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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Access Integrated Networks, )
Inc. )
) File No. EB-03-TC-041
) NAL/Acct. No. 200432170002
) FRN: 0005044375
Verification of Orders for )
Telecommunications Service )
Requirement
and Unsolicited Facsimile
Restrictions
ORDER
Adopted: June 1, 2004
Released: June 3, 2004
By the Chief, Enforcement Bureau:
1. In this Order, we adopt a Consent Decree terminating an
investigation into possible violations by Access Integrated
Networks, Inc. ("AIN") of Sections 201(b), 227(b)(1)(C), and 258
of the Communications Act of 1934, as amended (the ``Act'')1 and
Sections 64.1120 and 64.1200(a)(3) of the Commission's rules.2
2. The Bureau and AIN have negotiated the terms of a
Consent Decree that would resolve this matter and terminate the
investigation. A copy of the Consent Decree is attached hereto
and incorporated by reference.
3. After reviewing the terms of the Consent Decree, we
find that the public interest would be served by approving the
Consent Decree and terminating the investigation.
4. Accordingly, IT IS ORDERED, pursuant to Section 4(i) of
the Communications Act, 47 U.S.C. §§ 154(i), and the authority
delegated by sections 0.111 and 0.311 of the Commission's rules,
47 C.F.R. §§ 0.111, 0.311, that the attached Consent Decree IS
ADOPTED.
5. AIN shall make its voluntary contribution to the United
States Treasury by mailing a check or similar instrument, payable
to the order of the Federal Communications Commission, to the
Federal Communications Commission, Forfeiture Collection Section,
Finance Branch, P.O. Box 73482, Chicago, Illinois 60673-7482. The
payment should reference NAL/Acct. No. 200432170002 and FRN
0005044375.
6. IT IS FURTHER ORDERED that the investigation into the
matter described herein is terminated.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Access Integrated Networks, Inc. )
) File No. EB-03-TC-041
) NAL/Acct. No. 200432170002
) FRN: 0005044375
Verification of Orders for )
Telecommunications Service )
Requirement )
and Unsolicited Facsimile )
Restrictions
CONSENT DECREE
I. INTRODUCTION
1. The Enforcement Bureau (``Bureau'') of the Federal
Communications Commission (the "FCC" or the "Commission")
and Access Integrated Networks, Inc. (``AIN''), by their
authorized representatives, hereby enter into this Consent
Decree to resolve an investigation (the "Investigation") by
the Bureau regarding possible non-compliance with the
requirements contained in Sections 201(b), 227(b)(1)(C) and
258 of the Communications Act of 1934, as amended (the
``Act''), and Sections 64.1120 and 64.1200(a)(3) of the
Commission's rules.3 The Investigation was undertaken
pursuant to Sections 4(i) and 403 of the Act.4
2. The Enforcement Bureau has been investigating
whether AIN's sales, marketing, and record retention
practices violated the Act and the Commission's rules.
Specifically, the Bureau reviewed allegations that AIN may
have sent unsolicited advertisements to facsimile machines;
submitted unauthorized changes in subscriber carrier
selections; failed to maintain and preserve records of
verification of subscriber authorizations to change
telecommunications service for a minimum of two years after
obtaining such verification; and engaged in other unjust and
unreasonable practices raised in letters of inquiry
(``LOIs'') issued to AIN.5 AIN responded to the Bureau's
inquiries.
II. DEFINITIONS
3. For the Purposes of this Consent Decree, the
following definitions shall apply:
(a) "Adopting Order" means an Order of the Bureau
adopting the terms and conditions of this
Consent Decree.
(b) "AIN" includes directors, officers,
employees, agents or any other person acting
under, by, through, or on behalf of Access
Integrated Networks, Inc., directly or
indirectly, or through any corporate or other
device, including its subsidiaries,
affiliates, and successors.
(c) ``Authorized Sales Agent'' means any person
or entity authorized by AIN or an AIN agent
to market telecommunications services on its
behalf.
(d) ``Bureau'' means the Enforcement Bureau of
the Federal Communications Commission.
(e) "Effective Date" means the date on which the
Bureau releases the Adopting Order.
(f) The "FCC" or the "Commission" means the
Federal Communications Commission and all
Bureaus and Offices of the Commission,
including the Enforcement Bureau.
(g) "Parties" means AIN and the Bureau.
(h) ``Telemarketing Sales'' means the initiation
of a telephone call for the purpose of
obtaining an oral authorization to submit a
preferred carrier change on behalf of a
subscriber. Telemarketing Sales result in
oral authorizations that must be confirmed
via independent third party verification
(``TPV'') pursuant to the procedures set
forth in 47 C.F.R. § 64.1120(c)(3).
III. AGREEMENT
4. AIN represents and warrants that it is the
properly named party to this Consent Decree and is solvent
and has sufficient funds available to meet fully all
financial and other obligations set forth herein. AIN
further represents and warrants that it has caused this
Consent Decree to be executed by its authorized
representative, as a true act and deed, as of the date
affixed next to said representative's signature. Said
representative and AIN respectively affirm and warrant that
said representative is acting in his/her capacity and within
his/her authority as a corporate officer of AIN, and on
behalf of AIN and that by his/her signature said
representative is binding AIN to the terms and conditions of
this Consent Decree. AIN also represents that it has been
represented by counsel of its choice in connection with this
Consent Decree and is fully satisfied with the
representation of counsel.
5. AIN agrees that the Bureau has jurisdiction over
it and the matters contained in this Consent Decree and the
authority to enter into and adopt this Consent Decree.
6. AIN will make a voluntary contribution to the
United States Treasury in the amount of one hundred fifty-
five thousand dollars ($155,000). The payment shall be made
as follows: one payment of $95,000 within thirty (30)
calendar days after the Effective Date, and six (6)
consecutive monthly installments of $10,000 commencing
within sixty (60) calendar days after the Effective Date.
The payments shall be made, without further protest or
recourse, 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 ``NAL
Acct. No. 200432170002.'' If AIN 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 AIN makes this payment by wire
transfer, it must wire such payment in accordance with
Commission procedures for wire transfers.
7. AIN agrees that it will voluntarily implement a
Compliance Program as set forth below, beginning no later
than 30 days after the Effective Date. Under this program:
(a) AIN will implement a written policy that (1)
prohibits Authorized Sales Agents,
contractors and employees that market AIN's
services from sending unsolicited facsimiles
except as permitted in Section 227(b)(1)(C)
of the Act and Section 64.1200(a)(3) of the
Commission's rules and (2) requires
Authorized Sales Agents to maintain
documentation of prior express invitation or
permission by any recipient of a facsimile
advertisement. In addition, AIN will require
any Authorized Sales Agent that intends to
market AIN services through the use of
facsimile advertisements to obtain AIN's
prior consent before sending any such
facsimiles. Authorized Sales Agents who do
not receive AIN's prior consent will be
prohibited from using facsimiles to advertise
AIN services. If an Authorized Sales Agent
has been given approval by AIN to market AIN
services through the use of facsimile
advertisements, AIN shall require each
approved Authorized Sales Agent to maintain
for one year, a quarterly, written report
that (i) identifies the number of facsimile
advertisements sent during the quarter, (ii)
identifies the telephone number to which each
facsimile advertisement was sent during the
quarter; and (iii) confirms that prior to
sending the fax the Authorized Sales Agent
had documentation demonstrating express
invitation or permission from the person
receiving the facsimile advertisement.
Failure by an approved Authorized Sales Agent
to submit this report shall be grounds for
AIN to revoke the Authorized Sales Agents'
permission to send facsimile advertisements
on behalf of AIN and/or to terminate the
sales agency relationship. If any
requirement of this provision conflicts with
a Commission rule or order that becomes
effective during the period of this Consent
Decree and imposes a higher burden of care on
AIN, that requirement will be superseded by
such Commission rule or order.
(b) AIN will implement written policies and
procedures that: (1) require that all
records of verification of subscriber
authorizations to change telecommunications
service meet the requirements set forth in
the Commission's rules and orders; and (2)
require that all such records are maintained
and preserved for a minimum of two years
after obtaining such verification in
compliance with the Commission's rules and
orders. AIN will require compliance with
these policies in all contracts with
Authorized Sales Agents, and will incorporate
the written policies in its corporate
compliance, agent compliance, employee
training and agent training programs.
(c) AIN will not state or imply that
it is affiliated with, is a subsidiary,
division, faction or billing agent of, or is
sponsored by an incumbent local exchange
carrier, interexchange carrier, or any other
unaffiliated entity.
(d) In sales calls, AIN will make
clear to each prospective customer that the
customer is changing his or her local
telephone, intraLATA toll, or long distance
service provider, as applicable. AIN will
not state or imply that its services are
provided by the incumbent local exchange
carrier or any other carrier currently
providing telecommunications service to the
customer or that the customer's telephone
services will remain with the consumer's
current service provider. Nothing herein
shall prohibit AIN from truthfully answering
any questions from customers or potential
customers regarding the services to be
provided by AIN, including, without
limitations, statements that truthfully
describe any interconnection agreement with
an incumbent local telephone company or the
obligations of the Act.
(e) AIN will require each Authorized Sales
Agent to obtain AIN's prior consent before
commencing any Telemarketing Sales activity
on AIN's behalf. AIN shall monitor the
Telemarketing Sales activities of its
Authorized Sales Agents to ensure that the
activities are being conducted in compliance
with AIN policies and the FCC's rules and
orders. AIN represents that it will take
proactive measures to monitor compliance,
through measures determined by AIN, such as
on-site visits to Authorized Sales Agent's
telemarketing facilities or random telephonic
monitoring of outbound sales calls. At a
minimum AIN will conduct either on site
visits or telephonic monitoring. In the
event AIN conducts on-site visits to an
Authorized Sales Agent, AIN shall conduct
such visits at least twice per year. In the
event AIN conducts telephonic monitoring, AIN
shall monitor, on a random unannounced basis,
a minimum of two calls per sales
representative per week and eight calls per
sales representative per month to ensure
compliance with all AIN policies. AIN's
Authorized Sales Agent may perform this
initial random monitoring provided all
monitored calls are taped and monitoring
results are reviewed by AIN on at least a
monthly basis. In addition, AIN shall have
the capability to remotely monitor outbound
sales calls on an unannounced basis. Should
AIN receive information indicating that a
particular Authorized Sales Agent has engaged
in practices that may violate the
Commission's rules and orders, AIN shall
engage in telephonic monitoring of the calls
of that Agent for a period of time sufficient
to determine whether he or she is operating
in compliance with the Commission's rules and
orders. If AIN discovers noncompliance, such
Agent shall be terminated in accordance with
AIN's written procedures described below.
(f) In the event AIN or its Authorized Sales
Agents engage in Telemarketing Sales, AIN
shall contract directly with the entity that
will provide independent TPV services
pursuant to Section 64.1120(c)(3) of the
Commission's rules. AIN's contract with the
independent third party verifier shall
provide for the maintenance and preservation
of the TPV records in compliance with
Commission rules and orders; require that AIN
have access to and the ability to produce
copies of TPV records within 30 days of a
request from a consumer or regulatory
authority; and require that AIN approve all
verification scripts used by the independent
third party verifier.
(g) AIN will implement, for all Authorized Sales
Agents, contractors and employees who market
AIN's services, a training program addressing
the requirements and procedures for obtaining
and maintaining subscriber authorizations to
change telecommunications service. AIN will
make clear that failure to follow these rules
and procedures will result in disciplinary
action and could result in termination. All
Authorized Sales Agents, contractors and
employees will be required to complete such
training at least once a year.
(h) AIN will incorporate its sales and marketing
policies into all contracts with Authorized
Sales Agents. Violations of the sales and
marketing policies by an agent or agency
shall be grounds for termination of the
contract.
(i) AIN agrees to maintain and make available to
the Bureau, within 14 days of receipt of any
specific written request from the Bureau,
business records demonstrating compliance
with the terms and provisions of this Consent
Decree.
Nothing in this Compliance Program shall alter AIN's
obligation to otherwise comply with the Act and with the
Commission's rules and orders, subject to paragraph 16,
below.
8. Within sixty (60) calendar days from the Effective
Date, AIN will provide a written report to the Bureau of its
compliance with this Consent Decree, including progress in
implementing its Compliance Program. AIN also agrees to
submit to the Bureau additional written reports of its
compliance with this Consent Decree six (6) months after the
Effective Date, one (1) year after the Effective Date and
thereafter, upon written request from the Bureau.
9. In express reliance on the covenants and
representations contained herein, the Commission agrees to
terminate the Investigation concerning compliance with
Sections 201(b), 258 and 227(b)(1)(C) of the Act and
Sections 64.1120 and 64.1200(a)(3) of the Commission's
rules.
10. The Parties agree and acknowledge that this
Consent Decree shall constitute a final settlement of the
Investigation. The Bureau agrees that, in the absence of
new material evidence, it will not initiate on its own
motion any other enforcement action against AIN based on
this Investigation concerning violations of Sections 201(b),
258 and 227(b)(1)(C) of the Act and Sections 64.1120 and
64.1200(a)(3) of the Commission's rules occurring prior to
the Effective Date, or seek on its own motion any
administrative or other penalties from AIN based on this
Investigation. Consistent with the foregoing, nothing in
this Consent Decree limits the Commission's authority to
consider and adjudicate any complaint that may be filed
pursuant to Section 208 of the Act, 47 U.S.C. § 208, and to
take any action otherwise authorized by the Act in response
to such complaint.
11. AIN 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. The Bureau also agrees
that, in the absence of material new evidence related to
such matters, it will not institute, on its own motion, any
new proceeding, formal or informal, or take any action on
its own motion against AIN with respect to its basic
qualifications, including the character qualifications, to
be a Commission licensee.
12. AIN's agreement to enter into this Consent Decree
is expressly contingent upon the issuance of an Order by the
Commission or the Bureau that is consistent with this
Consent Decree, and which adopts the Consent Decree without
change, addition, or modification.
13. AIN represents and warrants that it shall not
effect any change in its form of doing business or its
organizational identity or participate directly or
indirectly in any activity to form a separate entity or
corporation that engages in acts prohibited in this Consent
Decree or for any other purpose which would otherwise
circumvent any part of this Consent Decree or the
obligations of this Consent Decree. AIN agrees to notify
the Chief, Telecommunications Consumers Division,
Enforcement Bureau, Federal Communications Commission,
Washington D.C. 20554, at least thirty (30) days prior to
the effective date of any material change in AIN's legal
status or corporate structure, including but not limited to
any merger, incorporation, dissolution, or assignment.
Nothing in this Consent Decree shall be deemed to be an
obligation by AIN to disclose to the Bureau ``material
inside information,'' as that term is defined in applicable
securities laws and regulations.
14. 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.
15. AIN represents and warrants that neither AIN nor
any of its representatives, employees, agents or any other
person acting under, by, through, or on behalf of AIN,
directly or indirectly, or through any corporate or other
device, shall state, represent, or imply that the
Commission, or any other governmental unit or subdivision
thereof, approved or authorized any practice, act, or
conduct of AIN as a result of this Consent Decree, other
than the standards and actions set forth in this Consent
Decree.
16. The Parties also agree that if any provision of
the Consent Decree conflicts with any subsequent rule or
order adopted by the Commission, where compliance with the
provision would result in a violation of the subsequent rule
or order, that provision will be superseded by such
Commission rule or order.
17. By this Consent Decree, AIN does not waive or
alter its right to assert and seek protection from
disclosure of any privileged or otherwise confidential and
protected documents and information, or to seek appropriate
safeguards of confidentiality for any competitively
sensitive or proprietary information. The status of
materials prepared for, reviews made and discussions held in
the preparation for and implementation of AIN's compliance
efforts under this Consent Decree, which would otherwise be
privileged or confidential, is not altered by the execution
or implementation of the terms of this Consent Decree and no
waiver of such privileges is made by this Consent Decree.
18. 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 AIN nor the Bureau
shall contest the validity of the Consent Decree or the
Adopting Order, and AIN and the Bureau will waive any
statutory right to a trial de novo with respect to any
matter upon which the Adopting Order is based, and shall
consent to a judgment incorporating the terms of this
Consent Decree.
19. The Parties agree that this Consent Decree does
not constitute either an adjudication on the merits or a
factual or legal finding or determination regarding any
compliance or noncompliance with the requirements of the Act
and the Rules. The Parties agree that this Consent Decree
is for settlement purposes only and that by agreeing to this
Consent Decree, AIN does not admit or deny any liability for
violating the Communications Act or Commission rules in
connection with the matters that are the subject of this
Consent Decree.
20. AIN agrees that 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 or remedies attendant to the enforcement
of a Commission order.
21. The Parties agree that this Consent Decree shall
expire two (2) years after the Effective Date. Unless
otherwise specified, all commitments made by AIN herein
shall continue until the expiration of this Consent Decree.
22. This Consent Decree may be signed in counterparts. For the Enforcement Bureau For Access
Integrated Networks, Inc.
By:_______________________________
By:___________________________
David H. Solomon Vincent
Oddo
Chief, Enforcement Bureau President
Federal Communications Commission Access
Integrated Networks, Inc.
__________________________________
______________________________
Date Date
_________________________
1 47 U.S.C. §§ 201(b), 227(b)(1)(C), and 258.
2 See 47 C.F.R. §§ 64.1200(a)(3), 64.1120(a)(1)(ii), (c)(3)(iv).
3 47 U.S.C. §§ 201(b), 227(b)(1)(C), 258; 47 C.F.R. §§
64.1120, 64.1200(a)(3).
4 47 U.S.C. §§ 154(i), 403.
5 Letter from Colleen Heitkamp, Chief, Telecommunications
Consumers Division, Enforcement Bureau, to Mr. William
Wright, Chief Executive Officer (May 28, 2003); Letter from
Colleen Heitkamp, Chief, Telecommunications Consumers
Division, Enforcement Bureau, to Counsel to Access
Integrated Networks, Inc. (Aug. 15, 2003); Letter from
Colleen Heitkamp, Chief, Telecommunications Consumers
Division, Enforcement Bureau, to Counsel to Access
Integrated Networks, Inc. (Sep. 12, 2003); and Letter from
Colleen Heitkamp, Chief, Telecommunications Consumers
Division, Enforcement Bureau, to Counsel to Access
Integrated Networks, Inc. (Nov. 20, 2003).