*Pages 1--5 from Microsoft Word - 44986.doc* Federal Communications Commission DA 04- 3958 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of LCR Telecommunications, LLC Complaints Regarding Unauthorized Change of Subscriber’s Telecommunications Carrier ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) IC Nos. 03- S82350 03- S84392 03- S84582 03- S84958 03- S85126 03- S85208 03- I0057557S 04- S86574 04- S86664 04- S86994 04- S87088 04- S87384 04- S87196 04- I0101938S ORDER Adopted: December 17, 2004 Released: December 22, 2004 By the Deputy Chief, Consumer Policy Division, Consumer & Governmental Affairs Bureau 1. In this Order, we consider complaints 1 alleging that LCR Telecommunications, LLC (LCR) changed Complainants’ telecommunications service providers without obtaining authorization and verification from Complainant in violation of the Commission’s rules. 2 We conclude that LCR’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 (continued….) 1 Federal Communications Commission DA 04- 3958 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% (Continued from previous page) 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- 3958 3 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 to LCR without Complainants’ authorization. 11 Pursuant to sections 1.719 and 64.1150 of our rules, 12 we notified LCR of the complaints and LCR responded. 13 LCR states in its responses that the switches occurred as a result of clerical errors on the part of its sales representatives. We find that LCR has failed to produce clear and convincing evidence that Complainants authorized carrier changes. 14 Therefore, we find that LCR’s actions resulted in unauthorized changes in Complainants’ telecommunications service providers and we discuss LCR’s liability below. 15 5. LCR must remove 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. 16 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 carrier nor LCR may pursue any collection against Complainants for those charges. 17 Any charges imposed by LCR on a subscriber for service provided after this 30- day period shall be paid by that subscriber to its authorized carrier at the rates the subscribers was paying to its respective authorized carrier at the time of the unauthorized change of telecommunications service provider. 18 6. Accordingly, IT IS ORDERED that, pursuant to section 258 of the 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. § 64.1150( d). 15 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 Complainant. See 47 C. F. R. § 1.719. 16 See 47 C. F. R. § 64.1160( b). 17 See 47 C. F. R. § 64.1160( d). 18 See 47 C. F. R. §§ 64.1140, 64.1160. 3 Federal Communications Commission DA 04- 3958 4 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 LCR Telecommunications, LLC 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 LCR 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- 3958 5 APPENDIX A INFORMAL DATE OF DATE OF AUTHORIZED COMPLAINT COMPLAINT CARRIER CARRIER NUMBER RESPONSE 03- S82350 January 21, 2003 April 1, 2003 Empire One Telecommunications 03- S84392 June 13, 2003 October 23, 2003 AT& T Corp. 03- S84582 July 30, 2003 September 5, 1003 AT& T Corp. 03- S84958 September 12, 2003 October 23, 2003 AT& T Corp. 03- S85126 October 1, 2003 November 20, 2003 Sprint 03- S85208 October 14, 2003 November 18, 2003 Verizon 03- I0057557S September 8, 2003 December 2, 2003 AT& T Corp. 04- S86574 February 11, 2004 July 7, 2004 AT& T Corp. 04- S86664 April 12, 2004 July 20, 2004 Working Assets 04- S86994 March 8, 2004 June 3, 2004 Verizon 04- S87088 March 11, 2004 July 7, 2004 MCI 04- S87384 May 13, 2004 July 22, 2004 Qwest 04- S87196 May 3, 2004 July 7, 2004 Verizon 04- I0101938S April 12, 2004 July 29, 2004 SBC 5