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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
) File No. EB-01-TC-057
Yestel, Inc. ) FRN No. 0007322456
Adopted: October 16, 2002; Released: October
By the Chief, Enforcement Bureau:
1. In this Order, we adopt a Consent Decree terminating an
investigation regarding unauthorized preferred carrier
conversions by Yestel, Inc. (Yestel).
2. The Bureau and Yestel have negotiated the terms of a
Consent Decree that would resolve this matter and the staff's
investigation. A copy of the Consent Decree is attached and is
incorporated by reference.
3. We have reviewed the terms of the Consent Decree, and
we conclude that the public interest would be served by approving
the Consent Decree and terminating the investigation.
4. Based on the record before us, and in the absence of
material new evidence relating to this matter, we conclude that
there are no substantial and material questions of fact as to
whether Yestel possesses the basic qualifications, including its
character qualifications, to hold or obtain any FCC licenses or
5. Accordingly, IT IS ORDERED, pursuant to sections 4(i)
and 503(b) of the Communications Act, 47 U.S.C. §§ 154(i),
503(b), and the authority delegated in sections 0.111 and 0.311
of the Commission's rules, 47 C.F.R. §§ 0.111, 0.311, that the
attached Consent Decree IS ADOPTED. 6. IT IS FURTHER ORDERED that the above-captioned case as
well as the Commission staff inquiry into the matter described
herein ARE TERMINATED.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau CONSENT DECREE
7. The Enforcement Bureau of the Federal Communications
Commission (``FCC'' or ``Commission'') and Yestel, Inc., (Yestel)
hereby enter into a Consent Decree terminating an informal Bureau
investigation into possible violations of section 258 of the
Communications Act and the Commission's rules relating to
unauthorized preferred interexchange carrier (``PIC'')
conversions and third party verification procedures.1 Yestel is
a reseller of interstate interexchange telecommunications
services as well as international telecommunications services and
is subject to the Commission's regulations pursuant to its status
as a common carrier. This Consent Decree is the result of an
informal investigation that was initiated on November 14, 2001.
8. For the purposes of this Consent Decree the following
definitions shall apply:
a) ``Commission'' or ``FCC'' means the Federal Communications
b) ``Bureau'' means the Enforcement Bureau of the Federal
c) ``Division'' means the Telecommunications Consumers Division
of the Enforcement Bureau;
d) ``Yestel '' means Yestel, Inc., its successors and assigns;
e) ``Parties'' means Yestel and the Commission or Bureau;
f) ``Adopting Order'' means an Order of the Bureau adopting the
terms and conditions of this Consent Decree;
g) ``Effective Date'' means the date on which the Commission
adopts the Adopting Order.
h) ``Preferred carrier change'' shall mean an order or request
submitted by a carrier to a local exchange carrier (``LEC'')
to effect a change in the customer's preferred carrier;
i) ``Informal Complaint'' or ``Consumer Complaint'' means a
complaint filed under 47 C.F.R. § 1.716;
j) ``Formal Complaint'' means a complaint filed under 47 U.S.C.
9. 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 an Adopting
Order of the Bureau.
10. The Parties agree that this Consent Decree shall become
effective on the date on which the Bureau releases the Adopting
Order. Upon release, the Adopting Order and this Consent Decree
shall have the same force and effect as any other Order of the
Commission and any violation of the terms of this Consent Decree
shall constitute a violation of a Commission Order entitling the
Commission to exercise any and all rights and to seek any and all
remedies authorized by law for the enforcement of a Commission
11. Yestel admits the jurisdiction of the Commission for
purposes of this Consent Decree and any Adopting Order.
12. Yestel waives any rights that it may have to further
procedural steps and any rights it may have to seek judicial
review or otherwise challenge or contest the validity of the
Adopting Order or this Consent Decree.
13. Yestel waives any rights it may have under any
provision of the Equal Access to Justice Act, 5 U.S.C. § 504.
Terms of Settlement
14. Yestel represents and warrants that it is the properly
named party to this Consent Decree and is solvent and has
sufficient funds available to meet fully all financial and other
obligations set forth herein. Yestel further represents and
warrants that it has caused this Consent Decree to be executed by
its authorized representative, as a true act and deed, as of the
date affixed next to said representative's signature. Said
representative and Yestel respectively affirm and warrant that
said representative is acting in his capacity and within his
authority as a corporate officer of Yestel, and on behalf of
Yestel and that by his signature said representative is binding
Yestel to the terms and conditions of this Consent Decree.
Yestel also represents that it has been represented by counsel of
its choice in connection with this Decree and is fully satisfied
with the representation of counsel.
15. Yestel represents and warrants that it shall not effect
any change in its form of doing business or its organizational
identity or participate directly or indirectly in any activity to
form a separate entity or corporation which engages in acts
prohibited in this Consent Decree or for any other purpose which
would otherwise circumvent any part of this Decree or the
obligations of this Decree.
16. In consideration for the termination by the Bureau of
its investigation into whether Yestel has violated the
Communications Act and/or Commission rules or orders, and in
accordance with the terms of this Consent Decree, Yestel agrees
to the following terms.
17. The Bureau and Yestel 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 with the requirements of the
Communications Act or the Commission's rules, including section
258 of the Act. The parties agree that this Consent Decree is
for settlement purposes only and that by agreeing to this Consent
Decree, Yestel does not admit or deny any liability for violating
the Act or Commission rules in connection with the matters that
are the subject of this Consent Decree.
18. Yestel shall make a voluntary contribution to the
United States Treasury in the total amount of $150,000 (one
hundred fifty thousand dollars). This amount shall be paid
within 30 days of the date the order adopting this Consent Decree
becomes final. Such contribution shall be made, without further
protest or recourse, by certified check, cashier's check, or
money order drawn to the order of the Federal Communications
Commission, and shall be mailed to the Federal Communications
Commission, P.O. Box 73482, Chicago, Illinois 60673-7482.
19. Yestel agrees to reimburse in full all affected
consumers whose long distance service was switched without
authorization to Yestel's network. Specifically, Yestel agrees
to reimburse, through billing credits for unpaid balances and
through issuance of checks for amounts already paid, all affected
consumers the full amount of any unauthorized Yestel charges
whether or not the consumer paid the charges in error or disputed
them. Yestel also agrees to return affected consumers, where
necessary, to their preferred carriers of choice and order all
collection agencies to close out all outstanding disputes and
remove any negative credit reports for all affected consumers.
Furthermore, Yestel agrees to notify all affected consumers
verbally of the unauthorized conversion and apprise them of their
credit for Yestel charges; if after two attempts to reach the
consumer, Yestel is unable to speak to the consumer, Yestel will
notify the consumer in writing of the unauthorized conversion and
credit. No attempt will be made by Yestel personnel to market
Yestel services to the consumer in these notification efforts.
All preferred carrier change charges associated with the switch
of the consumer back to his or her preferred long distance
carrier shall be paid by Yestel. All credits and checks will be
issued no later than sixty (60) days from the date on which this
Consent Decree is adopted.
20. In addition, Yestel agrees to ensure that all preferred
carrier change notifications are the product of current and valid
third party verification procedures. Yestel shall not, under any
circumstances, rely on communications from its underlying carrier
to effectuate a preferred carrier change for any customer, --
former, current, or prospective. Yestel will also create a task
force to ensure, more generally, that information regarding
customer records is kept current and updated monthly. Yestel
will meet these obligations no later than sixty (60) days from
the date on which this Consent Decree is adopted.
21. Yestel agrees that it will send each consumer whose
line was switched to Yestel without authorization, a $10.00
prepaid Yestel calling card within sixty (60) days of the date on
which the Consent Decree is adopted. Yestel is giving these
prepaid cards as an additional gesture of goodwill and apology.
It will be made clear that acceptance and use of this prepaid
card in no way constitutes a request by the recipient for Yestel
direct-dial service. Yestel shall not include marketing
materials in this mailing. A sample of this mailing shall be
provided to the Bureau ten (10) calendar days before it is used.
22. Yestel agrees that, in the future, it shall not
knowingly submit to any LEC any preferred carrier change request
unless Yestel has complied with all Commission rules and orders
concerning preferred carrier changes, in effect or as they may be
hereafter modified or amended. In the event that Yestel
discovers that its procedures for acquiring customers have been
compromised by poor communication with its underlying carrier, or
by any actions taken by its employees or its authorized agents,
resulting in the unauthorized conversion of a consumer's line to
Yestel, Yestel agrees to notify such consumer verbally of the
unauthorized conversion; if after two attempts to reach the
consumer, Yestel is unable to speak to the consumer, Yestel will
notify the consumer in writing of the unauthorized conversion.
No attempt will be made by Yestel personnel to market Yestel
services to the consumer in these notification efforts. Yestel
shall take any and all necessary and reasonable steps to ensure
that the customer is promptly returned to his or her authorized
carrier with the least possible inconvenience to the customer.
Yestel further agrees to credit such consumer in full for all
Yestel charges incurred between the date on which the consumer
was switched to the Yestel network until the consumer is switched
back if desired. Yestel further agrees to reimburse the consumer
for any switching fees assessed by the local exchange carrier as
a result of the unauthorized conversion and return the consumer
to his or her preferred carrier.
23. Yestel agrees to subject all of its employees and
agents to the following oversight mechanisms to help ensure
compliance with the Commission's regulations:
a) Yestel shall require each employee or agent both at the time
of hiring and at least twice a year thereafter to receive
formal training on the Commission's rules regarding preferred
carrier change requests. Should those rules and orders
change, Yestel will ensure that its employees and agents are
promptly apprised of such changes and that the training
material is updated to reflect the new rules.
b) Yestel shall observe its employees and agents, through on-
site or telephonic monitoring, as they process orders for
service and complaints to ensure that Yestel employees and
agents are operating in compliance with the Commission's
preferred carrier change rules. The telephonic monitoring
shall take place weekly, with the calls monitored on a random
basis. Should Yestel receive information indicating that a
particular employee or agent has engaged in practices that may
violate the Commission's preferred carrier change rules,
either knowingly or inadvertently, Yestel shall monitor the
calls of that agent for a period of time sufficient to
determine whether he or she is operating in compliance with
the Commission's rules and orders. If Yestel discovers
noncompliance, such agent shall be terminated in accordance
with Yestel's standard termination procedures.
c) Yestel shall further ensure that its third party verifier
collects all required information pursuant to section
64.1120(c)(3)(iii) of the Commission's rules.
24. While this Consent Decree is in effect, Yestel agrees
to maintain and make available to the Bureau, on a quarterly
basis and within 14 days of the receipt of any specific written
request from the Bureau, business records demonstrating
compliance with the terms and provisions of this Consent Decree.
25. In light of the covenants and representations in this
Consent Decree, and in particular, in light of the fact that
Yestel apparently took steps to correct the problem causing the
unauthorized preferred carrier conversions shortly after it was
discovered, the Bureau agrees to terminate its investigation into
unauthorized conversions described above, without any finding of
liability on the part of Yestel. The Bureau further agrees that,
in the absence of substantial additional and material facts, the
Bureau shall not on its own motion institute against Yestel new
proceedings of any kind relating to any allegation of
unauthorized preferred carrier changes that may have occurred as
a result of the unlawful actions described above and up to the
date on which this Consent Decree is adopted.
26. Nothing in this Consent Decree shall prevent the
Commission from adjudicating complaints against Yestel for
alleged misconduct regarding unauthorized preferred carrier
changes or for any other type of alleged misconduct regardless of
when such misconduct took place, or from instituting new
investigations or enforcement proceedings against Yestel in the
event of alleged future misconduct. If such enforcement
proceeding is initiated, Yestel's earlier conduct may be adduced,
but not for the purpose of assessing monetary forfeitures.
27. The Parties agree that any provision of the Consent
Decree that conflicts with any subsequent rule or order adopted
by the Commission will be superseded by such Commission rule or
28. The Parties agree that this Consent Decree shall expire
in three (3) years from the release date of the Order adopting
this Consent Decree. Yestel shall issue a report to the Bureau
within 60 days from the release date demonstrating compliance
with the terms and provisions herein.
29. This Consent Decree may be signed in counterparts.
For the Enforcement Bureau, For
Federal Communications Commission
David H. Solomon Robert Wu
11. See 47 C.F.R. §§ 64.1100; 64.1120.