*Pages 1--5 from Microsoft Word - 34319* Federal Communications Commission DA 03- 4014 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of Universal Broadband Communications d/ b/ a Connect America Complaints Regarding Unauthorized Change of Subscriber’s Telecommunications Carrier ) ) ) ) ) ) ) IC Nos. 03- I0041817S 02- S77086 02- S80099 02- S80104 ORDER Adopted: December 15, 2003 Released: December 19, 2003 By the Acting Deputy Chief, Policy Division, Consumer & Governmental Affairs Bureau: 1. In this Order, we consider the complaints 1 alleging that Universal Broadband Communications d/ b/ a Connect America (Connect America) changed Complainants’ telecommunications service providers without obtaining authorization and verification from Complainants in violation of the Commission’s rules. 2 We conclude that Connect America’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 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). 1 Federal Communications Commission DA 03- 4014 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 Complainant’s telecommunications services providers had been changed from their authorized carriers to Connect America without Complainants’ authorization. 11 Pursuant to Sections 1.719 and 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 03- 4014 3 64.1150 of our rules, 12 we notified Connect America of the complaints and Connect America responded. 13 Connect America states that Complainant’s telecommunications service providers were changed when they purchased another company’s customer base and, therefore, it did not use a letter of agency. Our rules allow a telecommunications provider to acquire all or part of another carrier’s subscriber base without obtaining each subscriber’s authorization and verification provided that the acquiring carrier comply with our streamlined procedures. 14 To comply with these procedures, the acquiring carrier must file with the Commission’s Office of the Secretary, no later than 30 days before the planned transfer, a letter notification in CC Docket 00- 257 that contains all of the information required by Section 64.1120 (e)( 1) of our rules, including proper customer notice. 15 Connect America, however, failed to follow these procedures. 16 We find that Connect America has failed to produce clear and convincing evidence that Complainant authorized a carrier change. 17 Therefore, we find that Connect America’s actions resulted in an unauthorized change in Complainants’ telecommunications service providers and we discuss Connect America’s liability below. 18 5. Connect America has removed all charges incurred for service provided to Complainants for the first thirty days after the alleged unauthorized change in accordance with the Commission’s liability rules. 19 We have determined that Complainants are entitled to absolution for the charges incurred during the first thirty days after the unauthorized change occurred and that neither the authorized carriers nor Connect America may pursue any collection against Complainants for those charges. 20 Any charges imposed by Connect America on the subscribers for service provided after this 30- day period shall be paid by each subscriber to their authorized carrier at the rates the subscribers were paying to each authorized carrier at the time of the unauthorized change. 21 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. §§ 64.1120( e). 15 See 47 C. F. R. § 64.1120( e)( 1). 16 See 47 C. F. R. § 64.1150( d). 17 See 47 C. F. R. § 64.1150( d). 18 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. 19 See 47 C. F. R. § 64.1160( b). 20 See 47 C. F. R. § 64.1160( d). 21 See 47 C. F. R. §§ 64.1140, 64.1160. 3 Federal Communications Commission DA 03- 4014 4 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 by Complainants 22 against Connect America 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 Connect America may pursue any collection against Complainants for those charges. 8. IT IS FURTHER ORDERED that this Order is effective upon release. FEDERAL COMMUNICATIONS COMMISSION Nancy A. Stevenson, Acting Deputy Chief Policy Division Consumer & Governmental Affairs Bureau 22 See Appendix A. 4 Federal Communications Commission DA 03- 4014 5 APPENDIX A IC NUMBER DATE OF COMPLAINT DATE OF CARRIER RESPONSE AUTHORIZED CARRIER 03- I0041817S 02- S77086 03- S80099 02- S80104 May 12, 2003 May 23, 2002 July 31, 2002 June 13, 2002 October 2, 2003 September 19, 2002 October 1, 2003 October 1, 2003 Sprint Molalla Communications AT& T AT& T 5