FTC wants more authority to hit telecoms scams
By Andy Sullivan, Reuters
18 March 2002
<<Now you are safe to invest, Ray!>>
U.S. trade commission chairman wants more powers to clamp down on telecoms companies deemed to be involved in unfair business practices
The head of the Federal Trade Commission said on Friday that his agency should have more authority to enforce fair-trade practices and pursue scam artists in the rapidly evolving telecommunications arena.
In a speech to the Consumer Federation of America, FTC Chairman Timothy Muris said the consumer-protection agency should be allowed to go after phone companies that make misleading claims in their advertisements, or otherwise bilk consumers.
The FTC has authority to protect consumers from unfair or deceptive business practices, but phone companies fall under the authority of the Federal Communications Commission and state regulatory bureaus.
That may have made sense when the telephone business was monopolized by AT&T Corp., falling into the same "common carrier" category as bus lines and other transport services, Muris said.
But in a deregulated environment in which dozens of phone companies compete for consumer dollars, more oversight is needed, he said.
"The world of telecommunications services has undergone a sea change. The 'common carrier' exemption can stand in the way of meaningful consumer protection. It should be changed," Muris said in prepared remarks provided by an FTC spokeswoman.
FCC officials did not return calls seeking comment.
Muris said he did not believe the FCC was laying down on the job, but that overlapping authority would beef up oversight of the rapidly evolving sector.
"There's plenty of deception to go around," Muris said, according to FTC spokeswoman Cathy MacFarlane.
Current law leaves unclear the exact extent of FTC authority.
For example, the FTC can go after deceptive advertising and abusive telemarketing practices, unless a phone company engages in such behavior, said Eileen Harrington, FTC associate director for marketing practices.
In October 2000, the FTC sued a company called Verity International Ltd., saying it placed unauthorized charges averaging $250 on consumers' phone bills. That case is still dragging on because Verity claims it is a common carrier and thus exempt from FTC actions, Harrington said.
FTC authority overlaps with several other agencies. For example, the FTC has long shared responsibility for reviews of corporate mergers with the Department of Justice.
The two agencies recently proposed a plan to parcel out oversight authority depending on what industry was affected, angering Democratic lawmakers. |
