WPC& 2B-J Z CourierCourierTimes New RomanTimes New Roman BoldX@HP LaserJet 4_230_1HPLAS4.PRS 4x  @\oeX@26F  3|x  CourierTimes New RomanT2HPLA4MPC.PRSx  @\X@Ш2vpTkk/a8DocumentgDocument Style StyleXX` `  ` a4DocumentgDocument Style Style . a6DocumentgDocument Style Style GX  a5DocumentgDocument Style Style }X(# 2vqt[a2DocumentgDocument Style Style<o   ?  A.  a7DocumentgDocument Style StyleyXX` ` (#` BibliogrphyBibliography:X (# a1Right ParRight-Aligned Paragraph Numbers:`S@ I.  X(# 2 '  q a2Right ParRight-Aligned Paragraph Numbers C @` A. ` ` (#` a3DocumentgDocument Style Style B b  ?  1.  a3Right ParRight-Aligned Paragraph Numbers L! ` ` @P 1. ` `  (# a4Right ParRight-Aligned Paragraph Numbers Uj` `  @ a. ` (# 24    [ a5Right ParRight-Aligned Paragraph Numbers _o` `  @h(1)  hh#(#h a6Right ParRight-Aligned Paragraph Numbersh` `  hh#@$(a) hh#((# a7Right ParRight-Aligned Paragraph NumberspfJ` `  hh#(@*i) (h-(# a8Right ParRight-Aligned Paragraph NumbersyW"3!` `  hh#(-@p/a) -pp2(#p 2Df f 6Tech InitInitialize Technical Style. k I. A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technicala1DocumentgDocument Style Style\s0  zN8F I. ׃  a5TechnicalTechnical Document Style)WD (1) . a6TechnicalTechnical Document Style)D (a) . 23v$qa2TechnicalTechnical Document Style<6  ?  A.   a3TechnicalTechnical Document Style9Wg  2  1.   a4TechnicalTechnical Document Style8bv{ 2  a.   a1TechnicalTechnical Document StyleF!<  ?  I.   2e3qa7TechnicalTechnical 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)DocumentgPleadingHeader 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;XXDTOKENNAMEDBMQUERYCTL3DBORDERFLAG:DRSVECTORSETSCALEKBDTRANSLATEACCELERATORRS_CACH_FMNUCONVERTSUBMENUs TIMSETTIMERIPCAPPGETFUNCTIONNAME%DBMGETSBARHE2& X4  #Xj\  P6G;XP#TRANSMITTED FOR FCC RECORD ONLY $// N.A.L. for Forfeiture, Interstate Savings, Inc. d/b/a ISI, File No. ENF 9514, DA 951834 //$  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 951834  X 4In the Matter of hhCq)  X 4` `  hhCq)File No. ENF 9514  X 4INTERSTATE SAVINGS, INC. d/b/aq)  X 4ISI TELECOMMUNICATIONShhC q)NAL/Acct. No. 516EF0004 ` `  hhCq)  X 4Apparent Liability for ForfeiturehhCq)  Xb4  NOTICE OF APPARENT LIABILITY FOR FORFEITURE  XK4 ` `  Adopted: August 18, 1995; Released: August 18, 1995 By the Chief, Common Carrier Bureau: yFI. INTRODUCTION  X|4 e X01Í ÍX01ÍÍ1.` ` By this Notice of Apparent Liability for Forfeiture ("NAL"), we initiate  Xe4 xenforcement action against Interstate Savings, Inc. d/b/a ISI Telecommunications ( "ISI").De X4 "ЍXInterstate Savings, Inc. is a Pennsylvania corporation registered in the District of  "4Columbia. Its business address is 1015 18th Street, N.W. Suite 505, Washington, D.C. 20036. Matthew Freedman is President and Director.(#D For  XN4 xcthe reasons discussed below, we find that ISI willfully violated Commission rules and orders NK XJ!4 "ЍX47 C.F.R.  64.1100; Investigation of Access and Divestiture Related Tariffs, CC Docket  X3"4 "831145, Phase 1, 101 FCC 2d 911 (1985) (Allocation Order); recon. denied, 102 FCC  X#4 "2d 503 (1985)(Reconsideration Order); Investigation of Access and Divestiture Related  X$4Tariffs, CC Docket 831145, Phase 1, 101 FCC 2d 935 (1985) (Waiver Order).(#  by  x/changing the primary interexchange carrier ("PIC") designated by Knicely & Cotorceanu, P.C.  x("K&C") of Williamsburg, Virginia, without K&C's authorization. Based upon our review of the  xEfacts and circumstances surrounding the violations, we find that ISI is apparently liable for a forfeiture in the amount of forty thousand dollars ($40,000). "0*0*0*"Ԍ  X-  II. BACKGROUND  Xv- ` x2.` ` In its Allocation Order and subsequent Reconsideration Order and Waiver Order,kv2 X-ԍXxSee supra proceedings cited at note 2.(#k  X_- xthe Commission set forth rules and procedures for implementing equal accessv_y2 X -  ЍXxEqual access for interexchange carriers ("IXCs") is that which is equal in type, quality and  Xr -  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.  XD -  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  XH- xpresubscriptionfH2 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  Xk-  0customer accesses the primary IXC's services. An end user can also access other IXCs  XT-by dialing a fivedigit access code (10XXX). Id. at 911.(#f to an interexchange carrier ("IXC").H 2 X-  @ЍXxPursuant to the MFJ, the Bell Operating Companies (BOCs) were ordered to provide,  X-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.O 2 Xq-  ЍXxAn LOA is a document, signed by the customer, which states that the customer has  XZ-  selected a particular carrier as that customer's primary long distance carrier. Allocation  XC-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  X - xhad "instituted steps to obtain signed LOAs."e )2 X"-ԍXxWaiver Order, 101 FCC 2d at 942.(#e In 1992, the Commission again revised its rules  X - xbecause it continued to receive complaints about unauthorized PIC changes.  2 X2%-  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"v 0*(("  x>telemarketing to solicit new business, it required IXCs to institute one of the following four  x.confirmation procedures before submitting PIC change orders generated by telemarketing: (1)  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  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 X-ԍXxSee 47 C.F.R.  64.1100; PIC Change Order, 7 FCC Rcd at 1045.(#ƅ 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.  X - ` 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  X - xcustomer's primary long distance carrier.  y2 X-  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 XT-  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  Xy- xLOA and require that the LOA be written in clear and unambiguous language._ y 2 X-ԍXxSee id. at para. 10.(#_ The rules  Xb- xprohibit all "negative option" LOAsb0 2 XC-  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 accompanying promotional  XK-materials contain complete translations if they employ more than one language._K 2 X -ԍXxSee id. at para. 40.(#_  X- ` Qx4.` ` On March 15, 1995, the Commission received a written complaint from James J.  xKnicely of K&C alleging that ISI had converted K&C's prescribed long distance service provider  X- x{from AT&T Corporation ("AT&T") to ISI without K&C's authorization.t{2 X&-ԍXxKnicely & Cotorceanu, Informal Complaint File No. 9511136.(#t The complaint  xcontains a sworn affidavit from Marney S. Haven, office manager of K&C, in which Haven",0*(("  xistates, among other things, that the "ISI Savings Authorization" ("authorization form") forwarded  X-to her by ISI as verification of K&C's order to switch carriers bears a forged signature.|2 Xb-ԍXxId. at Affidavit of Marney S. Haven (Haven Affidavit). (#|  X- ` x5.` ` Haven states that she was first contacted by Lee J. Gladney, a sales or marketing  X- x agent of ISI, on November 3, 1994.[y2 X-ԍXxHaven Affidavit at 1. (#[ On or about November 28, 1994, at Gladney's request,  x[Haven sent Gladney one of K&C's billing statements to enable Gladney to generate a proposal  xto provide long distance service. Gladney forwarded the proposal to Haven under a transmittal  XH- x{letter dated November 28, 1994.IH*2 X# -ԍXxId. (#I Haven informed Gladney that she would pass the long  X1-distance service proposal on to the partners of K&C for their consideration.B12 X-ԍXxId.(#B  X - ` x6.` ` According to Haven, she had no further contact with Gladney until January 31,  x1995, when Haven received a call from Gladney stating that his supervisor had authorized him  X - x.to offer K&C a rate of $.12 per minute on long distance calls.H 2 X-ԍXxId. at 2.(#H Haven told Gladney she would  X - xrelay the information to the partners of the firm.B = 2 X-ԍXxId.(#B On February 15, 1995 Haven wrote a letter  xto each long distance company that had submitted a service proposal advising that no decision  X-on their proposals had been made.O 2 X/-ԍXxId. (#O  Xb- ` x7.` ` On February 22, 1995, Haven telephoned an AT&T operator to inquire about  XK- x<AT&T's international telephone service rates.BK 2 X-ԍXxId.(#B Haven was informed by the operator that AT&T  X4- xwas no longer the prescribed long distance carrier for K&C.]4P2 X5"-ЍXxId. (#] Haven then contacted Bell  xAtlanticVirginia ("Bell Atlantic") and was advised that K&C's long distance carrier had been  xchanged to WilTel, Inc. ("WilTel"). When Haven telephoned WilTel, she learned that ISI, a  xreseller of WilTel's long distance service, had submitted the PIC change request to Bell Atlantic"0*((E"  X- x/that had led to ISI's designation as K&C's long distance carrier.2 Xy-  ЍXxAlthough not specifically mentioned in Haven's affidavit, K&C had other telephone lines   Pdesignating TeleFiber Net as the long distance provider and these lines were also  XK-  Papparently switched to ISI on February 6, 1995. See Letter from Wayne A. Mill to Connie Theirse, dated July 12, 1995.(#Ʃ Haven then called Kerry  X- xHolland of ISI about the service change.T42 X-ԍXxHaven Affidavit at 2.(#T Holland transmitted to Haven by facsimile a copy of  xlan LOA allegedly signed by Haven as verification of a K&C order authorizing the carrier  X- x=change.C2 Xh -ԍXxId. (#C The LOA purportedly bearing Haven's signature is attached to Haven's affidavit as Attachment D.   x8. Haven maintains that she had never seen the authorization form before Holland sent  X_- xit to her on February 22, 1995, and that the signature in the customer signature box is not hers.C_2 X-ԍXxId. (#C  x<Haven further states that she never spoke to Gladney on January 26, 1995, the date the document  xzwas allegedly signed and that the rate information contained in the LOA did not reflect ISI's  X -January 31, 1995 proposal.* ^ 2 X)-  AЍXxId. at 23. Haven also points out that the box on the form for accounting codes is  X-  ]checked "no" and that K&C always uses accounting codes in order to bill clients. Id. at 3.(#* %III. DISCUSSION  X - ` Px9.` ` We have carefully evaluated the information submitted in connection with K&C's  xinformal complaint and conclude that ISI is apparently liable for forfeiture for willful violation  x?of the Commission's rules and PIC change requirements. We find ISI's apparent actions  xparticularly egregious. It appears that on or about February 6, 1995, ISI submitted a PIC change  x[request to Bell Atlantic, based on an apparently forged LOA, which resulted in the conversion  xof K&C's telephone service from AT&T to ISI. The statements and information provided by  x!K&C leave virtually no doubt that the LOA was forged and that ISI lacked the requisite  xauthorization to request a PIC change to K&C's long distance service. There is no similarity  xbetween the signature on Haven's sworn affidavit and her purported signature on the LOA form  xOthat ISI used as the basis for the PIC change submitted to Bell Atlantic. Under these  xmcircumstances, we conclude that ISI's apparent actions were in willful violation of the Commission's PIC change rules and orders and that a substantial forfeiture penalty is appropriate.  X-  X- ` Qx 10.` ` 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"e 0*(("  X- xa single act or failure to act.[2 Xy-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  X- xmatters as justice may require."U y2 X-ԍXxId.  503(b)(2)(D).(#U For purposes of determining an appropriate forfeiture penalty  xin this case, we regard the conversion of K&C's telephone line as a single violation. After  xweighing the circumstances surrounding the violation, we find that ISI is apparently liable for a  x.forfeiture of forty thousand dollars ($40,000) for the unauthorized conversion of the K&C line.  X_- x- ISI will have the opportunity to submit evidence and arguments in response to this NAL to show  XH- x[that no forfeiture should be imposed or that some lesser amount should be assessed.z!H*2 X# -ԍXxSee 47 U.S.C.  503(b)(4)(C); 47 C.F.R.  1.80(f)(3).(#z In this  xregard, we note that the Commission has previously held that a licensee's gross revenues are the  xMbest indicator of its ability to pay a forfeiture and that use of gross revenues to determine a  xparty's ability to pay is reasonable, appropriate, and a useful yardstick in helping to analyze a  X - xLcompany's financial condition for forfeiture purposes.Q" 2 Xx-  ЍXxPJB 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  X3-  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). (#Q We will give full consideration to any financial information provided by ISI before assessing a final forfeiture amount.  X -:  IV. CONCLUSIONS AND ORDERING CLAUSES ă  Xy- ` nx 11.` ` We have carefully reviewed the information submitted in connection with Knicely  xz& Cotorceanu, P.C.'s informal complaint and conclude that on or about February 6, 1995, ISI  xapparently converted or caused a local exchange carrier to convert K&C's telephone line without  xK&C's authorization through the use of an apparently forged LOA. We further conclude that  xISI thereby willfully violated Commission rules governing primary interexchange carrier  x[conversions, and that its conduct warrants a forfeiture in the amount of forty thousand dollars ($40,000).  X- ` $x 12.` ` Accordingly, IT IS ORDERED, pursuant to Section 503(b) of Communications  X- x Act of 1934, as amended, 47 U.S.C.  503(b), and Section 1.80 of the Commission's rules, 47""0*((R"  xC.F.R.  1.80, that Interstate Savings, Inc. d/b/a ISI Telecommunications IS HEREBY  xNOTIFIED of an Apparent Liability for Forfeiture in the amount of forty thousand dollars ($40,000) for its willful violation of the Commission's PIC change rules and orders, ""0*(("  X- x47 C.F.R.  64.1100; PIC Change Order, 7 FCC Rcd 1038 (1992); Allocation Order, 101 FCC  X-2d 911 (1985); Waiver Order, 101 FCC 2d 935 (1985).  X- ` x 13.` ` IT IS FURTHER ORDERED, pursuant to Section 1.80 of the Commission's rules,  xM47 C.F.R.  1.80, that within thirty days of the release of this Notice, Interstate Savings, Inc.  X- x>d/b/a ISI Telecommunications SHALL PAY the full amount of the proposed forfeiture-#2 X-  ЍXxThe forfeiture amount must be paid by check or money order drawn to the order of the   lFederal Communications Commission. Reference should be made on Interstate Savings,   Inc. d/b/a ISI Telecommunications check or money order to "NAL/Acct. No. 516EF0004."   Such remittances must be mailed to Forfeiture Collection Section, Finance Branch, Federal Communications Commission, P.O. Box. 73482, Chicago, Illinois 606737482.(#- OR  xSHALL FILE a response showing why the proposed forfeiture should not be imposed or should be reduced.  X1- ` Qx 14.` ` IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability for  xForfeiture SHALL BE SENT by certified mail to Matthew Freedman, President of Interstate  xzSavings, Inc. d/b/a ISI Telecommunications 1015 18th Street, N.W. Suite 505, Washington, D.C. 20036. x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` `  hh@Kathleen M.H. Wallman  X-x` `  hh@Chief, Common Carrier Bureau #x6X@`7>fX@#