoryÌagencies€may€look€at€it€as€having€some€precedent€beyondÌits€intended€effect.Ì€€€€€€€€So,€I€think€the€issue€really€of€advertisingÌdisclosures€in€general€should€be€dealt€with€really€in€aÌseparate€proceeding€where€others€who,€you€know,€may€notÌhave€an€interest€in€this€proceeding€as€they€perceive€itÌas€more€audiotext-based€then€would€have€a€lot€ofÌexpertise€in€this€area€and€would€have€more€input.ÌÇ€€€€€€€€MS.€HARRINGTON:€€Jim?Ì€€€€€€€€MR.€BOLIN:€€I€agree€with€the€remarks€that€haveÌjust€been€made.€€I€think€it€would€be€a€mistake€to€treatÌthe€Internet€as€just€another€version€of€radio€or€justÌanother€version€of€TV.€€The€unavoidability€standard€isÌan€interesting€one,€and€I€think€that€that's€got€someÌlegs.€€My€concern,€though,€is€that€what€is€and€isn'tÌavoidable€I€think€is€changing€month€to€month€at€thisÌpoint€in€terms€of€what€controls€browsers€enable€users€toÌuse,€and€I€would€--€I€think€when€you€import€an€elementÌof€good€faith,€an€element€of€attempting€to€comply,€IÌdon't€know€that€we€can€even€define€what€is€and€isn'tÌavoidable€in€the€context€of€the€Internet€right€now.ÌMaybe€folks€with€more€expertise€than€I€can,€but€I€justÌdon't€think€the€Commission€should€be€very€flexible€onÌthat.Ì€€€€€€€€MS.€HARRINGTON:€€Question€from€Adam?Ì€€€€€€€€MR.€COHN:€€I€know€that€sometimes€when€I'm€on€theÌInternet,€I€sometimes€get€the€warning€I€can't€play€aÌcertain€message€if€I€don't€have€a€piece€of€software.ÌWould€that€be€something€that€would€create€a€problem€withÌunavoidability?Ì€€€€€€€€MR.€BOLIN:€€I€think€that's€an€issue.€€You€talkÌabout€audio€disclosures.€€I'm€often€getting€messagesÌjust€like€that€when€on€the€net.€€To€get€this,€you€need€XÌÇplug-in€or€Y€plug-in.€€I€rarely€bother€to€get€it.Ì€€€€€€€€I€think€the€Internet€allows€people€platforms€toÌtalk€to€each€other,€and€that's€not€perfect€either.€€IfÌyou€have€an€older€computer,€an€older€version€ofÌNetscape,€you€sometimes€can't€use€the€plug-ins€youÌneed.€€It's€changing€so€much,€so€many€different€kinds€ofÌhardware,€I€think€that€we€need€to€import€an€element€ofÌmaking€an€effort€to€make€a€good€faith€disclosure,€aÌclear€and€conspicuous€disclosure,€and€unavoidable€reallyÌhas€legs,€is€a€good€way€to€go,€but€I€think€anything€theÌCommission€does€here€is€going€to€have€reverberationsÌelsewhere€on€interstate€commerce,€and€I€think€none€of€usÌhave€the€expertise€to€address€it€at€this€point.Ì€€€€€€€€MS.€HARRINGTON:€€Peter?Ì€€€€€€€€MR.€BRENNAN:€€Unavoidability,€all€the€problemsÌyou€have€with€the€plug€and€plays€is€acknowledged,€butÌunavoidability€is€something€different€as€one€that€buildsÌweb€sites.€€That€means€that€you€can't€get€to€slide€CÌuntil€you€have€seen€slide€B€and€at€the€bottom€of€it€youÌsaid€yes;€yes,€I€agree€that€I€will€comply€with€theseÌrules;€yes,€that€I€really€want€to€see€slide€C;€yes,€thatÌ--€no,€I€--€you€know,€or€no,€I€want€to€go€back€to€slideÌA.€€It€--€it€--€and€unlike€the€--€unlike€the€difficultyÌinserting€the€tone€in€the€prior€discussion,€this€isÌsomething€which€--€which€is€--€is€at€this€point€in€timeÌÇan€available€option€for€--€for€web€site€constructors.Ì€€€€€€€€MR.€BOLIN:€€Is€it€going€to€stay€that€way€for€theÌforeseeable€future?€€Is€it€really€that€stable?Ì€€€€€€€€MR.€BRENNAN:€€Well,€I€don't€know€why€--€I€mean,ÌI€don't€know€why€it€shouldn't.Ì€€€€€€€€MS.€HARRINGTON:€€Besides€--€Gordie€or€Albe,€I'llÌcome€right€back€to€you,€but€besides€Internet€telephony,Ìare€there€any€other€technologies€coming€down€the€roadÌthat€have€applications€for€audiotext€services?Ì€€€€€€€€For€example,€and€maybe€it's€not€a€new€technologyÌbut€just€a€different€development,€I€don't€think€that€--Ìat€least€I€don't€think€that€I€foresaw€the€use€ofÌinternational€dialing€patterns€at€the€time€that€we€wereÌinitially€getting€together€to€write€the€rules€for€900Ìpay-per-call.€€Is€there€anything€like€that,€a€differentÌsort€of€application€that's€looming€out€there€so€thatÌthree€months€from€now€or€four€months€from€now€when€weÌfinish€this€rulemaking€we€find€all€sorts€of€problems€onÌsome€other€sort€of€platform€that€people€have€migratedÌto?Ì€€€€€€€€Albe?Ì€€€€€€€€MR.€ANGEL:€€I€chose€really€just€to€respond€toÌsomething€that€Peter€just€said.€€In€his€littleÌdescription€of€how€he€builds€a€web€site,€he€said€youÌcan't€go€to€slide€C€until€you've€passed€through€slide€BÌÇand€you€may€want€to€click€on€something€on€slide€B€inÌorder€to€see€slide€C.€€I€don't€want€his€comments€to€beÌinterpreted€as€those€of€the€ISA€that€any€affirmativeÌconsent€would€be€necessary€and€that€would€constitute€aÌclear€and€conspicuous€disclosure.€€You€can€see€howÌapplying€that€sort€of€standard€backwards€to€audiotextÌwould€set€us€back€quite€a€bit,€and€I€think€we€need€toÌreally€address€the€Internet€standards€for€advertising€inÌa€separate€proceeding.Ì€€€€€€€€MS.€HARRINGTON:€€Okay.Ì€€€€€€€€Richard?Ì€€€€€€€€MR.€R.€GORDON:€€There€is€somethingÌtechnologically€that€is€happening€now€that€I€think€theÌCommission€will€be€confronting€in€about€a€year€or€two.ÌBack€on€February€1st,€the€InternationalÌTelecommunications€Union€opened€up€the€applicationÌprocess€for€international€toll-free€dialing.€€This€isÌthe€new€0-800€technology€that€Congressman€GordonÌactually€mentioned€yesterday.€€I€don't€know€how€manyÌpeople€understood€what€he€said,€the€0-800,€but€that'sÌwhat€it€is.Ì€€€€€€€€We€happen€to,€as€a€--€as€a€company,€own€a€numberÌof€numbers€like€0-800-call-visa,€which€is€a€phone€numberÌthat€can€be€dialed€in€any€one€of€57€participatingÌcountries,€and€that€number€will€go€wherever€we€as€theÌÇowner€of€the€number€want€the€number€to€route.€€It€is€theÌequivalent€on€a€worldwide€basis€of€what€800€service€wasÌ26€years€ago€here€in€the€states.Ì€€€€€€€€From€the€perspective€of€electronic€commerce,€IÌknow€many€members€of€the€Congress€are€excited€aboutÌthis,€because€it€will€break€down€a€lot€of€theÌinternational€barriers€for€American-based€companies€thatÌwant€to€do€business€on€a€global€basis,€and€they€won'tÌhave€to€have€a€sales€office€in€England€or€a€sales€officeÌin€France€or€whatever.€€I€think€that€this€does€open€upÌthe€spectre€of€the€types€of€audiotext€services€thatÌtoday€are€provided€on€011€possibly€being€provided€in€aÌ0-800€environment€and,€of€course,€then€there€would€haveÌto€be€a€billing€mechanism.Ì€€€€€€€€What€that€is,€how€that€will€evolve,€who€will€beÌinvolved,€will€it€be€a€credit€card€platform€only,€willÌit€be€some€form€of€international€telephone€companyÌbilling,€will€it€be€collect,€I€don't€think€anybody€knowsÌyet.€€The€numbers€will€go€live,€I'm€told,€by€AT&T,€whoÌis€our€provider€for€services€here,€in€the€next€30€to€60Ìdays.€€So,€there€is€going€to€be€a€fair€amount€ofÌshake-up€when€it€comes€to€telecom,€and€I€think€thatÌthere€is€a€number€of€things€that€the€Commission€needs€toÌbecome€aware€of€with€these€new€technologies.Ì€€€€€€€€The€one€thing€that€probably€will€be€of€someÌÇinterest€and€relief€on€a€national€basis€is€the€currentÌstate€of€the€technology€is€such€that€the€only€place€theÌnumber€doesn't€work€is€intra-country.€€So,€myÌ0-800-call-visa€number€I€can€dial€from€the€U.S.€toÌEngland€or€from€the€U.S.€to€Canada€or€from€the€U.S.€toÌRussia€or€from€Russia€to€the€U.S.,€but€I€can't€dial€fromÌNew€York€to€Los€Angeles.Ì€€€€€€€€MS.€HARRINGTON:€€Do€you€--€does€your€companyÌknow€now,€Richard,€whether€you're€going€to€be€marketingÌ0-800€numbers€to€U.S.€consumers,€that€is,€will€you€beÌrouting€calls€outside€of€the€United€States?Ì€€€€€€€€MR.€R.€GORDON:€€I'm€not€sure€I€understand€thatÌquestion.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€my€understanding€of€whatÌyou're€saying€is€that€these€are€international€numbers,Ìand€I€guess€what€I'm€asking€is,€as€far€as€yourÌapplications€are€concerned,€will€this€have€implicationsÌfor€U.S.€consumers€or€are€these€numbers€going€to€beÌmarketed€only€to€consumers€in€other€countries?Ì€€€€€€€€MR.€R.€GORDON:€€Well,€first€and€foremost,€myÌcompanies€don't€generally€deal€with€the€consumers.ÌWe're€business€to€business,€and€we€provide€theÌtechnology€behind€some€of€this.Ì€€€€€€€€MS.€HARRINGTON:€€Do€you€know€whether€yourÌclients€will€be?ÌÇ€€€€€€€€MR.€R.€GORDON:€€Yes,€they€will.€€I€mean,€I€knowÌthat€as€an€example,€we€have€the€numberÌ0-800-Four-Seasons€for€the€Four€Seasons€hotel€chain.ÌThey€want€to€use€that€number€in€their€marketing€in€theÌUnited€States€and€to€take€those€calls€to€theirÌreservation€center€in€London.€€So,€yes,€there€will€beÌU.S.€people€using€these€types€of€numbers.€€The€entireÌplan€is€really€an€overlay€in€technology.€€You€have€toÌhave€an€established€toll-free€connection€between€theÌoriginating€point€and€the€terminating€point,€and€this€isÌreally€a€mathematical€or€a€software€solution€where€theÌ--€the€0-800€number€points€to€a€predesignated€toll-freeÌcircuit€that€you€have€already€established.€€It's€aÌnumbering€plan€is€what€it€is.Ì€€€€€€€€MS.€HARRINGTON:€€And€will€--€here's€a€reallyÌdumb€question.Ì€€€€€€€€MR.€R.€GORDON:€€No€such€thing.Ì€€€€€€€€MS.€HARRINGTON:€€I€may€be€missing€the€pointÌhere.€€Are€these€calls€going€to€be€toll-free€forÌconsumers€or€will€they€pay,€or€are€they€going€to€beÌcharged€for€calling?Ì€€€€€€€€MS.€GRANT:€€That€was€my€question.Ì€€€€€€€€MR.€R.€GORDON:€€Well,€the€technology€isÌintending€to€be€a€technology€that€the€receiver€of€theÌphone€call€pays€for€the€transport.€€So,€the€answer€toÌÇyour€question€is,€as€I€understand€the€ITU's€promotionÌhere€and€the€reason€that€they€want€this,€is€they€want€aÌglobal€free€phone€service€and€economy.€€There€areÌtoll-free€lines€available€from€all€different€types€ofÌlocations.€€My€toll-free€number€in€--€in€France€isÌ05-2000,€and€if€you€dial€that,€you€wind€up€in€my€LosÌAngeles€office,€free€of€charge.Ì€€€€€€€€MS.€HARRINGTON:€€Now,€I€guess€that€one€reasonÌthat€you're€raising€this€is€that€it's€conceivable€thatÌthe€recipient€might€want€to€pass€back€the€costs.Ì€€€€€€€€MR.€R.€GORDON:€€Don't€know€that,€don't€knowÌthat.Ì€€€€€€€€MS.€HARRINGTON:€€But€that's€a€possibility.Ì€€€€€€€€MR.€R.€GORDON:€€That's€a€possibility,€yes.Ì€€€€€€€€MS.€HARRINGTON:€€And€then€we€wind€up€in€aÌquasi-pay-per-call€sort€of€situation,€at€least.Ì€€€€€€€€MR.€R.€GORDON:€€Yeah.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€well€I€very€muchÌappreciate€the€information.Ì€€€€€€€€MR.€R.€GORDON:€€And€this€is€getting€back€to€oneÌof€the€other€issues€that€was€raised€here€about€passingÌANI€and€passing€CLI.€€While€we€believe€that€those€areÌvery€essential€things€for€risk€management€and€for€fraudÌand€for€consumer€protection,€they€also€have€to€be€dealtÌwith€very€carefully,€and€I€think€the€European€modelÌÇthere€where€you€have€to€be€specifically€in€the€riskÌmanagement€or€fraud€control€business€to€receive€CLI,€theÌequivalent€of€ANI,€is€a€good€one,€but€it€is€madeÌavailable€when€the€information€services€industry€wantsÌto€reduce€risk€and€reduce€fraud,€the€European€carriersÌdo€pass€CLI€under€a€specific€licensing€agreement.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€we€have€questions€fromÌAdam€and€Mark.Ì€€€€€€€€MR.€COHN:€€I€just€wanted€to€ask€if€AT&T€and€MCIÌor€perhaps€other€parties,€including€TSIA,€couldÌsupplement€the€record€with€information€about€0-800Ìservice.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€Jim€from€AT&T€nods€yes.Ì€€€€€€€€MR.€BOLIN:€€I€can€try.€€I€don't€know€much€aboutÌit.Ì€€€€€€€€MR.€HERTZENDORF:€€I€just€wanted€to€know€whetherÌthere€is€also€some€kind€of€international€version€of€aÌ900€number€service€that€the€ITU€is€working€on.€€IÌthought€I€read€something€like€that,€and€I€guess€it'sÌcalled€0-900.€€Maybe€you€can€supplement€the€record€onÌthat,€too,€and€maybe€Richard€has€something€to€say€aboutÌthat.Ì€€€€€€€€MR.€R.€GORDON:€€I€am€not€personally€aware€ofÌwhere€they€are€on€international€pay-per-call€on€theÌ0-900€platform.€€I€was€at€a€meeting€in€Dublin€about€aÌÇyear€and€a€half€ago€in€which€there€were€some€discussionsÌabout€a€European€prefix,€primarily€because€the€sameÌproblem€that€existed€here€in€the€United€States€with€976Ìand€550,€being€local€service€numbers€only,€in€Europe,Ìwhen€you€live€in€Brussels,€you€are€30€minutes€from€fourÌother€countries.€€So,€there€is€a€European€effort€that€IÌhave€been€somewhat€aware€of,€and€I€will€contact€myÌcolleague,€David€Wiseman,€in€London,€who€is€an€expert€onÌthis,€and€ask€him€to€give€us€some€current€informationÌand€supplement€the€record.Ì€€€€€€€€MR.€BOLIN:€€I€literally€learned€in€a€phone€callÌthis€morning€that€the€ITU€is€working€on€an€internationalÌ900€number.€€I'm€told€that€it's€coming€along.€€I'll€seeÌwhat€we€can€find€out€and€supplement€the€record.Ì€€€€€€€€MS.€HARRINGTON:€€Is€there€any€possibility,€doÌyou€think,€Jim€or€Richard€or€anyone€else€who€would€likeÌto€comment€on€this,€that€some€of€the€vendors€who€makeÌthese€0-800€and€possibly€0-900€services€available€toÌtheir€business€customers€to€make€available€to€consumersÌcould€work€on€some€sort€of€voluntary€standards€for€priceÌdisclosure€in€the€event€that€costs€are€being€passed€backÌto€end€use€consumers?Ì€€€€€€€€MR.€R.€GORDON:€€I€can€only€address€the€0-800Ìissue.Ì€€€€€€€€MS.€HARRINGTON:€€Yes.ÌÇ€€€€€€€€MR.€R.€GORDON:€€And€I€don't€think€personallyÌthat€that's€going€to€be€possible,€because€the€actualÌdomain€ownership€of€the€number€is€resident€with€theÌcarrier€who€first€obtained€the€number.€€In€other€words,Ìif€I'm€in€Iceland€and€the€Icelandic€telephone€companyÌmade€the€application€for€me,€then€I'm€governed€by€thatÌparticular€set€of€rules€for€Iceland€irrespective€ofÌwhere€I€may€use€that€number.Ì€€€€€€€€Now,€the€number€is€also€portable.€€So,Ìportability€has€been€recognized.€€There€is€anÌinternational€standard€that's€required,€and€I€canÌtransfer€it,€but€I'm€governed€by€the€rules€of€theÌcarrier€who€first€got€me€the€number€until€I€move€theÌnumber€to€another€carrier.€€Again,€it's€--€it'sÌimportant€to€understand€that€this€is€a€--€it's€a€billingÌand€a€numbering€scheme,€and€I€don't€mean€scheme€from€theÌnegative€standpoint,€the€European€standpoint.€€It's€anÌoverlay€plan.Ì€€€€€€€€If€you€turn€a€0-800€number€on,€you€have€to€tellÌthe€network€where€to€take€calls€from€and€where€to€takeÌcalls€to€and€how€to€get€them€there.€€If€you€turn€it€onÌin€Europe,€you€don't€turn€it€on€in€ten€countries,€youÌturn€it€on€wherever€you€have€international€connections.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€Jim,€your€tent€is€up.Ì€€€€€€€€MR.€BOLIN:€€Don't€have€any€information€on€thatÌÇsubject.€€Are€we€ready€to€move€on?Ì€€€€€€€€MS.€HARRINGTON:€€Sure.Ì€€€€€€€€MR.€BOLIN:€€Okay,€two€potential€scams,€one€ofÌwhich€may€not€really€be€in€the€scope€of€thisÌproceeding.€€As€I'm€sure€you're€aware,€the€888€or€NPA,Ìnot€an€area€code,€is€up€and€running€now€for€toll-freeÌcalling.€€To€date,€the€users€of€800€numbers€have€beenÌpermitted€to€reserve€and/or€block€out€the€same€888Ìnumbers.€€I€don't€know€for€a€fact€that€MCI€has€reservedÌ888-Collect,€but€that€would€be€one€example.Ì€€€€€€€€As€number€exhaust€becomes€increasingly€aÌproblem,€as€other€NPAs€are€opened€up€for€toll-free,€myÌprediction€is€the€pressure€is€going€to€get€to€be€suchÌthat€that€kind€of€reservation€system€will€not€beÌpermitted€anymore.€€If€every€time€you€open€a€new€NPA,Ìyou€can€reserve€the€numbers€that€are€in€use,€you€don'tÌhave€a€lot€of€numbers.Ì€€€€€€€€If€I'm€right€in€my€prediction,€I€think€you€mightÌstart€see€scams€that€someone€opens€up€whatever€the€tollÌfree€SAC€is,€if€it's€999,€999-Collect,€999-Flowers,Ì999-Call€AT&T.€€You€have€a€situation€where€a€consumerÌthinks€they€are€dealing€with€one€company€with€which€theyÌhave€a€relationship€or€which€they€believe€they€can€trustÌand€in€fact€they€are€dealing€with€another€entity.€€IÌthink€that€could€be€coming€down€the€road.ÌÇ€€€€€€€€MS.€HARRINGTON:€€Thank€you.€€It's€useful€to€knowÌthat,€depressing€to€know€that.Ì€€€€€€€€MS.€SCHWANKE:€€Isn't€there€another€new€--Ì€€€€€€€€MR.€R.€GORDON:€€877.Ì€€€€€€€€MS.€SCHWANKE:€€Is€that€already€currently€inÌuse?Ì€€€€€€€€MR.€R.€GORDON:€€It's€under€development,€I€think,Ìisn't€it?Ì€€€€€€€€MR.€R.€GORDON:€€April€4th.€€Better€than€AprilÌFools.Ì€€€€€€€€MS.€HARRINGTON:€€We€are€at€the€point€of€the€dayÌwhere€we€want€to€open€up€for€public€participation,€butÌJim€wanted€to€say€one€last€thing.Ì€€€€€€€€MR.€BOLIN:€€If€I€may,€there€is€one€other€scamÌpotentially,€not€technology€related,€but€new€Section€228Ìof€the€Communications€Act,€47€USC€228€contains€anÌexception€to€the€presubscription€requirement€for€800Ìcalls€for€purchase€of€goods€and€services€that€are€notÌinformation€services.€€I€think€that€the€creative€andÌunscrupulous€provider€could€argue€that€they€provide€aÌservice,€they€charge€for€some€goods.€€Say€if€it's€aÌpsychic€line,€we€are€going€to€produce€a€deck€of€tarotÌcards€that€cost€us€a€quarter,€we€are€charging€20€bucksÌfor€the€tarot€deck,€the€reading€is€free.€€Call€theÌnumber,€we€will€send€you€the€tarot€deck€and€charge€youÌÇ20€bucks.€€Because€the€call€was€free,€we€are€onlyÌcharging€you€for€goods,€we€don't€have€to€use€aÌpresubscription€arrangement.€€We€flagged€this€to€ourÌcomments€in€the€FCC€in€their€proceeding.€€We€think€thatÌthat€is€a€loophole€in€the€law€unless€it€is€closed€by€theÌFCC€and€FTC.Ì€€€€€€€€MS.€HARRINGTON:€€And€you€have€commented€on€thatÌto€the€FCC?Ì€€€€€€€€MR.€BOLIN:€€It€is€attached€to€our€comment€thatÌwe€submitted€in€this€proceeding.Ì€€€€€€€€MS.€HARRINGTON:€€Okay,€good,€thank€you.Ì€€€€€€€€Public€participation,€two€people€at€least€haveÌindicated€to€me€that€they€would€like€to€make€statementsÌand€converse€during€this€time,€and€you€know€who€youÌare.€€Is€there€anyone€else€other€than€the€two€who€I€haveÌspoken€with€who€would€like€to€participate€during€thisÌsession?Ì€€€€€€€€All€right,€we€will€hear€from€this€gentlemanÌfirst,€please,€thank€you.Ì€€€€€€€€MR.€ANGEL:€€I€have€to€catch€a€plane,€so€I€haveÌto€be€leaving€right€now,€and€I€wanted€to€thank€the€FTCÌand€everyone€participating€for€giving€the€ISA€anÌopportunity€to€participate.€€We€do€want€to€supplementÌthe€record,€particularly€in€the€areas€of€billing€andÌcollection.€€We€have€had€a€lot€of€discussion€followingÌÇour€discussion€yesterday,€and€we€just€would€like€to€knowÌhow€you€want€to€receive€that.Ì€€€€€€€€MS.€HARRINGTON:€€Send€it€in€to€the€secretary,Ìthe€same€way€you€would€file€a€comment.€€Alan€has€to€takeÌleave,€as€well,€and€the€rest€of€you€--€no€one€else€mayÌleave.€€This€gentleman€has€been€listening€to€us€allÌday.Ì€€€€€€€€Go€ahead,€please.Ì€€€€€€€€MR.€BARTEL:€€I€had€a€hand€out,€I€hope€everyoneÌgot€it€--Ì€€€€€€€€MS.€HARRINGTON:€€What's€your€name?Ì€€€€€€€€MR.€BARTEL:€€Richard€Bartel.€€I€am€representingÌthe€Communications€Venture€Services,€Inc.,€and€we€are€aÌconsulting€firm€in€Bethesda,€Maryland,€and€our€clientsÌare€information€service€providers,€and€in€particularÌclients€who€are€--€have€achieved€or€received€numberÌassignments€in€the€555€exchange.€€I€personally€am€alsoÌappearing€here.Ì€€€€€€€€We€have€a€ride-sharing€service,€one€of€ourÌclients€does,€which€is€a€tax-exempt,€nonprofit,Ì501(c)(3)€information€service.€€I€am€also€personally€aÌmember€of€the€North€American€Numbering€Council€DisputeÌResolution's€Task€Force.€€I€cannot€speak€for€themÌtoday.€€They€are€a€federal€advisory€committee€to€theÌFederal€Communications€Commission.ÌÇ€€€€€€€€Our€company€is€also€a€participant€in€theÌIndustry€Numbering€Committee,€and€a€lot€of€these€issuesÌon€NPA€exhaust€and€so€forth€have€come€up€there.Ì€€€€€€€€I'm€not€sure€how€to€go€about€this.€€Should€IÌread€my€comments€into€the€record€or€just€--Ì€€€€€€€€MS.€HARRINGTON:€€No,€your€comments€will€beÌincluded€in€the€record,€your€written€comments,€so€if€youÌcould€tell€us€what€your€most€important€concerns€are.Ì€€€€€€€€MR.€BARTEL:€€Okay,€I'm€assuming€that€this€is€notÌa€negotiated€rulemaking€proceeding.Ì€€€€€€€€MS.€HARRINGTON:€€That's€right.Ì€€€€€€€€MR.€BARTEL:€€First€of€all,€we€have€an€interestÌin€the€definition€of€pay-per-call,€and€our€opinion€isÌthat€from€a€regulator's€point€of€view,€this€is€a€veryÌsticky€thicket,€so€to€speak,€and€we€feel€that€theÌdefinition€of€pay-per-call€should€draw€the€distinctionÌbetween€those€things€that€are€operations€of€a€commonÌcarrier€versus€those€things€that€are€informationÌservices€provided€over€common€carrier€circuits,€so€thatÌyou€can€make€a€distinguishing€mark€between€regulatoryÌjurisdictions,€as€well,€between€FCC€and€FTC,€and€defineÌthe€overlap.Ì€€€€€€€€So,€therefore,€we€propose€that€pay-per-call€beÌdefined€as€any€charges€that€are€made€above€and€beyondÌthe€fair,€reasonable€and€nondiscriminatory€charges€thatÌÇare€made€for€the€transport€by€the€common€carrier,€theÌcosts€associated€there,€such€that€you€can€define€whichÌpart€of€a€call€was€pay-per-call,€what€part€is€commonÌcarriage€charges.Ì€€€€€€€€Secondly,€we€would€like€to€propose€somethingÌbold€that€may€take€into€--€may€solve€a€lot€of€theÌproblems€that€I'm€hearing€here€today.€€I'll€give€anÌanalogy,€when€they€build€a€new€college€campus,€theyÌplant€the€grass,€and€they€put€up€signs€that€say€don'tÌstep€on€the€grass,€but€after€a€while,€you€take€aerialÌphotographs,€you'll€notice€that€there€are€foot€pathsÌthat€develop€all€over€the€campus€where€people€walk€allÌthe€time.Ì€€€€€€€€So,€the€solution€to€that€problem€is€not€to€sendÌpolice€out€on€the€foot€paths€to€try€to€stop€people€butÌto€build€sidewalks€where€the€common€foot€paths€are,€andÌfinally€you€end€up€with€a€well-designed€campus,€forÌexample,€and€I€think€that€the€regulatory€analogy€here€isÌthat€it€seems€from€the€testimony€here€today€and€theÌevidence€in€the€record€that€I've€seen€so€far€that€theÌcharges€below€$2€are€really€not€a€big€chargebackÌproblem,€not€a€big€consumer€problem€for€issues€ofÌcharges€below€$2.Ì€€€€€€€€So,€what€we€would€propose€is€that€the€preambleÌrequirements€and€the€pay-per-call€definition€and€theÌÇdisclosure€requirements€begin€at€the€point€where€theÌpremium€charge€for€the€call€reaches€$2,€so€that€there€isÌa€very€significant€period€of€time€in€some€instancesÌwhere€the€disclosure€can€be€made€rather€than€trying€toÌtalk€fast€in€18€seconds,€where€there€is€this€affirmativeÌarea€where€the€consumer€is€well€versed€on€what€they€areÌgetting€themselves€into,€and€I€think€that€if€you€allowÌthe€carriers€to€go€ahead€and€charge€that€first€$2€andÌhave€the€presumption€shift€to€the€carrier€after€$2€andÌbe€in€the€consumers'€--€I'm€sorry,€in€the€carrier'sÌinterest€the€first€$2€and€the€consumers'€interest€afterÌthe€$2€point,€that€you€will€find€that€you're€going€toÌhave€fewer€chargebacks,€fewer€consumer€complaints€toÌboth€carriers€and€to€the€FTC,€and€there€will€be€anÌopportunity€in€that€first€period€of€time€for€not€onlyÌadequate€disclosure€but€also€for€promotional€purposesÌfor€the€information€service€provider.Ì€€€€€€€€So,€therefore,€we€suggest€that€there€be€a€$2Ìthreshold€on€the€premium€over€transport€where€there€isÌan€irrefutable€premium€charge€there€where€the€consumerÌreally€does€not€have€the€--€basically€the€first€$2€areÌthe€cost€of€the€call,€and€after€that,€you€get€into€theÌpoint€where€the€burden€shifts€to€the€consumer€to€showÌthat€the€call€was€fraudulently€obtained€or€that€theyÌwere€led€into€something€that€they€didn't€think€they€wereÌÇgetting€into.€€That€takes€care€of€the€clear€andÌconspicuous€standard€that€appears€to€be€in€theÌadministrative€law.Ì€€€€€€€€On€the€comments€of€AT&T€regarding€the€additionalÌcodes,€there€are€--€there€is€877€coming€in€April€of€nextÌyear.€€There€is€630€new€area€codes€coming€out€in€theÌnext€15€to€20€years.€€NPA€exhaust€is€now€estimated€byÌNAPA€to€be€around€the€year€2031€under€currentÌconditions,€assuming€that€there€is€some,€you€know,€greatÌcenter€pooling€and€some€other€issues€that€occur,€andÌtherefore,€the€consumer€is€less€and€less€likely€now€toÌdecide€what€they€are€getting€themselves€into€based€uponÌthe€first€three€digits€they€call.Ì€€€€€€€€800€is€toll-free,€but€very€few€people€know€aboutÌ888,€or€it€is€getting€better€and€better.€€Almost€nobodyÌknows€about€877,€and€in€addition,€on€the€other€side€ofÌthe€coin,€there€are€a€lot€of€pay-per-call€codes€thatÌpeople€are€not€aware€of.Ì€€€€€€€€NYNEX€itself,€in€a€study€they€did,€they€haveÌover€a€dozen€to€20€pay-per-call€prefixes€that€are€notÌrecognized€by€the€public€as€pay-per-call,€and,€ofÌcourse,€everyone€knows€about€976,€but€there€is€a€wholeÌslew€of€other€types€of€codes€that€are€intra-LATA,Ìintrastate€pay-per-call.€€I€don't€know€if€that's€theÌsubject€of€this€proceeding,€but€the€states€attorneysÌÇgeneral€might€be€interested€in€that.Ì€€€€€€€€So,€therefore,€the€solution€may€be€not€to€try€toÌwrangle€around€trying€to€figure€out€which€area€code€isÌpay-per-call€and€which€is€not€but€to€allow€pay-per-callÌto€occur€on€any€code€sequence€provided€that€theÌdisclosure€requirements€trigger€at€the€$2€premium€level,Ìand€that€will€clean€up€and€clear€up€a€lot€of€wranglingÌand€regulatory€heartburn€and€discussions€and€minutia€andÌdetail€about€that€first€18€seconds€of€the€call.Ì€€€€€€€€And€I€guess€I€--€I€don't€know€how€much€time€IÌhave€here,€but€my€comments€and€our€comments€in€here€goÌinto€much€more€detail€in€these€areas,€and€we€would€likeÌto€thank€you€for€the€time€today€to€make€a€presentation.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€Mr.€Bartel,€it'sÌvery€thoughtful,€and€I€was€trying€to€figure€out€how€oldÌI'll€be€in€the€year€2031,€and€hopefully€I'll€be€retiredÌwhen€we€have€complete€exhaustion€of€dialing€codes.Ì€€€€€€€€Let's€see,€here€we€go.Ì€€€€€€€€MR.€LOADER€nick€Loader,€Lo-Ad€Communications,Ìthanks€again€for€a€chance€to€give€some€comments.€€I€willÌbe€brief.Ì€€€€€€€€There€are€a€number€of€questions€that€were€askedÌtoday€that€were€not€answered.€€One€in€particular€of€theÌgentleman€from€the€Florida€PSC€had€a€phone€bill€from€aÌconsumer€or€a€constituent,€I€assume,€that€indicated€thatÌÇthe€company€had€charged€in€excess€of€$5€per€minute€for€aÌcall€terminating€in€Canada.€€I've€been€in€this€businessÌand€had€quite€a€bit€of€exposure€to€international€calls.ÌI€was€unaware€how€you€could€get€away€with€something€likeÌthat.€€I€do€trust€before€the€FTC€offers€any€regs€thatÌsome€type€of€investigation€to€see€that€these€companiesÌlike€these€aren't€violating€any€existing€framework€orÌregulatory€framework€that€may€exist€out€there€coveringÌhow€you€can€get€away€with€charging€those€kind€of€ratesÌfor€a€normal€phone€call€to€Canada.Ì€€€€€€€€In€regards€to€a€question€brought€up€by€Adam€onÌthe€matter€of€fraud€and€fraud€calls,€he€posed€a€questionÌof€how€the€payment€cycles€are.€€They€are€anywhere€fromÌ90€to€120€days€for€foreign€carriers.€€Whenever€we€areÌmade€aware€of€fraud€by€any€regulatory€agency€or€anÌassociation€makes€us€aware€of€anything,€there€is€stillÌsuch€a€lag€in€the€time€length€of€the€revenue€thatÌultimately€the€offending€party€will€very€rarely€end€upÌwith€any€significant€sums€of€money€as€a€result€of€thatÌfraud,€and€we€encourage€any€regulatory€agency,€state€orÌfederal,€to€contact€either€the€trade€associations,€andÌthey€can€always€contact€the€offending€bureaus,€andÌbecause€of€the€nature€of€our€contracts,€we€can€moveÌextremely€quickly€to€shut€those€numbers€down€withoutÌeven€a€phone€call€to€the€--€to€the€perpetrator€of€it,ÌÇand€we€invite€you€to€participate€in€helping€us€policeÌthe€problems€that€exist€in€this€business.Ì€€€€€€€€I€would€also€like€to€make€a€statement€regardingÌthe€aspect€of€--€I€heard€again€today€again€and€againÌabout€somebody€can€get€in€your€house€and€rack€up€allÌthese€unauthorized€charges.€€I€seriously€don't€believeÌthat's€a€significant€problem,€but€I€offer€a€briefÌexample€here.€€We€offered€a€900€service€in€Chicago.€€AÌmentally€retarded€man€made€a€number€of€--€thousands€ofÌdollars€actually€worth€of€phone€calls€to€the€services.ÌThe€press€got€ahold€of€that,€and€they€approached€theÌbilling€entity€with€would€you€--€are€you€going€to€tryÌand€collect€these€charges?€€The€answer€is,€of€course,Ìno,€we€would€rather€block€a€call€like€that€than€pursueÌit€and€collect€it.Ì€€€€€€€€Over€the€next€14€days,€there€was€a€200€percentÌincrease€in€chargebacks€and€over€80€percent€of€themÌcited€mental€retardation€or€diminished€capacity€ofÌsomeone€in€the€house€as€a€result€of€those€calls.Ì€€€€€€€€What€I'm€trying€to€get€to€here€is€I€think€a€lotÌof€where€you€guys€are€going€to€try€and€regulate€theseÌrare€occurrences€of€where€somebody€comes€into€somebody'sÌhome€and€steals€services€or€what€have€you,€what€isÌhappening€is€you€are€causing€a€self-fulfilling€prophecyÌhere€where€people€know€they€can€get€out€of€paying€theÌÇcharge€as€a€result€of€that,€it's€a€given,€nobody€wantsÌto€try€and€sustain€it.€€We€must€move€to€communicate€toÌthe€consumer€that€he€has€a€point€of€sale€in€his€house.ÌThese€points€of€sale€for€new€scams€and€new€regulationsÌand€what€have€you,€television,€satellite,€cable,ÌInternet€service,€Internet€access,€we€need€to€make€aÌconcerted€effort€to€educate€that€these€are€points€ofÌsale,€and€you€need€to€protect€those€points€of€sale,Ìbecause€you€can't€just€run€around€saying,€Oh,€well,€youÌknow,€somebody€else€walked€in€on€me€and€did€it€when€IÌwasn't€looking.Ì€€€€€€€€I€think€overall€that€can€be€the€best€benefit€toÌthe€consumer€and€to€the€industry€as€a€whole,€that€theÌnumber€one€benefit€is€that€these€consumers€that€areÌusing€this€as€an€excuse€are€really€--€we€know€we€handleÌall€of€the€tasks€of€the€consumers,€but€the€penaltiesÌhave€now€become€at€least€a€50€percent€increase€in€ratesÌto€the€honest€and€viable€people€that€are€willing€toÌaccept€and€pay€for€their€responsible€usage€of€theseÌservices,€and€it€is€a€rather€small€percentage€of€theseÌpeople€that€amount€to€a€tremendous€dollar€value€of€theÌchargebacks.Ì€€€€€€€€I€thank€you€all€for€your€time.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you€very€much.Ì€€€€€€€€Jill?ÌÇ€€€€€€€€MS.€SANDFORD:€€Yes,€I€would€like€to€ask€thisÌgentleman€a€question.€€You€just€stated€in€terms€of€theÌtime€period€between€which€the€charge€is€made€and€thenÌthe€information€provided€is€paid.Ì€€€€€€€€MR.€LOADER:€€Yeah,€the€typical€carrierÌsettlement€period,€it€varies€by€carrier€and€by€country,Ìbut€I€don't€know€of€any€case€where€it's€faster€than€60Ìdays,€typically€averages€90,€and€can€often€be€as€far€outÌas€120.Ì€€€€€€€€MS.€SANDFORD:€€Okay,€when€--€because€IÌunderstand€that€there€is€also€a€time€lag€between€theÌtime€a€consumer€makes€a€call€and€it€actually€appears€onÌthe€bill.€€Is€this€the€same€time€period€or€would€this€beÌafter€the€consumer€has€gotten€a€bill?Ì€€€€€€€€MR.€LOADER:€€The€time€period€I'm€referring€toÌrefers€to€the€60€days€after€close€of€calendar€month,€andÌthat€is€a€very€rare€case.€€Typically€AT&T€pays€a€lot€ofÌthe€smaller€carriers€much€faster€than€an€MCI€or€a€SprintÌwould.Ì€€€€€€€€MR.€R.€GORDON:€€I€think€what€you're€talkingÌabout,€you€are€talking€about€a€stack-on€time.€€If€a€callÌis€made€today,€it€might€be€processed€and€put€on€a€billÌon€the€5th€of€July.€€What€Nick€is€talking€about€is€it'sÌfrom€the€5th€of€July€probably€120€days€before€theÌinformation€provider€is€going€to€get€that€cash.ÌÇ€€€€€€€€MR.€LOADER:€€It€puts€us€in€a€unique€position€toÌbe€able€to€stop€anyone€benefitting€by€doing€theseÌillegal€schemes,€but€what€it€does€require€that€theÌregulatory€agencies€and€bodies€that€exist€communicate€toÌus.€€A€lot€of€times€you€know€something€is€going€on€andÌare€not€--€and€do€not€have€the€ability€to€move€asÌquickly€as€we€can€on€it.€€I€don't€have€to€do€a€lot€ofÌevidentiary€findings.€€You€tell€me€you€don't€likeÌsomething,€my€contract€says€that's€it,€you're€out€ofÌbusiness,€buddy,€no€further€excuse.Ì€€€€€€€€MS.€SANDFORD:€€That's€interesting,€because€whatÌwe're€finding€when€we€do€initiate€an€investigation€isÌthere€is€a€time€lag€between€the€time€that€the€consumerÌallegedly€made€the€call,€it€may€be€30,€60€days€beforeÌit's€on€the€consumer's€phone€bill.€€By€that€point,€whenÌwe€followed€the€money,€the€IP€is€gone,€the€money€hasÌalready€passed€on,€the€factor€may€be€at€the€end€of€theÌchain€as€opposed€to€the€IP,€and€often€times€we€are€toldÌthat€there€is€nothing.Ì€€€€€€€€MR.€R.€GORDON:€€Okay,€you€are€talking€aboutÌdomestic€situations.€€Nick€is€talking€aboutÌinternational€situations.Ì€€€€€€€€MR.€LOADER:€€But€you€have€a€very€viable€point.ÌThere€are€certain€companies€that€are€buying€theÌpayables,€and€almost€every€single€scam€that's€beingÌÇperformed€right€now,€they€are€being€sold€to€a€factorÌcompany.€€I€suggest€this€to€you,€you€make€the€factorÌcompany€pay€the€redress€and€you'll€stop€that€actionÌalmost€immediately.Ì€€€€€€€€MS.€HARRINGTON:€€Well,€thank€you€all€very€much.ÌWe€have€had€I€think€excellent€discussion€over€the€pastÌtwo€days.€€We€have€a€very€rich€record€at€this€point.€€WeÌhave€your€written€comments.€€We€have€the€record€of€theseÌdiscussions.Ì€€€€€€€€We€are€in€the€advanced€notice€of€proposedÌrulemaking€phase€of€this€rule€review,€and€the€recordÌremains€open.€€So,€if€anyone€would€like€to€supplementÌthe€record,€you€may€send€whatever€you€have€into€theÌCommission€through€our€Office€of€Secretary.Ì€€€€€€€€The€procedure€here€is€that€at€some€point€in€theÌnear€future,€the€staff€working€on€this€matter€will€makeÌa€recommendation€to€the€Commission€for€further€action,Ìlikely€the€publication€of€a€notice€of€proposed€ruleÌmaking,€and€then€the€Commission€will€be€making€an€actualÌproposal€for€perhaps€changes€to€this€rule,€and€we€willÌagain€invite€your€comment.€€We€will€invite€your€writtenÌcomment,€and€it's€very€likely€that€we€will€have€anotherÌproceeding€like€this.€€We€like€these.Ì€€€€€€€€We€hope€you€do,€but€we€want€to€make€sure€thatÌwhen€the€Commission€is€faced€with€the€recommendationÌÇthat€it€take€final€regulatory€action€in€this€area€thatÌit€does€so€equipped€with€the€richest€possible€record€andÌthe€richest€exchange€of€ideas€and€suggestions€so€that€itÌcan€do€right€both€by€consumers€and€by€this€very€excitingÌand€vibrant€and€growing€industry.Ì€€€€€€€€I€see€that€Richard,€your€tent€is€up.€€Did€youÌwant€to€say€something?Ì€€€€€€€€MR.€R.€GORDON:€€I€did.€€I€wanted€to€formallyÌsubmit€into€the€record€the€TSIA€Code€of€Ethics.€€We€areÌalso€going€to€be€sending€to€everyone€that€we€have€a€nameÌand€address€for€a€copy€of€this,€particularly€theÌconsumer€groups€and€attorney€generals.Ì€€€€€€€€I'd€like€to€also€make€sure€that€everyone€isÌaware€of€the€fact€that€as€a€supplement€to€the€code€ofÌethics,€there€is€a€publisher's€code€of€ethics€for€allÌthe€members€of€the€TSIA.Ì€€€€€€€€And€I€would€like€to€first€and€foremost€thank€theÌCommission€and€secondarily€thank€all€the€participantsÌhere€and€encourage€those€of€you€that€might€have€viewsÌthat€are€somewhat€different€than€ours€to€communicateÌwith€us.€€I€think€consensus€works,€regulation€onlyÌcauses€additional€heartache€and€confusion€sometimes,Ìtrying€to€interpret€what€somebody€thought€they€said.ÌI'm€not€saying€that€regulation€is€bad,€but€if€we€canÌcome€to€consensus,€I€think€that€we€can€move€a€lot€moreÌÇquickly.Ì€€€€€€€€In€closing€I€would€like€to€say€that€MuldovaÌissue€that€was€raised,€I€think€this€morning€orÌyesterday,€the€TSIA€notified€Congress,€notifiedÌCongressman€Gordon€specifically,€that€we€knew€that€thatÌwas€going€to€happen€about€a€week€before€it€happened.€€WeÌdidn't€know€where€or€how€it€was€going€to€happen,€but€weÌknew€it€was€going€to€happen.Ì€€€€€€€€We€are€very€actively€self-policing,€and€when€theÌbeeper€scam€took€place,€and€I€think€that€one€of€theÌpeople€up€here€found€out€about€that€very€early€on,Ìimmediately€the€service€bureau€was€notified,€and€thatÌwas€brought€down.€€We€don't€want€this€type€of€behavior,Ìand€we€are€doing€everything€we€can€within€our€power€toÌstop€it€at€the€source.Ì€€€€€€€€Thank€you.Ì€€€€€€€€MS.€HARRINGTON:€€Thank€you,€and€thank€you€allÌvery€much,€very€much.Ì€€€€€€€€I'm€sorry,€Mr.€Bartel?Ì€€€€€€€€MR.€BARTEL:€€I€have€a€procedural€question.Ì€€€€€€€€MS.€HARRINGTON:€€Yes,€procedural€question.Ì€€€€€€€€MR.€BARTEL:€€How€long€is€the€ANPR€docket€goingÌto€remain€open,€and€secondly,€has€it€been€decided€thatÌthe€Internet€issues€are€going€to€be€a€separateÌproceeding?ÌÇ€€€€€€€€MS.€HARRINGTON:€€The€two€questions,€how€long€isÌthe€ANPR€record€open€and€has€it€been€decided€thatÌInternet€issues€will€be€dealt€with€in€a€separateÌproceeding.€€The€answer€to€the€first€question€isÌgenerally€as€a€practical€matter€we€try€to€keep€ourÌrecord€open€until€the€point€that€we€close€comment€on€aÌnotice€of€proposed€rule.€€So,€you€know,€we€have€set€someÌdeadlines€and€asked€for€comments€to€be€submitted€byÌcertain€points,€but€this€is€an€agency€that€tries€veryÌmuch€to€accommodate€the€desire€of€people€to€have€a€say.ÌSo,€we€would€invite€you€to€continue€to€submitÌinformation€if€you€care€to€do€that.Ì€€€€€€€€On€your€second€question,€I€really€would€notÌanticipate€that€there€would€be€very€much,€if€any,Ìproposal€in€this€rulemaking€to€deal€with€InternetÌissues,€but€there€may€be€some.€€I€think€it's€also€likelyÌthat€the€Bureau€of€Consumer€Protection€of€the€FTC€willÌinitiate€some€separate€mechanism€for€a€carefulÌexamination€of€the€applicability€of€all€of€our€tradeÌregulation€rules,€guides€and€Section€5€advertisingÌprinciples€to€Internet€advertising,€selling€andÌmarketing,€not€necessarily€a€regulatory€proceeding,€butÌa€proceeding€to€explore€those€issues€with€people€whoÌhave€information€and€an€interest.Ì€€€€€€€€And€I'm€really€needing€to€end,€and€I€wouldÌÇinvite€if€you€have€further€questions,€I'll€--Ì€€€€€€€€MR.€BARTEL:€€Real€quick€question,€is€there€anyÌinter-agency€coordination€between€this€agency€and€theÌFCC€on€this?Ì€€€€€€€€MS.€HARRINGTON:€€Yes.Ì€€€€€€€€MR.€BARTEL:€€Thank€you.Ì€€€€€€€€MR.€BOLIN:€€Can€I€ask€a€procedural€question?ÌThere€is€going€to€be€a€fair€amount€of€supplementalÌmaterial€coming€into€the€record.€€How€can€otherÌparticipants€get€copies€of€this€material?Ì€€€€€€€€MS.€HARRINGTON:€€Is€this€on€the€Internet,€on€theÌweb€site?Ì€€€€€€€€MS.€SCHWANKE:€€If€they€are€submitted€inÌelectronic€form,€they€will€go€onto€our€web€page,€andÌthey€will€also€be€on€the€public€record.Ì€€€€€€€€MS.€HARRINGTON:€€So€submit€them€in€electronicÌform,€and€the€public€record€is€available€in€the€publicÌreference€room.€€We€are€not€going€to€xerox€everythingÌand€send€it€out€to€you,€that€is€not€going€to€happen,€butÌyou€can€obtain€everything€that€is€in€the€record€if€it'sÌnot€on€the€Internet,€but€submit€additional€materials.Ì€€€€€€€€MR.€BOLIN:€€Is€there€a€date€when€they€will€beÌplaced€in€the€reading€room€or€do€we€just€need€to€checkÌperiodically?Ì€€€€€€€€MS.€HARRINGTON:€€Check€periodically.ÌÇ€€€€€€€€Thank€you€very€much,€very€much.Ì€€€€€€€€òò(Whereupon,€at€4:51€p.m.,€the€meeting€wasÌconcluded.)Ìóó€€€€€€€€€€€€€€€-€€€€-€€€€-€€€€-€€€€-ÌÇòò€€€€€€C€E€R€T€I€F€I€C€A€T€I€O€N€€€O€F€€€R€E€P€O€R€T€E€RÌóó€ÌDOCKET/FILE€NUMBER:€òòR611016ÌóóCASE€TITLE:€€òòPAY-PER-CALL€RULEMAKINGÌóóMEETING€DATE:€€òòJUNE€20,€1997Ìóó€Ì€€€€€€€€I€HEREBY€CERTIFY€that€the€transcript€containedÌherein€is€a€full€and€accurate€transcript€of€the€notesÌtaken€by€me€at€the€hearing€on€the€above€cause€before€theÌFEDERAL€TRADE€COMMISSION€to€the€best€of€my€knowledge€andÌbelief.Ì€Ì€€€€€€€€€€€€€€€€€€€€€€€€€DATED:€€6/27/97Ì€€€€€€€€€€€€€€€€€€€€€€€€€òò€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ìóó€€€€€€€€€€€€€€€€€€€€€€€€€SUSANNE€Q.€TATEÌ€Ì€Ì€€òò€C€E€R€T€I€F€I€C€A€T€I€O€N€€€O€F€€€P€R€O€O€F€R€E€A€D€EÌóó€Ì€€€€€€€€I€HEREBY€CERTIFY€that€I€proofread€the€transcriptÌfor€accuracy€in€spelling,€hyphenation,€punctuation€andÌformat.Ì€Ì€€€€€€€€€€€€€€€€€€€€òò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ìóó€€€€€€€€€€€€€€€€€€€€€€€€€DIANE€QUADEÌ