*Pages 1--6 from Microsoft Word - 35296* Federal Communications Commission DA 04- 246 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of WorldCom Complaints Regarding Unauthorized Change Of Subscribers’ Telecommunications Carriers ) ) ) ) ) ) ) IC Nos. 01- S51004 01- S51336 01- S52286 01- S53891 01- S53936 01- S55039 01- S56693 01- S57750 01- S59612 01- S62717 01- S62922 01- S62930 01- S62998 01- S63048 01- S64396 01- S65328 01- S65775 01- S66005 01- S66132 01- S66346 02- B0007064 02- P28634 02- S66715 02- S66752 02- S67037 02- S67110 02- S67586 02- S67663 02- S67802 02- S67803 02- S69446 02- S69451 02- S71634 02- S71654 02- S72008 02- S72046 02- S72941 02- S73282 02- S73377 02- S73436 02- S74498 02- S76842 02- S77060 02- S77061 ORDER Adopted: January 29, 2004 Released: January 30, 2004 By the Acting Deputy Chief, Policy Division, Consumer & Governmental Affairs Bureau: 1. In this Order, we consider the complaints filed by Complainants 1 alleging that WorldCom changed Complainants’ telecommunications service providers without obtaining authorization and verification from Complainants in violation of the Commission’s rules. 2 We conclude that WorldCom’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 1 See Appendix A. 2 See 47 C. F. R. §§ 64.1100 – 64.1190. 1 Federal Communications Commission DA 04- 246 2 by the Telecommunications Act of 1996 (1996 Act). 3 Section 258 prohibits the practice of “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 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, WorldCom WorldCom v. FCC, No. 99- 1125 (D. C. Cir. May 18, 1999); First Order on Reconsideration, 15 FCC Rcd 8158 (2000); stay lifted, WorldCom 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); Third Order on Reconsideration and Second Further Notice of Proposed Rule Making, 18 FCC Rcd 5099 (2003); Order, FCC 03- 116, (rel. May 23, 2003). 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). 4 47 U. S. C. § 258( a). 5 See 47 C. F. R. § 64.1120. 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. 2 Federal Communications Commission DA 04- 246 3 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 additional action, if warranted, pursuant to Section 503 of the Act. 10 4. We received Complainants’ complaints, alleging that Complainants’ telecommunications service providers were changed to WorldCom without Complainants’ authorizations. Pursuant to Sections 1.719 and 64.1150 of our rules, 11 we notified WorldCom of the complaints and WorldCom responded. 12 WorldCom states that Complainants authorized the change in their services through third party verification. WorldCom’s third party verifiers, however, failed to obtain separate authorizations for each service sold as required by our rules. 13 We find that WorldCom has failed to produce clear and convincing evidence that Complainants authorized a carrier change. 14 Therefore, we find that WorldCom’s actions resulted in an unauthorized change in Complainants’ telecommunications service providers and we discuss WorldCom’s liability below. 15 5. Pursuant to Section 64.1170( b) our rules, WorldCom must forward to Complainants’ authorized carriers an amount equal to 150% of all charges paid by the subscriber to WorldCom. 16 Therefore, WorldCom must forward to Complainants’ authorized carriers 150% of the amount, along with copies of any telephone bills issued from the company to each Complainant. 17 Within ten days of receipt of this amount, Complainants’ authorized carriers shall provide a refund or credit to each Complainant in the amount of 50% of all charges paid by Complainants to WorldCom. Complainants have the option of asking Complainants’ authorized carriers to re- rate WorldCom’s charges based on Complainants’ authorized carriers’ rates and, 9 See 47 C. F. R. §§ 64.1140, 64.1170. 10 See 47 U. S. C. § 503. 11 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). 12 See Appendix A. 13 See 47 C. F. R. 64.1120( b). 14 See 47 C. F. R. § 64.1150( d). 15 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 Complainants’ 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. 16 47 C. F. R. § 64.1170( b). 17 Id. 3 Federal Communications Commission DA 04- 246 4 on behalf of Complainants, seek from WorldCom, any re- rated amount exceeding 50% of all charges paid by Complainants to WorldCom. Complainants’ authorized carriers must also send a notice to the Commission, referencing this Order, stating that is has given a refund or credit to Complainants. 18 If Complainants’ authorized carriers have not received the reimbursement required from WorldCom within 45 days of the release of this Order, Complainants’ authorized carriers must notify the Commission and Complainants accordingly. Complainants’ authorized carriers also must notify the Complainants of his or her right to pursue a claim against WorldCom for a refund of all charges paid to WorldCom. 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 by Complainants against WorldCom ARE GRANTED. 7. IT IS FURTHER ORDERED that, pursuant to Section 64.1170( b) of the Commission’s rules, 47 C. F. R. § 64.1170( b), that WorldCom must forward to Complainants’ authorized carriers an amount equal to 150% of all charges paid by the subscriber along with copies of any telephone bills issued from the company to the Complainants within ten (10) days of the release of this order. 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 18 See 47 C. F. R. § 64.1170( c). 19 See 47 C. F. R. § 64.1170( e). 4 Federal Communications Commission DA 04- 246 5 INFORMAL COMPLAINT NUMBER DATE OF COMPLAINT DATE OF CARRIER RESPONSE 01- S51004 April 30, 2001 June 1, 2001 01- S51336 April 10, 2001 June 19, 2001 01- S52286 June 7, 2001 July 11, 2001 01- S53891 June 14, 2001 July 16, 2001 01- S53936 April 20, 2001 July 16, 2001 01- S55039 May 29, 2001 July 24, 2001 01- S56693 July 19, 2001 August 21, 2001 01- S57750 August 12, 2001 September 3, 2001 01- S62717 January 2, 2002 October 30, 2001 01- S62922 August 31, 2001 October 30, 2001 01- S62930 September 20, 2001 October 30, 2001 01- S62998 November 23, 2001 October 30, 2001 01- S63048 September 27, 2001 October 30, 2001 01- S64396 September 18, 2001 November 15, 2001 01- S65775 October 9, 2001 December 17, 2001 01- S66005 November 30, 2001 January 7, 2002 01- S66132 October 11, 2001 December 18, 2001 01- S66346 October 15, 2001 January 25, 2002 02- B0007064 November 5, 2002 January 28, 2003 02- P28634 April 24, 2002 March 28, 2003 02- S66715 January 25, 2002 March 4, 2002 02- S66752 January 25, 2002 March 4, 2002 02- S67037 January 25, 2002 March 4, 2002 02- S67110 March 11, 2002 April 23, 2002 02- S67586 February 22, 2002 March 28, 2002 02- S67663 February 22, 2002 March 28, 2002 02- S67802 March 11, 2002 April 11, 2002 02- S67803 March 11, 2002 April 15, 2002 02- S69446 April 5, 2002 May 7, 2002 02- S69451 April 5, 2002 May 7, 2002 02- S71634 May 10, 2002 June 11, 2002 02- S71654 May 10, 2002 June 11, 2002 02- S72008 May 10, 2002 June 14, 2002 02- S72046 May 10, 2002 June 11, 2002 02- S72941 June 3, 2002 July 2, 2002 02- S73282 May 24, 2002 June 26, 2002 02- S73377 June 19, 2002 December 4, 2002 02- S73436 June 25, 2002 December 10, 2002 02- S74498 June 25, 2002 December 13, 2002 02- S76842 July 14, 2002 December 13, 2002 5 Federal Communications Commission DA 04- 246 6 INFORMAL COMPLAINT NUMBER DATE OF COMPLAINT DATE OF CARRIER RESPONSE 02- S77060 August 23, 2002 December 13, 2002 02- S77061 July 19, 2002 December 10, 2002 6