Calling Card Consumer Protection Act Will Protect New Yorkers From Unsavory Tactics

By Rep. Eliot Engel

Calling cards are an invaluable resource for people without long-distance telephone service in their home or those who make frequent overseas calls. Common users are students, members of the Armed Forces, those who have family living outside of the United States and those who cannot afford home service. Calling cards, when providing the services advertised, can save consumers a great deal of money when they make overseas calls.

But these calling cards can also lead to unsavory business practices when companies fail to keep their advertised terms.

About three years ago, I began hearing from a number of constituents whose cards did not provide the number of minutes advertised. Furthermore, when attempting to contact the calling card company, they found it difficult or impossible to reach a customer service line.

I purchased a calling card to investigate for myself, and I experienced the exact same problems. This is when I decided to introduce my legislation (H.R. 3993) to ban these practices, and have re-introduced it this year.

A study by the Hispanic Institute found that callers only received an average of 60 percent of the minutes “guaranteed” by the card. The prepaid calling card industry takes in $4 billion a year in revenue. If the cards are only providing 60 percent of the minutes, you can do the unfortunate math.

Companies also have instituted a variety of hidden fees that reduce the amount of minutes. Some cards deduct minutes even if the call is not connected. Other cards cut off the call after a few minutes so the consumer must redial and be subjected to another connection charge. Some cards round up the number of minutes used in four-minute increments. Others advertise “no connection fees,” but then charge you a hang-up fee.

Calling card fraud harms those who are among the most vulnerable: poor, minority and immigrant populations, as well as our military serving overseas.

An article in Business Week described a company that marketed in Spanish, but the fine print detailing fees was in English. The company responded that, “We’re in America.” It seems they could use the Spanish language to sell their products, just not to sell them honestly.

Honest businesses, which provide all the minutes they advertise, are being taken advantage of by their unscrupulous competitors. A misinformed consumer will always choose the card advertised to provide 1,000 minutes over a similarly-priced one offering 500 minutes, not knowing that the 1,000-minute card will only be worth 400 minutes.

My legislation would do the following:

• Outlaw advertising for a certain number of minutes on a prepaid card and failing to provide them.

• Disclose all terms and conditions clearly labeled on the card, packaging and advertising, and, if necessary, also in the language the card is advertised in.

• Require vendors to place signs next to the card display clearly marking surcharges, terms and conditions.

By working with the honest participants and helping to rein in their disreputable competitors, we can not only make the industry better, but protect people who are being swindled out of their hard-earned money.

Eliot Engel, a Democrat representing parts of Bronx, Rockland and Westchester counties, is the senior member of the House Energy and Commerce Committee.

With Empire 2.0, New York Can Improve Government Communication

By Melodie Mayberry-Stewart

In early summer, when leaves were still on the trees, New York State announced a new technology initiative themed Empire 2.0—a social media networking initiative designed to promote government participation, increase collaboration and transparency, and expand the state’s ability to share information with citizens and workers. Empire 2.0 is a new and innovative way for New York State to create, connect and collaborate with government, businesses and citizens anywhere at any time.

The Empire 2.0 strategy is the roadmap for New York’s executive agencies to use Web 2.0, new media and social collaborative tools and technologies. With new and additional channels of communication, we can improve intergovernmental communications and encourage citizen involvement by stimulating conversations that strengthen the connection between communities and government. The Empire 2.0 strategy paves the way for New York State agencies to embrace modern Internet technologies to interact with citizens, businesses and employees with increased efficiency, collaboration, transparency and openness.

Tools commonly used at home such as Facebook, Twitter, blogs, Wiki, Second Life, YouTube, RSS Feeds and Flickr, to name just a few, provide limitless opportunities for people to connect with friends and family, engage in debate and share information. For younger generations in particular these are the tools for their everyday communication. But don’t be fooled, for these are not toys or silly computer games kids play. They are powerful networking tools that create a capacity to share volumes of information through trusted networks inexpensively, employed by individuals and businesses alike.

Government has the same boundless opportunity to connect with constituents and citizens—young and old—across the state, nation and world, creating a dynamic give-and-take of information, and it is now getting onboard. The fact is, a video message on YouTube may reach new communities that a written note would not. A posting to Facebook may initially reach 200 “friends,” but once shared with each of their friends then reaches thousands more readers, from a source they trust. The multiplying effect of an online network is tremendous.

A number of New York State agencies have piloted Web 2.0 tools with great success. The Office of the CIO and the Office for Technology (CIO/OFT) began its social media effort by launching a Facebook page and a Twitter feed to tweet real-time updates about agency events and news. CIO/OFT also launched a Wiki to invite dialogues on IT policy and strategy development, and is using a crowd-sourcing application to generate ideas and discussions on future technology initiatives and strategies from state employees and citizens. The State Emergency Management Office uses Twitter with its New York Alert system to notify people of public safety or weather emergencies. The state Office of Mental Health uses Facebook and MySpace in its suicide prevention program. The state Office of Homeland Security is planning on using Second Life to train 700,000 first responders statewide. Many, many more uses are being implemented and many more ideas have yet to surface but will, probably through an online collaboration.

I strongly believe the interactivity and personalization associated with next-generation technology like social media networking and Web 2.0 tools will enable state agencies to bring communications to a new level. State government has an obligation to meet the needs of millions of people who are engaged through social media sites with personalized, interactive tools they have come to expect to get instantaneous information and to engage in our democracy.

To join the action and to learn more about our state’s Empire 2.0 strategy, visit the Empire 2.0 website at www.oft.state.ny.us/OFT/empire20.html. 


Melodie Mayberry-Stewart, PhD., is the director of the New York State Office for Technology.

Telecommunications Upstate A Vital Part Of 21st-Century Economy

By State Sen. Darrel Aubertine

We’ve probably all seen advertisements on television for cell phone companies claiming to have the fastest wireless Internet. Cable and phone companies also advertise, and as they claim to be faster than their competitors, no distinction is ever made whether these ads run in the New York City metro area, or Northern New York.

The fact is that Upstate New York faces a significant set of challenges in meeting the telecommunications needs of the new economy. Three issues face our region: the condition of traditional landlines, the availability of affordable high-speed Internet and the availability of cellular telephone and data coverage.

In Upstate New York, traditional landline telephone service is offered by many companies, not just Verizon or another major company as we see downstate. We are served by small independent companies, which face a higher cost for maintaining rural lines, though they are unable to recover costs in the marketplace. As a result, these companies draw from a State fund to maintain service at affordable prices. This “Transition Fund” is likely to run out of money within the next 18 months. The result will likely be that these independent companies are forced to raise prices or face extreme fiscal challenges.

The Public Service Commission has started to examine the dwindling Transition Fund and other issues, including a lifeline telephone service for low- and fixed-income households. As chair of the Senate Energy and Telecommunications Committee, I am engaged in these proceedings to pay attention to the economics of the Transition Fund and small telephone companies because it is important we protect the jobs and services provided by these local companies. It is important that the cost of telephone services does not spike in Upstate. I am also watching to see what steps are made to safeguard service quality, promote competition as a means to contain costs and generally address universal service issues.

On the remaining issues of broadening high-speed Internet and cellular coverage, competition and leadership are important as well. Access to high-speed Internet from cable, satellite and telephone companies has spread throughout much of Upstate New York, but prices are higher partly because there is little or no competition. Certainly, in areas such as the Adirondack Park, cellular coverage is uneven and high-speed Internet is available, as a practical matter, primarily from satellites. Those considerations are why expanding the physical availability and affordability of broadband Internet is a long-held concern for Upstate elected officials.

Access to the Internet is a key means by which many of us work, communicate, shop and pay our bills. For Upstate to continue to improve its ability to retain and attract new business, we need to spur the growth of competition in broadband so that we will have choice where we live and lower prices. More and more, we all depend on cellular voice and data coverage, and too many areas still lack cellular telephone coverage, do not have reliable coverage, or do not have high-speed (3G) data service. The cellular industry is competitive and may in time address these issues, but filling in coverage and reliability gaps and promoting better service for Upstate is critical.

More and more every day, businesses, from farms to manufacturers and retailers to service companies, rely and depend on the latest and highest- quality telecommunications services. It is important our Legislature continues working to facilitate improvements to our telecommunications infrastructure
upstate to attract the businesses and
growth we need to revive our economy.

Darrel Aubertine, a Democrat representing Oswego, Jefferson and parts of St. Lawrence counties, is chair of the Senate Energy and Telecommunications Committee.