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I.E. Comm Slam Order

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Released: December 23, 2013

Federal Communications Commission

DA 13-2442

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Matrix Telecom, Inc. d/b/a I.E. Comm
)
IC No. 12-S003437

)
)

Complaint Regarding
)
Unauthorized Change of
)
Subscriber’s Telecommunications Carrier
)

ORDER

Adopted: December 19, 2013

Released: December 23, 2013

By the Deputy Chief, Consumer Policy Division, Consumer & Governmental Affairs Bureau:
1.
In this Order, we consider the complaint filed by Complainant1 alleging that
Matrix Telecom, Inc., d/b/a I.E. Comm (I.E. Comm) changed Complainant’s
telecommunications service provider without obtaining authorization and verification from
Complainant in violation of the Commission’s carrier change rules.2 We conclude that I.E.
Comm 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


1
Informal Complaint No. IC 12-S003437, filed June 19, 2012.
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, I.E. Comm WorldCom v. FCC
, No. 99-1125 (D.C. Cir. May 18, 1999); First Order on
Reconsideration, 15 FCC Rcd 8158 (2000); stay lifted, I.E. Comm 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 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 Carrier
s, 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 13-2442

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 Complainant’s complaint on June 19, 2012, alleging that
Complainant’s telecommunications service provider had been changed to I.E. Comm without
Complainant’s authorization. Pursuant to Sections 1.719 and 64.1150 of our rules,11 we notified
I.E. Comm of the complaint and I.E. Comm on September 4, 2012.12 I.E. Comm states that


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).
12
I.E. Comm’s response to Informal Complaint No. IC 12-S003437, received September 4, 2012.
2

Federal Communications Commission

DA 13-2442

Complainant’s telephone number was established to utilize its long distance service since April
2001, the last call to route across its network was on June 12, 2012, and only the local exchange
carrier (LEC) has this capability to route calls. Pursuant to Sections 1.719 and 64.1150 of our
rules,13 we notified Complainant’s LEC, Verizon, of the complaint, and Verizon responded on
September 18, 2013.14 Verizon states that its records show that on March 29, 2011, it received
an electronic request from Telco Communications Group on behalf of a reseller, Matrix Retail,
requesting the customer’s telephone number for long distance service. I.E. Comm failed to
provide a third party verification or letter of agency, as required by our rules.15 Therefore, we
find that I.E. Comm’s actions resulted in an unauthorized change in Complainant’s
telecommunications service provider and we discuss I.E. Comm’s liability below.16
5.
Pursuant to Section 64.1170(b) our rules, I.E. Comm must forward to Verizon an
amount equal to 150% of all charges paid by the subscriber to I.E. Comm along with copies of
any telephone bills issued from I.E. Comm to the Complainant.17 Within ten days of receipt of
this amount, Verizon shall provide a refund or credit to Complainant in the amount of 50% of all
charges paid by Complainant to I.E. Comm. Complainant has the option of asking Verizon to re-
rate I.E. Comm charges based on Verizon rates and, on behalf of Complainant, seek from I.E.
Comm, any re-rated amount exceeding 50% of all charges paid by Complainant to I.E. Comm.
Verizon must also send a notice to the Commission, referencing this Order, stating that is has
given a refund or credit to Complainant.18 If Verizon has not received the reimbursement
required from I.E. Comm within 45 days of the release of this Order, Verizon must notify the
Commission and Complainant accordingly. Verizon also must notify the Complainant of his or
her right to pursue a claim against I.E. Comm for a refund of all charges paid to I.E. Comm.19
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 Matrix Telecom, Inc., d/b/a I.E. Comm IS GRANTED.


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
Verizon’s Response to Informal Complaint No. IC 12-S003437, received September 18, 2013.
15
See 47 C.F.R § 64.1120-64.1130.
16
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
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.
17
See 47 C.F.R § 64.1170(b)(1)(2).
18
See 47 C.F.R. § 64.1170(c).
19
See 47 C.F.R. § 64.1170(e).
3

Federal Communications Commission

DA 13-2442

7.
IT IS FURTHER ORDERED that, pursuant to Section 64.1170(b) of the
Commission’s rules, 47 C.F.R. § 64.1170(b), that I.E. Comm must forward to Verizon an amount
equal to 150% of all charges paid by the subscriber along with copies of any telephone bills
issued from the company to the Complainant within ten (10) days of the release of this order.
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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