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                         Before the
              FEDERAL COMMUNICATIONS COMMISSION
                    Washington, DC 20554


                                   )
In the Matter of                        )         File   No.  
EB-02-IH-0568
                                   )                   
                                        )         Acct.  No.  
20033208000
                                   )
Verizon Telephone Companies             )         FRN    No.  
0003708500
                                   )                             

                       CONSENT DECREE

   1.     1.    The  Federal Communications  Commission (the 
``Commission''  or the  ``FCC'') and  the Verizon  Telephone 
Companies  (``Verizon'')  hereby  enter  into  this  Consent 
Decree  for the  purpose of  terminating an  informal Bureau 
investigation  into whether  Verizon  provided, marketed  or 
sold in-region,  interLATA services prior to  its receipt of 
authorization pursuant to section  271 of the Communications 
Act  of 1934  (``the Act''),  as amended.   As part  of this 
investigation, the Bureau  has examined Verizon's compliance 
with section  272(g)(2) of the  Act, 47 U.S.C.  § 272(g)(2), 
which  prohibits a  Bell  Operating  Company (``BOC'')  from 
marketing or  selling in-region interLATA  services provided 
by  an  affiliate  in  states  where  it  has  not  received 
authorization to  provide such services pursuant  to section 
271 of the Act.1    

   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) ``Verizon'' means the Verizon Telephone Companies, 
         which  include   Verizon  Delaware   Inc.,  Verizon 
         Maryland Inc.,  Verizon New  England Inc.,  Verizon 
         New Jersey  Inc., Verizon  New  York Inc.,  Verizon 
         Pennsylvania Inc.,  Verizon Virginia  Inc., Verizon 
         Washington, DC  Inc., Verizon  West Virginia  Inc., 
         Bell Atlantic  Communications,  Inc. d/b/a  Verizon 
         Long Distance,  NYNEX Long  Distance Company  d/b/a 
         Verizon Enterprise  Solutions,  and Verizon  Select 
         Services Inc., and their successors and assigns.

      (d) ``Parties'' means Verizon and the Bureau.

      (e) ``In-region  state'' is  defined  at  47 U.S.C.  § 
         271(i)(1), and  for  Verizon  includes  Maine,  New 
         Hampshire,  Connecticut,   Vermont,  Massachusetts, 
         Rhode Island, New  York, New  Jersey, Pennsylvania, 
         Delaware, Maryland, West Virginia, Virginia and the 
         District of Columbia.  

      (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  July  9,  2002  into 
         allegations that Verizon provided, marketed 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,  1999 to June 30, 
         2002.  

      (i) ``Effective  Date'' means  the date  on which  the 
         Commission adopts the Adopting Order.
   3.     

I.   BACKGROUND

   4.     3.   Verizon   is    prohibited   from   providing 
interLATA  services originating  in  a particular  in-region 
state  (other than incidental interLATA services and certain 
services permitted under the Modification of Final Judgment) 
until it has received authorization to provide such services 
in such state pursuant to section 271 of the Act.  To obtain 
authorization to provide  in-region interLATA services under 
section 271,  a Verizon BOC  must show, among  other things, 
that it  has fully  implemented a  ``competitive checklist'' 
designed  to give  competitors nondiscriminatory  access and 
interconnection to its network.  47 U.S.C. § 271(d)(3)(A).

   5.     4.   Section 272(g)(2) of the  Act prohibits a BOC 
from  marketing  or  selling  in-region  interLATA  services 
provided  by  an  affiliate  before  it  has  satisfied  the 
requirements  of   section  271.   In   particular,  section 
272(g)(2)  states that  ``[a  BOC] may  not  market or  sell 
interLATA service provided by  an affiliate required by this 
section  within  any  of  its in-region  States  until  such 
company is authorized to  provide interLATA services in such 
State under section 271(d).''2

   6.     5.   Prior to June 30,  2002, Verizon had received 
authorization pursuant to section 271  of the Act to provide 
long  distance  services in  six  of  its in-region  states.  
Verizon also provided long distance  services in a number of 
out-of-region   states  that   are   not   subject  to   the 
requirements  of section  271.   To  ensure compliance  with 
sections 271 and 272, Verizon states that it had established 
specific procedures  to govern the introduction  of its long 
distance services  in its in-region states.   In particular, 
Verizon states that it had controls in place for each aspect 
of the  long distance process -  marketing, sales, ordering, 
and provisioning - and states  that these applied to Verizon 
as well as to the third-party vendors and suppliers.

   7.     6.   In connection with its New Jersey section 271 
application, Verizon voluntarily disclosed to the Commission 
four   incidents  in   which,  according   to  Verizon,   it 
inadvertently marketed or sold  long distance service in New 
Jersey,  Connecticut, and  Virginia.   Once these  incidents 
were  identified, Verizon  states that  it immediately  took 
steps to  correct these  problems and initiated  an internal 
review to  identify the causes  of the errors.   Among other 
steps, Verizon  states that it  imposed a moratorium  on all 
advertising,   direct  mail,   bill   media,  and   outbound 
telemarketing in the former  Bell Atlantic states, including 
states in which  Verizon had section 271  approval, in order 
to  ensure that  all appropriate  safeguards were  in place.  
Verizon also  states that marketing was  phased in gradually 
only after Verizon  completed a review of  its practices and 
controls.  As  described below, Verizon states  that it also 
adopted a series of additional controls.

   8.     7    Following these disclosures, on July 9, 2002, 
the Bureau began its Investigation. During the course of the 
Investigation,  in  a  sworn  response to  the  Bureau  LOI, 
Verizon disclosed evidence of additional unrelated incidents 
it  discovered during  an internal  review in  which it  had 
potentially   marketed,  sold   or  provisioned   in-region, 
interLATA  services  in  nine   in-region  states  prior  to 
receiving section  271 authorization for those  states.  The 
Bureau's  investigation  included  review of  the  following 
incidents:

   9.     (a)   Washington,  D.C.   Area  Cable   Television 
Advertisements.   In  February  and  March  2002,  prior  to 
receipt of  section 271  authorization in  Washington, D.C., 
Maryland,  Virginia and  West  Virginia, Verizon  ran a  30-
second cable  television advertisement campaign  targeted to 
business customers  on several  Washington, D.C.  area cable 
channels.   During  the  ad,   the  phrase  ``Long  Distance 
Savings''  appeared  on  the  screen  for  several  seconds.  
Verizon indicates that this ad could have reached a total of 
approximately 660,000  viewers. Verizon maintains  that this 
campaign  ran   in  five   media  markets,   Tampa,  Boston, 
Philadelphia, New York, and Washington, D.C., and by mistake 
the text that  mentioned long distance was  not removed from 
the ad that ran in  the Washington, D.C. area.  Verizon also 
maintains  no Washington,  D.C. area  customers received  or 
paid for long distance service as a result of the ad.  

   10.    (b) Bill Inserts.  In  June 2002, prior to receipt 
of  section   271  authorization  in  New   Jersey,  Verizon 
announced  the launch  of Verizon  long distance  service by 
placing bill  inserts in the bills  of approximately 554,000 
residential  customers  in   New  Jersey,  which  represents 
roughly 17% of Verizon's  residential subscriber base in the 
state.   These  bill   inserts,  which  advertise  Verizon's 
``Timeless Long  Distance Plan,'' state that  ``Verizon Long 
Distance is available in New Jersey.''  The bill insert also 
invites prospective customers to  call a toll-free number to 
``sign  up'' for  service. Verizon  maintains that  the bill 
inserts  were distributed  inadvertently  as a  result of  a 
change in the  launch date for Verizon long  distance in New 
Jersey.  When  it became clear  that the Commission  was not 
going  to approve  Verizon's application  on an  accelerated 
schedule, as  Verizon had  originally anticipated  after the 
Commission set  an expedited  pleading cycle,  Verizon moved 
the  date that  it planned  to  launch its  New Jersey  long 
distance service but states  that it inadvertently failed to 
send the appropriate notice to the personnel who managed the 
bill insertion process.   Shortly thereafter, Verizon states 
that it sent  a Western Union mailgram to  each customer who 
received  the  bill  insert  stating that  Verizon  was  not 
authorized to provide long  distance services in New Jersey. 
Verizon also  maintains that  no customers received  or paid 
for long distance service as  a result of receiving the bill 
inserts.   

   11.    (c) Local  Service ``Winback''  Letters.   Between 
March  and  June  2002,  prior to  receipt  of  section  271 
authorization  in the  relevant  nine  states, Verizon  sent 
local  service ``winback''  letters to  approximately 20,000 
former   business  customers   in   New  Jersey,   Virginia, 
Washington, D.C., Maryland,  West Virginia, Delaware, Maine, 
New  Hampshire, and  Vermont  which  reference, among  other 
types  of   services,  Verizon's  long   distance  services. 
Approximately  15,000 of  these  letters did  not include  a 
disclaimer stating that not all services may be available in 
all areas. Verizon maintains that it inadvertently failed to 
include  these disclaimers  and  that no  customers in  non-
section  271 authorized  states  received or  paid for  long 
distance service as a result of these letters.   

   12.    (d) Virginia Business Solicitations.  On May 1 and 
May 9, 2002,  prior to receipt of  section 271 authorization 
in Virginia,  Verizon Enterprise Solutions sent  direct mail 
solicitations for Verizon long  distance services to a total 
of approximately 2,250 business  customers in Virginia.  The 
letters offered  certain customers ``[a] discounted  7 cents 
per minute  rate on  all direct-dialed,  state-to-state long 
distance calls,'' and invited interested customers to call a 
toll-free  number. Verizon  maintains  that  it intended  to 
exclude  from this  mailing customers  in Virginia,  but the 
software program written to pull these customer names failed 
to  exclude  some former  GTE  small  business customers  in 
Virginia  to whom  Verizon provided  local service.  Shortly 
thereafter,  Verizon states  that  it mailed  a first  class 
letter to  each of  these customers explaining  that Verizon 
was  not authorized  to  provide long  distance services  in 
Virginia.  Verizon maintains  that none  of these  customers 
received or  paid for long  distance service as a  result of 
the mailing.

   13.    (e)  Exton BPC  Correspondence.  During some  time 
period between  January and July  2002, prior to  receipt of 
section 271 authorization in  New Jersey, an account manager 
in  Verizon's Exton  Business  Partnership Channel  (``Exton 
BPC'') (a  center which  manages accounts for  certain small 
business  customers   in  various  in-region   states)  sent 
correspondence  to  approximately  400 New  Jersey  business 
customers which  stated that Verizon long  distance services 
were either ``coming soon''  or ``coming in March.'' Verizon 
maintains that  the letters were  sent in error and  that no 
customers received  or paid for  long distance service  as a 
result of these letters.

     8.   In  or after  June  2002, Verizon  states that  it 
adopted a series  of additional controls for  each aspect of 
the  long  distance  process,  including  marketing,  sales, 
ordering  and  provisioning.    Verizon  states  that  these 
controls include the following  measures:  (1) creation of a 
compliance team that reviews  the processes and controls for 
marketing  and  provisioning   long  distance  service;  (2) 
additional  training  for  service  representatives  on  the 
requirements  of  sections  271  and 272;  (3)  adoption  of 
enhanced controls on direct mail and bill media advertising; 
and (4)  a June  2002 comprehensive review  of telemarketing 
vendors  operating  in  the  former  Bell  Atlantic  states.  
Verizon asserts that it will maintain these procedures until 
it receives  authorization to provide interLATA  services in 
all of its  in-region states in accordance  with section 271 
of the Act.


II.  AGREEMENT

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

   15.    10.  Verizon  admits  that,  with respect  to  the 
incidents  enumerated  in  paragraphs 7(a)  to  (e),  supra, 
Verizon violated section 272(g)(2).

   16.    11.  Verizon   maintains  that   these  violations 
occurred as  a result of  mistakes and were  not deliberate.  
Verizon  does not  admit any  noncompliance, violations,  or 
liability  associated  with  or  arising  from  any  alleged 
actions  or failures,  including  any  problems or  failures 
described in  the letters  of inquiry,  ex partes,  or other 
information  the  Commission  received   on  or  before  the 
Effective Date of  this Consent Decree other  than as stated 
in paragraph 7(a) to (e), supra.

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

   18.    13.  As  noted  in  paragraph  8,  supra,  Verizon 
represents  that  it has  instituted  a  number of  measures 
designed  to improve  controls in  each aspect  of the  long 
distance process,  including marketing, sales,  ordering and 
provisioning.  Verizon  agrees that  it will  maintain these 
procedures  until  it   receives  authorization  to  provide 
interLATA  services  in  all  of  its  in-region  states  in 
accordance with section 271 of the Act.

   19.    14.  Verizon will make a voluntary contribution to 
the United  States Treasury  in the  amount of  $5.7 million 
within 10 calendar days  after the Commission Order adopting 
this Consent  Decree becomes final.  Verizon  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. 20033208000''  and ``FRN  No. 0003708500.''   If Verizon 
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 Verizon makes this 
payment  by wire  transfer,  it must  wire  such payment  in 
accordance with Commission procedures for wire transfers.

   20.    15.  The Commission agrees that, in the absence of 
new  evidence relating  to  incidents that  Verizon 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  take any actions on its  own motion against 
the Company concerning the matters  that were the subject of 
the Investigation.  The Commission  also agrees that, in the 
absence of  new evidence relating to  incidents that Verizon 
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 
Verizon with respect to  its basic qualifications, including 
its character  qualifications, to be a  Commission licensee.  
Consistent  with  the  foregoing, 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.

   21.    16.  Verizon 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 Order adopts the Consent Decree 
without change, addition, or modification.

   22.    17.  Verizon'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.

   23.    18.  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.

   24.    19.  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 Verizon nor 
the  Commission shall  contest the  validity of  the Consent 
Decree  or  Adopting  Order,  and  Verizon  will  waive  any 
statutory right to a trial de novo.

   25.    20.  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.
   26.    21.  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  Verizon does  not consent)  that provision 
will be superseded by such Commission rule or order. 

   27.    22.  This   Consent  Decree   may  be   signed  in 
counterparts.



FEDERAL COMMUNICATIONS COMMISSION




By:  __________________________________
     Marlene H. Dortch
     Secretary


VERIZON




By:  ___________________________________
     Michael E. Glover
     Senior Vice-President and Deputy General Counsel
     Verizon
_________________________

1    See  Letter from  Maureen F.  Del Duca,  Deputy Chief, 
Investigations and  Hearings Division,  Enforcement Bureau, 
to  Gordon R.  Evans, Vice  President, Federal  Regulatory, 
Verizon,  and Dee  May, Assistant  Vice President,  Federal 
Regulatory, Verizon, dated July 9, 2002 (``LOI'').

2    The legislative history for section 272(g)(2) includes 
the    statement    that    ``the   ability    to    bundle 
telecommunications, information  and cable services  into a 
single  package to  create  `one-stop shopping'  will be  a 
significant competitive  marketing tool.  As a  result, and 
to provide for parity among competing industry sectors, the 
Committee has included restrictions on joint marketing. . . 
.''  S. Rep. No. 23, 104th Cong., 1st Sess. 22 (1995).