*Pages 1--5 from Microsoft Word - 43504.doc* Federal Communications Commission DA 04- 3453 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- S81979 03- S82586 03- S82741 03- S83431 03- S83952 03- S84005 03- S84115 03- S84196 03- S84277 03- S84468 03- S84987 03- S85006 03- S85294 03- S85326 03- S85337 03- S85410 03- S85560 03- S85616 03- S85849 03- B0078586S 03- I0043479S 03- I0048665S 03- I0048798S 03- I0052834S 03- I0058213S 03- I0062791S 03- I0068647S ORDER Adopted: October 27, 2004 Released: October 29, 2004 By the Deputy Chief, Consumer Policy Division, 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’ 1 See Appendix A. 2 See 47 C. F. R. §§ 64.1100 – 64.1190. 1 Federal Communications Commission DA 04- 3453 2 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 “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 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); 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( 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. 2 Federal Communications Commission DA 04- 3453 3 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 notified Sprint of the complaints and Sprint responded. 13 Sprint states that authorization was received and confirmed through signed letters of agency (LOAs). Sprint’s LOAs, however, were not dated by the subscriber as required by our rules. 14 Sprint has failed to produce clear and convincing evidence that Complainants authorized a carrier change. 15 Therefore, we find that Sprint’s actions resulted in an unauthorized change in Complainants’ telecommunications service providers and we discuss Sprint’s liability below. 16 5. Pursuant to Section 64.1170( b) our rules, Sprint must forward to the authorized carriers an amount equal to 150% of all charges paid by the subscriber to Sprint. 17 According to the complaints, Sprint must forward to the authorized carriers the amounts, along with copies of any telephone bills issued from the company to the Complainants. 18 Within ten days of receipt of this amount, the authorized carriers shall provide a refund or credit to Complainants in the amount of 50% of all charges paid by Complainants to Sprint. Complainants has the option of 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. 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( b). 15 See 47 C. F. R. § 64.1150( d). 16 If a Complainant is unsatisfied with the resolution of this complaint, such 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 such 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 such Complainant. See 47 C. F. R. § 1.719. 17 47 C. F. R. § 64.1170( b). 18 Id. 3 Federal Communications Commission DA 04- 3453 4 asking the authorized carriers to re- rate Sprint’s charges based on the authorized carriers rates and, on behalf of Complainants, seek from Sprint, any re- rated amount exceeding 50% of all charges paid by the Complainants to Sprint. The authorized carriers must also send a notice to the Commission, referencing this Order, stating that is has given a refund or credit to Complainants. 19 If the authorized carriers have not received the reimbursement required from Sprint within 45 days of the release of this Order, the authorized carriers must notify the Commission and Complainants accordingly. The authorized carriers also must notify the respective Complainant of his or her right to pursue a claim against Sprint for a refund of all charges paid to Sprint. 20 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 21 against Sprint 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), Sprint must forward to the authorized carriers an amount equal to 150% of all charges paid by the subscribers along with copies of any telephone bills issued from Sprint 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, Deputy Chief Consumer Policy Division Consumer & Governmental Affairs Bureau 19 See 47 C. F. R. § 64.1170( c). 20 See 47 C. F. R. § 64.1170( e). 21 See Appendix A. 4 Federal Communications Commission DA 04- 3453 5 APPENDIX A INFORMAL COMPLAINT NUMBER DATE OF COMPLAINT DATE OF CARRIER RESPONSE 02- S81979 December 5, 2002 January 31, 2003 03- S82586 February 10, 2003 March 28, 2003 03- S82741 February 3, 2003 April 18, 2003 03- S83431 April 8, 2003 May 30, 2003 03- S83952 May 14, 2003 July 3, 2003 03- S84005 May 20, 2003 September 5, 2003 03- S84115 June 11, 2003 August 1, 2003 03- S84196 June 12, 2003 August 1, 2003 03- S84277 June 23, 2003 August 22, 2003 03- S84468 July 8, 2003 September 5, 2003 03- S84987 September 8, 2003 February 4, 2004 03- S85006 September 15, 2003 February 4, 2004 03- S85294 October 14, 2003 February 5, 2004 03- S85326 October 24, 2003 December 19, 2003 03- S85337 October 21, 2003 February 5, 2004 03- S85410 October 29, 2003 February 25, 2004 03- S85560 November 13, 2003 January 8, 2004 03- S85616 November 13, 2003 January 23, 2004 03- S85849 December 15, 2003 March 12, 2004 03- B0078586S December 11, 2003 March 26, 2004 03- I0043479S May 28, 2003 September 12, 2003 03- I0048665S July 9, 2003 February 4, 2004 03- I0048798S July 7, 2003 September 19, 2003 03- I0052834S August 4, 2003 October 3, 2003 03- I0058213S September 16, 2003 February 4, 2004 03- I0062791S October 6, 2003 December 23, 2003 03- I0068647S October 24, 2003 February 6, 2004 5