Federal Communications Commission DA 08-2326 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Embarq Communications Complaint Regarding Unauthorized Change of Subscriber’s Telecommunications Carrier ) ) ) ) ) ) ) IC No. 08-S0293390 ORDER Adopted: October 21, 2008 Released: October 21, 2008 By the Deputy Chief, Consumer Policy Division, Consumer & Governmental Affairs Bureau: 1. In this Order, we consider the complaint1 alleging that Embarq changed Complainant’s telecommunications service provider without obtaining authorization and verification from Complainant in violation of the Commission’s rules.2 We conclude that Embarq’s actions did result in an unauthorized change in Complainant’s telecommunications service provider and we grant Complainant’s complaint. 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 1 Informal Complaint No. IC 07-S0293390, filed April 21, 2008. 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 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). Federal Communications Commission DA 08-2326 2 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 ; (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% 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 Complainant’s complaint on April 21, 2008, alleging that Complainant’s telecommunications service provider had been changed from IDT to AT&T Corporation (AT&T) without Complainant’s authorization. Pursuant to Sections 1.719 and 64.1150 of our rules,11 we notified AT&T of the complaint and AT&T responded on May 20, 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. 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). Federal Communications Commission DA 08-2326 3 2008.12 AT&T states in its response that the Complainant’s carrier or the carrier involved in the alleged switching of telephone service is a carrier that purchases certain telecommunications services, namely, a product called AT&T Network Connection Service (ANC) from AT&T. According to AT&T, ANC is a CIC-based platform that requires the purchasing carrier to have its own Carrier Identification Code (CIC). Using ANC, the purchasing carrier does its own provisioning with the relevant local exchange carrier (LEC). Embarq is the LEC for Complainant. Pursuant to Sections 1.719 and 64.1150 of our rules,13 we notified Embarq of the complaint and Embarq responded on September 8, 2008.14 Based on AT&T’s response and Embarq’s response, the Division sought additional information from Embarq. The Division informed Embarq that Embarq did not address the following quoted language in AT&T’s response: “It is possible that traffic will default to the underlying carrier for billing. This will occur if any of the following apply: 1) If at any time, an ANC Reseller submits a PIC change request to a LEC that is not CIP capable 2) where the resellers CIC(s) have not been opened at the LEC 3) if the LEC does not properly process the request to open the CIC in all of its tandem…”15 In response to this request, Embarq stated that the Division should refer to the supplemental response that Embarq filed on September 18, 2008.16 Embarq’s supplemental response, however, does not address the issue raised by AT&T about which the Division specifically sought further information, and we find that Embarq has failed to provide requested information.17 Therefore, we find that Embarq’s actions resulted in a violation of our carrier change rules, and we discuss Embarq’s liability below.18 12 AT&T Corporation’s Response to Informal Complaint No. IC 08-S0293390, received May 20, 2008. 13 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). 14 Embarq Communications’s Reponse to Informal Complaint No. IC 08-S0293390, received September 8, 2008. 15 See electronic mail to Joseph J. Harper, Embarq, from Bert Weintraub, FCC, dated October 2, 2008. 16 See electronic mail to Bert Weintraub from Sharron Turner, Manager, Embarq. Attached to Embarq’s electronic mail was Embarq’s September 18th supplemental response. 17 When we requested information from Embarq regarding AT&T’s response, we were unaware of Embarq’s earlier–filed supplemental response. Because Embarq relied on its supplemental response even after the request was made, Embarq had more than one opportunity to respond with specificity sought by the Division yet, as mentioned above, Embarq did not provide the requested information. 18 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 Complainant’s informal complaint so long as the (continued….) Federal Communications Commission DA 08-2326 4 5. Pursuant to Section 64.1170(b) our rules, Embarq must forward to IDT an amount equal to 150% of all charges paid by the subscriber to AT&T along with copies of any telephone bills issued from AT&T to the Complainant.19 Within ten days of receipt of this amount, IDT shall provide a refund or credit to Complainant in the amount of 50% of all charges paid by Complainant to AT&T. Complainant has the option of asking IDT to re-rate AT&T’s charges based on IDT’s rates and, on behalf of Complainant, seek from AT&T any re-rated amount exceeding 50% of all charges paid by Complainant to AT&T. Embarq must also send a notice to the Commission, referencing this Order, stating that it has given a refund or credit to Complainant. 20 If IDT has not received the reimbursement required from AT&T within 45 days of the release of this Order, IDT must notify the Commission and Complainant accordingly. IDT also must notify the Complainant of his or her right to pursue a claim against Embarq for a refund of all charges paid to AT&T.21 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 complaint filed by Complainant against Embarq Communications IS 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), Complainant is entitled to absolution for the IDT nor AT&T Corporation may pursue any collection against Complainant 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 (Continued from previous page) 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. 19 See 47 C.F.R § 64.1170(b)(1)(2). 20 See 47 C.F.R. § 64.1170(c). 21 See 47 C.F.R. § 64.1170(e).