Consumer Protection

A. Introduction
Antitrust and consumer protection laws share a common goal of
fostering consumer welfare and consumer choice, though they approach
the marketplace from different perspectives. The procompetitive
economic policies underlying antitrust laws promote consumer choice by
protecting competition overall, not individual competitors or consumers.
In contrast, consumer protection laws focus on the behavior of particular
competitors and consumers and promote consumer choice by prohibiting
coercion and deception in the marketplace.
The legal structure for a competitive, deregulated
telecommunications marketplace evolved in a piecemeal fashion until the
enactment of the Telecommunications Act of 1996 (1996 Act).1 Before
the 1996 Act, separate judicial, administrative, and legislative actions at
both federal and state levels shaped the deregulatory process. During that
period, as the industry shifted from pervasive oversight to deregulation
intended to spur competition, the unfair and deceptive practices of some
market participants prompted new consumer safeguards.
This chapter identifies major consumer protection issues in the
deregulated telecommunications marketplace. Broadly considered,
consumer protection analysis could include most regulatory measures
affecting commerce, but this chapter will focus on efforts to curtail unfair
and deceptive practices that deprive or limit a consumers right and
ability to choose among products and services in the telecommunications
industry. Particular practicessome controversialare described along
with the responses contemplated or implemented by federal and state
1. Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56
(1996) (codified as amended at 47 U.S.C. § 151 et seq. [hereinafter 1996
400 Telecom Antitrust Handbook
B. Jurisdiction over Unfair and Coercive Practices in the
Deregulated Telecommunications Marketplace
The telecommunications industry’s transition to a deregulated,
competitive marketplace necessarily involved a restructuring of
consumer safeguards afforded in a previously regulated, monopolistic
market. Before deregulation, the principal oversight of consumer
protection issues fell to state public utility commissions, which had
jurisdiction over local telephone services. While the Federal
Communications Commission (FCC) retained jurisdiction over interstate
services, the FCC was not active on consumer protection issues during
much of this period.
Consumer protection in the regulated telecommunications
marketplace was a function of several factors. First, economic rate
review was designed to make reasonably priced services available on a
nondiscriminatory basis. Second, service terms and conditions in filed
tariffs (performing the function of contracts in a competitive
marketplace) were required to be just and reasonable so as to preclude
coercive, unfair, and deceptive practices. These terms and conditions
typically were reviewed prior to the introduction of the service, when
tariff amendments were proposed by telecommunications carriers. Third,
government regulatory agencies used their comprehensive authority to
address consumer complaints of unsatisfactory service and repair
problems, unfair practices, deceptive advertising, and billing disputes.
Deregulation decreased barriers to entry, reduced legal restraints, and
opened the telecommunications marketplace to many new participants
and practices. Deregulation also resulted in uncertainty regarding
consumer rights, provider obligations, and the authority of government
agencies. When consumers encountered questionable or unscrupulous
practices in the marketplace, they filed complaints with the FCC and
other agencies. FCC statistics reflect that between October 2014 and
June 2017 the FCC received more than 850,000 consumer complaints
(approximately 147,000 concerned billing issues, more than 100,000
about “robocalls,“ and nearly 10,000 relating to “cramming” or
“slamming”). 2 Additionally, telephone and mobile services are
consistently in the top ten list of common consumer complaints at the
Federal Trade Commission, a sister agency that primarily focuses on
non-carriers. The FCCs response to these and other practices are
discussed in the sections that follow.
2. Data, FED. COMMCNS COMMN, available at
Consumer Protection 401
Federal Response to Consumer Protection Issues in
Telecommunications Markets
a. FCC Consumer Protection Jurisdiction and Enforcement
Historically, most consumer telecommunications providers offered
intrastate local telephone services. Under the Communications Act,
intrastate services generally are not subject to FCC oversight and for
decades state agencies (such as public utility commissions) were the
primary regulators of consumer protection issues arising in connection
with telecommunications services. With the proliferation of wireless
telecommunications services, Voice over Internet Protocol (VoIP)
services, and Internet access services that blur the line between interstate
and intrastate communications, the FCC began taking a more active role
in consumer protection matters and pursuing a robust agenda, citing
numerous provisions in the 1996 Act—including Sections 201, 202, and
258—as the basis for its authority, both in regulatory and enforcement
actions. Recent history therefore reflects this more active FCC presence
in consumer protection matters.
The 1996 Act introduced numerous provisions through which the
FCC has asserted jurisdiction over consumer protection issues:
Section 201 mandates that common carriers 3 provide their
common carrier services upon reasonable request, and that all
charges, practices, classifications, and regulations for such
services be just and reasonable;
Section 202 provides that it is unlawful for any common carrier,
with respect to a common carrier service offering, to make any
unjust or unrea sonable discrimination in charges, practices,
classifications, regulations, facilities, or services, or to make or
give any undue or unreasonable preference or advantage to any
person or class of persons;
3. Though the term “common carrier” is often used to refer to
telecommunications providers generally, it in fact has a narrower
statutory definition as follows: “The term co mmon carrieror carrier
means any person engaged as a common carrier for hire, in interstate or
foreign communication by wire or radio or interstate or foreign ra dio
transmission of energy, except where reference is made to common
carriers not subject to this chapter; but a person engaged in radio
broadcasting shall not, insofar as such person is so engaged, be deemed a
common carrier.” 47 U.S.C. §153.

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