*Pages 1--5 from Microsoft Word - 23852.doc* Federal Communications Commission DA 02- 3524 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of Sprint Communications Company Complaints Regarding Unauthorized Change of Subscriber’s Telecommunications Carrier ) ) ) ) ) ) ) ) ) ) IC Nos. 02- S72488 02- S80231 ORDER Adopted: December 18, 2002 Released: December 20, 2002 By the Deputy Chief, Consumer & Governmental Affairs Bureau: 1. In this Order, we consider the complaints 1 alleging that Sprint Communications Company (Sprint) changed Complainants’ telecommunications service providers without obtaining authorization and verification from Complainants in violation of the Commission’s rules. 2 We conclude that Sprint’s actions did result in an unauthorized change in Complainants’ telecommunications service providers and we grant Complainants’ complaints. 2. In December 1998, the Commission released the Section 258 Order in which it adopted rules to implement Section 258 of the Communications Act of 1934 (Act), as amended by the Telecommunications Act of 1996 (1996 Act). 3 Section 258 prohibits the practice of 1 See Appendix A. 2 See 47 C. F. R. §§ 64.1100 – 64.1190. 3 47 U. S. C. § 258( a); Telecommunications Act of 1996, Pub. L. No. 104- 104, 110 Stat. 56 (1996); Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996; Policies and Rules Concerning Unauthorized Changes of Consumers’ Long Distance Carriers, CC Docket No. 94- 129, Second Report and Order and Further Notice of Proposed Rule Making, 14 FCC Rcd 1508 (1998) (Section 258 Order), stayed in part, MCI WorldCom v. FCC, No. 99- 1125 (D. C. Cir. May 18, 1999); First Order on Reconsideration, 15 FCC Rcd 8158 (2000); stay lifted, MCI WorldCom v. FCC, No. 99- 1125 (D. C. Cir. June 27, 2000); Third Report and Order and Second Order on Reconsideration, 15 FCC Rcd 15996 (2000), Errata, DA No. 00- 2163 (rel. Sept. 25, 2000), Erratum, DA No. 00- 2192 (rel. Oct. 4, 2000), Order, FCC 01- 67 (rel. Feb. 22, 2001); reconsideration pending. Prior to the adoption of Section 258, the Commission had taken various steps to address the slamming problem. See, e. g., Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance Carriers, CC Docket No. 94- 129, Report and Order, 10 FCC Rcd 9560 (1995), stayed in part, 11 FCC Rcd 856 (1995); Policies and Rules Concerning Changing Long Distance Carriers, CC Docket No. 91- 64, 7 FCC Rcd 1038 (1992), reconsideration denied, 8 FCC Rcd 3215 (1993); Investigation of Access and Divestiture (continued….) 1 Federal Communications Commission DA 02- 3524 2 “slamming,” the submission or execution of an unauthorized change in a subscriber’s selection of a provider of telephone exchange service or telephone toll service. 4 In the Section 258 Order, the Commission adopted aggressive new rules designed to take the profit out of slamming, broadened the scope of the slamming rules to encompass all carriers, and modified its existing requirements for the authorization and verification of preferred carrier changes. The rules require, among other things, that a carrier receive individual subscriber consent before a carrier change may occur. 5 Pursuant to Section 258, carriers are absolutely barred from changing a customer's preferred local or long distance carrier without first complying with one of the Commission's verification procedures. 6 Specifically, a carrier must: (1) obtain the subscriber's written or electronically signed authorization in a format that meets the requirements of Section 64.1130 authorization; (2) obtain confirmation from the subscriber via a toll- free number provided exclusively for the purpose of confirming orders electronically; or (3) utilize an independent third party to verify the subscriber's order. 7 3. The Commission also has adopted liability rules. These rules require the carrier to absolve the subscriber where the subscriber has not paid his or her bill. In that context, if the subscriber has not already paid charges to the unauthorized carrier, the subscriber is absolved of liability for charges imposed by the unauthorized carrier for service provided during the first 30 days after the unauthorized change. 8 Where the subscriber has paid charges to the unauthorized carrier, the Commission’s rules require that the unauthorized carrier pay 150% of those charges to the authorized carrier, and the authorized carrier shall refund or credit to the subscriber 50% of all charges paid by the subscriber to the unauthorized carrier. 9 Carriers should note that our actions in this Order do not preclude the Commission from taking action, if warranted, pursuant to section 503 of the Act. 10 4. We received Complainants’ complaints alleging that Complainants’ telecommunications services providers had been changed from their authorized carriers to Sprint without Complainants’ authorization. 11 Pursuant to Sections 1.719 and 64.1150 of our rules, 12 we (Continued from previous page) Related Tariffs, CC Docket No. 83- 1145, Phase I, 101 F. C. C. 2d 911, 101 F. C. C. 2d 935, reconsideration denied, 102 F. C. C. 2d 503 (1985). 4 47 U. S. C. § 258( a). 5 See 47 C. F. R. § 64.1120( b). 6 47 U. S. C. § 258( a). 7 See 47 C. F. R. § 64.1120( c). Section 64.1130 details the requirements for letter of agency form and content for written or electronically signed authorizations. 47 C. F. R. § 64.1130. 8 See 47 C. F. R. §§ 64.1140, 64.1160. Any charges imposed by the unauthorized carrier on the subscriber for service provided after this 30- day period shall be paid by the subscriber to the authorized carrier at the rates the subscriber was paying to the authorized carrier at the time of the unauthorized change. Id. 9 See 47 C. F. R. §§ 64.1140, 64.1170. 10 See 47 U. S. C. § 503. 11 See Appendix A. 2 Federal Communications Commission DA 02- 3524 3 notified Sprint of the complaints and Sprint responded. 13 Sprint’s letter of agency requires the customers to deselect services that they do not want in violation of our rules. 14 Sprint has failed to produce clear and convincing evidence that Complainants authorized carrier changes. 15 Therefore, we find that Sprint’s actions resulted in unauthorized changes in Complainants’ telecommunications service providers and we discuss Sprint’s liability below. 16 5. Sprint has removed all charges incurred for services provided to Complainants for the first thirty days after the alleged unauthorized change in accordance with the Commission’s liability rules. 17 We have determined that Complainants are entitled to absolution for the charges incurred during the first thirty days after the unauthorized changes occurred and that neither the authorized carriers nor Sprint may pursue any collection against Complainants for those charges. 18 Any charges imposed by Sprint on the subscriber for service provided after this 30- day period shall be paid by each subscriber to its authorized carrier at the rates each subscriber was paying to its authorized carrier at the time of each unauthorized change. 19 6. Accordingly, IT IS ORDERED that, pursuant to Section 258 of the Communications Act of 1934, as amended, 47 U. S. C. § 258, and Sections 0.141, 0.361 and 1.719 of the Commission’s rules, 47 C. F. R. §§ 0.141, 0.361, 1.719, the complaints filed against Sprint ARE GRANTED. 7. IT IS FURTHER ORDERED that, pursuant to Section 64.1170( d) of the Commission’s rules, 47 C. F. R. § 64.1170( d), Complainants are entitled to absolution for the charges incurred during the first thirty days after the unauthorized change occurred to the relevant Complainant and neither the authorized carrier nor Sprint may pursue any collection against Complainants for those charges. (Continued from previous page) 12 47 C. F. R. § 1.719 (Commission procedure for informal complaints filed pursuant to Section 258 of the Act); 47 C. F. R. § 64.1150 (procedures for resolution of unauthorized changes in preferred carrier). 13 See Appendix A. 14 See 47 C. F. R. § 64.1130( g). 15 See 47 C. F. R. § 64.1150( d). 16 If Complainant is unsatisfied with the resolution of this complaint, Complainant may file a formal complaint with the Commission pursuant to Section 1.721 of the Commission’s rules, 47 C. F. R. § 1.721. Such filing will be deemed to relate back to the filing date of Complainant’s informal complaint so long as the formal complaint is filed within 45 days from the date this order is mailed or delivered electronically to Complainant. See 47 C. F. R. § 1.719. 17 See 47 C. F. R. § 64.1160( b). 18 See 47 C. F. R. § 64.1160( d). 19 See 47 C. F. R. §§ 64.1140, 64.1160. 3 Federal Communications Commission DA 02- 3524 4 8. IT IS FURTHER ORDERED that this Order is effective upon release. FEDERAL COMMUNICATIONS COMMISSION Margaret M. Egler, Deputy Chief Consumer & Governmental Affairs Bureau 4 Federal Communications Commission DA 02- 3524 5 APPENDIX A INFORMAL COMPLAINT NUMBER DATE OF COMPLAINT DATE OF CARRIER RESPONSE NAME OF AUTHORIZED CARRIER 02- S72488 02- S80231 April 17, 2002 August 19, 2002 June 17, 2002 October 29, 2002 WorldCom AT& T Corp. 5