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America Net Slam Order

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Released: March 12, 2013
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Federal Communications Commission

DA 13-377

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of

)

)

America Net, LLC

)

IC Nos. 11-S003103

)

11-S003115

Complaints Regarding

)

11-S003133

Unauthorized Change of

)

11-S003163

Subscriber’s Telecommunications Carrier

)

11-S003170

)

11-S003227

)

11-S2959973

)

11-S2986315

)

11-S3100985

)

11-S3167118

)

11-S3192086

)

11-S3207400

)

11-S3267909

)

12-S3310036

ORDER

Adopted: March 11, 2013

Released: March 12, 2013

By the Deputy Chief, Consumer Policy Division, Consumer & Governmental Affairs Bureau:

1.

In this Order, we consider the complaints1 alleging that America Net, LLC

(America Net) changed Complainants’ telecommunications service providers without obtaining

authorization and verification from Complainants in violation of the Commission’s rules.2

We

conclude that America Net’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

1

See Appendix.

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); Fourth Report and Order, 23 FCC Rcd 493 (2008). Prior to the adoption of

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Federal Communications Commission

DA 13-377

“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; (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

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.

9

See 47 C.F.R. §§ 64.1140, 64.1170.

10

See 47 U.S.C. § 503.

2

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Federal Communications Commission

DA 13-377

4.

We received Complainants’ complaints alleging that Complainants’

telecommunications service providers had been changed without Complainants’ authorization.11

Pursuant to Sections 1.719 and 64.1150 of our rules,12 we notified America Net of the complaints

and America Net responded.13

America Net states that authorization was received and confirmed

through Third Party Verifications (TPV) in each case. The Commission’s rules require that the

verification elicit, amongst other things, confirmation that the person on the call is “authorized to

make the carrier change.” 14

We have reviewed the TPVs that America Net submitted with its

responses and, in each case, the verifier instead asks whether the person on the call is “authorized

by the telephone account owner to make changes to and incur charges on this telephone

account.” A switch from one carrier to another carrier differs from merely making changes to

the customer’s service.15

As we emphasized in the Fourth Report and Order, “any description of

the carrier change transaction…shall not be misleading” and verifiers should convey explicitly

that “the consumers will have authorized a carrier change, and not for instance an upgrade in

existing service (emphasis added).”16

We find that America Net’s actions were in violation of

our carrier change rules, and we discuss America Net’s liability below.17

5.

America Net 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.18

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 America Net may pursue any

collection against Complainants for those charges.19

Any charges imposed by America Net 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.20

11

See Appendix.

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.

14

See 47 C.F. R. § 64.1120(c)(3)(iii).

15

Cf. Consumer Telcom, Inc., Order on Reconsideration, 27 FCC Rcd 5340 (CGB 2012) (“the

verifier’s question, ‘Do you have authority to make changes to your long distance service?’ did not confirm that

the person was authorizing a change that would result in receiving service from a different carrier”).

16

See 47 C.F.R. § 64.1120(c)(3)(iii) and Fourth Report and Order, 23 FCC Rcd 493 (2008).

17

If any 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.

18

See 47 C.F.R. § 64.1160(b).

19

See 47 C.F.R. § 64.1160(d).

20

See 47 C.F.R. §§ 64.1140, 64.1160.

3

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Federal Communications Commission

DA 13-377

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

America Net 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 neither

the America Net 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

4

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Federal Communications Commission

DA 13-377

APPENDIX

INFORMAL

DATE OF

DATE OF

COMPLAINT

COMPLAINT

RESPONSE

NUMBER

11-S003103

February 16, 2011

March 30, 2011

11-S003115

March 9, 2011

April 14, 2011

11-S003133

March 9, 2011

May 12, 2011

11-S003163

June 14, 2011

July 15, 2011

11-S003170

June 22, 2011

August 5, 2011

11-S003227

September 30, 2011

November 14, 2011

11-S2959973

February 7, 2011

March 4, 2011

11-S2986315

February 16, 2011

March 30, 2011

11-S3100985

April 20, 2011

May 13, 2011

11-S3167118

July 19, 2011

August 31, 2011

11-S3192086

August 8, 2011

January 26, 2012

11-S3207400

August 22, 2011

September 22, 2011

11-S3267909

November 7, 2011

December 5, 2011

12-S3310036

January 10, 2012

February 15, 2012

5

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