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                           Before the
                    Washington, D. C.  20554

In the Matter of                )
                                )  File No. EB-00-TC-006
AT&T Communications, Inc.       )
Apparent Liability for Forfeiture  )    NAL/Acct. No. 


Adopted:  December 21, 2000                  Released:      
December 21, 2000

By the Commission:
                        I.  INTRODUCTION

     1.   In this Notice of Apparent Liability for Forfeiture 
(NAL),1 we find that AT&T Communications, Inc. (AT&T) apparently 
willfully or repeatedly violated section 258 of the 
Communications Act of 1934, as amended (the Act),2 as well as 
Commission rules and orders, by changing the designated preferred 
carriers for 14 telephone lines without the consumers' 
authorization, a practice commonly know as ``slamming.''  Based 
upon our review of the facts and circumstances surrounding the 
violations, we find AT&T apparently liable for a forfeiture in 
the amount of $40,000 for each of 12 violations and $80,000 for 
each of two violations, resulting in a total proposed forfeiture 
amount of $640,000.

                         II.  BACKGROUND

     2.   Section 258 of the Act makes it unlawful for any 
telecommunications carrier to "submit or execute a change in a 
subscriber's selection of a provider of telephone exchange 
service or telephone toll service except in accordance with such 
procedures as the Commission shall prescribe." 3  Pursuant to 
section 258, carriers are thus barred from changing a consumer's 
preferred local or long distance carrier without first complying 
with the Commission's procedures, which are codified at section 
64.1100 of the Commission's rules.  Specifically, section 64.1150 
lays out the various approved methods carriers can use to verify 
consumer requests to change a preferred telephone service 
provider.4  For example, a carrier may elect to use a letter of 
agency (LOA) as the basis for submitting a carrier change order.  
Pursuant to section 64.1160, the LOA must be signed ``by the 
subscriber to the telephone line(s) requesting the preferred 
carrier change.''5  

     3.   An alternative to LOA verification involves the use of 
an independent, third party to verify carrier change requests.  
If a carrier elects to use this method of verification, the 
carrier must ensure that ``[t]he content of the verification . . 
. include[s] clear and conspicuous confirmation that the 
subscriber has authorized a preferred carrier change.''6  
Furthermore, section 64.1100 provides that ``[w]here a carrier is 
selling more than one type of telecommunications service . . .  
that carrier must obtain separate authorization from the 
subscriber for each service sold.''7  This section also requires 
the carrier submitting a change request to ``maintain and 
preserve records of verification of subscriber authorization for 
a minimum period of two years after obtaining such 

     4.   During the course of this year, the Commission has 
received over 1,000 consumer complaints9 alleging that AT&T has 
switched the consumers' preferred telecommunications service 
provider without authorization.  In response to the high volume 
of complaints against AT&T, Commission staff has investigated 
many of the allegations contained in the complaints.  This 
enforcement action is based upon 12 of these consumer complaints 
(see Appendix A) involving 14 telephone lines.

                        III.  DISCUSSION

     5.   For purposes of assessing AT&T's apparent liability, 
the Commission must determine, on the basis of the available 
evidence, that 1) the complainant did not authorize a preferred-
carrier change and 2) AT&T submitted a preferred-carrier change 
request to the complainant's local exchange carrier.10  The 
statements contained in the 12 consumer complaints profiled in 
this NAL,11 and AT&T's responses, provide strong evidence that 
AT&T converted 14 consumer lines without proper authorization.  
Indeed, AT&T does not dispute the consumers' statements in six of 
the cases.12  Specifically, AT&T acknowledges that it did not 
obtain authorization for the carrier changes alleged in the 
complaints submitted by Ms. Phyllis Crawford, Mr. and Mrs. David 
Scott, Mr. and Mrs. Jon Schuerholz, Mr. Bernard Hanavan, Mr. 
David Dinerman, and Mr. Steven Rosenberg.  In another five cases, 
AT&T has failed to provide sufficient evidence to rebut the 
allegations contained in the complaints submitted by Mr. and Mrs. 
Greg Ortega, Mr. Thomas Patterson, Ms. Teresa Plunkett, Ms. Mari 
Krumwiede and Mr. Robert Agnew.  Finally, AT&T relied on an LOA 
that appears to contain a forged or falsified signature as the 
basis for converting two lines identified in Ms. Sophia Palacio's 
complaint.  Each of these complaints is discussed below.

A.   Undisputed Conversions

     6.   In a written complaint, Ms. Crawford alleges that AT&T 
switched her preferred long distance provider from MCI to AT&T 
without authorization.13  Ms. Crawford states that she called 
AT&T on February 25, 2000, to inquire about AT&T's local service 
options.  After she agreed to subscribe to AT&T's local service, 
Ms. Crawford says AT&T tried to convince her to select AT&T for 
her long distance service.  Ms. Crawford, however, was not 
interested; as she recalls stating several times during the call, 
she was satisfied with MCI's calling plan and favorable 
international rates to the countries she called frequently.14  
Despite her explicit statements to AT&T that she was not 
interested in their long distance service, AT&T nevertheless 
switched Ms. Crawford's long distance service on March 2, 2000.15  
Ms. Crawford states that she first learned of the conversion when 
she failed to receive an expected call from an associate in 
India.16  When Ms. Crawford eventually called the associate, she 
learned that her MCI ``Call Home'' option had been terminated 
because AT&T had switched her preferred long distance provider.17  
On March 22, 2000, Ms. Crawford called MCI to reinstate them as 
her long distance carrier.

     7.   Upon receipt of her March phone bill, Ms. Crawford 
called AT&T to discuss the conversion of her long distance 
service and the resultant higher charges.  According to Ms. 
Crawford, AT&T said it would retrieve the tape recording of the 
call in which she purportedly verified the change request and 
advise Ms. Crawford of the results.18  Ms. Crawford subsequently 
filed an informal complaint with the Commission.19  Ms. Crawford 
also submitted a signed declaration attesting to the fact that 
she did not authorize the switch to AT&T long distance service.20  
Ms. Crawford's declaration also notes that AT&T failed to provide 
her with information regarding the contents of the purported 
taped verification conversation.21

     8.   Commission staff forwarded Ms. Crawford's complaint to 
AT&T and directed AT&T to respond to Ms. Crawford's 
allegations.22  AT&T replied that one of its representatives had 
spoken with Ms. Crawford on June 7 and had told her that the 
unauthorized conversion of her long distance service was due to 
``a processing error that caused both local and long distance 
service to be switched.''23  Staff sent AT&T another letter of 
inquiry (LOI) on July 24, 2000, asking for a more detailed 
explanation of the processing error.24  AT&T responded that it 
had manually processed Ms. Crawford's order for local service 
because the electronic linkages between AT&T's telemarketer and 
third party verifier were temporarily inoperative.25  AT&T 
further states that AT&T inadvertently ordered long distance 
service during the manual order processing.26

     9.   AT&T similarly admits changing Mr. Scott's long 
distance service without his consent.  In his complaint, Mr. 
Scott states that he changed his local service provider to 
MediaOne, now AT&T Broadband,27 on March 28, 2000.28  Mr. Scott 
further notes that he did not change his long distance 
provider.29  Mr. Scott states that when he received an invoice 
for AT&T long distance calls, he immediately called AT&T to 
inform them that he had not selected AT&T for long distance 
service.  According to Mr. Scott, the AT&T representative would 
neither adjust the charges (which Mr. Scott claims were twice as 
high as MCI's) nor accept responsibility for the alleged slam.30  
Mr. Scott then filed a complaint with the Commission, which staff 
forwarded to AT&T. 

     10.  AT&T responded to the complaint by stating that the 
long distance carrier change was the ``result of a local phone 
company sending AT&T an install order to do so.  No orders were 
initiated by AT&T or Mr. Scott.''31  But in a subsequent response 
to a second staff inquiry, AT&T states that MediaOne executed an 
order to provide both local and long distance service ``at Mrs. 
Scott's request and with her authorization.''32  AT&T notes that 
the ``local service authorization was recorded on MediaOne's 
voice log script,''33 but provides no verification whatever of 
the claimed authorization for the long distance change.  Rather, 
as the explanation for that change, AT&T merely states that ``the 
telemarketing representative mistakenly used the voice log 
verification script for the local service request instead of the 
script for local and long distance combined requests.''34  
Because Mr. Scott represents that he requested local service 
only, and AT&T's verification records do not indicate otherwise, 
it appears that AT&T erred in ordering the long distance service, 
not in using the wrong script to verify the consumer's request.

     11.  The four remaining undisputed complaints similarly 
allege that AT&T changed the consumers' preferred telephone 
service provider without authorization.  In response to the 
allegations contained in the complaints submitted by Ms. and Mrs. 
Schuerholz, Mr. Hanavan, Mr. Dinerman, and Mr. Rosenberg, AT&T 
concedes that it improperly changed the consumers' preferred 
service providers.  For example, Mrs. Schuerholz alleges that in 
July 2000, AT&T changed her and her husband's preferred long 
distance service provider without consent.35  In response to this 
allegation, AT&T admits that it improperly converted the 
Schuerholz's long distance service ``due to a coding error when 
the transaction [for local and regional toll] was processed,'' so 
that ``AT&T was also mistakenly selected as the interLATA 
carrier.''36  Similarly, AT&T admits that it did not have 
authority to change Mr. Hanavan's local toll service.  In 
response to Mr. Hanavan's allegation that AT&T converted his 
local toll service without permission,37 AT&T acknowledges that 
one of its representatives had entered ``inaccurate customer 
information under Mr. Hanavan's telephone number on February 23, 

     12.  AT&T states that similar errors resulted in improper 
changes to the Dinerman and Rosenberg accounts.  AT&T concedes 
that Mr. Dinerman authorized AT&T to provide only his local 
service during a June 27, 2000 call with AT&T.39  According to 
AT&T, a telemarketer from one of AT&T's cable service affiliates 
apparently submitted an order incorrectly requesting that AT&T be 
designated as Mr. Dinerman's preferred local, local toll, and 
long distance carrier.40  AT&T states that an independent third 
party discovered the discrepancy when verifying Mr. Dinerman's 
order for local service; AT&T, however, failed to reconcile the 
conflicting information and submitted the incorrect original 
order ``due to a clerical error.''41  AT&T thus improperly 
changed Mr. Dinerman's local toll and long distance carriers.  
Likewise, AT&T concedes that it did not obtain proper 
authorization to change Mr. Rosenberg's local toll service.  
According to Mr. Rosenberg, he called AT&T at the end of July 
2000 and authorized AT&T to provide his long distance service 
only.42  Mr. Rosenberg later received a bill for AT&T local toll 
service.  In response to Mr. Rosenberg's allegation that he did 
not authorize AT&T to provide local toll service, AT&T admits 
that the ``service choice was not properly verified.''43

     13.  AT&T attributes its conversions of these consumers' six 
lines to inadvertent error or mistake.  Even if we accept at face 
value AT&T's statements that these conversions were due to error 
or mistake, however, neither the Act nor our rules requires 
specific intent to violate the statute or rules.44  The 
Commission has stated that:

     holding carriers liable for both inadvertent and intentional 
     unauthorized changes to subscribers' preferred carriers will 
     reduce the overall incidence of slamming and is consistent 
     with 258.  We find that the rights of the consumer and the 
     authorized carrier to remedies for slamming should not be 
     affected by whether the slam was an intentional or 
     accidental act.  Regardless of the intent, or lack thereof, 
     behind the unauthorized change, the consumer and the 
     authorized carrier have suffered injury.45  

Because the Act and our rules do not require us to find that a 
carrier had specific intent to violate the Act or our rules, we 
therefore find AT&T apparently liable for the unauthorized 
conversion of the six telephone lines identified by these six 

B.   LOA Complaint

     14.  AT&T's response to an allegedly forged LOA fails to 
rebut the consumer's allegations.  In a written complaint to the 
Commission, Ms. Palacio recounts that on February 28, 2000, MCI, 
her preferred carrier, advised her that two of her lines had been 
changed to AT&T.46  Ms. Palacio then called her local provider 
and asked them to reinstate MCI as her long distance provider.  
She also called AT&T's executive complaint department to express 
her dissatisfaction with the conversions and to close the 

     15.  During the course of her communications with AT&T, Ms. 
Palacio requested a copy of the letter of authorization AT&T 
relied on as the basis of its purported authority to change her 
designated service provider.  On or about March 22, 2000, AT&T 
faxed Ms. Palacio a copy of a signed LOA that included a copy of 
one of her business cards affixed next to the signature.  Upon 
receipt of the faxed LOA, Ms. Palacio realized that the signature 
was not hers but that the business card was.47  Ms. Palacio then 
recalled that a man and a woman had stopped by her business in 
February 2000 and asked if she would be interested in changing 
carriers.  Ms. Palacio told them she was not interested, and when 
she watched the couple leave, she observed the woman take one of 
Ms. Palacio's business cards that was displayed on a counter.48

     16.  Commission staff forwarded Ms. Palacio's complaint to 
AT&T, along with a copy of the LOA and a request for a detailed 
response to Ms. Palacio's allegations (including the possibility 
of forgery).49  In its response, AT&T states that it submitted 
orders to change the long distance and local toll carrier for 
both lines based on a written letter of authorization bearing the 
signature of Sophia Palacio.50  AT&T acknowledges that the 
customer disputed the authorization and states that it credited 
all charges and closed the account on May 6, 2000.51  AT&T offers 
no other evidence to rebut Ms. Palacio's allegation that AT&T 
changed her preferred carrier based on a forged LOA.  

     17.  AT&T was aware that the LOA signature might have been 
forged as a result of Ms. Palacio's complaint and the 
Commission's inquiries.  AT&T's response, however, did not 
address the possibility that the signature could have been 
forged.  Our own examination of the signature on the LOA and the 
exemplar provided by the complainant leads us to conclude that 
there is little similarity between the signatures, thus 
supporting Ms. Palacio's allegations.  We therefore find that the 
complainant has provided credible evidence that she did not 
authorize AT&T to provide local toll or long distance service for 
her two telephone lines, and we accept her allegations for 
purposes of this Notice.

C.   Remaining Complaints

     18.  For the remaining complaints that form the basis of 
this NAL, AT&T fails to provide evidence sufficient to rebut the 
complainants' allegations that AT&T changed their service without 
consent.  AT&T either fails to address the allegations, as 
charged in the complaints submitted by Mr. and Mrs. Ortega and 
Mr. Patterson, or fails to provide documentation that would 
establish its authority to submit a request to change the 
consumers' preferred carriers (see the complaints submitted by 
Ms. Plunkett, Ms. Krumwiede, and Mr. Agnew, discussed below).  
For example, in the case involving Mr. and Mrs. Ortega, AT&T 
states that on July 22, 2000, an independent, third party 
verifier spoke with a Dwight Lewis to confirm a request to change 
the Ortegas' long distance provider.52  A few days later, the 
Ortegas' local carrier called to advise them that AT&T had been 
designated as their long distance carrier.  Because neither of 
the Ortegas had requested a change of long distance carrier, the 
Ortegas called AT&T to protest the unauthorized conversion of 
their service.53  AT&T responded to their complaint via the 
August 5 Letter and stated that AT&T's marketing representative 
had confirmed that one Dwight Lewis was authorized to make 
decisions regarding the Ortegas' account.54  The Ortegas, 
however, state that they did not request a change and declare 
that they do not know anyone named Dwight Lewis.55  When the 
Ortegas eventually received an AT&T bill addressed to Greg 
Ortega, they filed a complaint with the Commission. 

     19.  AT&T's response to the Ortegas' allegation fails to 
rebut the Ortegas' assertion that Dwight Lewis was not authorized 
to change their service.  In response to a Commission staff 
inquiry, AT&T states that the authorization was obtained during 
an outbound marketing call and that TeleTech, a third party 
verifier, confirmed the alleged change request.56  In support of 
its statements, AT&T provided a copy of a TeleTech memo stating 
that Dwight Lewis authorized AT&T to provide long distance and 
local toll service.57  The memo lists the Ortegas' telephone 
number but indicates that the ``Customer (billing) Name'' for the 
account was Dwight Lewis, not the Ortegas.58  AT&T does not 
provide any other evidence to rebut the Ortegas' allegation.  The 
fact that the Ortegas complained of the carrier change 
immediately upon learning of the conversion, coupled with AT&T's 
response that Dwight Lewis confirmed a change for an account 
billed to himself (as opposed to the Ortegas), leads us to 
conclude, for the purposes of this Notice, that the Ortegas did 
not authorize a change in carriers.  

     20.  The complaint filed by Mr. Patterson mirrors the 
complaint filed by Mr. and Mrs. Ortega.  Mr. Patterson states 
that AT&T changed his long distance carrier without his 
authorization.59  Mr. Patterson became aware of the change when 
he received an AT&T long distance bill in January 2000.  Mr. 
Patterson states that he promptly contacted AT&T to complain 
about the conversion, and states that AT&T advised him that the 
person who had the telephone number before Mr. Patterson was the 
one who requested the change.60  Mr. Patterson states that he was 
perplexed by this explanation, however, because he has had the 
telephone number for the past four years.61  

     21.  In response to a staff inquiry to AT&T regarding this 
allegation, AT&T states that it became Mr. Patterson's long 
distance service on December 27, 1999, based on the verified 
request provided by one Sam Carrillo.62  Mr. Patterson, however, 
avers that he does not know anyone named Sam Carrillo.63  In 
response to a second staff inquiry, AT&T explains that during an 
outbound sales call on December 23, 1999, one of its marketing 
representatives confirmed that Sam Carrillo was authorized to 
make changes to Mr. Patterson's account.64  AT&T included a 
memorandum from TeleTech, a third party verifier, indicating that 
Sam Carrillo was the authorized party who confirmed the change 
request.65  The third party verifier's memorandum, however, lists 
the ``Customer (Billing Name)'' as Sam Carrillo, not Mr. 
Patterson.66 As in the case involving the Ortegas, Mr. 
Patterson's statements, coupled with AT&T's responses, lead us to 
conclude that, for purposes of this Notice, Mr. Patterson did not 
authorize AT&T to be his long distance carrier.

               22.  In her written complaint, Ms. Plunkett 
     alleges that AT&T, her preferred long distance provider, 
     converted her local service from Southwestern Bell (SWBT) 
     without authorization.67  Ms. Plunkett states that on March 
     24, 2000, her local service was disconnected from SWBT and 
     subsequently connected to AT&T, although she never 
     authorized such a change.68  According to Ms. Plunkett, she 
     promptly called AT&T to request a disconnect; the 
     representative said she would turn in a ``slam form'' and 
     issue the disconnect order; and the rep assured Ms. Plunkett 
     that she would not have to contact AT&T again regarding this 

     23.  On March 31, one week after the alleged slam, Ms. 
Plunkett states that she spoke with SWBT, who advised her that 
AT&T had not yet completed the disconnect order.70  Ms. Plunkett 
spoke to SWBT on April 5 and was again advised that AT&T had not 
completed the disconnect order.71  By letter dated April 10, 
2000, Ms. Plunkett asked the Federal Communications Commission to 
intervene on her behalf.72  Staff forwarded Ms. Plunkett's 
complaint to AT&T and directed AT&T to state whether it had 
submitted a request to change Ms. Plunkett's preferred local 
telephone service provider and, if so, upon what authority.73 
AT&T's response states that ``Ms. Plunkett was not slammed to 
AT&T for local service'' and that ``an order was placed on 
February 28, 2000 for AT&T and the order became complete on March 
24, 2000.''74  AT&T further states that it issued Ms. Plunkett a 
$51.80 credit for local service billing, and that ``Ms. 
Plunkett's account was forwarded to Dallas for an outploc [sic], 
to insure Ms. Plunkett's lines are released from AT&T local 

     24.  Commission staff issued a second letter to AT&T 
directing the company to provide more details regarding the 
conversion of Ms. Plunkett's service.76  AT&T's second response 
indicates that it had implemented the change request on March 24, 
2000, and states that J.C. Penney, an independent third party, 
verified the change request on February 8, 2000.77  This response 
included what AT&T termed a ``statement'' from the verifier that 
purportedly confirmed the change request.78  The proffered 
statement, however, consists of an unsigned sheet of paper with 
no letterhead and contains a table implying that on February 8, 
2000, Teresa Plunkett had given a ``pass'' for local, intraLATA, 
and interLATA ``TPV Type'' categories.79  AT&T provided no other 

     25.  AT&T's verification ``statement'' fails to rebut Ms. 
Plunkett's contention that she did not authorize AT&T to provide 
her local service.  First, the purported verification is 
unsigned, does not indicate when it was created, and does not 
state that it is an accurate representation of a contact with Ms. 
Plunkett.  Nor does it indicate whether the verifier obtained 
separate verifications for each service offered, as required by 
our rules.  Second, the accuracy of the purported authorization 
is questionable.  Ms. Plunkett asserts that AT&T had been her 
designated long distance provider prior to February 8, 2000.80  
The document, however, indicates that on February 8, 2000, Ms. 
Plunkett provided a ``pass'' in the long distance category, as 
well as the local and local toll categories.  AT&T apparently 
interpreted the term ``pass'' to mean that Ms. Plunkett 
authorized AT&T to become her preferred service provider for 
these services.  Because AT&T was providing Ms. Plunkett's long 
distance service prior to February 8, 2000, however, it is 
unclear to us that the term ``pass'' can be deemed an 
authorization to change carriers.  Accordingly, for the reasons 
discussed above, we find that the purported verification does not 
provide confirmation that Ms. Plunkett authorized a preferred 
carrier change.  We thus accept, for purposes of this Notice, Ms. 
Plunkett's statement that she did not authorize AT&T to provide 
local service.

     26.  Similarly, AT&T fails to offer evidence sufficient to 
rebut the allegations contained in the complaints filed by Ms. 
Krumwiede and Mr. Agnew.  Indeed, AT&T fails to provide any 
evidence of how it obtained authority to change three of these 
complainants' lines.  In her written complaint, Ms. Krumwiede 
states that she received a bill for AT&T local and long distance 
service in March 2000.81  While Ms. Krumwiede acknowledges that 
she requested literature about AT&T's One Rate plan in response 
to a telemarketing call she received in January, she did not 
authorize any change in her service providers.82  After receiving 
a bill from AT&T, Ms. Krumwiede states that she called AT&T 
several times to correct the situation, but when AT&T had not 
resolved the matter by July, she filed a complaint with the 
Commission.  In response to a staff request for information 
regarding Ms. Krumwiede's allegations,83 AT&T states that it 
``has been unable to date to retrieve the detailed evidence of 
the third party verification for this carrier selection due to a 
data corruption problem.''84  AT&T's inability to produce 
evidence supporting the purported authorization leads us to 
accept as true Ms. Krumwiede's statement that AT&T converted her 
local and long distance service without her consent.

     27.  Likewise, AT&T has failed to offer evidence to rebut 
Mr. Agnew's allegation that AT&T converted the local and long 
distance service of both his business and residential lines 
without proper authorization.85  In response to a staff inquiry 
regarding these allegations, AT&T states that it changed Mr. 
Agnew's service ``based on authorization provided during a 
telemarketing call to his business on April 5, 2000.''86  AT&T's 
August 16, 2000 response further states that it ``has requested a 
copy of the authorization from the vendor and will provide 
results upon receipt.''87  To date, staff has not received any 
evidence related to Mr. Agnew's disputed verification.  
Therefore, in the absence of an argument or rebuttal evidence to 
the contrary, we conclude that AT&T has apparently changed the 
local and long distance service of Mr. Agnew's business and 
residential lines without proper authorization.  

D.   Forfeiture Amount

     28.  AT&T's actions, as described above, persuade us that a 
significant forfeiture is warranted against AT&T for its apparent 
willful or repeated violations of section 258 of the Act and the 
Commission's rules and orders.88  These actions include: (1) the 
use of an apparently forged or falsified LOA to effect changes in 
long distance service; (2) the use of verbal authorizations from 
individuals who were apparently without authority to effectuate a 
change; and (3) the submission of apparently unauthorized carrier 
change orders.

     29.  Section 503(b) of the Communications Act authorizes the 
Commission to assess a forfeiture of up to $110,000 for each 
violation of the Act or of any rule, regulation, or order issued 
by the Commission under the Act.89 In exercising such authority, 
we are required to take into account "the nature, circumstances, 
extent, and gravity of the violation and, with respect to the 
violator, the degree of culpability, any history of prior 
offenses, ability to pay, and such other matters as justice may 
require."90  The Commission's forfeiture guidelines currently 
establish a standard forfeiture amount of $40,000 for violations 
of our rules and orders regarding unauthorized changes of 
preferred interexchange carriers. 91   These policies and 
guidelines, however, include upward adjustment criteria that 
warrant a higher forfeiture amount based on the particular facts 
and circumstances of the violation(s).92  These include the 
egregiousness of the misconduct, ability or inability to pay, 
whether the violation was intentional, whether substantial harm 
resulted from the violations, history of compliance with 
Commission requirements, whether the violator realized 
substantial economic gain from the misconduct, and whether the 
violation is repeated or continuous.93 

     30.  We note that on several occasions, the Commission has 
sternly admonished carriers that it would take swift and decisive 
enforcement action, including the imposition of substantial 
monetary forfeitures, against any carrier found to have engaged 
in slamming, including through the use of forged LOAs.94  More 
recently, the Commission has issued several NALs assessing 
forfeitures at $80,000 per violation for the use of forged 
LOAs.95  In those orders, the Commission found that the higher 
forfeiture amount was warranted by the egregiousness of 

     31.  In the instant case, the evidence before us indicates 
that AT&T has apparently willfully or repeatedly changed 
consumers' preferred telecommunications service providers without 
proper authorization.  Moreover, in one of the complaints before 
us, it appears that AT&T relied on a forged LOA which, as we have 
explained in earlier NALs, we find to be a particularly egregious 
form of slamming.97  We thus find that the upward adjustment 
criterion related to egregious misconduct is applicable in this 
case.  Based on the facts alleged by Ms. Palacio, we conclude 
that it is appropriate to propose a forfeiture amount that is 
double the base amount contained in our forfeiture guidelines for 
the two lines AT&T converted based on a forged LOA.  Because AT&T 
converted two telephone numbers without proper authorization, we 
find that AT&T has committed two separate violations.  We thus 
propose a forfeiture of $80,000 for each violation resulting from 
AT&T's reliance on a forged LOA, or $160,000.  

     32.  For each of the remaining 12 violations, we will apply 
the $40,000 base slamming forfeiture amount, or $480,000.  Thus, 
we find that AT&T is apparently liable for a total proposed 
forfeiture of $640,000 for the unauthorized conversion of 14 
telephone lines.  AT&T will have the opportunity to submit 
further evidence and arguments in response to this NAL to show 
that no forfeiture should be imposed or that some lesser amount 
should be assessed.98

   33.    We note that this case involves several instances in 
which the consumer authorized AT&T to provide one type of 
service, and then apparently had additional unauthorized services 
switched by AT&T.99  We remind AT&T and other carriers that they 
must obtain separate authorization from the subscriber for each 
type of service for which the carrier requests a change.


     34.  We have determined that AT&T has apparently violated 
section 258 of the Act and the Commission's preferred carrier 
change rules and orders100 by converting the preferred telephone 
service providers for 14 telephone lines identified in the 12 
consumer complaints discussed above, on the dates and in the 
manner described herein.  We have further determined that AT&T 
Communications, Inc. is apparently liable for forfeitures in the 
amount of $80,000 for each of the two conversions based on an 
apparently forged letter of agency, and $40,000 for each of the 
remaining 12 violations, resulting in a total forfeiture amount 
of $640,000.

     35.  Accordingly, IT IS ORDERED, pursuant to section 503(b) 
of Communications Act of 1934, as amended, 47 U.S.C.  503(b), 
section 1.80 of the Commission's rules, 47 C.F.R.  1.80, that 
AT&T Communications, Inc. IS HEREBY NOTIFIED of an Apparent 
Liability for Forfeiture in the amount of $640,000 for willful or 
repeated violations of section 258 of the Act101 and the 
Commission's preferred carrier change rules and orders as 
described in the paragraphs above.102

     36.  IT IS FURTHER ORDERED, pursuant to section 1.80 of the 
Commission's rules, 47 C.F.R.  1.80, that within thirty (30) 
days of the release of this Notice, AT&T Communications, Inc. 
SHALL PAY the full amount of the proposed forfeiture103 OR SHALL 
FILE a response showing why the proposed forfeiture should not be 
imposed or should be reduced.
     37.  IT IS FURTHER ORDERED that a copy of this Notice of 
Apparent Liability for Forfeiture SHALL BE SENT by certified mail 
to, AT&T Communications, Inc., 295 North Maple Avenue, Basking 
Ridge, New Jersey, 07920.


                         Magalie Roman Salas
                       F-            Complainant             Location

      1       EB-00-TC-006  Agnew, Robert           New York
      2       EB-00-TC-006  Crawford, Phyllis       New York
      3       EB-00-TC-006  Dinerman, David         California
      4       EB-00-TC-006  Hanavan, Bernard L.      California
      5       EB-00-TC-006  Krumwiede, Mari         Montana
      6       EB-00-TC-006  Ortega, Tracie S. and   Texas
                           Greg L.
      7       EB-00-TC-006  Palachio, Sophia        California
      8       EB-00-TC-006  Patterson, Thomas H.    California
      9       EB-00-TC-006  Plunkett, Teresa M.     Texas
     10       EB-00-TC-006  Rosenberg, Steven R.    Kentucky
     11       EB-00-TC-006  Schuerholz, Esta  M.    New York
                           and Jon
     12       EB-00-TC-006  Scott, David S. and     Georgia

Customer's TPV Record


1    See 47 U.S.C.  503(b)(4)(A).  The Commission has authority 
under this section of the Act to assess a forfeiture penalty 
against a common carrier if the Commission determines that the 
carrier has "willfully or repeatedly" failed to comply with the 
provisions of the Act or with any rule, regulation, or order 
issued by the Commission under the Act.  For a violation to be 
willful, it need not be intentional.  Southern California 
Broadcasting Co., 6 FCC Rcd 4387 (1991).

2    47 U.S.C.  258.  

3    Id.  The Commission's rules and orders prescribe that a 
carrier wishing to effectuate an authorized change in a 
consumer's designated preferred carrier shall submit the 
preferred carrier change order to an executing carrier, who is 
then obligated to make the change absent some indication that the 
request is not legitimate.  See 47 C.F.R.  64.1100, 64.1150.  
Sections 64.1100 and 64.1150 are now codified at section 64.1120.  
65 FR 47678, 47690 (2000).  Because the apparent violations 
occurred prior to November 28, 2000, the effective date of the 
revised rules, sections 64.1100 and 64.1150 were the applicable 
Commission rules in effect during the relevant time period.  

4    See 47 C.F.R.  64.1150.

5    47 C.F.R.  64.1160(b).  Effective November 28, 2000, 
section 64.1160 was redesignated as section 64.1130; see note 3, 

6    47 C.F.R.  64.1150(d).

7    47 C.F.R.  64.1100(b).

8    47 C.F.R.  64.1100 (a)(1)(ii).

9    From January 1, 2000 to September 22, 2000, the Commission's 
Consumer Information Bureau received 1,143 complaints alleging 
unauthorized preferred carrier changes by AT&T.

10   See 47 U.S.C.  258; 47 C.F.R.  64.1100, 64.1150.  See 
also Vista Service Corporation, Order of Forfeiture, FCC 00-378, 
at  7 (rel. Oct. 23, 2000) recon. pending.

11   See Appendix A.

12   Catherine Seidel, Chief, Telecommunications Consumers 
Division (Division Chief), issued a series of letters of inquiry 
to AT&T, in which she provided copies of the complaints and 
directed AT&T to respond to the consumers' allegations.  See 
Letter of Inquiry dated May 19, 2000, from Catherine Seidel, 
Division Chief, to Margaret R. Berry, District Manager, AT&T, and 
Letters of Inquiry dated July 24, 2000, September 22, 2000, 
October 12, 2000, October 30, 2000, from Catherine Seidel, 
Division Chief, to James Cicconi, General Counsel, AT&T.  AT&T 
duly responded; see AT&T Responses dated July 26, 2000, August 
14, 2000, August 16, 2000, October 13, 2000, November 3, 2000, 
and November 21, 2000. 

13   Complaint dated April 12, 2000, from Phyllis Crawford 
(Crawford Complaint).

14   Id. 

15   AT&T Response dated August 16, 2000, from Peter H. Jacoby, 
General Attorney, to Catherine Seidel, Division Chief (August 16 

16   Crawford Complaint.

17   Id.

18   Id.

19   Id.

20   See Declaration of Phyllis Crawford dated June 27, 2000.

21   Id.

22   See Letter of Inquiry dated May 19, 2000, from Catherine 
Seidel, Division Chief, to Margaret R. Berry, District Manager, 
AT&T (May 19 LOI).

23   AT&T Response dated June 8, 2000, from Margaret R. Berry, 
District Manager, to Catherine Seidel, Division Chief (June 8 

24   See Letter of Inquiry dated July 24, 2000, from Catherine 
Seidel, Division Chief, to James Cicconi, General Counsel, AT&T 
(July 24 LOI).

25   August 16 Response.

26   Id.

27   According to an AT&T press release dated August 23, 2000, 
several former MediaOne properties would begin doing business as 
AT&T Broadband Systems, effective August 23, 2000. 

28   Complaint dated May 15, 2000, from David S. Scott (Scott 

29   Declaration of Mr. and Mrs. David Scott dated December 13, 

30   Id.

31   AT&T Response dated July 26, 2000, from Margaret R. Berry, 
District Manager, to the Common Carrier Bureau, Enforcement 
Division (July 26 Response).

32   AT&T Response dated August 14, 2000, from Eddie H. Cooper, 
Contract Attorney, to Catherine Seidel, Division Chief (August 14 

33   Id.

34   Id.  

35   Complaint from Esta Schuerholz dated August 10, 2000 
(Schuerholz Complaint).  Mrs. Schuerholz acknowledges that during 
an outbound telemarketing call, she did authorize AT&T to provide 
local and local toll service. 

36   AT&T Response dated October 13, 2000, from Peter H. Jacoby, 
General Attorney, to Catherine Seidel, Division Chief (October 13 

37   Complaint dated March 15, 2000, from Bernard L. Hanavan.

38   July 26 Response.  

39   AT&T Response dated November 21, 2000, from Peter H. Jacoby, 
General Attorney, to Catherine Seidel, Division Chief (November 
21 Response).

40   Id.

41   Id.

42   Complaint dated September 5, 2000, from Steven R. Rosenberg.
     AT&T Response dated November 3, 2000, from Kathleen M. 
Cronin, Senior Attorney, to Catherine Seidel, Division Chief 
(November 3 Response).

44   Implementation of the Subscriber Carrier Selection Changes 
Provisions of the Telecommunications Act of 1996 and Policies and 
Rules Concerning Unauthorized Changes of Consumers' Long Distance 
Carriers, CC Docket. No. 94-129, Second Report and Order and 
Further Notice of Proposed Rulemaking, 14 FCC Rcd 1508 (1998) 
(1998 Second Order & FNPRM).

45   Id. at 1540.

46   Complaint dated April 18, 2000, from Sophia Palacio d/b/a 
Palace Frame Company.

47   Id.

48   Id.

49   Letter of Inquiry dated September 22, 2000, from Catherine 
Seidel, Division Chief, to James Cicconi, General Counsel, AT&T 
(September 22 LOI).

50   October 13 Response.

51   Id.

52   Letter dated August 5, 2000, from Stephanie Scow, AT&T Case 
Manager, to Greg Ortega (August 5 Letter).

53   Complaint dated August 29, 2000, from Tracie Ortega.

54   August 5 Letter.

55   Declaration of Greg and Tracie Ortega dated September 27, 

56   October 13 Response.

57   Id. at Appendix F. 

58   Id.

59   Declaration of Thomas H. Patterson dated June 6, 2000.

60   Id.

61   Id.

62   AT&T Response dated April 26, 2000, from Margaret R. Berry, 
District Manager, to the Enforcement Bureau.

63   Declaration of Thomas H. Patterson dated September 30, 2000.

64   August 16 Response.  

65   Id. at Appendix C.

66   Id.

67   Complaint dated April 10, 2000, from Theresa M. Plunkett 
(Plunkett Complaint).

68   Id.

69   Id.

70   Id.

71   Id.

72   Id.

73   May 19 LOI. 

74   AT&T Response dated June 8, 2000, from Margaret R. Berry, 
District Manager, to Catherine Seidel, Division Chief.

75   Id.

76   July 24 LOI.  

77   August 16 Response.  

78   Id. at Appendix C.

79   Id.  See also Appendix B.

80   See Plunkett Complaint.  Southwestern Bell Telephone, Ms. 
Plunkett's local carrier on February 8, 2000, corroborated Ms. 
Plunkett's statement that AT&T was her designated long distance 
provider prior to February 8, 2000.  See Letter dated May 30, 
2000 from Bruce Logan, Associate Director - Appeals, SBC, to 
Catherine Seidel.  See also Memo dated December 12, 2000 from 
Bruce Logan to Dana E. Leavitt, staff attorney.

81   See Complaint dated July 27, 2000, from Mari Krumwiede.

82   Id.

83   See Letter of Inquiry dated October 12, 2000, from Catherine 
Seidel, Division Chief, to James Cicconi, General Counsel, AT&T.
84   November 3 Response.  

85   See Complaint dated June 21, 2000, from Robert Agnew.

86   Letter dated August 9, 2000, from Margaret M. Berry, 
District Manager, to Enforcement Division, Common Carrier Bureau.

87   Id.

88   See Commission's Forfeiture Policy Statement and Amendment 
of Section 1.80 of the Rules to Incorporate the Forfeiture 
Guidelines, Report and Order, 12 FCC Rcd 17087 (1997).

89   47 U.S.C.  503(b)(2)(B); 47 C.F.R.  1.80.  The Commission 
recently amended its rules to increase the maximum penalties to 
account for inflation since the last adjustment of the penalty 
rates.  The new rates will apply to violations that occur after 
November 13, 2000.  In the Matter of Amendment of Section 1.80(b) 
of the Commission's Rules and Adjustment of Forfeiture Maxima to 
Reflect Inflation, Order, FCC-347 (rel. Sep. 19, 2000).

90   See 47 U.S.C.  503(b)(2)(D).

91   Section 503(b)(2)(B) provides for forfeitures up to $100,000 
for each violation or a maximum of $1,000,000 for each continuing 
violation by common carriers or an applicant for any common 
carrier license, permit, certificate or similar instrument.  47 
U.S.C.  503(b)(2)(B).  The Debt Collection Improvement Act of 
1996 (DCIA), Pub L. No. 104-134,  31001, 110 Stat. 1321 (1996), 
requires, however, that civil monetary penalties assessed by the 
federal government be adjusted for inflation based on the formula 
outlined in the DCIA.  The current statutory maxima pursuant to 
Section 503(b)(2)(B) are $110,000 and $1,100,000 and have 
increased to $120,000 and $1,200,000 respectively, for violations 
occurring after November 13, 2000. See note 89, supra. 

92   Id.

93   Id.  See also 47 U.S.C.  503(b)(2)(D).

94   See, e.g., Nationwide Long Distance, Inc. NAL, 11 FCC Rcd 
3087, 3089 (Com. Car. Bur. 1996).  The Commission has also 
emphasized on numerous occasions that the actions of a carrier's 
marketing agents do not relieve a carrier of its independent 
obligation to ensure compliance with the rules.  Rather, under 
the Communications Act, the acts or omissions of an agent or 
other person acting for a common carrier are deemed to be the 
acts or omissions of the carrier itself.  See 47 U.S.C.  217; 
see also Heartline Communications, Inc. 11 FCC Rcd 18487, 18494 

95   Brittan Communications International Corp., 15 FCC Rcd 4852 
(2000) (Brittan Forfeiture Order); Amer-I-Net Services Corp., 15 
FCC Rcd 3118 (2000) (Amer-I-Net Forfeiture Order); All American 
Telephone Company, Inc., 13 FCC Rcd 15040 (1998).

96   See, e.g., Brittan Forfeiture Order, 15 FCC Rcd at 4855.

97   See Amer-I-Net Forfeiture Order, 15 FCC Rcd at 3119, 3122; 
See also Excel Telecommunications Incorporated, 11 FCC Rcd 19765, 
19767 (Com. Car. Bur. 1996).

98   See 47 U.S.C.  503(b)(4)(C); 47 C.F.R.  1.80(f)(3).

99   See, e.g., the Crawford, Scott, Schuerholz, and Plunkett 

100  47 U.S.C.  258; 47 C.F.R.  64.1100, 64.1150.  See also 
1998 Second Order & FNPRM, 14 FCC Rcd 1508; Further Notice of 
Proposed Rule Making and Memorandum Opinion and Order on 
Reconsideration, 12 FCC Rcd 10674 (1997) (1997 FNPRM & Order on 

101  47 U.S.C.  258.

102  See 47 C.F.R.  64.1100, 64.1150; 1998 Second Order & 
FNPRM;14 FCC Rcd 1508; 1997 FNPRM & Order on reconsideration, 12 
FCC Rcd 10674.

103  The forfeiture amount should be paid by check or money order 
drawn to the order of the Federal Communications Commission.  
AT&T should include the reference ``NAL/Acct. No. 200132170015'' 
on AT&T Communications, Inc.'s check or money order.  Such 
remittance must be mailed to Forfeiture Collection Section, 
Finance Branch, Federal Communications Commission, P.O. Box. 
73482, Chicago, Illinois 60673-7482.