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. (Note: The actual charge varies by state.)

"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.

TeleTruth