******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. 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 WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of) ) WINSTAR GATEWAY NETWORK, INC.) File No. ENF 97-001 ) Consent Decree) ORDER Adopted: November 27, 1996; Released: December 6, 1996 By the Chief, Common Carrier Bureau: 1.In June 1996, the Common Carrier Bureau's Enforcement Division initiated an investigation into allegations that WinStar Gateway Network, Inc. ("WGNI") has violated the Commission's policies and rules concerning primary interexchange carrier ("PIC") conversions. 2.The Common Carrier Bureau has reached an agreement with WGNI that would resolve this proceeding, the terms and conditions of which are contained in the attached Consent Decree. We believe that the public interest would be served by adopting the Consent Decree, the terms of which are hereby incorporated by reference. 3.Accordingly, IT IS ORDERED, pursuant to Section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), that the Consent Decree, incorporated by reference herein, IS HEREBY ADOPTED. 4.IT IS FURTHER ORDERED that the above-captioned investigation proceeding IS HEREBY TERMINATED. FEDERAL COMMUNICATIONS COMMISSION Regina M. Keeney Chief, Common Carrier Bureau Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of) ) WINSTAR GATEWAY NETWORK, INC.) File No. ENF 97-001 CONSENT DECREE 1.The Common Carrier Bureau's Enforcement Division ("CCBED") of the Federal Communications Commission and WinStar Gateway Network, Inc. ("WGNI") hereby enter into a consent decree terminating an investigation by the Commission into WGNI's alleged violations of the Commission's policies and rules concerning primary interexchange carrier ("PIC") conversions. The informal complaints that the Commission received about WGNI's practices primarily arose from the use of box programs by some of WGNI's marketing agents in soliciting Letters of Agency ("LOAs") from subscribers. 2.For the purposes of this Consent Decree, the following definitions apply: (a)"Commission" means the Federal Communications Commission; (b) "WGNI" means Winstar Gateway Network, Inc., its successors, and assigns; (c)"Parties" means WGNI and CCBED; (d) "Order" means an order of the Common Carrier Bureau adopting the terms and conditions of this Consent Decree; (e) "PIC Change" is an order or request transmitted by an interexchange carrier to a local exchange carrier requesting a change of a customer's primary interexchange carrier; and, (f) "Letter of Agency" or "LOA" means a written authorization signed by the customer authorizing a PIC change. 3.WGNI admits the jurisdiction of the Commission for the purposes of this Consent Decree and any Order. 4.WGNI does not admit and specifically denies any and all liability for the allegations contained in the informal complaints filed with the Commission on or before October 1, 1996. 5.WGNI agrees that upon its signing and the signing by CCBED, the provisions of this Consent Decree shall be incorporated by reference in the Order formally adopting this Consent Decree. 6.WGNI waives any rights, whatsoever, that it may have to seek judicial review or otherwise challenge or contest the validity of the Order. 7.In consideration for the termination by the Commission of the investigation, and in accordance with the terms of this Consent Decree, WGNI agrees to the following terms, conditions, and procedures without admitting any of the alleged violations brought to the Commission's attention on or before October 1, 1996: (a) WGNI will make a non-tax-deductible, voluntary contribution to the United States Treasury, without further protest or recourse to a trial de novo, in the amount of eighty thousand dollars ($80,000), within fourteen (14) days of the date on which the Order is released. (b) Beginning within sixty (60) days of the release date of this Consent Decree and concluding within one hundred and eighty (180) days of the release date of this Consent Decree, WGNI will send a prepaid telephone debit card containing a face value of five dollars ($5.00) of telephone time billed at no more than $0.25 per minute, and a check in the amount of three dollars ($3.00), at no cost, to all former box subscribers (customers joining WGNI through box programs) who previously used WGNI as their long-distance provider and did not receive any form of compensation from WGNI when they terminated their service. (c) No later than sixty (60) days of the release date of this Consent Decree, WGNI will provide a credit in the amount of three dollars ($3.00) on the monthly bill of all WGNI subscribers who joined WGNI through box programs, and who still are customers on the date that this Consent Decree is released. (d) For two years from the release date of this Consent Decree, existing WGNI customers who joined WGNI through box programs prior to the release date of this Consent Decree shall have their WGNI long distance rates frozen at, or below, their current rate of sixteen cents ($0.16) per minute. WGNI warrants and represents that this is the rate that WGNI instituted for those customers commencing on or about the first of August 1996. (e) For two years following the release date of the Order described in paragraph 2(d), WGNI shall use one or more of the verification procedures set forth in the then current version of Section 64.1100 of the Commission's rules to verify every PIC change requested by any residential customer via a LOA. Six (6) months after the release date of this Consent Decree, and every six (6) months for a period of two years from the date of release of the Order, WGNI agrees to submit a report to CCBED analyzing the effectiveness of its mandatory verification program. If WGNI chooses to utilize the verification procedure described as the "Welcome Letter," WGNI agrees, for a period of two years from the date of release of the Order, to provide to CCBED a copy of every version of the "Welcome Letter" utilized. (f) Within thirty (30) days of the release date of this Consent Decree, WGNI will send a written advisory to all companies and employees under contract or employed by WGNI that act as sales representatives for WGNI's long distance services, instructing them that it is impermissible to sign an LOA on a customer's behalf, and that the signature on the LOA must be that of the party authorized to make the PIC change. A copy of the written advisory will be submitted to CCBED within ten (10) days of its distribution. WGNI will further require the recipients of such advisories to provide to WGNI written acknowledgment and understanding of the advisory within ten (10) days of receipt. (g) Within sixty (60) days of the release date of this Consent Decree, WGNI will supplement its sales binders to make clear that no sales representative may sign a LOA on a customer's behalf and that the signature on the LOA must be that of the party authorized to make the PIC change. Copies of such supplements will be submitted to CCBED within ten (10) days of their completion. (h) Within thirty (30) days of the release date of this Consent Decree, WGNI will advise its sales distributors and agents in writing that the submission of PIC- change orders bearing forged or unauthorized signatures may result in the termination of their agreements with WGNI. WGNI will submit to CCBED the form of the written advisory provided to sales distributors and agents within ten (10) days of its initial distribution. (i) For two (2) years beginning on the release date of this Consent Decree, WGNI agrees to maintain and make available to CCBED, within fourteen (14) days of the receipt of a written request from CCBED, business records demonstrating compliance with the terms and provisions of this Consent Decree, including, but not limited to, written consumer complaints filed directly with WGNI and those filed in any local, state, or federal jurisdiction served on or otherwise submitted to WGNI. CCBED will consider any written requests (if made within seven (7) days) by WGNI for an extension of time in which to comply with CCBED's written request described herein. (j) WGNI will continue to provide appropriate refunds or credits to all customers who reasonably allege that WGNI instituted the unauthorized conversion of that customer's PIC. Such customer will, at a minimum, (1) have any and all PIC-change fees resulting from the alleged unauthorized conversions refunded to them (or otherwise credited through the LEC), and (2) for customers who send re-rating documentation to WGNI, have all calls billed by WGNI re-rated to reflect no more than the lesser of the amount billed by WGNI or the amount that would have been billed by the customer's original PIC. Nothing in this subsection (j) shall be construed to limit any customer's rights under any applicable state or federal law, rule, or regulation, or limit WGNI's obligations under any applicable state or federal law, rule, or regulation. 8.CCBED agrees that in the absence of substantial additional and material facts, it shall not on its own motion institute enforcement proceedings against WGNI based on informal complaints concerning unauthorized PIC changes arising out of activities of WGNI or its sales representatives which occurred before October 1, 1996. Consumer complaints concerning WGNI's practices or the practices of its sales representatives occurring before October 1, 1996, will be served on WGNI under the procedures and rules governing such complaints and WGNI agrees to resolve these complaints to the extent required by the Communications Act, the Commission's rules and regulations, and the terms of this Consent Decree. Nothing in this Consent Decree shall prevent the Commission from adjudicating complaints filed against WGNI for alleged future misconduct, or from instituting new investigations or enforcement proceedings against WGNI in the event of alleged future misconduct. If such an enforcement proceeding is initiated, WGNI's earlier conduct may be adduced, but not for the purpose of assessing monetary forfeitures. 9.In light of the covenants and representations contained in this Consent Decree, and in express reliance thereon, CCBED agrees that execution of this Consent Decree shall serve to resolve all issues arising from allegations of unauthorized conversion violations by WGNI that occurred prior to October 1, 1996, without any finding of liability on the part of WGNI. 10.The Parties agree that the terms and conditions of this Consent Decree shall remain in effect for two (2) years from the release date of the Order described in paragraph 2(d). 11.The parties agree that any violation of the Order or of this Consent Decree shall constitute a separate violation of a Commission order, entitling the Commission to execute any rights and remedies attendant to the enforcement of a Commission order. 12.If the Consent Decree is not signed by both parties, is not adopted by the Common Carrier Bureau, or is otherwise rendered invalid by any court of competent jurisdiction, it shall become null and void and shall not become part of the record in these enforcement proceedings nor may it be used in any fashion by any party in a legal proceeding. The parties agree, however, that except for WGNI's financial rights and obligations herein or except as otherwise ordered by any court of competent jurisdiction, the parties will comply with the operational rights and obligations of this Consent Decree during the pendency of any proceeding initiated by a third party seeking to void, nullify, or otherwise modify this Consent Decree or the Order. 13.The parties further agree that this Consent Decree shall become effective on the date of the release of the Order. 14.If the Commission brings an action in United States District Court to enforce the terms of the Order, WGNI and the Commission agree that neither party will contest the validity of the Order, both parties will consent to a judgment incorporating the terms of the Consent Decree, and WGNI will waive its statutory right to a trial de novo. For: Winstar Gateway Network, Inc.For the:Federal Communications Commission /s/ T. R. Graham /s/ John B. Muleta Timothy R. GrahamJohn B. Muleta General CounselChief, Enforcement Division WGNI Network, Inc.Common Carrier Bureau December 4, 1996 December 2, 1996 DateDate