Click here for Adobe Acrobat version
Click here for Microsoft Word version

******************************************************** 
                      NOTICE
********************************************************

This document was converted from Microsoft Word.

Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.

All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.

Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.

If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.

*****************************************************************



                            Before the
                FEDERAL COMMUNICATIONS COMMISSION
                      Washington, D.C. 20554


                                   )
In the Matter of                        )         File No.  
EB-03-IH-0013
                                   )                        
                                        )         Acct.  No. 
200332080019  
                                   )
SBC Communications Inc.                 )         FRN No. 
0004333571
                                   )                        


                              ORDER

     Adopted:       September 25, 2003            Released:  
October 1, 2003

By the Commission:

     1.   The Commission has been conducting an 
investigation into possible violations by SBC Communications 
Inc. (``SBC'') of section 271 of the Communications Act of 
1934, as amended, in connection with the provisioning of in-
region interLATA services in states where SBC had not 
received authorization to provide such services pursuant to 
section 271 of the Act.1 

     2.   The Commission and SBC have negotiated the terms 
of a Consent Decree that would terminate the Commission's 
investigation.  A copy of the Consent Decree is attached 
hereto and is incorporated by reference.

     3.   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.

     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 SBC possesses the basic 
qualifications, including its character qualifications, to 
hold or obtain any FCC licenses or authorizations.

     5.   Accordingly, IT IS ORDERED, pursuant to sections 
4(i) and 4(j) of the Communications Act of 1934, as amended, 
47 U.S.C.  154(i) and 154(j), that the Consent Decree, 
incorporated by reference in and attached to this order, is 
hereby ADOPTED. 
     
     6.   IT IS FURTHER ORDERED that the Secretary SHALL 
SIGN the Consent Decree on behalf of the Commission.

     7.   IT IS FURTHER ORDERED that the above captioned 
investigation IS TERMINATED.


                         FEDERAL COMMUNICATIONS COMMISSION



                         Marlene H. Dortch
                         Secretary
































                         Before the
              FEDERAL COMMUNICATIONS COMMISSION
                    Washington, DC 20554


In the Matter of                   )
                              )    File No.  EB-03-IH-0013
                              )            
                              )    Acct. No. 200332080019
                              )
                              )    FRN No. 0004333571
SBC Communications Inc.            )
                              )

                       CONSENT DECREE

     1.   The   Federal   Communications   Commission   (the 
``Commission'' or  the ``FCC'') and SBC  Communications Inc. 
(``SBC'')  hereby enter  into  this Consent  Decree for  the 
purpose of  terminating an  investigation by  the Commission 
into whether  SBC provided  interLATA services prior  to its 
receipt  of authorization  pursuant  to section  271 of  the 
Communications Act  of 1934,  as amended (the  ``Act'').  As 
part   of   the   investigation,  the   Enforcement   Bureau 
(``Bureau'')  has examined  SBC's  compliance with  sections 
271(a)  and (b) of  the Act,  47 U.S.C.   271(a)  and (b), 
which  prohibit  a  Bell Operating  Company  (``BOC'')  from 
providing in-region  interLATA services  in states  where it 
has  not received  authorization  to  provide such  services 
pursuant to section 271 of the Act.2  

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

     (a)  ``FCC''  or the  ``Commission'' means  the Federal 
          Communications Commission  and all of  its bureaus 
          and offices.

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

     (c)  ``SBC''  means the  SBC  Communications Inc.,  its 
          incumbent local exchange  telephone companies, any 
          wholly  or partially  owned  subsidiary, or  other 
          affiliated  companies   or  business,   and  their 
          successors and assigns.




     (d)  ``Parties'' means SBC and the Commission.

     (e)  ``In-region  state'' is  defined  at  47 U.S.C.   
          271(i)(1),   and   for  SBC   includes   Arkansas, 
          California,  Illinois, Indiana,  Kansas, Michigan, 
          Missouri,  Nevada,  Ohio,   Oklahoma,  Texas,  and 
          Wisconsin.

     (f)  ``Order'' or ``Adopting Order''  means an order of 
          the FCC adopting the  terms of this Consent Decree 
          without change, addition, or modification.

     (g)  ``Final Order''  means an order that  is no longer 
          subject    to     administrative    or    judicial 
          reconsideration, review, appeal, or stay.

     (h)  ``Investigation''    means    the    investigation 
          commenced  by the  Bureau on  March 10,  2003 into 
          whether  SBC provided,  marketed  and/or sold  in-
          region, interLATA services prior to its receipt of 
          authorization pursuant  to section 271 of  the Act 
          during  the period  from  January 1,  2002 to  the 
          present.   The  term   specifically  includes  the 
          matters  identified  in  SBC's  responses  to  the 
          Bureau's Letter  of Inquiry dated March  10, 2003, 
          and  the events  discussed  in  the SBC  voluntary 
          disclosure letters to the Commission dated July 3, 
          2002 and  November 19, 2002, and  in meetings with 
          the Bureau on June 21, 2002 and January 15, 2003.

     (i)  ``Effective  Date'' means  the date  on which  the 
          Commission adopts the Order.

     (j)  ``Compliance Plan'' means the safeguards stated in 
          paragraphs 8 and 9 herein.

I.   BACKGROUND

     3.   SBC is prohibited from providing certain interLATA 
(or ``long distance'') services  originating in a particular 
in-region state  until it receives authorization  to provide 
such services in  such state pursuant to section  271 of the 
Act.   47  U.S.C.    271(a).  To  obtain  authorization  to 
provide in-region interLATA services  under section 271, SBC 
must show, among  other things, that it  fully implemented a 
``competitive  checklist''  designed   to  give  competitors 
nondiscriminatory access and interconnection to its network.  
47 U.S.C.  271(d)(3)(A).  

     4.   SBC received authorization pursuant to section 271 
to provide long  distance services to customers  in Texas in 
2000,  and in  Arkansas, Kansas,  Missouri, and  Oklahoma in 
2001.  More recently, SBC received authorization pursuant to 
section 271  to provide long distance  services to customers 
in California on  December 19, 2002, in Nevada  on April 14, 
2003, and  in Michigan on  September 17, 2003.  On  July 17, 
2003, SBC  filed its pending applications  for authorization 
to provide  long distance services to  customers in Indiana, 
Illinois, Ohio and Wisconsin.      

     5.   On  March  1 and  19,  June  21  and 24,  July  3, 
November 19,  December 30, 2002,  and January 15,  2003, SBC 
disclosed to  FCC staff  in the Wireline  Competition Bureau 
and   the   Enforcement   Bureau  certain   incidents   that 
potentially constituted providing  long distance services in 
pre-relief   states.   SBC   states  that   it  made   these 
disclosures  in good  faith soon  after SBC  learned of  the 
incidents and that  SBC took immediate steps  to correct the 
problems  as  described  herein.   On March  10,  2003,  the 
Enforcement  Bureau opened  an informal  Investigation.  SBC 
states that it cooperated with the Bureau's Investigation in 
good faith.   The Bureau's Investigation included  review of 
the following incidents:   

     (a)  Continued   Provisioning  to   Former  Affiliates:  
          Prior  to  the   SBC/Ameritech  merger,  Ameritech 
          affiliates had  received long-distance  service on 
          approximately  980  lines   from  Ameritech's  272 
          affiliate, pursuant to the Official Communications 
          Services (``OCS'') exemption  in section 271(f) of 
          the  Act,  47  U.S.C.    271(f).   Following  the 
          SBC/Ameritech    merger,   SBC    divested   these 
          affiliates, however, many  of the lines associated 
          with  the  service  of these  previous  affiliates 
          continued to  be identified in an  SBC database as 
          an  affiliate  line  although the  section  271(f) 
          exemption no  longer applied.  SBC states  that it 
          failed to remove these lines from its OCS database 
          due to  human error  and between October  1999 and 
          November 2002  inadvertently continued  to provide 
          the  long-distance  service  free-of-charge.   SBC 
          states  that once  it discovered  the problem,  it 
          promptly took steps to remove these lines from the 
          OCS  database, terminated  the  provision of  long 
          distance service over these lines, and voluntarily 
          disclosed the matter to Commission staff.

     (b)  ASI   Provisioning:   SBC   states  that   between 
          February  2001  and  April  2002,  SBC's  advanced 
          services   affiliate,   Advanced  Services,   Inc. 
          (``ASI'')    inadvertently   provided    interLATA 
          transport  of   traffic  for  nine   customers  in 
          California.   SBC  states   that  these  incidents 
          occurred because an SBC technician mistakenly used 
          an  interLATA  connection   between  ASI  and  the 
          customers' Internet  service providers (``ISPs''), 
          instead  of an  intraLATA connection.   SBC states 
          that ASI  did not  bill the ISPs  or the  end user 
          customers for the  interLATA connections, and that 
          SBC   voluntarily   disclosed   this   matter   to 
          Commission staff.

     (c)  SBC  West Provisioning:   SBC states  that between 
          July  1987 and  November  2002, SBC  inadvertently 
          provided  and billed  for in-region  long-distance 
          service involving  approximately 140 lines  in its 
          former Pacific  Bell (now  SBC West)  region.  SBC 
          states that it discovered  these lines following a 
          comprehensive review  of its  circuits in  the SBC 
          West region.  SBC states  that, in many cases, the 
          causes of the problems are unknown to SBC, but SBC 
          generally attributes the problems to a combination 
          of human  error and  problems with SBC  and third-
          party   databases.   SBC   states  that   once  it 
          discovered this  issue, it promptly took  steps to 
          terminate  service  over  the affected  lines  and 
          voluntarily  disclosed  the matter  to  Commission 
          staff.   SBC states  that it  voluntarily refunded 
          all charges  for inadvertently  provided interLATA 
          service.    

     (d)  California  Pre-Launch  Testing Provisioning:   On 
          December  19, 2002,  the  Commission released  its 
          decision authorizing SBC  to provide long-distance 
          service  in California.   Prior  to the  effective 
          date of that order,  SBC began testing its process 
          for   connecting    long-distance   customers   in 
          California,  which  involved  changing  customers' 
          presubscribed interexchange carrier (``PIC'') from 
          another long  distance provider to  SBC.  Although 
          the test was intended to be internal, SBC's system 
          sent twelve PIC change orders to Verizon.  Verizon 
          converted five  of the  twelve orders  on December 
          23,   2002,  and   SBC  was   designated  as   the 
          presubscribed long  distance service  provider for 
          these customer accounts.  SBC and Verizon returned 
          all of these customers  to their original carriers 
          no more  than eight  days later.  SBC  states that 
          this event occurred because  SBC personnel did not 
          realize that the California order delivery process 
          was active at the time of the testing.

     (e)  PIC and Switched Toll Free Orders: SBC states that 
          in 37 separate instances, SBC inadvertently placed 
          orders    to    either   change    a    customer's  
          presubscribed interexchange carrier or establish a 
          toll-free service  terminating in states  where it 
          did not  have section  271 authority.   SBC states 
          that  in  most  cases it  cancelled  these  orders 
          before  they  were  provisioned  and  it  did  not 
          complete or bill for any  long distance calls as a 
          result of the PIC changes.  SBC asserts that these 
          incidents  were  due  to inadvertent  mistakes  by 
          sales representatives.


II.  AGREEMENT

     6.   The  Parties  agree   and  acknowledge  that  this 
Consent Decree  shall constitute a final  settlement between 
SBC   and  the   Commission   of   the  Investigation.    In 
consideration for  the termination of this  Investigation in 
accordance with the terms of this Consent Decree, SBC agrees 
to the terms, conditions, and procedures contained herein.

     7.   SBC and the Bureau  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  SBC 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, SBC does 
not   admit  any   noncompliance,  violation   or  liability 
associated with or arising from  its actions or omissions as 
described herein.

     8.   SBC states  that it took the  following corrective 
measures in response to the incidents described in paragraph 
5 herein:

      (a)      Implemented processes to validate new numbers 
         added to affiliate databases.

      (b)      Implemented    the     following    processes 
         applicable   to    the   SBC-West    ordering   and 
         provisioning systems:

           (b)1)    Designed and implemented pre-design and 
              post-design Trunk Information Record Keeping 
              System (``TIRKS'') edits to prevent the 
              provisioning of interLATA circuits without 
              human intervention.

           (b)2)     Required manager approval to override 
              TIRKS system edit.

           (b)3)    Updated Methods and Procedures to 
              educate provisioning and maintenance managers 
              on permissible interLATA serving arrangements 
              prior to section 271 authorization.

           (b)4)    Updated Network Operations and 
              Translation methods and procedures to add 
              steps to the provisioning and maintenance 
              process to identify interLATA circuits and 
              document the interLATA exemption that applies.

           (b)5)    Designed additional system edits to the 
              Service Order Retrieval and Distribution 
              (``SORD'') ordering system and the Carrier 
              Access Billing System (``CABS'') to prevent 
              the ordering of interLATA circuits without 
              human intervention.  These system edits will 
              be completed on or before December 31, 2003. 

      (c)      Made edits in the SBC Long Distance ordering 
         system that provide notice to service 
         representatives when an attempt is made to 
         establish an account in an unauthorized state.  
         Service representatives now must get legal and/or 
         regulatory approval to proceed with the order.

      (d)      Required refresher training to service 
         representatives and sales teams on Switched Toll 
         Free Service to ensure that the terminating 
         telephone number is in a state where SBC is an 
         authorized long distance provider.

      (e)      Ensured that SBC Long Distance daily report 
         that identifies billing accounts established in 
         unauthorized states is reviewed early in the day 
         and acted on before the end of the same day to 
         ensure that ordering errors are corrected before 
         services are provisioned.  If any unauthorized 
         accounts are identified within the SBC Long 
         Distance organization, the accounts are cancelled, 
         and the billing system is checked for usage on the 
         accounts to ensure that no customer is billed.

     9.   Compliance Plan.  For purposes of settling the 
matters set forth herein, SBC commits to retain and 
incorporate into a Compliance Plan the safeguards described 
in paragraph 8 herein, except for the processes set forth in 
paragraph 8(b).  In addition to retaining these measures, 
SBC commits to implement the following additional safeguards 
as part of the Compliance Plan:

     (a)  SBC will implement a process for regular review 
        and validation of LATA tables used in provisioning 
        and pre-order systems to detect errors downloaded 
        from third-party databases.

     (b)  SBC will modify its Methods and Procedures to add 
        steps to the provisioning and maintenance process to 
        identify interLATA circuits.

     (c)  SBC will enhance its affiliate OCS administration 
        procedures, expanding semi-annual review of 
        affiliate database telephone numbers and migration 
        procedures for the sale or purchase of affiliates.

     (d)  SBC will develop a comprehensive plan for 
        administering OCS to its affiliates to prevent the 
        inadvertent provision of interLATA OCS to 
        unaffiliated entities.  Upon initiating the sale or 
        divestiture of an affiliate, SBC will undertake a 
        process to identify and migrate the affected 
        affiliate's official communications services.

     (e)  SBC will modify its existing section 272 
        compliance training materials and  section 272 
        employee compliance guidelines to add additional 
        emphasis as to the impermissibility of premature 
        selling, marketing and provisioning of interLATA 
        services.  These materials will be made available to 
        employees via SBC's intranet website.

     10.  SBC will assign the oversight of the Compliance 
Plan to the SBC 272 Oversight Team that is comprised of 
senior managers.  The SBC 272 Oversight Team will meet 
monthly and review compliance with this Compliance Plan.


     11.  Review of SBC's compliance with this Compliance 
Plan will be included in the Enforcement Bureau's Section 
271 Compliance Review Program.

     12.  SBC will implement this Compliance Plan within 30 
days of the Effective Date of the Consent Decree, unless 
otherwise noted in the Compliance Plan.

     13.  This Compliance Plan shall remain in effect until 
such time as SBC obtains authorization pursuant to section 
271 of the Act to provide long distance services in each of 
its twelve in-region states.

   14.    In express reliance on the covenants and 
   representations contained herein, the Commission agrees 
   to terminate the Investigation.

     15.  SBC  will make  a  voluntary  contribution to  the 
United States Treasury in the amount of $1.35 million within 
10 calendar  days after  the Commission Order  adopting this 
Consent Decree becomes final.  SBC must make this payment by 
check, wire  transfer or money  order drawn to the  order of 
the Federal  Communications Commission, and the  check, wire 
transfer  or  money  order   should  refer  to  ``Acct.  No. 
200332080019''  and ``FRN  No. 0004333571.''   If SBC  makes 
this payment by check or money order, it must mail the check 
or money  order to:  Forfeiture Collection  Section, Finance 
Branch, Federal Communications Commission,  P. O. Box 73482, 
Chicago, Illinois, 60673-7482.  If SBC makes this payment by 
wire transfer, it must wire  such payment in accordance with 
Commission procedures for wire transfers.


     16.  The  Commission agrees  that,  in  the absence  of 
material new evidence relating to incidents that SBC has not 
disclosed to the  Bureau through the Effective  Date of this 
Consent Decree, it will not  use the facts developed in this 
Investigation, or  the existence of this  Consent Decree, to 
institute, on its own motion, any new proceedings, formal or 
informal, or to  make any actions on its  own motion against 
the Company  concerning the  matters that were  disclosed in 
the Investigation.  The Commission  also agrees that, in the 
absence of material new  evidence relating to incidents that 
SBC has  not disclosed to  the Bureau through  the Effective 
Date  of this  Consent Decree,  it  will not  use the  facts 
developed  in  the Investigation  to  institute  on its  own 
motion  any  proceeding, formal  or  informal,  or take  any 
action against SBC with respect to its basic qualifications, 
including its  character qualifications, to be  a Commission 
licensee.   Nothing  in  this   Consent  Decree  limits  the 
Commission's authority to consider and adjudicate any formal 
complaint that may be filed  pursuant to sections 208 or 271 
of  the Communications  Act,  as amended,  and  to take  any 
action in response to such formal complaint.

     17.  SBC waives any and all  rights it 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 Order  adopting this Consent 
Decree, provided the Commission issues an Order adopting the 
Consent Decree without change, addition, or modification.

     18.  SBC's decision  to enter into this  Consent Decree 
is expressly contingent upon the Commission's issuance of an 
Order that is consistent with this Consent Decree, and which 
adopts  the  Consent  Decree without  change,  addition,  or 
modification.

     19.  In the event that  this Consent Decree 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.

     20.  If either party (or the United States on behalf of 
the  Commission), brings  a judicial  action to  enforce the 
terms of the Adopting Order,  neither SBC nor the Commission 
shall contest the validity of the Consent Decree or Adopting 
Order, and SBC will waive any  statutory right to a trial de 
novo.

     21.  Any  violation  of  the   Consent  Decree  or  the 
Adopting  Order will  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.
     
     22.  The Parties  also agree  that if any  provision of 
the  Consent Decree  conflicts with  any subsequent  rule or 
order   adopted  by   the   Commission   (except  an   order 
specifically intended  to revise  the terms of  this Consent 
Decree to which SBC does not consent) that provision will be 
superseded by such Commission rule or order.






     23.  This Consent Decree may be signed in counterparts.


FEDERAL COMMUNICATIONS COMMISSION



By: ___________________________________
     Marlene H. Dortch
     Secretary


SBC COMMUNICATIONS INC.



By: ___________________________________
     James C. Smith
     Senior Vice President - Federal Regulatory
     SBC Telecommunications, Inc.







_________________________

1 See Letter from Maureen F. Del Duca, Chief, Investigations 
and Hearings Division, Enforcement Bureau, to Michelle 
Thomas, Executive Director, Federal Regulatory, SBC 
Communications Inc., dated March 10, 2003.

2    See Letter from Maureen F. Del Duca, Chief, 
Investigations and Hearings Division, Enforcement Bureau, to 
Michelle Thomas, Executive Director, Federal Regulatory, SBC 
Communications Inc., dated March 10, 2003.