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                         Before the
                FEDERAL COMMUNICATIONS COMMISSION
                      Washington, D.C. 20554
                                   
                              )         File  No.  EB-04-IH-
0342
In the Matter of                        )                   
                              )         Acct.            No. 
200532080007        
SBC Communications Inc.            )                        
                              )         FRN No. 0005049150 
                                   
                       CONSENT DECREE

INTRODUCTION

      1.  The Enforcement Bureau (the ``Bureau'') of the 
 Federal Communications Commission (the ``Commission'' or 
 ``FCC'') and SBC Communications Inc. (``SBC'') and its 
 wholly-owned subsidiaries and affiliates, hereby enter 
 into this Consent Decree for the purpose of terminating an 
 Investigation into whether SBC Connecticut complied with 
 universal service support requirements of section 254 of 
 the Communications Act of 1934, as amended (``the Act''),1 
 and Part 54 of the Commission's rules.2

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

      (a) 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 SBC Communications Inc., and its 
         successors and assigns.

      (d)  ``SBC Connecticut'' means The Southern New 
         England Telephone Company d/b/a SBC Connecticut, a 
         wholly owned subsidiary of SBC.

      (e)  ``Parties'' means SBC and the Bureau.

      (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 Commission in the above-referenced 
         file concerning whether SBC Connecticut violated 
         Part 54 of the Commission's rules in connection 
         with SBC Connecticut's receipt of universal service 
         support for New London Public Schools (``NLPS'') 
         projects, which are referenced in SBC's August 6, 
         2004 and September 13, 2004, responses to Bureau 
         inquiries.3  

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

I.   BACKGROUND

      3.  The ``E-Rate'' or ``Education-Rate'' Program is 
 the universal service fund (``USF'') mechanism designed to 
 assist eligible schools and libraries in gaining access to 
 telecommunications and advanced services.4  On August 6, 
 2004, SBC informed the Bureau that, as part of its 
 continuing review of its wholly-owned subsidiaries' 
 involvement in the E-Rate program, it discovered that SBC 
 Connecticut may have used or received E-Rate funds in a 
 manner inconsistent with the Commission's rules and 
 orders.  More specifically, SBC informed the Bureau that, 
 with respect to the NLPS, SBC Connecticut invoiced the 
 Schools and Libraries Division (``SLD'') of the Universal 
 Service Administrative Company (``USAC'')5 in one funding 
 year for services provided in another; that SBC 
 Connecticut invoiced SLD for services it provided to 
 certain schools and other entities for which it had not 
 sought and obtained authorization; and that SBC 
 Connecticut invoiced SLD for services that are not 
 eligible for USF support.  SBC Connecticut refunded to SLD 
 the amounts collected in connection with these invoices 
 and withdrew any outstanding invoices.

II.  AGREEMENT

      4.  The Parties agree and acknowledge that this 
 Consent Decree shall constitute a final settlement of the 
 Investigation.  In express reliance on the covenants and 
 representations contained herein, and to avoid the further 
 expenditure of scarce public resources, the Bureau agrees 
 to terminate the Investigation.  In consideration for the 
 termination of the Investigation and in accordance with 
 the terms of this Consent Decree, SBC agrees to the terms, 
 conditions and procedures contained herein.

      5.  SBC agrees that SBC Connecticut will make a 
 voluntary contribution to the United States Treasury in 
 the amount of five hundred thousand dollars ($500,000) 
 within ten (10) calendar days from the Effective Date.  
 SBC Connecticut 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. 200532080007'' and 
 ``FRN No. 0005049150.''  If SBC Connecticut 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.  Payment by overnight mail 
 may be sent to Bank One/LB 73482, 525 West Monroe, 8th 
 Floor Mailroom, Chicago, IL 60661.  Payment by wire 
 transfer may be made to ABA Number 071000013, receiving 
 bank Bank One, and account number 1165259.

      6.  SBC agrees that within thirty (30) days from the 
 Effective Date, and to ensure SBC's wholly-owned 
 subsidiaries' future compliance with the Commission's 
 rules governing the E-Rate program, SBC will institute a 
 Compliance Plan.  That plan will include, at a minimum, 
 the following components: 

     A.  Compliance Training Program.  SBC shall establish 
     and maintain an E-rate compliance training program for 
     its wholly-owned subsidiaries' employees responsible 
     for sales, account management, and project management 
     relating to E-Rate contracts and services.6  This 
     program will include at least the following elements: 

           i.  SBC shall maintain a training package 
             regarding E-Rate program requirements for its 
             wholly-owned subsidiaries' employees 
             responsible for sales, account management, and 
             project management relating to E-Rate 
             contracts and services.  This package shall 
             cover the following subject matter areas:  
             eligible services, competitive bidding, the 
             application process, service provider roles 
             and responsibilities, discounts, the 
             prohibition against free services, service 
             substitutions and equipment transfers, billing 
             SLD for services, and document retention 
             requirements.  The training package shall also 
             include a section on the potential 
             ramifications of failing to comply with the E-
             Rate rules, and a section reminding employees 
             that they are responsible for knowing their 
             obligations under the SBC Code of Business 
             Conduct, which requires employees to comply 
             with all applicable legal and regulatory 
             requirements.  The training package shall also 
             remind employees that they are responsible for 
             maintaining the highest level of honesty and 
             integrity, and notifying management if they 
             learn of or suspect that any employee has 
             engaged in any illegal or unethical business 
             conduct related to the E-Rate program.  
           ii. SBC shall provide E-Rate training sessions, 
             at least annually, utilizing the foregoing 
             training package for its wholly-owned 
             subsidiaries' employees responsible for sales, 
             account management, and project management 
             relating to E-Rate contracts and services.  
             SBC also will provide the training package to 
             new employees of its wholly-owned subsidiaries 
             that are responsible for sales, account 
             management, and project management functions 
             relating to E-Rate contracts and services 
             within 45 days of being assigned such 
             responsibilities.  
           iii.     SBC shall update and enhance the 
             foregoing training package regarding the E-
             Rate rules as appropriate and necessary to 
             reflect the current FCC rules.

     B.  Regional E-Rate Coordinators.  SBC shall cause each 
     of its regional business sales organizations to 
     designate and maintain an employee to act as the E-Rate 
     subject matter expert for that organization. The 
     Regional E-Rate Coordinators shall be responsible for 
     answering day-to-day E-Rate questions posed by 
     employees in their business units and bringing 
     potential violations of the E-Rate rules to the 
     attention of the SBC Legal Department.

     C.   E-Rate Oversight Team.  SBC shall establish and 
     maintain an E-Rate Oversight Team to provide training 
     and act as a resource for SBC's business units 
     regarding the rules and requirements of the E-Rate 
     Program.  The E-Rate Oversight Team shall include 
     representatives of SBC's Regulatory Planning and Policy 
     Group, Regulatory Compliance Group, and Legal 
     Department.  The E-Rate Oversight Team will:

          i.   act as the central point of contact for 
               documentation and dissemination of E-Rate 
               Program requirements throughout the company;

          ii.  monitor changes in the federal E-Rate rules 
               and regulations and ensure that those changes 
               are documented and disseminated 
               appropriately;

          iii. develop and coordinate dissemination of E-
               Rate training materials;

          iv.  serve as a centralized resource for resolving 
               questions and problems relating to SBC's 
               compliance with applicable E-Rate Program 
               rules and regulations; and

          v.   work with SBC's Regional E-Rate Coordinators 
               to ensure consistent implementation of the E-
               Rate rules and regulations across the 
               company.

     D.   E-Rate Oversight Team Subcommittees.  The E-Rate 
     Oversight Team shall establish and maintain inter-
     disciplinary E-Rate subcommittees, which will be 
     charged with the following responsibilities:

          i.   Program Requirements Subcommittee:  Outlining 
               E-Rate Program requirements and mapping each 
               to the appropriate organizations and business 
               functions.

          ii.  Training Subcommittee:  Developing and 
               delivering E-Rate training and updating 
               training material, as needed, to reflect 
               program changes.  

          iii. Marketing and Communications Subcommittee:  
               Maintaining the SBC customer and employee E-
               Rate websites to serve as repositories for E-
               Rate reference materials.

          iv.  Billing and 
               Collections/IT/Invoicing/Accounting 
               Subcommittee:  Developing consistent methods 
               of operations for SLD invoicing, tracking and 
               monitoring SLD receivables, account 
               reconciliation, and collections.

          v.   Process Standardization Subcommittee:  
               Developing consistent methods and procedures 
               for sales, customer invoicing, SLD 
               escalations, document retention and other 
               issues that might arise.

     E.   SLD Principal Point of Contact.  SBC shall 
     designate an employee with appropriate background and 
     experience in E-Rate matters to act as SBC's principal 
     point of contact with the SLD for questions relating to 
     interpretation of the E-Rate rules, requests for 
     extensions of E-Rate deadlines, and appeals of adverse 
     decisions by SLD.  SBC will instruct employees with E-
     Rate responsibilities that they should route such 
     questions to SBC's principal point of contact with the 
     SLD.  

     F.  Termination.  The provisions of this Paragraph 
     6 shall  remain in effect  for two (2)  years from 
     the Effective Date.
      7.  The Bureau agrees that, in the absence of new 
 evidence relating to incidents that were not the subject 
 of the Investigation, the Bureau will not use the facts 
 developed in the Investigation, or the existence of this 
 Consent Decree, to institute, on its own motion, any new 
 proceedings, formal or informal, or to take any actions on 
 its own motion against SBC concerning the matters that 
 were the subject of the Investigation.  The Bureau also 
 agrees that, in the absence of such new evidence, 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.  

      8.  Nothing in this Consent Decree shall prevent the 
 Commission or its delegated authority from adjudicating 
 any formal complaint that may be filed pursuant to section 
 208 of the Act, and to take any action in response to such 
 formal complaint.  Except as expressly provided in this 
 Consent Decree, nothing herein shall prevent the 
 Commission or its delegated authority from investigating 
 SBC's compliance with the Act, the Commission's rules, or 
 this Consent Decree.

      9.  SBC waives any and all rights it may have to seek 
 administrative or judicial reconsideration, review, appeal 
 or stay, or otherwise to challenge or contest the validity 
 of this Consent Decree and the Adopting Order, provided 
 the Bureau issues an Adopting Order without change, 
 addition, or modification.

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

      11. 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.

      12. 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 Bureau 
 shall contest the validity of this Consent Decree or the 
 Adopting Order, and SBC will waive any statutory right to 
 a trial de novo.

      13. The parties agree that this Consent Decree is for 
 settlement purposes only and that it does not constitute 
 an admission, denial, adjudication on the merits, or a 
 factual or legal determination regarding any compliance or 
 noncompliance with the requirements of section 254 of the 
 Act  or Part 54 of the Commission's rules.

      14. Any violation of this Consent Decree or the 
 Adopting Order will constitute a separate violation of a 
 Commission order, entitling the Commission or its 
 delegated authority to exercise any rights and remedies 
 attendant to the enforcement of a Commission order.

      15. The Parties agree that if any provision of this 
 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 Connecticut does not consent) that provision 
 will be superseded by such Commission rule or order.


      16. This Consent Decree may be signed in counterparts.


     FEDERAL COMMUNICATIONS COMMISSION
     ENFORCEMENT BUREAU




     By:  __________________________________
          David H. Solomon
          Chief, Enforcement Bureau


     SBC Communications Inc.




     By:  ___________________________________
          James C. Smith
          Senior Vice President - FCC
          SBC Telecommunications, Inc.
_________________________

1 47 U.S.C.  254.

2 47 C.F.R.  54.1 et. seq.

3 Letters  from Christopher Heimann, General  Attorney, SBC 
Telecommunications, Inc., to  David Janas, Special Counsel, 
Investigations  &  Hearings Division,  Enforcement  Bureau, 
Federal Communications Commission, dated August 6, 2004 and 
September 13, 2004. 

4 See  Part 54,  Subpart F, of  the Commission's  rules, 47 
C.F.R.  54.500 et seq.  

5  The   Commission  has  designated  USAC   to  administer 
universal  service support  under Commission  direction and 
oversight.  47 C.F.R.  54.701.

6 Under this provision, SBC will not be required to provide 
E-Rate    compliance    training   to    employees    whose 
responsibilities  do   not  include  any   decision  making 
regarding   E-Rate  contracts   and  services,   and  whose 
involvement  in E-Rate  projects is  limited to  performing 
non-E-Rate specific job functions.