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Horizon Telecom, Inc. & Reduced Rate Long Distance, LLC Consent Decree

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Released: April 5, 2012

Federal Communications Commission

DA 12-487

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
File No.: EB-07-TC-4006
)
NAL /Acct. No.: 200832170013
Horizon Telecom, Inc.
)
FRN: 0009704925
)
and
)
)

Reduced Rate Long Distance, LLC
)
File No.: EB-08-TC-1067
)
NAL /Acct. No.: 200832170026
Apparent Liability for Forfeiture
)
FRN: 0005003025
)

ADOPTING ORDER

Adopted: March 30, 2012

Released: April 5, 2012

By the Chief, Enforcement Bureau:
1.
In this Order, we adopt the attached Consent Decree entered into between the
Enforcement Bureau (Bureau) of the Federal Communications Commission (Commission) and
Horizon Telecom, Inc. (Horizon) and Reduced Rate Long Distance, LLC (Reduced Rate Long
Distance). The Consent Decree terminates the investigation initiated by the Bureau regarding
Horizon’s compliance with Sections 201(b) and 258 of the Communications Act of 1934, as
amended (Act),1 and Sections 1.717, 64.1120, and 64.1130 of the Commission’s rules,2 and finds
that the forfeiture proposed in the Notice of Apparent Liability for Forfeiture should not be
imposed.3 The Consent Decree also terminates the investigation initiated by the Bureau regarding
Reduced Rate Long Distance’s compliance with Section 1.717 of the Commission’s rules,4 and
finds that the forfeiture proposed in the Notice of Apparent Liability for Forfeiture should not be
imposed.5
2.
The Bureau and Horizon and Reduced Rate Long Distance have negotiated the
terms of a Consent Decree that resolves these matters. A copy of the Consent Decree is attached
hereto and incorporated by reference.


1 47 U.S.C. §§ 201(b), 258.
2 47 C.F.R. §§ 1.717, 64.1120, 64.1130.
3 In the Matter of Horizon Telecom, Inc., Notice of Apparent Liability for Forfeiture, Apparent Liability for
Forfeiture, 23 FCC Rcd 3485 (2008)(Horizon NAL).
4 47 C.F.R. § 1.717.
5 In the Matter of Reduced Rate Long Distance, Notice of Apparent Liability for Forfeiture, 23 FCC Rcd
2697 (Enf. Bur. 2008)(Reduced Rate Long Distance NAL).

Federal Communications Commission

DA 12-487

3.
After reviewing the terms of the Consent Decree and evaluating the facts before
us, we find that the public interest would be served by adopting the Consent Decree and
terminating the referenced investigations.
4.
In the absence of material new evidence relating to this matter, we conclude that
our investigations raise no substantial or material questions of fact as to whether Reduced Rate
Long Distance possesses the basic qualifications, including those related to character, to hold or
obtain any Commission license or authorization.6
5.
Accordingly,

IT IS ORDERED

, pursuant to Section 4(i) of the Communications
Act of 1934, as amended7 and the authority delegated by Sections 0.111 and 0.311 of the
Commission’s rules,8 that the attached Consent Decree

IS ADOPTED

.
6.

IT IS FURTHER ORDERED

that the above-captioned investigations

ARE

TERMINATED

.
7.

IT IS FURTHER ORDERED

that a copy of this Order and Consent Decree
shall be sent by first class mail and certified mail, return receipt requested, to Thomas K. Crowe,
Partner, Law Offices of Thomas K. Crowe, P.C., 1250 24th Street, N.W., Suite 300, Washington,
D.C. 20037.
FEDERAL COMMUNICATIONS COMMISSION
P. Michele Ellison
Chief, Enforcement Bureau


6 Horizon permanently discontinued all interstate, international, and intrastate long distance services in
April 2007. Horizon’s telecommunications assets, including its customer base, were transferred to
Reduced Rate Long Distance on January 23, 2009.
7 47 U.S.C. § 154(i).
8 47 CFR §§ 0.111, 0.311.
2

Federal Communications Commission

DA 12-487

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
File No.: EB-07-TC-4006
)
NAL /Acct. No.: 200832170013
Horizon Telecom, Inc.
)
FRN: 0009704925
)
and
)
)

Reduced Rate Long Distance, LLC
)
File No.: EB-08-TC-1067
)
NAL /Acct. No.: 200832170026
Apparent Liability for Forfeiture
)
FRN: 0005003025
)

CONSENT DECREE

I.

INTRODUCTION

1.
The Enforcement Bureau of the Federal Communications Commission and
Horizon Telecom, Inc. and Reduced Rate Long Distance, LLC, by their authorized
representatives, hereby enter into this Consent Decree for the purpose of terminating the
investigations initiated by the Bureau into whether Horizon Telecom, Inc. violated Sections
201(b) and 258 of the Communications Act of 1934, as amended,1 and Sections 1.717, 64.1120,
and 64.1130 of the Commission’s rules,2 and whether Reduced Rate Long Distance, LLC
violated Section 1.717 of the Commission’s rules. In addition to terminating the investigations,
the Consent Decree finds that the forfeitures proposed in the related Notices of Apparent Liability
for Forfeiture should not be imposed.3

III

.

DEFINITIONS

2.
For purposes of this Consent Decree, the following definitions shall apply:
a. “Act” means the Communications Act of 1934, as amended, 47 U.S.C. § 151
et seq.


1 47 U.S.C. §§ 201(b), 258.
2 47 C.F.R. §§ 1.717, 64.1120, 64.1130.
3 In the Matter of Horizon Telecom, Inc., Notice of Apparent Liability for Forfeiture, Apparent Liability for
Forfeiture, 23 FCC Rcd 3485 (2008)(Horizon NAL). In the Matter of Reduced Rate Long Distance, Notice
of Apparent Liability for Forfeiture, 23 FCC Rcd 2697 (Enf. Bur. 2008)(Reduced Rate Long Distance
NAL
).

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DA 12-487

b. “Adopting Order” or “Order” means an order of the Bureau adopting the
terms and conditions of this Consent Decree without change, addition, or
modification, and formally terminating the above-captioned Investigations.
c.
“Affiliate” shall have the same meaning as that term is defined in Section
153(1) of the Communications Act. 47 U.S.C. § 153(1).
d.
“Bureau” means the Enforcement Bureau of the Federal Communications
Commission.
e. “Commission” or “FCC” means the Federal Communications Commission
and all of its bureaus and offices.
f.
“Effective Date” means the date on which the Bureau releases the Adopting
Order.
g. “Horizon” means Horizon Telecom, Inc., its affiliates, and its predecessors-
in-interest and successors-in-interest.
h. “Horizon Obligations” means the requirements described in this Consent
Decree at paragraph 12.
i.
“Horizon Investigation” means the Bureau’s investigation regarding
Horizon’s compliance with Sections 201(b) and 258 of the Act,
47 U.S.C. §§ 201(b), 258, and Sections 1.717, 64.1120, and 64.1130 of the
Commission’s rules, 47 C.F.R. §§ 1.717, 64.1120, 64.1130, commenced by
the Bureau’s June 28, 2007 letter of inquiry to Horizon, described in
paragraph 5 below.
j.
“Investigations” means, collectively, the Horizon Investigation and the
Reduced Rate Long Distance Investigation.
k. “Parties” means Horizon, Reduced Rate Long Distance, and the Bureau, each
of which is a “Party.”
l.
“Rules” means those rules and regulations codified in Title 47 of the Code of
Federal Regulations.
m. “Reduced Rate Long Distance” means Reduced Rate Long Distance, LLC,
its affiliates, and its predecessors-in-interest and successors-in-interest.
n. “Reduced Rate Long Distance Compliance Plan” means the program
described in this Consent Decree at paragraph 13.
o. “Reduced Rate Long Distance Investigation” means the Bureau’s
investigation regarding Reduced Rate Long Distance’s compliance with
Section 1.717 of the Commission’s rules, 47 C.F.R. § 1.717, commenced by
the Bureau’s January 24, 2008 letter of inquiry to Reduced Rate Long
Distance, described in paragraph 6 below.
2

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DA 12-487

p. “Slamming Rules” means the Rules set forth at 47 C.F.R. § 64.1120 et seq.

II.

BACKGROUND

3.
In December 1998, the Commission released the Section 258 Order in which it
adopted rules to implement Section 258 of the Act.4 Section 258 makes it unlawful for any
telecommunications carrier to “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 as the Commission shall prescribe.”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.6 The rules require, among
other things, that a carrier receive individual subscriber consent before a carrier change may
occur.7 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.8 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.9
4.
Horizon was a provider of telecommunications services that primarily used the
internet to market its products to residential customers from approximately February 2006
through April 2007. Horizon also engaged in a telemarketing program that was suspended in


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 generally Section 258 Order.
7 47 C.F.R. § 64.1120.
8 47 U.S.C. § 258(a).
9 47 C.F.R. § 64.1120(c).
3

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DA 12-487

May 2007. On December 1, 2007, Horizon and Reduced Rate Long Distance entered into a
management agreement, whereby Reduced Rate Long Distance agreed to manage the business of
Horizon. The companies also contemporaneously entered into an asset purchase agreement,
whereby Horizon’s telecommunications assets, including its customer base, would be transferred
to Reduced Rate Long Distance. The transfer was consummated on January 23, 2009. The
companies state that all affected customers have been notified pursuant to Section 64.1120(e)(3)
of the Commission’s rules.10
Horizon NAL
5.
The Bureau sent a letter of inquiry (LOI) to Horizon on June 28, 2007.11 Horizon
provided a Response to the LOI on July 27, 200712 and supplemented its Response on September
19, 2007 and October 5, 2007.13 On February 29, 2008, the Commission released an NAL against
Horizon for its apparent willful and repeated failure to respond on a timely basis to twenty-one
informal complaints that had been served upon it by the Commission’s Consumer and
Governmental Affairs Bureau (CGB), and for apparently changing the preferred carriers of one
hundred twenty-five consumers without proper authorization.14 On March 31, 2008, Horizon
filed its response to the NAL.15
Reduced Rate Long Distance NAL
6.
The Bureau sent an LOI to Reduced Rate Long Distance on January 24, 2008.16
Reduced Rate Long Distance submitted its responses on March 3, 200817 and March 12, 2008.18


10 47 C.F.R. § 64.1120(e)(3). Additionally, according to the companies, a copy of the notice to affected
customers was filed by Horizon and Reduced Rate Long Distance on December 22, 2008 in CC Docket No.
00-257, pursuant to Section 64.1120(e)(1) of the Commission’s rules, 47 C.F.R. § 64.1120(e)(1), and the
Notification of Pro Forma Assignment of Customer Base from Horizon Telecom, Inc. to Reduced Rate
Long Distance, LLC was filed with the Commission on February 3, 2009, pursuant to Sections 63.03(d)
and 63.24(f)(2), 47 C.F.R. §§ 63.03(d), 63.24(f)(2).
11 Letter from Marcy Greene, Deputy Division Chief, Telecommunications Consumers Division, FCC
Enforcement Bureau, to Cheyenne Devine, Customer Service Manager, Horizon Telecom, Inc. (June 28,
2007) (on file in EB-07-TC-4006).
12 Letter from Andrew Lustigman, The Lustigman Firm, P.C., Counsel to Horizon Telecom, Inc., to Marcy
Greene, Deputy Division Chief, Telecommunications Consumers Division, FCC Enforcement Bureau,
(July 27, 2007) (on file in EB-07-TC-4006).
13 Letter from Andrew Lustigman, The Lustigman Firm, P.C., Counsel to Horizon Telecom, Inc., to Marcy
Greene, Deputy Division Chief, Telecommunications Consumers Division, FCC Enforcement Bureau,
(September 19, 2007) (on file in EB-07-TC-4006).
14 See supra note 1.
15 Written Statement in Response to Notice of Apparent Liability for Forfeiture from Thomas K. Crowe and
Cheng-yi Liu, Law Offices of Thomas K. Crowe, P.C., Counsel to Horizon Telecom, Inc., to Marlene H.
Dortch, Secretary, Federal Communications Commission, filed March 31, 2008 (on file in EB-07-TC-
4006).
16 Letter from Marcy Greene, Deputy Division Chief, Telecommunications Consumers Division, FCC
Enforcement Bureau, to Robert Sorrentino, Chief Executive Officer, Reduced Rate Long Distance, LLC,
and Adam Z. Solomon, The Lustigman Firm, P.C. (January 24, 2008) (on file in EB-08-TC-1067).
4

Federal Communications Commission

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On February 19, 2008, the Bureau released an NAL against Reduced Rate Long Distance for its
failure to respond to two informal consumer complaints served upon it by CGB in apparent
violation of Section 1.717 of the Commission’s rules.19 On March 20, 2008, Reduced Rate Long
Distance filed its response to the NAL.20

IV.

TERMS OF AGREEMENT

7.

Adopting Order

. The Parties agree that the provisions of this Consent Decree
shall be subject to final approval by the Bureau by incorporation of such provisions by reference
in the Adopting Order without change, addition, modification, or deletion. Horizon’s and
Reduced Rate Long Distance’s decisions to enter into this Consent Decree are expressly
contingent upon the Bureau’s issuance of an Adopting Order.
8.

Jurisdiction

. Horizon and Reduced Rate Long Distance agree that the Bureau
has jurisdiction over them and the matters contained in this Consent Decree and has the authority
to enter into and adopt this Consent Decree.
9.

Effective Date; Violations

. The Parties agree that this Consent Decree shall
become effective on the Effective Date. Upon the Effective Date, the Adopting Order and this
Consent Decree shall have the same force and effect as any other order of the Commission. Any
violation of the Adopting Order or of the terms of this Consent Decree shall constitute a separate
violation of a Commission order, entitling the Commission to exercise any rights and remedies
attendant to the enforcement of a Commission order.
10.

Termination of Investigation

. In express reliance on the covenants and
representations contained herein, and to avoid expenditure of additional public resources, the
Bureau agrees to terminate the Investigations. In consideration for the termination of said
Investigations and in accordance with the terms of this Consent Decree, Horizon and Reduced
Rate Long Distance agree to the terms, conditions, and procedures contained herein. The Bureau
agrees that, in the absence of new material evidence related to the Investigations, it will not use
the facts developed in the Investigations through the Effective Date, or the existence of this
Consent Decree to institute, on its own motion, or refer to the Commission, any new proceeding,
formal or informal, or take, on its own motion, or refer to the Commission, any action against
Horizon or Reduced Rate Long Distance, concerning the matters that were the subject of the
Investigations, or with respect to Reduced Rate Long Distance’s basic qualifications, including its
character qualifications, to be a Commission licensee or hold other Commission authorizations.




17 Letter from Andrew Lustigman, The Lustigman Firm, P.C., Counsel to Reduced Rate Long Distance,
LLC, to Marcy Greene, Deputy Division Chief, Telecommunications Consumers Division, FCC
Enforcement Bureau (March 3, 2008) (on file in EB-08-TC-1067).
18 Letter from Andrew Lustigman, The Lustigman Firm, P.C., Counsel to Reduced Rate Long Distance,
LLC, to Marcy Greene, Deputy Division Chief, Telecommunications Consumers Division, FCC
Enforcement Bureau, (March 12, 2008) (on file in EB-08-TC-1067).
19 See supra note 2.
20 Written Statement in Response to Notice of Apparent Liability for Forfeiture from Thomas K. Crowe and
Cheng-yi Liu, Law Offices of Thomas K. Crowe, P.C., and Andrew Lustigman and Adam Z. Solomon, The
Lustigman Firm, P.C., Counsel to Reduced Rate Long Distance, LLC, to Marlene H. Dortch, Secretary,
Federal Communications Commission, filed March 3, 2008 (on file in EB-08-TC-1067).
5

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DA 12-487

11.

Section 208 Complaints; Subsequent Investigations

. Nothing in this Consent
Decree shall prevent the Commission or its delegated authority from adjudicating complaints
filed pursuant to Section 208 of the Act against Horizon or Reduced Rate Long Distance for
alleged violations of the Act, or for any other type of alleged misconduct, regardless of when such
misconduct took place. The Commission’s adjudication of any such complaint will be based
solely on the record developed in that proceeding. Except as expressly provided in this Consent
Decree, this Consent Decree shall not prevent the Commission from investigating new evidence
of noncompliance by Horizon or Reduced Rate Long Distance with the Act, the Rules, or the
Adopting Order.
12.

Horizon Obligations

. To resolve and terminate the Horizon Investigation,
Horizon agrees to certain obligations consistent with this paragraph 12.
A.

No Marketing or Sales of Telecommunications Services

. Irrespective
of other terms that may be set forth in this Consent Decree, Horizon shall not, at any
time, market or sell, or resume marketing or sales of, telecommunications services.
B.

Discontinuance of Service

. Horizon represents that it has transferred its
telecommunications assets, including its customer base, to Reduced Rate Long Distance
and permanently discontinued all interstate, international, and intrastate long distance
services as of April 2007. Irrespective of other terms that may be set forth in this
Consent Decree, Horizon shall not, at any time, resume the provision of
telecommunications services in the future.
C.

Notice of Consent Decree

. Within sixty (60) calendar days after the
Effective Date, Horizon shall notify all of its directors, officers, managers, employees,
and agents, including all sales representatives and Third Party Verification firms utilized
by Horizon, of the terms and conditions set forth in this Consent Decree.
D.

Reporting Non-Compliance

. Horizon shall report any non-compliance
with this Consent Decree to the Enforcement Bureau within thirty (30) calendar days
after the discovery of non-compliance. Such reports shall include a detailed explanation
of (i) each instance of non-compliance; (ii) the steps that Horizon has taken or will take to
remedy such non-compliance; (iii) the schedule on which such remedial actions will be
taken; and (iv) the steps that Horizon has taken or will take to prevent the recurrence of
any such non-compliance. All reports of non-compliance shall be submitted to the Chief,
Telecommunications Consumers Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street S.W., Washington, D.C. 20554, with a
copy submitted electronically to donna.cyrus@fcc.gov and kimberly.wild@fcc.gov.
13.

Reduced Rate Long Distance Compliance Plan

. To resolve and terminate the
Reduced Rate Long Distance Investigation, Reduced Rate Long Distance agrees to implement a
Compliance Plan consistent with this paragraph 13.
A.

Compliance Officer

. Within thirty (30) calendar days after the
Effective Date, Reduced Rate Long Distance shall designate a Compliance Officer
responsible for administering Reduced Rate Long Distance’s Compliance Plan. The
6

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Compliance Officer shall ensure compliance with this Consent Decree and the Slamming
Rules.
B.

Consumer Remedies

. Reduced Rate Long Distance shall take the
necessary steps to address any and all consumer complaints regarding an alleged
unauthorized switch of service provider by:
i.
having all such complaints addressed by appropriately-trained
customer service representatives; and
ii.
acting in good faith to resolve all such complaints during the first
call; and where it is necessary to call the customer back or leave
a message, striving to resolve the complaint in the same business
day and at the latest within twenty-four (24) hours, excluding
weekends and federal holidays; and
iii.
providing all appropriate remedies, including credits and
refunds, if necessary; and
iv.
implementing improvements to its customer service program,
including upgrading its complaint logging database to allow
timely responses to informal complaints served by the FCC.
C.

Revised Sales Scripts, Third Party Verification Scripts, and Letters

of Authorization. Reduced Rate Long Distance shall revise its sales scripts, third party
verification scripts, and any other marketing or verification scripts, including written or
electronic Letters of Authorization to ensure compliance with the Rules.
D.

Customer Service Record Retention

.
i.
In addition to the Third Party Verification retention requirements
set forth in Section 64.1120(a)(1)(ii) of the Commission’s rules,
Reduced Rate Long Distance shall retain records of all consumer
complaints and customer service responses, including consumer
credits, for the term of this Consent Decree. The records shall be
maintained in an accurate and easy-to-review format. These
records shall be made available to the Bureau for inspection
within twenty (20) business days from receipt of a Bureau
request.
ii.
Consumer complaint records shall include all written consumer
complaints filed directly with Reduced Rate Long Distance by
consumers or submitted to Reduced Rate Long Distance by the
Commission or other state or federal authority.
iii.
The record of consumer complaints shall include the name,
address, and telephone number of each complainant, Reduced
Rate Long Distance’s response, and the status or final disposition
of each complaint. For the purposes of this provision, consumer
7

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complaint records shall include all non-privileged writings,
computer records, electronic, or email communications, all
written notes regarding such writings, verbal discussions, and
electronic mail communications.
E.

Sales Training Materials

.
i.
Reduced Rate Long Distance shall implement a new Policy
Manual (Manual) within thirty (30) calendar days after the
Effective Date. The Manual will prohibit any activity that
violates any federal or state law, misrepresents the sales caller’s
identity or purpose, or involves any other misleading, untrue, or
incomplete statements. The Manual shall impose a “zero
tolerance” policy for acts of misrepresentation for which
Reduced Rate Long Distance may immediately terminate its
relationship with any employee, affiliate, agent, contractor, or
any other individual or entity acting on behalf of, or for the
benefit of, Reduced Rate Long Distance. All such sales and
marketing individuals or entities shall be provided with a copy of
the Manual, and be required to review the Manual, and an
explanation of the provisions in the Manual shall be a part of
their initial training.
ii.
The activity prohibited by the Manual shall include, but will not
be limited to:
a.
any activity that violates any federal or state law or results in
violation of any regulation enacted by any federal or state
governmental body including the FCC or any state public
utilities commission. Any activity that would constitute a
violation of federal or state slamming or cramming laws is
strictly prohibited; and
b.
any act of misrepresentation or fraud made in relation to
Reduced Rate Long Distance’s services, rates, surcharges, terms,
and conditions. This may include, but is not limited to, the
following:
1)
claiming that a sales call is for a purpose other than to
sell Reduced Rate Long Distance’s long distance
services;
2)
claiming that a sales call is only for the purpose of
verifying or confirming the consumer’s current services;
3)
falsely claiming that the call will not result in a change
of the consumer’s long distance carrier;
8

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4)
claiming to be affiliated with or working for any
telecommunications carrier or any other company other
than Reduced Rate Long Distance;
5)
claiming that another carrier (or the consumer’s current
carrier) cannot make or complete certain long distance
calls;
6)
failing to adequately identify the marketing
representative or Reduced Rate Long Distance on a sales
call;
7)
making any false, untrue, misleading, or incomplete
statements;
8)
any conduct which generally violates standard industry
ethical practices.
F.

Sales and Marketing Contracts

. Reduced Rate Long Distance shall
require contracts from all sales and marketing companies it employs obligating them to
abide by all applicable federal, state, and local laws and regulations, including the Act.
Said contracts shall allow Reduced Rate Long Distance, in its sole discretion, to
terminate any contract upon suspicion of illegal or unethical conduct.
G.

Counsel Review

. Prior to distributing the new Policy Manual and the
new sales scripts, TPV scripts, and other marketing or verification scripts described
herein, Reduced Rate Long Distance shall submit the same to legal counsel of its own
designation for review and editing regarding conformity with the requirements of this
Compliance Plan and all applicable federal and state laws. Such counsel shall have
experience with federal telecommunications and consumer protection laws, including the
law relating to fraudulent, deceptive, unconscionable, and unfair acts or practices.
H.

Notice of Consent Decree

. Within sixty (60) calendar days after the
Effective Date, Reduced Rate Long Distance shall notify all directors, officers, managers,
employees and agents, including all sales representatives and Third Party Verification
firms utilized by Reduced Rate Long Distance, of the terms and conditions set forth
therein.
I.

Reporting Non-Compliance

. Reduced Rate Long Distance shall report
any non-compliance with this Consent Decree, or with the Slamming Rules, to the
Bureau within thirty (30) calendar days after the discovery of non-compliance. Such
reports shall include a detailed explanation of (i) each instance of non-compliance; (ii)
the steps that Reduced Rate Long Distance has taken or will take to remedy such non-
compliance; (iii) the schedule on which such remedial actions will be taken; and (iv) the
steps that Reduced Rate Long Distance has taken or will take to prevent the recurrence of
any such non-compliance. All reports of non-compliance shall be submitted to the Chief,
Telecommunications Consumers Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street S.W., Washington, D.C. 20554, with a
copy submitted electronically to donna.cyrus@fcc.gov.
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J.

Compliance Report

. The Compliance Officer, as an agent of and on
behalf of Reduced Rate Long Distance, shall file compliance reports ninety (90) calendar
days after the Effective Date, one (1) year after the Effective Date, and at the end of the
two (2) year term, in compliance with the terms of this paragraph 13(J).
i.
Each compliance report shall include a detailed description of
Reduced Rate Long Distance’s efforts during the relevant period
to comply with the terms and conditions of this Consent Decree
and the Commission’s Slamming Rules.
ii.
Each compliance report shall include a certification by the
Compliance Officer, as an agent of and on behalf of Reduced
Rate Long Distance, stating that the Compliance Officer has
personal knowledge that Reduced Rate Long Distance (A) has
established and implemented the Compliance Plan; (B) has been
following all aspects of the Compliance Plan for the entire term
of the Consent Decree; and (C) is not aware of any instances of
non-compliance with the terms and conditions of this Consent
Decree that have not been disclosed as required by paragraph
13(I) above. The certification shall be accompanied by a
statement explaining the basis for the Compliance Officer’s
certification and must be substantially in the form set forth in
Section 1.16 of the Rules.21
iii.
If the Compliance Officer cannot provide the requisite
certification, the Compliance Officer, as an agent of and on
behalf of Reduced Rate Long Distance, shall provide the
Commission with a detailed explanation of (A) each instance of
non-compliance; (B) the steps that Reduced Rate Long Distance
has taken or will take to remedy such non-compliance, including
the schedule on which proposed remedial actions will be taken;
and (C) the steps that Reduced Rate Long Distance has taken or
will take to prevent recurrence of any such non-compliance,
including the schedule on which such preventive action will be
taken.
iv.
Such certification must be mailed within fifteen (15) calendar
days of the one (1) and the two (2) year anniversary of the
Effective Date, and Reduced Rate Long Distance must mail the
certification to the Chief, Telecommunications Consumers
Division, Enforcement Bureau, Federal Communications
Commission, 445 12th Street, S.W., Washington, D.C. 20554,
and must include the file number listed above. Reduced Rate
Long Distance shall also send an electronic copy of its


21 47 C.F.R. § 1.16.
10

Federal Communications Commission

DA 12-487

certification to kimberly.wild@fcc.gov and
donna.cyrus@fcc.gov.
K.

Duration of the Compliance Plan

. Reduced Rate Long Distance shall
implement the Reduced Rate Long Distance Compliance Plan within sixty (60) calendar
days after the Effective Date. The term of the Reduced Rate Long Distance Compliance
Plan shall expire two (2) years after the Effective Date.
14.

Voluntary Contribution

. In consideration for the termination of the
Investigations in accordance with the terms of this Consent Decree, Horizon and Reduced Rate
Long Distance agree to make a voluntary contribution to the United States Treasury, without
further protest or recourse to a trial de novo, in the amount of fifty-three thousand dollars
($53,000) within thirty (30) calendar days after the Effective Date. Horizon and Reduced Rate
Long Distance agree that they are jointly and severally liable for the payment, which is reduced
from the proposed NAL amounts based upon their demonstrated inability to pay.22 The payment
must be made by check or similar instrument, payable to the Order of the Federal
Communications Commission. The payment must include the Account Number and FRN
referenced in the caption to the Adopting Order. Payment by check or money order may be
mailed to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000.
Payment by overnight mail may be sent to U.S. Bank – Government Lockbox #979088, SL-MO-
C2-GL, 1005 Convention Plaza, St. Louis, MO 63101. Payments by wire transfer may be made
to ABA Number 021030004, receiving bank Federal Reserve Bank of New York and account
number 27000001. Horizon and Reduced Rate Long Distance will also send electronic
notification on the date said payment is made to Johnny.Drake@fcc.gov.
15.

Waivers

. Horizon and Reduced Rate Long Distance waive any and all rights
they may have to seek administrative or judicial reconsideration, review, appeal or stay, or to
otherwise challenge or contest the validity of this Consent Decree and the Adopting Order.
Horizon and Reduced Rate Long Distance shall retain the right to challenge the Commission’s
interpretation of the Consent Decree or any terms contained herein, and of the Rules. If any Party
(or the United States on behalf of the Commission) brings a judicial action to enforce the terms of
the Adopting Order or this Consent Decree, neither Horizon, Reduced Rate Long Distance, nor
the Bureau shall contest the validity of the Consent Decree or the Adopting Order, and Horizon
and Reduced Rate Long Distance shall waive any statutory right to a trial de novo and shall
consent to a judgment incorporating the terms of this Consent Decree. Horizon and Reduced
Rate Long Distance hereby agree to waive any claims they may otherwise have under the Equal
Access to Justice Act, 5 U.S.C. § 504 and 47 C.F.R. § 1.1501 et seq., relating to the matters
contained in this Consent Decree.
16.

Severability

. The Parties agree that if any of the provisions of the Adopting
Order or the Consent Decree shall be invalid or unenforceable, such invalidity or unenforceability
shall not invalidate or render unenforceable the entire Adopting Order or Consent Decree, but
rather the entire Adopting Order or Consent Decree shall be construed as if not containing the
particular invalid or unenforceable provision or provisions, and the rights and obligations of the
Parties shall be construed and enforced accordingly. In the event that this Consent Decree in its


22 See supra note 3.
11

Federal Communications Commission

DA 12-487

entirety is rendered invalid by any court of competent jurisdiction, it shall become null and void
and may not be used in any manner in any legal proceeding.
17.

Privileged and Confidential Documents

. By this Consent Decree, Horizon and
Reduced Rate Long Distance neither waive nor alter their rights to assert and seek protection
from disclosure of any privileged or otherwise confidential and protected documents and
information, or to seek appropriate safeguards of confidentiality for any competitively sensitive
or proprietary information.
18.

Subsequent Rule or Order

. The Parties agree that if any provision of this
Consent Decree is inconsistent with any subsequent rule or order adopted by the Commission,
that provision will be superseded by such Commission rule or order.
19.

Successors and Assigns

. Horizon and Reduced Rate Long Distance agree that
the provisions of this Consent Decree shall be binding on their successors, assigns, and
transferees.
20.

Final Settlement

. The Parties agree and acknowledge that this Consent Decree
shall constitute a final settlement of the Investigations. The Parties agree that this Consent
Decree does not constitute either an adjudication on the merits or a factual or legal finding or
determination regarding any compliance or noncompliance by Horizon or Reduced Rate Long
Distance with the requirements of the Act or the Commission’s rules or orders. The Parties agree
that this Consent Decree is for settlement purposes only, and that by agreeing to this Consent
Decree, Horizon and Reduced Rate Long Distance do not admit or deny any noncompliance,
violation, or liability associated with or arising from their actions or omissions involving the Act
or the Rules that are the subject of this Consent Decree.
21.

Modifications

. This Consent Decree cannot be modified without the advance
written consent of both parties.
22.

Paragraph Headings

. The headings of the paragraphs in this Consent Decree
are inserted for convenience only and are not intended to affect the meaning or interpretation of
this Consent Decree.
23.

Counterparts

. This Consent Decree may be signed in counterparts (including
by facsimile or electronic mail), each of which, when executed and delivered, shall be an original,
and all of which counterparts together shall constitute one and the same fully executed
instrument.
12

Federal Communications Commission

DA 12-487

24.

Authorized Representative

. Each Party represents and warrants that it has full power
and authority to enter into this Consent Decree.
For: Horizon Telecom, Inc.
__________
_______________________
Date
Robert Sorrentino
President
For: Reduced Rate Long Distance, LLC
__________
_______________________
Date
Robert Sorrentino
President
For: Federal Communications Commission
__________
________________________________
Date
P. Michele Ellison
Chief, Enforcement Bureau
13

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