*Pages 1--5 from Microsoft Word - 43523.doc* Federal Communications Commission DA 04- 3466 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of Business Networks Long Distance Complaints Regarding Unauthorized Change of Subscriber’s Telecommunications Carrier ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) IC Nos. 04- S86759 04- S87537 04- S87608 04- S87624 04- S87637 04- S87732 04- S87648 04- S87683 04- S87773 04- S87819 04- S87831 04- S87857 04- S87907 04- S87948 04- S88023 04- S000618S 04- S000646S ORDER Adopted: October 28, 2004 Released: October 29, 2004 By the Deputy Chief, Consumer Policy Division, Consumer & Governmental Affairs Bureau 1. In this Order, we consider complaints 1 alleging that Business Networks Long Distance (BNLD) changed Complainants’ telecommunications service providers without obtaining authorization and verification from Complainant in violation of the Commission’s rules. 2 We conclude that BNLD’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- 3466 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 carrier, the Commission’s rules require that the unauthorized carrier pay 150% of those charges 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. 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- 3466 3 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 had been changed from their authorized carriers to BNLD without Complainants’ authorization. 11 Pursuant to sections 1.719 and 64.1150 of our rules, 12 we notified BNLD of the complaints and BNLD responded. 13 BNLD indicates that authorization was received and confirmed through third party verification. BNLD’s verifiers, however, failed to confirm that the person on each call was authorized to make the carrier change as required by our rules. 14 BNLD has failed to produce clear and convincing evidence that Complainants authorized a carrier change. 15 Therefore, we find that BNLD’s actions resulted in unauthorized changes in Complainants’ telecommunications service providers and we discuss BNLD’s liability below. 16 5. BNLD 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. 17 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 Complainants authorized carrier nor BNLD may pursue any collection against Complainants for those charges. 18 Any charges imposed by BNLD on the subscribers for service provided after this 30- day period shall be paid by the subscribers to the authorized carrier at the rates the subscribers were paying to the authorized carriers at the time of unauthorized change of telecommunications service provider. 19 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. 1120( c)( 3)( iii). 15 See 47 C. F. R. § 64. 1150( d). 16 If a Complainant is unsatisfied with the resolution of their 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 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 04- 3466 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 against BNLD 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 and BNLD may not 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, Deputy Chief Consumer Policy Division Consumer & Governmental Affairs Bureau 4 Federal Communications Commission DA 04- 3466 5 APPENDIX A INFORMAL DATE OF DATE OF AUTHORIZED COMPLAINT COMPLAINT RESPONSE CARRIER NUMBER 04- S86759 02/ 27/ 04 07/ 01/ 04 None 04- S87537 05/ 10/ 04 07/ 26/ 04 AT& T 04- S87608 06/ 08/ 04 08/ 11/ 04 SBC 04- S87624 05/ 10/ 04 08/ 04/ 04 AT& T 04- S87637 06/ 14/ 04 08/ 04/ 04 Sprint 04- S87732 06/ 14/ 04 08/ 08/ 04 AT& T 04- S87648 06/ 23/ 04 08/ 04/ 04 AT& T 04- S87683 06/ 07/ 04 08/ 04/ 04 MCI 04- S87773 06/ 14/ 04 07/ 19/ 04 Verizon 04- S87819 06/ 02/ 04 08/ 04/ 04 SBC 04- S87831 07/ 06/ 04 08/ 04/ 04 SBC 04- S87907 07/ 07/ 04 08/ 23/ 04 SBC 04- S87857 06/ 29/ 04 08/ 13/ 04 MCI 04- S87948 07/ 20/ 04 08/ 23/ 04 AT& T 04- S88023 07/ 09/ 04 08/ 23/ 04 MCI 04- S000618S 06/ 07/ 04 07/ 13/ 04 AT& T 04- S000646S 06/ 21/ 04 07/ 14/ 04 Globcom 5