Federal Communications Commission DA 07-2354 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Ultimate Medium Communications Corporation Complaints Regarding Unauthorized Change of Subscriber’s Telecommunications Carrier ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) IC No. 06-S001481 06-S001485 06-S001492 06-S001493 06-S001497 06-S0254661 06-S0255184 06-S0256429 06-S0256442 06-S0258210 06-S0258228 06-S0259253 06-S0259321 06-S0259590 06-S0259591 06-S0259693 07-S0260923 07-S0261592 07-S0262340 07-S0266370 07-S0260854 ORDER Adopted: May 30, 2007 Released: June 8, 2007 By the Deputy Chief, Consumer Policy Division, Consumer & Governmental Affairs Bureau: 1. In this Order, we consider the complaints filed by Complainants’1 alleging that Ultimate Media Communications Corporation (UMCC)2 changed Complainants’ telecommunications service providers without obtaining authorization and verification in violation of the Commission’s rules.3 We conclude that UMCC’s actions did result in unauthorized changes in Complainants’ telecommunications service providers and we grant Complainants’ complaints. 1 See Appendix A. 2 These complaints were originally served on Buzz Telecom, Inc. (Buzz). Buzz has sold all company assets, including trade names, and conveyed all rights to service and bill Buzz customers to UMCC Holdings, Inc. 3 See 47 C.F.R. §§ 64.1100 – 64.1190. Federal Communications Commission DA 07-2354 2 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).4 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.5 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.6 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.7 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; (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.8 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 4 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, 18 FCC Rcd 10997 (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). 5 47 U.S.C. § 258(a). 6 See 47 C.F.R. § 64.1120. 7 47 U.S.C. § 258(a). 8 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. Federal Communications Commission DA 07-2354 3 days after the unauthorized change.9 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.10 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.11 4. We received Complainants’ complaints alleging that Complainants’ telecommunications service providers had been changed to UMCC without Complainants’ authorization. Pursuant to Sections 1.719 and 64.1150 of our rules,12 we notified UMCC of the complaints. UMCC has failed to respond to the complaints. The failure of UMCC to respond or provide proof of the verifications is presumed to be clear and convincing evidence of violations.13 Therefore, we find that UMCC’s actions resulted in unauthorized changes in Complainants’ telecommunications service providers and we discuss UMCC’s liability below.14 We also will forward a copy of the record of this proceeding to our Enforcement Bureau to determine what additional action may be necessary. 5. UMCC must remove all charges incurred for service provided to Complainants for the first thirty days after the alleged unauthorized changes in accordance with the Commission’s liability rules.15 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 UMCC may pursue any collection against Complainants for those charges.16 Any charges imposed by UMCC on the subscribers for service 9 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. 10 See 47 C.F.R. §§ 64.1140, 64.1170. 11 See 47 U.S.C. § 503. 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 47 C.F.R. § 64.1150(d). These complaints were originally served on Buzz and Buzz has sold all company assets, including trade names, and conveyed all rights to service and bill Buzz customers to UMCC. See supra n.2. We note that UMCC did not file proper notice with the Commission prior to transferring Complainants’ service from Buzz in violation of the Commission’s slamming rules. See 47 C.F.R. § 64.1120(e)(1). 14 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. 15 See 47 C.F.R. § 64.1160(b). 16 See 47 C.F.R. § 64.1160(d). Federal Communications Commission DA 07-2354 4 provided after this 30-day period shall be paid by the subscribers to the their respective authorized carrier at the rates the subscribers were paying to the respective authorized carrier at the time of unauthorized changes of telecommunications service providers.17 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 Ultimate Media Communications Corporation 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 neither Complainants’ authorized carrier nor UMCC may pursue any collection against Complainants for those charges. 8. IT IS FURTHERED ORDERED that this Order is effective upon release. FEDERAL COMMUNICATIONS COMMISSION Nancy A. Stevenson, Deputy Chief Consumer Policy Division Consumer & Governmental Affairs Bureau 17 See 47 C.F.R. §§ 64.1140, 64.1160. Federal Communications Commission DA 07-2354 5 APPENDIX A INFORMAL DATE OF DATE OF AUTHORIZED COMPLAINT COMPLAINT SERVED NOTICE CARRIER 06-S001481 December 7, 2006 March 23, 2007 Verizon 06-S001485 December 7, 2006 March 23, 2007 AT&T, Inc. 06-S001492 December 29, 2006 March 23, 2007 AT&T, Inc. 06-S001493 December 29, 2006 March 23, 2007 06-S001497 January 3, 2007 March 23, 2007 06-S0254661 November 7, 2006 March 23, 2007 Verizon 06-S0255184 November 8, 2006 March 23, 2007 06-S0256429 October 11, 2006 March 23, 2007 06-S0256442 November 21, 2006 March 23, 2007 AT&T Corporation 06-S0258210 November 30, 2006 March 23, 2007 MCI 06-S0258228 December 6, 2006 March 23, 2007 Windstream Comm. 06-S0259253 December 11, 2006 March 23, 2007 06-S0259321 December 11, 2006 March 23, 2007 Verizon 06-S0259590 December 12, 2006 March 23, 2007 AT&T Corporation 06-S0259591 December 12, 2006 March 23, 2007 06-S0259693 December 19, 2006 March 23, 2007 Windstream Comm. 07-S0260923 February 20, 2007 March 23, 2007 07-S0261592 January 9, 2007 March 23, 2007 07-S0262340 January 8, 2007 March 23, 2007 07-S0266370 January 16, 2007 March 23, 2007 07-S0260854 November 20, 2006 March 23, 2007 AT&T, Inc.