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Home > Industries > Telecommunications  
Telcos Must Tell The Truth About '10 Cents A Minute'
So says new policies from the FCC and FTC that aim to clarify ads.
By Russell Shaw

March 9, 2000 — The 1960s rock band The Kinks turned "All Day And All Of The Night" into a famous catch phrase. If a long distance carrier's advertising copy claims that its rates apply "All Day And All Of The Night," it had better be prepared to explain exactly what this means or be guilty of deceptive advertising.

That example, plus several other instances of "misleading advertising," were the basis for a recent joint policy statement by the Federal Communications Commission and the Federal Trade Commission. The policy statement specifies the principles long distance carriers should adhere to in order to prevent enforcement action for deceptive advertising.

  "Telecom marketing doesn't lie, but it doesn't always tell the whole truth."
  — Jeffrey Kagan
independent telecom industry analyst

Characteristic abuses cited by the two agencies include carriers' claims of a flat "all day and all night" rate, when in fact that rate was only effective between states and between certain hours; long-distance phone surcharges that are not mentioned in ads; and monthly subscription fees not mentioned in commercials, but which are necessary to activate low, per-minute rates.

The FCC says it received nearly 3,000 complaints about deceptive telecom advertising in the first six months of last year. MCI WorldCom recently signed a consent agreement with the FCC, calling for a $100,000 fine and a self-review of the company's 1999 advertising materials related to dial-around services.

One prominent telecommunications analyst sees these practices as a by-product of competition.

"Telecom marketing doesn't lie, but it doesn't always tell the whole truth," said Jeffrey Kagan, an independent telecom industry analyst in Marietta, Ga. "It often takes advantage of the confusion in the marketplace to make one plan look more attractive."

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