FCC Fines MCI for Misleading Ads

WASHINGTON, March 1, 2000 -- MCI Worldcom has been fined $100,000 for misleading ads about its "dial-around" service.

The Federal Communications Commission announced the fine as it and the Federal Trade Commisison jointly unveiled a new set of advertising guidelines for the "10-10" services, which amount to about $3 billion in yearly sales.

FTC Chairman Robert Pitofsky says much of the dial-around advertising is either "outright deception" or "confusing to consumers."

MCI Worldcom operates two of the heavily-promoted services, 10-10-321 and 10-10-220.

The dial-around services advertise rates that seem much cheaper than comparable long-distance rates. But when customers' bills arrive, it's often a different story.

What the ads don't reveal is often more significant. For example, those ads that say ou can talk for 20 minutes for 99 cents? That's great, except that it also costs 99 cents to talk for 30 seconds. That's because 99 cents is the minimum charge for all calls, hardly a bargain.

Other ads claim callers can "save 30% of AT&T rates" -- referring to AT&T's basic rate of 26 cents per minute rather than its more heavily discounted rates that can be as low as 5 cents per minute.