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Consumer News Release

For immediate release -- Tuesday, November 16, 1999.

States Blow Whistle on MCI Billing Practice-- MCI to Pay States $1.3 Million

States alleged MCI misrepresented a "National Access Fee" in long distance phone bills. MCI to pay Iowa $55,000 for consumer education and litigation.

Attorney General Tom Miller said Tuesday that MCI WORLDCOM Communications Inc. (MCI) has agreed to change certain practices and pay a total of $1.32 million to Iowa and 23 other states as part of a settlement reached by the company and the states. States will each receive $55,000, and Iowa's share will go for consumer education and litigation.

The states challenged MCI's practice, starting last year, of billing its customers for a new, self-described "National Access Fee" --and sometimes listing the fee in the "taxes and surcharges" portion of MCI customers' bills or characterizing the fee as government-imposed.

"We argued this was a misrepresentation," Miller said. "They can impose their own fees, but they must not misleadingly characterize them as required by the government. If consumers are going to have any chance of comparing prices and shopping for the best long distance deals, they must have truthful information in advertising, on their bills, and when they call a company."

Miller said an employee of MCI wrongly told a consumer protection investigator in his office that the "National Access Fee" was imposed by state and federal lawmakers. Neither the FCC nor any other state or federal agency has required MCI to collect the charge from consumers.

MCI denied wrongdoing, but it agreed to several measures in an "Assurance of Voluntary Compliance": MCI will not wrongly represent that fees are required by the FCC or any other governmental agency; MCI will not use the term "National Access Fee" or any similar term that could mislead consumers to think the charge is a tax or government-mandated charge; and MCI will not place discretionary fees in the tax and surcharge portion of its bills.

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