NEWSReport No. CC 95-59            COMMON CARRIER ACTION             October 12, 1995

       COMMON CARRIER BUREAU DIRECTS CAPITAL NETWORK SYSTEM TO ADD
            CONSUMER MESSAGE AND LOWER RATES OR JUSTIFY THEM

     The Common Carrier Bureau has directed Capital Network Systems, Inc. (CNSI), an
operator service provider, to add additional information to the recorded messages on its
network and to either reduce its rates or seek to justify them with the Commission.

     Operator service providers (OSPs) are carriers that serve payphones or other phones
available to the public in hotels, motels, airports and other locations.  Consumers using a
public phone for a long-distance call may assume the call will be billed to their own
presubscribed carrier and only later discover they were charged at a much higher rate than
expected.  Recently, these complaints have become the  Commission's second largest source
of telephone service-related complaints.  The complaint level indicates that, although billions
of successful OSP calls take place each year, numerous consumers still use the carrier chosen
by the payphone provider and are surprised and angry when they receive a larger than
expected telephone bill.  The Bureau has responded to these increasing complaints with a
combination of education and enforcement.

     In the past three years, informal complaints received concerning CNSI have increased
significantly.  In response to this level of complaints as well as the level of charges imposed
by CNSI and numerous congressional inquiries, the Bureau's Enforcement Division notified
CNSI that it was opening an investigation of its rates.  Since that notification, CNSI has not
reduced its rates.

     The Order announced today directs CNSI to add within 14 days an audible message
alerting callers using CNSI operator services that its rates are available upon request by
dialing a specified number and to reduce the rates it charges for interstate operator services,
including commissions and surcharges.  If CNSI does not agree to reduce its rates within 30
days, the Order also directs the company to show why it should not add an additional
message alerting consumers to the possibility of higher charges, including rates that may
exceed $10.00 for a one minute call, and to provide within 120 days certain expense,
revenue and investment information.

 (over)
                                   -2-

     The Enforcement Division investigation found that CNSI's maximum interstate OSP
rates substantially exceed those of AT&T for comparable service in every instance and often
by as much as five times even before various commissions and surcharges are applied. 
According to consumer complaints filed with the Commission, some consumers have been
charged more than $10.00 for a one minute call.  The Order uses AT&T's operator services'
rates and charges as a benchmark for comparison stating that the Bureau generally will not
challenge those rates that do not exceed those of AT&T, for a comparable OSP service, by
more than 15 percent.  The Bureau noted that the rates charged by AT&T, MCI and Sprint
are the rates paid by most consumers and the Bureau compared the CNSI rates to those of
AT&T because MCI and Sprint's rates were identical, in most respects, compared to those of
AT&T.

     The Telephone Operator Consumer Services Improvement Act of 1990 (TOCSIA) was
enacted to protect consumers from unfair and deceptive practices relating to their use of
operator services to place interstate telephone calls and to ensure that consumers have the
opportunity to make informed choices in placing such calls.  The Commission's regulations
established rules concerning consumer information and call blocking.  For example, the name
of the OSP must be posted on or near the phone and callers must hear an audible messages,
or branding, announcing the name of the OSP before the call is completed and before any
charges are incurred.  In addition, callers always have the right to access the carrier of their
choice by dialing an access code.  TOCSIA also provides that, if upon review, the rates and
charges filed by any OSP appear to be unjust and unreasonable, the Commission may require
the OSP to do either or both of the following: demonstrate that its rates are just and
reasonable and announce at the beginning of the call that its rates are available upon request.

     In the past year, the Bureau has undertaken an aggressive outreach campaign to alert
consumers to their right to obtain rate information in advance of making a call and of their
right to use their carrier of choice.  The Bureau has also begun non-public investigations of
carriers that have generated numerous consumer complaints and whose rates appear to be far
greater than those of the carriers used by most consumers.  In April, the Bureau issued its
first Order to Show Cause directing OCI/Oncor to reduce its rates or justify them.

     Action by the Chief, Common Carrier Bureau, October  10, 1995, by Memorandum
Opinion and Order and Order to Show Cause (DA 95-2145).

  -FCC-

     News media contact: Susan Lewis Sallet at (202) 418-1500.
     Common Carrier Bureau contact: Michelle Carey at (202) 418-0960