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X(# a2Right ParRight-Aligned Paragraph Numbers C @` A. ` ` (#` a3DocumentgDocument Style Style B b  ?  1.  a3Right ParRight-Aligned Paragraph Numbers L! ` ` @P 1. ` `  (# 2  H   a4Right ParRight-Aligned Paragraph Numbers Uj` `  @ a. ` (# a5Right ParRight-Aligned Paragraph Numbers _o` `  @h(1)  hh#(#h a6Right ParRight-Aligned Paragraph Numbersh` `  hh#@$(a) hh#((# a7Right ParRight-Aligned Paragraph NumberspfJ` `  hh#(@*i) (h-(# 2   za8Right ParRight-Aligned Paragraph NumbersyW"3!` `  hh#(-@p/a) -pp2(#p Tech InitInitialize Technical Style. k I. A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technicala1DocumentgDocument Style Style\s0  zN8F I. ׃  a5TechnicalTechnical Document Style)WD (1) . 23ha6TechnicalTechnical Document Style)D (a) . a2TechnicalTechnical Document Style<6  ?  A.   a3TechnicalTechnical Document Style9Wg  2  1.   a4TechnicalTechnical Document Style8bv{ 2  a.   2/3a1TechnicalTechnical Document StyleF!<  ?  I.   a7TechnicalTechnical Document Style(@D i) . a8TechnicalTechnical Document Style(D a) . Doc InitInitialize Document Stylez   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)Documentg2ePleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:fx6X@`7X@7jC:, Xj\  P6G;XP7nC:,Xn4  pG;XW!@(#,9h@\  P6G;hP\5hC:,-Xh*f9 xr G;XX"@T  \!V!FngnOȈ0Ȉ0Ȉ#0Ȉ/MOUSEWEP 2& X4  #Xj\  P6G;XP#TRANSMITTED FOR FCC RECORD ONLY $// N.A.L. for Forfeiture, Excel Telecomm., Inc., File No. ENF 9515, DA 951833 //$  x3$/ 47 C.F.R.  64.1100 Verification of orders for long distance service generated by telemarketing /$  X4+` Before the [ FEDERAL COMMUNICATIONS COMMISSION  X_'(Washington, D. C. 20554 ă ` `  hhCqpp  *xxXDA 951833  X 4In the Matter of hhCq)  X 4` `  hhCq)ppFile No. ENF9515  X 4EXCEL TELECOMMUNICATIONS, INC.)pp  X 4` `  hhC q)ppNAL/Acct. No. 516EF0005 ` `  hhCq)  X 4Apparent Liability for ForfeiturehhCq)  Xb4  NOTICE OF APPARENT LIABILITY FOR FORFEITURE  XK4  X44 ` ` Adopted: August 18, 1995;q Released: August 18, 1995 By the Chief, Common Carrier Bureau: yFI. INTRODUCTION  X4 e X01Í ÍX01ÍÍ1.` ` By this Notice of Apparent Liability for Forfeiture ("NAL"), we initiate  X4 x enforcement action against Excel Telecommunications, Inc. ("Excel"). X 4 "ЍXExcel Telecommunications, Inc. is located at 9101 LBJ Freeway, Suite 800, Dallas, Texas 75243. Kenny Troutt is the Chairman, President and Chief Executive Officer. (# For the reasons discussed  X|4 xbelow, we find that Excel willfully or repeatedly violated Commission rules and orders |b X4 "ЍX47 C.F.R.  64.1100; Investigation of Access and Divestiture Related Tariffs, CC Docket  Xx4 "831145, Phase 1, 101 FCC 2d 911 (1985) (Allocation Order); recon. denied, 102 FCC  Xa 4 "2d 503 (1985)(Reconsideration Order); Investigation of Access and Divestiture Related  XJ!4Tariffs, CC Docket 831145, Phase 1, 101 FCC 2d 935 (1985) (Waiver Order).(#  by  xchanging the primary interexchange carrier ("PIC") designated by Mr. Bruce Adelman  xN("Adelman") of Los Angeles, California and Mrs. Robert J. Blake ("Blake") of Altadena,  xVCalifornia, without Adelman's or Blake's authorization. Based upon our review of the facts and  xcircumstances surrounding the violations, we find that Excel is apparently liable for a forfeiture in the amount of eighty thousand dollars ($80,000). HII. BACKGROUND " 0*0*0*b"Ԍ X- ` x2.` ` In its Allocation Order and subsequent Reconsideration Order and Waiver Order,k2 Xy-ԍXxSee supra proceedings cited at note 2.(#k  X- xthe Commission set forth rules and procedures for implementing equal accessvy2 X-  ЍXxEqual access for interexchange carriers ("IXCs") is that which is equal in type, quality and  X-  price to the access to local exchange facilities provided to AT&T and its affiliates. United  X-  #States v. American Tel. & Tel., 552 F. Supp. 131, 227 (D.D.C. 1982), aff'd sub nom.  X-  Maryland v. United States, 460 U.S. 1001 (1983) (Modification of Final Judgement or  X-  ^"MFJ"). "Equal access allows end users to access facilities of a designated [IXC] by  X -dialing '1' only." Allocation Order, 101 FCC 2d at 911.(# and customer  X- xpresubscriptionf2 X: -  ЍXxPresubscription is the process by which each customer selects one primary interexchange   carrier ("PIC"), from among several available carriers, for the customer's phone line(s).  X -  Allocation Order, 101 FCC 2d at 911, 928. Thus, when a customer dials "1", only the  X-  0customer accesses the primary IXC's services. An end user can also access other IXCs  X-by dialing a fivedigit access code (10XXX). Id. at 911.(#f to an interexchange carrier ("IXC"). 2 X-  @ЍXxPursuant to the MFJ, the Bell Operating Companies (BOCs) were ordered to provide,  Xx-where technically feasible, equal access to their customers by September 1986. Id.(# The Commission's original allocation plan  xrequired IXCs to have on file a letter of agency ("LOA") signed by the customer before  X- xLsubmitting PIC change orders to the local exchange carrier ("LEC") on behalf of the customer.O2 X-  ЍXxAn LOA is a document, signed by the customer, which states that the customer has  X-  selected a particular carrier as that customer's primary long distance carrier. Allocation  X-Order, 101 FCC 2d at 929.(#O  xAfter considering claims by certain IXCs that this requirement would stifle competition because  xconsumers would not be inclined to execute the LOAs even though they agreed to change their  xPIC, the Commission later modified the requirement to allow IXCs to initiate PIC changes if they  XH- xhad "instituted steps to obtain signed LOAs."eH)2 X"-ԍXxWaiver Order, 101 FCC 2d at 942.(#e In 1992, the Commission again revised its rules  X1- xbecause it continued to receive complaints about unauthorized PIC changes. 12 X-  1ЍXxPolicies and Rules Concerning Changing Long Distance Carriers, 7 FCC Rcd 103839  X -(1992) (PIC Change Order).(# Specifically, while  xzthe Commission recognized the benefits of permitting a telephonebased industry to rely on  x>telemarketing to solicit new business, it required IXCs to institute one of the following four  xconfirmation procedures before submitting PIC change orders generated by telemarketing: (1)  X - x=obtain the consumer's written authorization; (2) obtain the consumer's electronic authorization  xby use of an 800 number; (3) have the consumer's oral authorization verified by an independent  xthird party; or (4) send an information package, including a prepaid, returnable postcard, within  x=three days of the consumer's request for a PIC change, and wait 14 days before submitting the"v 0*(("  X- xconsumer's order to the LEC, so that the consumer has sufficient time to return the postcard  X- xdenying, cancelling or confirming the change order. 2 Xb-ЍXxSee 47 C.F.R.  64.1100; PIC Change Order, 7 FCC Rcd at 1045.(#Ə Hence, the Commission's rules and orders  xrequire that IXCs either obtain a signed LOA or, in the case of telemarketing solicitations,  xcomplete one of the four telemarketing verification procedures before submitting PIC change requests to LECs on behalf of consumers.  Xv- ` x3.` ` Because of its continued concern over unauthorized PIC changes, the Commission  xrecently prescribed the general form and content of the LOA used to authorize a change in a  XH- xcustomer's primary long distance carrier. Hy2 Xr -  1ЍXxPolicies and Rules Concerning Unauthorized Changes of Consumers' Long Distance  X[ -Carriers, FCC 95225 (June 14, 1995) (LOA Order).(# The Commission's recent rules prohibit the potentially  xdeceptive or confusing practice of combining the LOA with promotional materials in the same  X - xdocument.  2 X-  ЍXxSee LOA Order, FCC 95225 at para. 27. Checks that serve as an LOA are excepted   from the "separate or severable" requirement so long as the check contains certain   information clearly indicating that endorsement of the check authorizes a PIC change and  X-otherwise complies with the Commission's LOA requirements. Id. at para. 25.(# The rules also prescribe the minimum information required to be included in the  X - xLOA and require that the LOA be written in clear and unambiguous language._   2 X3-ԍXxSee id. at para. 10.(#_ The rules  X - x-prohibit all "negative option" LOAs 0 2 X-  ЍXxSee id. at para. 11. "Negative option" LOAs require consumers to take some action to avoid having their long distance telephone service changed.(# and require that LOAs and any accompanying promotional  X -materials contain complete translations if they employ more than one language._ 2 XP-ԍXxSee id. at para. 40.(#_  X - ` Rx4.` ` On March 13, 1995 and November 7, 1994, the Commission received written  xcomplaints from Adelman and Blake, respectively, alleging that Excel had converted Adelman's  xand Blake's prescribed long distance service provider from AT&T Corporation ("AT&T") to  Xb- xExcel without either Adelman's or Blake's authorization.b{2 X!-  ЍXxBruce Adelman, Informal Complaint No. 9510834; Mrs. Robert J. Blake, Informal Complaint No. 9502575.(#ƶ Both Adelman and Blake state that  x.the "Residential Service Request Forms" ("authorization form") forwarded to them by Excel as  X4- x.verification of their requests to have their long distance service switched to Excel, bear forged"40*((f"  X-signatures and fabricated social security numbers.2 Xy-  ЍXxBruce Adelman, Informal Complaint No. 9510834; Mrs. Robert J. Blake, Informal Complaint No. 9502575.(#Ƽ  X- ` x5.` ` Subsequently, the Common Carrier Bureau's Enforcement Division (the "Division")  x=sent a letter to Excel directing it to provide specific information regarding the allegations listed  X- xyin both the Adelman and Blake complaints.b2 X-ЍXxSee, e.g., Official Notice of Informal Complaint, Complaint No. 9510834.(#Ƙ In response to the complaints, Excel explains that  xMits marketing is based exclusively on obtaining a written LOA from a prospective customer,  xtypically as the result of an inperson, oneonone presentation by one of its independent  xmarketing agents. Excel states that its practice is to review LOAs obtained from prospective  x<customers to ensure completeness and that it occasionally checks social security numbers. Excel  xstates that it is unable to ascertain whether these review procedures were implemented with regard  X - xto the Adelman and Blake LOAs or whether the signatures are authentic.4 2 X-  #ЍXxSee, e.g., Excel Response to Informal Complaint No. 9510834 at 7 (Excel Adelman   Response); Excel Response to Informal Complaint No. 9502575 at 7 (Excel Blake  X-Response).(#4 Excel concedes that  xit is possible that Adelman's and Blake's signatures and social security numbers may have been  X -forged by the independent marketing representatives who submitted the forms at issue. 2 X3-ЍXxSee, e.g., Excel Adelman Response at 5; Excel Blake Response at 5.(#Ɨ x %III. DISCUSSION  X- ` x6.` ` We have carefully evaluated the information submitted in connection with  xAdelman's and Blake's informal complaints and conclude that Excel is apparently liable for  xforfeiture for willful or repeated violation of the Commission's rules and PIC change  xrequirements. We find Excel's apparent actions particularly egregious. It appears that on or  xabout August 22, 1994 and August 30, 1994, Excel submitted two PIC change requests to Pacific  xBell, based on apparently forged LOAs, which resulted in the conversion of both Adelman's and  xBlake's telephone service from AT&T to Excel. The statements and information provided by  xAdelman, Blake, and Excel leave virtually no doubt that the LOAs were forged, the social  xsecurity numbers falsified, and consequently, that Excel lacked the requisite authorization to  x[request a PIC change to either Adelman's or Blake's long distance service. With respect to the  xAdelman complaint, there is no similarity between the signature on Adelman's complaint and his  xpurported signature on the LOA form that Excel used as the basis for the PIC change submitted  xyto Pacific Bell. With respect to the Blake complaint, information obtained from the complainant  xindicates that neither Mr. or Mrs. Blake ever met with an Excel representative nor were they ever  xcontacted by telephone regarding a switch in their long distance service. Further, the complainant  xconfirmed that Mr. Blake's name is misspelled, his signature is forged, and that the purported  xZsocial security number appearing on the form is not his. Under these circumstances, we conclude" G 0*(("  xthat Excel's apparent actions were in willful or repeated violation of the Commission's PIC change rules and orders and that a substantial forfeiture penalty is appropriate.  X-  X- ` Qx7.` ` Section 503(b)(2)(B) of the Communications Act authorizes the Commission to  xLassess a forfeiture of up to one hundred thousand dollars ($100,000) for each violation or each  xday of a continuing violation up to a statutory maximum of one million dollars ($1,000,000) for  Xv- xa single act or failure to act.[v2 X-ԍXx47 U.S.C.  503(b)(2)(B).(#[ In exercising such authority, the Commission is required to take  xinto account "the nature, circumstances, extent, and gravity of the violation and, with respect to  x<the violator, the degree of culpability, any history of prior offenses, ability to pay, and such other  X1- xmatters as justice may require."U1y2 X[ -ԍXxId.  503(b)(2)(D).(#U For purposes of determining an appropriate forfeiture penalty  xZin this case, we regard the conversion of Adelman's and Blake's telephone lines as two violations.  xAfter weighing the circumstances surrounding the violation, we find that Excel is apparently  x"liable for a forfeiture of forty thousand dollars ($40,000) for each of the unauthorized  X - xLconversions, resulting in a total forfeiture of eighty thousand dollars ($80,000). Excel will have  xthe opportunity to submit evidence and arguments in response to this NAL to show that no  X - xZforfeiture should be imposed or that some lesser amount should be assessed.z *2 X-ԍXxSee 47 U.S.C.  503(b)(4)(C); 47 C.F.R.  1.80(f)(3).(#z In this regard, we  x/note that the Commission has previously held that a licensee's gross revenues are the best  xindicator of its ability to pay a forfeiture and that use of gross revenues to determine a party's  x-ability to pay is reasonable, appropriate, and a useful yardstick in helping to analyze a company's  XK- xfinancial condition for forfeiture purposes.P K2 X-  mЍXxPJB Communications of Virginia, 7 FCC Rcd 2088, 2089 (1992) (finding that forfeitures   of $5,000 and $3,000 assessed against two jointly owned and operated paging companies   were not excessive because the total forfeiture amount ($8,000) represented approximately  X-  2.02 percent of the companies' combined gross revenues of $395,469). See also David   L. Hollingsworth d/b/a Worland Services, 7 FCC Rcd 6640 (Com. Car. Bur. 1992)   A($6,000 forfeiture representing approximately 1.21 percent of licensee's 1991 gross   ?revenues and approximately 1.34 percent of projected 1992 gross revenues not found to   be excessive); Afton Communications Corp., 7 FCC Rcd 6741 (Com. Car. Bur. 1992)   |($6,000 forfeiture representing approximately 3.91 percent of 1990 gross revenues and 2.75 percent of projected 1992 gross revenues not found to be excessive). (#P We will give full consideration to any financial information provided by Excel before assessing a final forfeiture amount.  X-:  IV. CONCLUSIONS AND ORDERING CLAUSES ă  X- ` x8.` ` We have carefully reviewed the information submitted in connection with  xjAdelman's and Blake's informal complaints and conclude that on or about August 22, 1994 and  xAugust 30, 1994, Excel apparently converted or caused a local exchange carrier to convert"0*((R"  X- xAdelman's and Blake's telephone lines without either Adelman's or Blake's authorization through  xthe use of apparently forged LOAs. We further conclude that Excel thereby willfully or  xrepeatedly violated Commission rules governing primary interexchange carrier conversions, and that its conduct warrants a forfeiture in the amount of eighty thousand dollars ($80,000).  X- ` $x9.` ` Accordingly, IT IS ORDERED, pursuant to Section 503(b) of Communications  x Act of 1934, as amended, 47 U.S.C.  503(b), and Section 1.80 of the Commission's rules, 47  xC.F.R.  1.80, that Excel Telecommunications, Inc. IS HEREBY NOTIFIED of an Apparent  x{Liability for Forfeiture in the amount of eighty thousand dollars ($80,000) for its willful or  X1- xrepeated violation of the Commission's PIC change rules and orders, 47 C.F.R.  64.1100; PIC  X - xChange Order, 7 FCC Rcd 1038 (1992); Allocation Order, 101 FCC 2d 911 (1985); Waiver  X -Order, 101 FCC 2d 935 (1985).  X - ` x 10.` ` IT IS FURTHER ORDERED, pursuant to Section 1.80 of the Commission's rules,  xy47 C.F.R.  1.80, that within thirty days of the release of this Notice, Excel Telecommunications,  X - xInc. SHALL PAY the full amount of the proposed forfeiture 2 X -  lЍXxThe forfeiture amount should be paid by check or money order drawn to the order of the   %Federal Communications Commission. Reference should be made on Excel   ]Telecommunications, Inc.'s check or money order to "NAL/Acct. No. 516EF0005." Such   "remittances must be mailed to Forfeiture Collection Section, Finance Branch, Federal Communications Commission, P.O. Box. 73482, Chicago, Illinois 606737482.(# OR SHALL FILE a response showing why the proposed forfeiture should not be imposed or should be reduced.  Xb- ` Qx 11.` ` IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability for  xForfeiture SHALL BE SENT by certified mail to Kenny Troutt, Chairman, President and Chief  xExecutive Officer of Excel Telecommunications, Inc., 9101 LBJ Freeway, Suite 800, Dallas, Texas 75243. x` `  hh@FEDERAL COMMUNICATIONS COMMISSION  X- x` `  hh@Kathleen M.H. Wallman  XN-x` `  hh@Chief, Common Carrier Bureau