Tom Allibone, tom@teletruth.org, 609-397-2257 Bruce Kushnick, bruce@teletruth.org, 212-777-5418 FOR IMMEDIATE RELEASE --- JUNE 1st, 2004   To Read the Complaints and Other Materials   FCC Line Charge Should Be Removed from All Phone Bills, Teletruth Charges Teletruth Files First Complaint Under the Data Quality Act at FCC — The FCC Line Charge Increases Had Inadequate Cost Support — Quintuple Taxed as Well. Teletruth Files Second Petition with the FCC Over 'Truth-In-Billing".— FCC Line Charge Doesn't Go To Fund the FCC. New York --- Teletruth, a nationwide customer alliance, today petitions the FCC, under the Data Quality Act, to remove and cost justify the FCC Line Charge located on every residential and business telecommunications phone bill per line. This appears to be the first "Data Quality Act" challenge at the FCC, which was established in 2002 for parties to question the data provided by a regulatory agency and request corrections. "Since 2000, residential and small business customers have had an 86% increase in this one charge, from $3.50 to $6.50 a line. That comes to adding $14.3 billion to household charges --- about $125 a line, counting numerous taxes and surcharges," states Bruce Kushnick, Chairman of Teletruth. "Our challenge to the FCC under the Data Quality Act is based on our conclusion that flawed, selective, statistical analysis has maintained then increased this charge over the last two decades without adequate cost support. We are calling for an investigation into the data and analysis used for the increases," adds Tom Allibone, Teletruth, Director of Auditing. "In fact, there are studies done in 1998 that seem to indicate that the original starting price to customers was inflated." This challenge should not come as a surprise to the FCC. Commissioner Copps, in 2002 wrote: "I am troubled that consumers will face an increase in the line charge on their local bill without the Commission undertaking a thorough analysis of forward-looking cost data. In 2000, when the Commission adopted access charge reform for price cap carriers, the Commission pledged that it would initiate and complete before July 1, 2002 a cost review proceeding to ensure that consumers are not overpaying for telecommunications services. This has not been done. Carriers were required to provide, and the Commission stated that it would examine forward-looking cost data. A significant number of carriers, however, submitted summary data without disclosing the inputs used, cost models that were not transparent, or in some cases, models that have been rejected by the state commissions….The Commission then failed to conduct its own independent analysis of the cost data. By failing to undertake the thorough analysis of cost data that was promised in the access reform order, we are neglecting our obligation to consumers." More importantly, the data used for this change was totally without any merit. The phone companies only submitted "summary" data with no back up cost support. Meanwhile, NASUCA, (the National Association of State Utility Consumer Advocates) found that literally 76% of the population would be paying excess charges when this fee was raised above $5.00. Mislabeling the Slush Fund: Truth-in-Billing. In a second claim, Teletruth has filed a petition under the "Truth-in-Billing" guidelines, claiming that the labeling of this charge leads most consumers to believe this charge is funding the FCC, but in fact, it is unmarked revenue to the local phone companies. "Besides the lack of cost support, everything about this charge is misleading. For example, it is not included in the advertised cost of packages. It is stuck in the "Surcharges and Taxes" section on the Verizon New York phone bill, though it is not a tax or a surcharge, and in New Jersey it is in "Basic Service", which is also wrong," stated Tom Allibone of LTC Consulting and Director of Audits for Teletruth. And when the phone companies talk about rate increases, they never include it, even though it went up 86%." "To top it off, in our survey, we found that it was quintuple taxed in New York City and other states. In New York City, it adds an additional 27% to the cost. In fact, it is taxed a "Universal Service Fund" charge, among other taxes and surcharges, even though it is in the "Surcharges and Taxes" section of the Verizon, New York City phone bill," adds Kushnick. Summary of Problems with the FCC Line Charge? This charge is on every wireline residential and business phone bill in America. It has at least 10 names across the US, from FCC Line Charge to "SLC". The advertised price for a bundled "package" does not include this charge. It does not go to fund the FCC as is the common belief. It has continually increased over the last three years - 86% since 2000. it is quintuple taxed in New York City adding 27% to the cost. It is unmarked revenue of billions of dollars back to the phone companies. The FCC never conducted a full cost analysis as to why it should be on the bill. It is not "mandated" or "ordered" by the FCC. It is not part of "Basic" service, even though it’s on many state phone bills. It's not a tax, even though it's in the "Surcharges and Taxes" section of the NY Verizon bill, and some other states. It is not controlled by the state commission even though Verizon NJ says it is. Verizon stated publicly that local phone service hasn't increased in 11 years in New York and 20 years in New Jersey. — They didn’t include the charge. A study done in 1998 indicates that this charge could be inflated 550%. The FCC is now entertaining plans to raise the charge per month in 2004. Teletruth's recent new report "Phone Bill Independence" and the new fact-based expose/novel "The Dirty, Little, Secret Lives of Phone Bills", explains the FCC Line Charge in detail. For more information see http://www.teletruth.org, or call 212-777-5418. Teletruth is an independent, nationwide, customer alliance and is not funded by any telephone company, lobbying or astroturf group or association. Teletruth is a member of the FCC Consumer Advisory Committee.