Federal Communications Commission DA 09-712 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Silv Communication Inc. Complaints Regarding Unauthorized Change of Subscriber’s Telecommunications Carrier ) ) ) ) ) ) ) ) IC Nos. 08-S002126 08-S002154 08-S0293774 08-S0293844 08-S0294078 08-S0294171 ORDER Adopted: March 27, 2009 Released: March 31, 2009 By the Deputy Chief, Consumer Policy Division, Consumer & Governmental Affairs Bureau: 1. In this Order, we consider the complaints1 alleging that Silv Communication Inc. (Silv) changed Complainants’ telecommunications service providers without obtaining authorization and verification from Complainants in violation of the Commission’s rules.2 We conclude that Silv’s actions did result in unauthorized changes 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 “slamming,” the submission or execution of an unauthorized change in a subscriber’s selection 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 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 09-712 2 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; (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 Complainants’ complaints alleging that Complainants’ telecommunications service providers had been changed to Silv without Complainants’ authorization.11 Pursuant to Sections 1.719 and 64.1150 of our rules,12 we notified Silv of the 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 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). Federal Communications Commission DA 09-712 3 complaints and Silv responded.13 In its responses, Silv stated that authorization was received and confirmed through third party verifications (TPVs). We have reviewed the TPVs Silv filed with its responses. Section 258(a) of the Communications Act of 1934 (Act), as amended by the Telecommunications Act of 199614 provides that, “[n]o telecommunications carrier shall submit or execute a change in a subscriber’s selection of a provider of telephone exchange service or telephone toll service except in accordance with such verification procedures s the Commission shall prescribe (emphasis added).15 Section 64.1120(c)(3)(iii) of the Commission’s rules specifically requires that all third party verifiers “elicit, at a minimum the identity of the subscriber, [and] confirmation that the person on the call is authorized to make the carrier change…” (emphasis added). Silv did not satisfy this procedural requirement when in each case, its verifier asked whether the person on the call was “authorized to make changes and/or incur charges for that account.”16 The verifier asked, “Are you 18 years of age and authorized by the telephone account owner to make changes to and/or incur charges on this telephone account?” A “yes” response by the person on the call does not provide clear and convincing evidence confirming that such person was “authorized to make the carrier change” because the person on the call could have been confirming authorization only for incurring charges. The possibility of the person on the call only confirming authorization to incur charges would not meet the specific procedural requirement that the third party verifier “confirm that the person on the call is authorized to make the carrier change.”17 Accordingly we grant Complainants’ complaints.18 5. Silv must secure the removal of 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.19 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 Silv nor the authorized carriers may pursue any collection against Complainants for those charges.20 Any charges imposed by the authorized carriers on the subscribers for service provided after this 30-day period shall be paid by the subscribers at the 13 See Appendix A. 14 47 U.S.C. § 258(a); Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996). 15 See 47 U.S. C. § 258(a). 16 See Reduced Rate Long Distance, LLC, 24 FCC Rcd 2496 (2009). In that Order on Reconsideration, CGB upheld a Division order which state that a TPV which confirmed that the person on the call was authorized to make changes “and/or” incur charges did not satisfy the Commission’s explicit procedural requirement that the verification elicit a confirmation that the person on the call is authorized to make the carrier change. 17 See id. 18 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. 19 See 47 C.F.R. § 64.1160(b). 20 See 47 C.F.R. § 64.1160(d). Federal Communications Commission DA 09-712 4 rates the subscribers were paying to Silv at the time of unauthorized change of telecommunications service provider.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 complaints filed against Silv Communications Inc. 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 the Silv Communications Inc. nor the authorized carriers may 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 21 See 47 C.F.R. §§ 64.1140, 64.1160. Federal Communications Commission DA 09-712 5 APPENDIX A INFORMAL DATE OF DATE OF AUTHORIZED COMPLAINT COMPLAINT RESPONSE CARRIER NUMBER 08-S002126 July 22, 2008 August 4, 2008 AT&T 08-S002154 August 19, 2008 September 10, 2008 Qwest Communications 08-S0293774 June 16, 2008 July 10, 2008 Windstream Communications 08-S0293844 July 2, 2008 September 8, 2008 Qwest Communications 08-S0294078 July 31, 2008 August 29, 2008 Verizon 08-S0294171 August 20, 2008 September 10, 2008 Verizon