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                           Before the
                Federal Communications Commission
                     Washington, D.C. 20554


In the Matter of                 )
                                )
Talk America, Inc.               )    File No. EB-00-TC-007
                                )    NAL/Acct. No.  20033217004
Consent Decree                   )    FRN No. 0004319430
                                )
                                )





                              ORDER

   Adopted: March 31, 2003              Released: April 1, 2003


By the Chief, Enforcement Bureau:

     1.   In this Order, we adopt a Consent Decree terminating an 
informal investigation  by  the Enforcement  Bureau  (``Bureau'') 
into possible violations by Talk America, Inc. (``Talk America'') 
of Section 258 of the Communications Act of 1934, as amended (the 
``Act''),  the   Commission's  rules   related  to   unauthorized 
preferred carrier changes (``slamming''), Section 64.1120 of  the 
Commission's rules, and Section 201(b) of the Communications Act, 
regarding business practices of  Talk America, including  billing 
errors.1 

     2.   We have reviewed  the terms of  the Consent Decree  and 
evaluated the  facts  before  us.  We  believe  that  the  public 
interest would  be served  by approving  the Consent  Decree  and 
terminating the investigation.

     3.   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  Talk   America  possesses   the  basic   qualifications, 
including its character qualifications, to hold or obtain any FCC 
licenses or authorizations.
       
     4.   Accordingly, IT IS ORDERED, pursuant to Sections  4(i), 
4(j), and 503(b) of the Communications Act, 47 U.S.C.   154(i), 
154(j), and 503(b) and the authority delegated by sections  0.111 
and 0.311 of the Commission's  rules, 47 C.F.R.  0.111,  0.311, 
that the Consent Decree attached hereto IS ADOPTED.  



     5.   IT  IS   FURTHER  ORDERED   that  the   above-captioned 
investigation IS TERMINATED.


                              FEDERAL COMMUNICATIONS COMMISSION



                              David H. Solomon
                              Chief, Enforcement Bureau
                           Before the
                FEDERAL COMMUNICATIONS COMMISSION
                     Washington, D.C. 20554


                              )
In the Matter of                   )         File  No.  EB-00-TC-
007
Talk America, Inc.                 )         NAL/    Acct.    No.  
20033217004
                              )         FRN No.  0004319430
                              


                         CONSENT DECREE

     1.   The  Enforcement  Bureau  ("Bureau")  of  the   Federal 
Communications Commission (``Commission'') and Talk America  Inc. 
(``Talk  America''  or  the  ``Company''),  previously  known  as 
Talk.com  Holding   Corp.,  by   their  counsel   or   authorized 
representatives,  hereby   enter   into   this   Consent   Decree 
terminating  an   Investigation  by   the  Bureau   staff.    The 
Investigation involved possible violations of Section 258 of  the 
Communications Act  of 1934,  as amended,  47 U.S.C.   258,  the 
Commission's rules  related  to  unauthorized  preferred  carrier 
changes,  47  C.F.R.    64.1120,  and  Section  201(b)  of   the 
Communications  Act,  47  U.S.C.    201(b),  regarding  business 
practices of Talk America, including billing errors.

     2.   Talk America  is a  common carrier  that offers  local, 
long distance, intraLATA toll,  and international voice  services 
to residential and small business customers nationwide.

3.        On November  3, 2000,  the Bureau  issued a  letter  of 
inquiry (``LOI'')  initiating an Investigation of Talk  America's 
compliance  with Sections 201(b)  and 258  of the  Communications 
Act  and  Section 64.1120  of  the Commission's  rules.   In  its 
filings  and  discussions with  the  Bureau in  response  to  the 
Investigation, Talk  America identified several problems that  it 
had  experienced.   The Company  switched  consumers  from  their 
preferred carriers to Talk America without proper  authorization. 
The  Company incorrectly  sent  promotional checks  with  billing 
telephone numbers (``BTNs'')  belonging to one consumer to  other 
consumers,  causing  additional  unauthorized  preferred  carrier 
changes.  Talk America dial-around customers received bills  that 
contained  charges for  presubscribed customers.  Consumers  were 
double-billed  by Talk  America for  monthly charges.   Consumers 
complained that they tried to cancel their Talk America  service, 
but were  unable to do so.   Consumers also complained that  they 
tried to disconnect  their Talk America service and reconnect  to 
a  new  preferred   carrier,  but  that  they  had   considerable 
difficulty doing so.

     4.   For the purposes of this Consent Decree, the  following 
definitions shall apply:

          (a)  "Adopting Order" shall mean an Order of the Bureau 
               adopting the terms and conditions of this  Consent 
               Decree. 

          (b)  ``Bureau'' shall  mean the  Enforcement Bureau  of 
               the Federal Communications Commission.

          (c)  ``Commission"    shall     mean    the     Federal 
               Communications Commission.

          (d)  "Effective Date" shall mean the date on which  the 
               Enforcement Bureau adopts the Adopting Order.

          (e)  ``Informal  complaint''  shall  mean  a  complaint 
               filed under 47 C.F.R.  1.711-1.717.

          (f)  ``LEC'' shall mean a Local Exchange Carrier.

          (g)  "Parties" shall mean the Bureau or the  Commission 
               and Talk America.
           
          (h)  ``preferred carrier change''  shall mean an  order 
               or request  submitted by  a carrier  to a  LEC  to 
               effect  a  change  in  the  customer's   preferred 
               carrier.

          (i)  ``Talk America" or the  "Company" shall mean  Talk 
               America and all parents, subsidiaries,  divisions, 
               successors  or   assigns,   officers,   directors, 
               employees,  agents,   representatives,   marketing 
               personnel,  or   any  other   persons  acting   or 
               purporting to act  on behalf of  Talk America,  or 
               its successors or assigns.

          (j)  ``Investigation''    means    the    investigation 
               initiated by  the  Bureau  regarding  the  matters 
               discussed in  paragraph 3  above, concerning  Talk 
               America's  conduct  during  the  time  period   of 
               January 1,  2000  to  the Effective  Date  of  the 
               Consent Decree.

     5.   The Parties agree that  the provisions of this  Consent 
Decree shall be subject to  final approval by the Bureau  through 
incorporation of  such provisions  by  reference in  an  Adopting 
Order, which shall immediately terminate the Investigation.

     6.   The Parties agree that this Consent Decree shall become 
effective on the date on which  the Adopting Order is adopted  by 
the Bureau and  shall expire  two (2) years  after its  Effective 
Date.  Unless otherwise specified,  all commitments made by  Talk 
America herein  shall  continue  until  the  expiration  of  this 
Consent Decree.  The  Consent Decree  and Adopting  Order may  be 
extended by  the Bureau  upon  a finding  that Talk  America  has 
materially failed to comply with the terms of the Consent Decree.  
Upon the effective date of the Consent Decree, 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 Order. 

     7.   The Parties agree that  any provisions of this  Consent 
Decree that would cause Talk America  to act in violation of  any 
subsequent rule  or  order  adopted by  the  Commission  will  be 
superseded by any such subsequent rule or order.

     8.   Talk America admits the jurisdiction of the Bureau over 
it and the  subject matter of  this action for  purposes of  this 
Consent Decree and the Adopting Order.

     9.   Talk America waives  any further  procedural steps  and 
any rights  it may  have  to seek  judicial review  or  otherwise 
challenge or contest the validity  of this Consent Decree or  the 
Adopting Order.

     10.  If the Commission brings an action in the United States 
District Court to enforce the  terms of the Consent Decree,  Talk 
America agrees  that it  will  not contest  the validity  of  the 
Consent Decree or  Adopting Order,  will consent  to a  judgement 
incorporating the terms  of this Consent  Decree, and will  waive 
its statutory right to a trial de novo.

     11.  Talk America waives  any rights it  may have under  any 
provision of the Equal Access to Justice Act, 5 U.S.C.  504.

     12.  In   express    reliance   on    the   covenants    and 
representations contained  in  this Consent  Decree,  the  Bureau 
agrees to  terminate the  Investigation, without  any finding  of 
liability on the part of Talk America.  This Consent Decree shall 
constitute a final settlement between Talk America and the Bureau 
of the above-captioned Investigation and, except as otherwise set 
forth in  this  paragraph,  any additional  proceeding  based  on 
allegations of  unauthorized  preferred  carrier  changes  and/or 
billing errors occurring on or before the Effective Date of  this 
Consent Decree.  This  Consent Decree is  not dispositive of  any 
matter(s) within the jurisdiction of  any other federal or  state 
agency, regulatory body, or  state attorney general.  Nothing  in 
this Consent  shall  prevent  the  Commission  from  adjudicating 
formal or informal complaints filed against the Company  pursuant 
to Section 208 of the Communications Act, as amended, 47 U.S.C.  
208.  Similarly, nothing  in this Consent  Decree is  dispositive 
with respect to the rights of any third party or complainant  who 
has filed or should file  a formal or informal complaint  against 
the Company pursuant to Section 208 of the Communications Act, as 
amended, 47 U.S.C.  208.   Nothing in this Consent Decree  shall 
prevent the  Commission from  instituting new  investigations  or 
enforcement proceedings against Talk America in the event of  any 
alleged future misconduct.

     13.  The Bureau agrees that, based on the facts developed in 
this Investigation and  in the absence  of material new  evidence 
related to this matter,  it will not use  the facts developed  in 
this Investigation  through the  Effective  Date of  the  Consent 
Decree or the existence of  this Consent Decree to institute,  on 
its own motion,  any new  proceeding, formal or  informal, or  to 
take any action on its own motion against Talk America concerning 
the matters  discussed in  paragraph 3  above.  The  Bureau  also 
agrees that, based on the  facts developed in the  Investigation, 
and in  the absence  of  material new  evidence related  to  this 
matter, it will not use the facts developed in this Investigation 
through  the  Effective  Date  of  this  Consent  Decree  or  the 
existence of this Consent Decree  to institute on its own  motion 
any proceeding, formal or informal, or take any action on its own 
motion  against   Talk  America   with  respect   to  its   basic 
qualifications, including its character  qualifications, to be  a 
Commission licensee  or  with  respect  to  compliance  with  the 
Commission's rules and policies.  

     14.  The Bureau  and Talk  America 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 
Commission's rules.  The parties  agree that this Consent  Decree 
is for  settlement purposes  only and  that by  agreeing to  this 
Consent Decree, Talk America does not admit or deny liability for 
violating Commission rules  in connection with  the matters  that 
are the subject of this Consent Decree.  

     15.  Talk America shall make a voluntary contribution to the 
United States Treasury in  the total amount  of four hundred  and 
seventy-five thousand dollars ($  475,000.00)  The payment  shall 
be made within  thirty (30) days  of the Effective  Date of  this 
Consent Decree.  The  payment  shall  be  made,  without  further 
protest or  recourse, by  check, wire  transfer, or  money  order 
drawn to the order of the Federal Communications Commission,  and 
the check, wire transfer or money order shall refer to: "FCC File 
No. EB-00-TC-007'';  ``NAL/ Acct.  No. 20033217004'';  ``FRN  No. 
0004319430.''  If Talk  America makes  this payment  by check  or 
money order,  it  must mail  the  check  or money  order  to  the 
Forfeiture   Collection   Section,   Finance   Branch,    Federal 
Communications Commission,  P.O.  Box  73482,  Chicago,  Illinois 
60673-7482.  If Talk America makes this payment by wire transfer, 
it  must  wire  such   payment  in  accordance  with   Commission 
procedures for wire transfers.

     16.  Talk America shall not knowingly submit to any LEC  any 
preferred carrier change request unless Talk America has complied 
with all Commission rules  and orders concerning preferred  local 
exchange, interexchange,  and/or  intraLATA  carrier  changes  in 
effect, or as they may be hereafter modified or amended.

     17.  With respect  to  outbound telemarketing,  the  Company 
represents that  it  has  terminated its  relationship  with  its 
former telemarketing agent,  Traffix (formerly  known as  Quintel 
Corporation) because  of  the  Company's belief  that  its  agent 
engaged in unauthorized  marketing promotions  and practices  and 
agrees not to rehire Traffix. The Company will not permit the use 
of  marketing  materials,   promotions  and   practices  by   its 
telemarketing agents without the Company's prior approval and the 
Company will require  prior approval of  all marketing  materials 
used by third parties hired to conduct marketing on the Company's 
behalf.  The  Company  represents  that  it  will  intensify  its 
scrutiny of its internal  and external telemarketing forces.  The 
Company represents  that  will  create  a  permanent  centralized 
regulatory department in New Hope, Pennsylvania to ensure uniform 
and expeditious Company  responses to customer  complaints and  a 
heightened awareness of  potential problems.   Talk America  will 
enforce a  zero tolerance  policy  with respect  to  unauthorized 
preferred  carrier  changes  by  telemarketers  or  third   party 
verification entities  such  that  any  employee  or  independent 
contractor who violates the  foregoing policy will be  terminated 
immediately.   The  Company  will   conduct  remote  and   random 
monitoring of telemarketing calls and to review its telemarketing 
and verification scripts to  ensure full compliance with  federal 
and state rules regarding the  solicitation of customers and  the 
unauthorized preferred carrier changes.  Talk America will review 
and approve its direct mail and on-line promotional campaigns  in 
accordance with  its zero-tolerance  policy.  Talk  America  will 
distribute, within 60 days of the Effective Date of this  Consent 
Decree, a  comprehensive sales  training  manual, which  it  will 
distribute to all  of its telemarketing  agents and employees  to 
provide  them   with  centralized   information,  including   the 
Company's zero  tolerance policy  against unauthorized  preferred 
carrier  changes  and  the   Company  policies  with  which   all 
telemarketing  agencies  and  employees  must  comply,  including 
compliance  with  Section  258  of  the  Communications  Act  and 
implementing rules.

     
     18.  To address the issue of  whether Talk America has  sent 
promotional checks to prospective customers with incorrect  BTNs, 
Talk America will implement procedures to improve the accuracy in 
its issuance of  promotional checks.  For  local customers,  Talk 
America  will  manually  compare  the  customer  service   record 
(``CSR'') that it receives from the  LEC to the name and  address 
of the  customer  who  approves  the  sale.   For  long  distance 
customers, the Company will put in place an automated system that 
matches up the billing name and address (``BNA'') provided by the 
LEC with the telephone  numbers the company has  on file for  the 
customer.  Talk America will  fully implement this system  within 
60 days  of  the  Effective  Date of  this  Consent  Decree.   In 
instances where the customer name/BTN matches are incorrect,  the 
Company will  not  proceed further  with  the processing  of  the 
order, but instead will assign its provisioning staff to manually 
check  the  BNA  with  the  telephone  number(s).   Talk  America 
represents that it has no plans, at this time, to resume  issuing 
promotional checks.  To the extent that it determines to do so in 
the future,  however,  Talk  America will  use  all  commercially 
reasonable efforts to ensure that a consumer's preferred  carrier 
is not switched based on the use of promotional checks until  and 
unless the customer's information first has been verified. 

     19.  As of the Effective Date  of this Consent Decree,  Talk 
America has corrected an internal billing programming error  that 
causes some consumers to receive incorrect bills for  dial-around 
service  that  contain  the  monthly  fees  commonly  applied  to 
presubscribed customers. The Company has made significant changes 
in its  billing programs  and will  endeavor to  make any  future 
changes necessary to ensure against any future recurrence of this 
type of error.    Additionally, Talk America  will segregate  the 
casual or dial-around  customers at  issue from the  rest of  its 
customer pool so that these  customers cannot again be billed  en 
masse for monthly fees applicable to presubscribed customers.  To 
the extent that  any billing  errors occur in  the future,   Talk 
America, as it  has in  the past, expeditiously  will inform  all 
affected customers, state regulators and the Bureau, and take the 
necessary steps  to  issue  appropriate  refunds  or  credits  to 
affected customers.

     20.  With respect to issues involving customer difficulty in 
regard to  cancellation,  disconnection,  or  reconnection,  Talk 
America commits to resolving all operational problems within  its 
control that have  occurred as  a result  of its  entry into  the 
provision of local exchange service.  Talk America has hired  and 
will  maintain  a  sufficient  number  of  customer  service  and 
provisioning staff to  handle the volume  of cancellation  orders 
received,  and  has  and  will  continue  to  ensure  that  these 
employees are thoroughly trained to accurately and  expeditiously 
process the cancellation  orders that the  Company receives.   To 
this end, the  Company has trained  and will maintain  sufficient 
customer service representatives  to process cancellation  orders 
in order to prevent, as much as possible, such orders from  being 
sent to  the  LEC  in  error.   Second,  in  instances  in  which 
customers  have  placed  disconnection  or  cancellation   orders 
directly  with  the  LECs  resulting  in  inaccurate  or  missing 
cancellation orders for Talk America, the Company will work  with 
the LECs to achieve fair and expeditious problem resolution.   In 
addition, Talk  America will  expeditiously process  cancellation 
orders.  If a customer is billed for a time period for which  the 
customer should not have been served by Talk America, the Company 
will  immediately  issue  a  customer  credit  to  cover  charges 
collected during such time period.

     21.  Talk  America  will  provide  prompt  redress  to   any 
consumer affected by actions of  the Company that do not  conform 
to the Commission's rules  and orders, as  they may be  hereafter 
modified or amended,  or that  do not conform  to the  agreements 
reached in this Consent Decree.

     22.       Within six  (6) months  of the  Effective Date  of 
this Consent  Decree  and  every  one-hundred  and  eighty  (180) 
calendar days thereafter for the duration of this Consent Decree, 
Talk America agrees to  submit a report  to the Bureau  detailing 
Talk America's compliance with all  terms and conditions of  this 
Consent  Decree,  and  Talk  America's  record  with  respect  to 
unauthorized  preferred  carrier   changes.   The  report   shall 
describe the  methods and  materials used  in verifying  customer 
preferred  carrier  change  authorizations.   The  report   shall 
include the percentage of preferred carrier changes submitted  to 
LECs or  other  entities that  were  disputed by  consumers,  the 
nature of each dispute,  and a description  of action or  actions 
taken by Talk America to resolve such disputes.  The report shall 
also include  a  list,  sorted by  state,  of  every  complainant 
alleging the unauthorized conversion of his/her telephone service 
through any marketing program.

     23.  Beginning with  the  Effective  Date  of  this  Consent 
Decree, and  for  two  (2)  years following  the  filing  of  any 
consumer complaint,  as  described  below,  against  the  Company 
during the  duration of  the Consent  Decree, Talk  America  will 
maintain business  records reflecting  its record  of  compliance 
with the  terms  and provisions  of  this Consent  Decree.   Such 
business  records  shall  include,   but  are  not  limited   to, 
advertisements, sales  scripts, presentations  or manuals,  third 
party   verification   tapes,   written   advisories   to   sales 
distributors  or   agents  and   required  responses   to   those 
advisories, Letters of Agency, preferred carrier change  records, 
billing  records,  and  all  written  consumer  complaints  filed 
directly with Talk America and those complaints filed against, or 
otherwise submitted  to,  the  Company in  any  local,  state  or 
federal jurisdiction served.  The  record of consumer  complaints 
shall include  the name,  address and  telephone number  of  each 
complainant, Talk America's response, and the final  disposition, 
if any,  of  each  such  complaint.  For  the  purposes  of  this 
provision, consumer complaint records shall include all writings, 
computer records, electronic  or e-mail  communications, and  all 
written notes regarding  such writings,  verbal discussions,  and 
electronic mail communications.  Talk America will maintain  such 
records in an accurate and easy-to-review format.  Within fifteen 
(15) business days of the receipt  of a written request from  the 
Commission, Talk  America shall  make all  such business  records 
available to the  requesting entity.  In  addition, Talk  America 
agrees that, upon request,  the Commission shall have  reasonable 
access to Talk America's operational, marketing, and verification 
facilities, including the facilities  of independent third  party 
verifiers.

     24.  Talk America  agrees that  it shall  notify the  Chief, 
Telecommunications  Consumers   Division,   Enforcement   Bureau, 
Federal Communications  Commission,  Washington, D.C.  20554,  at 
least thirty (30) days prior to  the date of any material  change 
in Talk America's  legal status or  corporate structure that  may 
materially affect its  obligations hereunder,  including but  not 
limited to,  merger, incorporation,  dissolution, assignment,  or 
any other  change  that  may  materially  affect  Talk  America's 
obligations under this Consent Decree.     25.  This consent decree may be signed in counterparts.




     For the Enforcement Bureau,             For  Talk   America, 
     Inc. 
     Federal Communications Commission                      



     By:  ___________________________   By: 
     ___________________________
     David H. Solomon                Aloysius T. Lawn
     Chief, Enforcement Bureau       Executive  Vice   President, 
     General Federal Communications Commission    Counsel     and 
     Secretary
                                        

     ___________________________     ___________________________
     Date                            Date




_________________________

1 47 U.S.C.  258; 47 C.F.R.  64.1120; 47 U.S.C.  201(b).