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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-03-IH-0531
)
Qwest Communications ) Acct. No. 200432080142
International Inc. )
) FRN No. 0003605953
ORDER
Adopted: May 26, 2004 Released: May 28,
2004
By the Chief, Enforcement Bureau:
1. The Enforcement Bureau (``Bureau'') has been conducting
an investigation into possible violations by Qwest
Communications International Inc. (``Qwest'') of sections
271 and 272 of the Communications Act of 1934, as amended
(the ``Act''), in connection with the marketing and
provisioning of in-region, interLATA services in a state
where Qwest had not received authorization to provide such
services pursuant to section 271 of the Act.1
2. The Bureau and Qwest have negotiated the terms of a
Consent Decree that would terminate the Bureau's
investigation. A copy of the Consent Decree is attached
hereto and incorporated by reference.
3. We have reviewed the terms of the Consent Decree and
evaluated the facts before us. We believe that the public
interest would be served by approving the Consent Decree and
terminating the investigation.
4. Based on the record before us, and in the absence of
material new evidence relating to this matter, we conclude
that there are no substantial and material questions of fact
as to whether Qwest possesses the basic qualifications,
including its character qualifications, to hold or obtain
any Federal Communication Commission licenses or
authorizations.
5. Accordingly, IT IS ORDERED, pursuant to sections 4(i) and
4(j) of the Communications Act of 1934, as amended, 47 U.S.C. §§
154(i) and 154(j), 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.
6. IT IS FURTHER ORDERED that the above captioned
investigation is TERMINATED.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
Before the
Federal Communications Commission
Washington, DC 20554
In the Matter of ) File No. EB-03-IH-0531
)
Qwest Communications ) Acct. No. 200432080142
International Inc. )
) FRN No. 0003605953
CONSENT DECREE
1. The Enforcement Bureau (``Bureau'') of the Federal
Communications Commission (``Commission'') and Qwest
Communications International Inc. (``Qwest''), hereby
enter into this Consent Decree for the purpose of
terminating the Bureau's investigation into whether
Qwest 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.2 As part of the Investigation,
the Bureau has examined Qwest's compliance with
sections 271(a), (b), and 272(g), 47 U.S.C. §§ 271(a)
and (b), 272(g), which prohibit 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.
2. For the purposes of this Consent Decree, the
following definitions shall apply:
2)a. ``Commission'' means the Federal
Communications Commission.
2)b. ``Bureau'' means the Enforcement Bureau of
the Federal Communications Commission.
2)c. ``Qwest'' means Qwest Communications
International Inc., any affiliate, d/b/a,
predecessor-in-interest, parent companies, any
wholly or partially owned subsidiary, or other
affiliated companies or business.
2)d. ``Parties'' means Qwest and the Bureau.
2)e. ``In-region state'' is defined at 47 U.S.C. §
271(i)(1), and for Qwest includes Arizona,
Colorado, Idaho, Iowa, Minnesota, Montana,
Nebraska, New Mexico, North Dakota, Oregon,
South Dakota, Utah, Washington, and Wyoming.
2)f. ``Order'' or ``Adopting Order'' means an
Order of the Commission or the Bureau adopting
the terms of this Consent Decree without change,
addition, or modification.
2)g. ``Effective Date'' means the date on which
the Commission or the Bureau releases the
Adopting Order.
2)h. ``Investigation'' means the investigation
commenced by the Bureau's December 15, 2003
Letter of Inquiry into allegations that Qwest
provided, marketed, or sold in-region, interLATA
services in Arizona prior to its receipt of
authorization pursuant to section 271 of the Act
during the period of November 3, 2003 to
November 4, 2003.
I. BACKGROUND
3. Qwest was prohibited from providing interLATA
services originating in a particular in-region state
until it received authorization to provide such
services in such state pursuant to section 271 of the
Act. 47 U.S.C. § 271(a). Section 272(g)(2) of the Act
prohibits a BOC from marketing or selling in-region,
interLATA service 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 States under section
271(d).''3
4. On May 24, 2001, the Bureau began an investigation
into whether Qwest failed to comply with sections 271
and 272 of the Act and the Qwest Merger Orders.
Specifically, the Bureau considered whether Qwest
improperly provisioned certain in-region, interLATA
services.4 The investigation was terminated by a
Consent Decree entered into between Qwest and the
Commission on May 5, 2003.5 The issues resolved by the
May 5, 2003 Consent Decree are separate from the issues
considered in this agreement. No evidence was
presented in the instant Investigation indicating that
Qwest violated any term or condition of the May 5, 2003
Consent Decree.
5. On December 23, 2002, Qwest received authorization
pursuant to section 271 to provide long distance
services to customers in nine of its in-region states:
Colorado, Idaho, Iowa, Montana, Nebraska, North Dakota,
Utah, Washington, and Wyoming. On April 15, 2003,
Qwest received authorization to provide long distance
to customers in Oregon, New Mexico, and South Dakota.
On June 26, 2003, Qwest received authorization to
provide long distance services to customers in
Minnesota. On December 3, 2003, Qwest received
authorization to provide long distance to customers in
its remaining in-region state, Arizona. Before
receiving approval in each of these states, to ensure
compliance with sections 271 and 272, Qwest states that
it established specified procedures to govern the
introduction of its long distance services. In
particular, Qwest states that it had controls in place
for each aspect of the long distance process -
marketing, sales, ordering, and provisioning - and that
these controls applied to Qwest as well as to its
third-party vendors and suppliers.
6. On November 13, 2003, Qwest voluntarily disclosed
to the Bureau an incident involving vendor
telemarketing to Arizona customers for a brief period
in November 2003.6 Specifically, from November 3 to 4,
2003, APAC Customer Services, Inc. (``APAC''), a vendor
working on behalf of Qwest, made telemarketing calls to
353 residential customers in Arizona, offering Qwest
long distance services. The Bureau began its
Investigation of this incident on December 15, 2003.7
Qwest provided written responses to the Letter of
Inquiry from the Bureau on January 26 and 29, and March
2, 2004.8 During the course of the Investigation,
Qwest complied with the Bureau's inquiry in a
cooperative and good faith manner. Qwest states that
in this case the marketing was not done by the BOC, but
rather by APAC on behalf of Qwest's section 272
affiliate, and only involved marketing of the
affiliate's long distance service, and not joint
marketing of local and long distance service. Qwest
states that APAC received a list of consumers in
various in-region states to call from The Allant Group,
who in turn, received the list from Qwest. Qwest
states that it informed both vendors not to market long
distance service to customers in Arizona prior to
Qwest's receipt of section 271 approval. Qwest states
that it specifically asked that the names of Arizona
customers on the list be removed. Qwest states that
the vendor nevertheless called certain Arizona
customers during an approximately 24-hour period at the
start of the multi-state telemarketing campaign before
the problem was found and corrected. Qwest states that
no sales were made to Arizona customers and no long
distance services were provided to Arizona customers
due to the other controls it had in place. Qwest
states that it subsequently augmented its oversight of
third party telemarketing vendors.
II. AGREEMENT
7. The Parties agree and acknowledge that this
Consent Decree shall constitute a final settlement of
the Investigation between Qwest and the Bureau. In
consideration for the termination of this Investigation
and in accordance with the terms of this Consent
Decree, Qwest agrees to the terms, conditions, and
procedures contained herein.
8. 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 by Qwest with the
requirements of the Act or the Commission's rules or
orders. The Parties agree that this Consent Decree is
for settlement purposes only and that by agreeing to
this Consent Decree, Qwest does not admit or deny any
noncompliance, violation, or liability associated with
or arising from its actions or omissions as described
herein.
9. For the purposes of settling the matters set forth
herein, Qwest agrees to implement a Compliance Plan
related to its telemarketing and equal access practices
and consisting of the components delineated below. The
Compliance Plan will be for a period of 12 months
following the Effective Date of the Adopting Order.
(a) Not later than 20 days after the Effective
Date of the Adopting Order, Qwest will adopt revised
policies and procedures regarding outbound
telemarketing (OBTM) campaign management and the
creation, approval and distribution of lists of
potential customers and telephone numbers to
telemarketers (i.e., ``leads''). The written
policies and procedures will include the following
requirements:
(i) For all campaign changes, Qwest managers
will be required to execute a ``Change Setup
Form,'' which will require signed approval and
acknowledgement from the vendor(s).
(ii) Any significant change (as determined by the
responsible Qwest OBTM manager) to a product
offering or to a telemarketing campaign will
require the closing of the telemarketing campaign
and the return of all leads to Qwest. Qwest, in
turn, will issue new leads as part of a new
telemarketing campaign.
(iii) All instructions communicated via e-mail or
voicemail to Qwest's data clearinghouse vendor
will require written acknowledgement and
confirmation by that vendor via e-mail.
(b) Not later than 30 days after the Effective Date
of the Adopting Order, Qwest will provide the
written policies and procedures (outlined in
paragraph 9(a) above) to its employees in database
marketing, consumer telemarketing, and small
business telemarketing departments. Qwest will
require these employees to acknowledge in writing
that they have read and understand the policies and
procedures. Not later than 45 days after the
Effective Date of the Adopting Order, Qwest will
provide the written policies and procedures to its
outside telemarketing and data clearinghouse
vendors. Qwest will require each vendor to execute
a pledge indicating that it has read and understands
the policies and procedures.
(c) Not later than 20 days after the Effective Date
of the Adopting Order, Qwest will institute an
``Escalation Alert'' process to define clear
responsibility for data record quality and
timeliness in telemarketing campaigns. The
``Escalation Alert'' process will be administered by
Qwest's data clearinghouse vendor, with support from
Qwest.
(d) Not later than 30 days after the Effective Date
of the Adopting Order, Qwest will create a manual
that centralizes all reports and agreements
associated with OBTM. Each document in the manual
will be assigned to a document owner, who will
provide updates to the manual as they occur.
(e) Not later than 20 days after the Effective Date
of the Adopting Order, Qwest will provide written
policies and procedures to all employees responsible
for acquiring new residential local exchange service
subscribers in Qwest's in-region 14-state operating
territory and who work in database marketing,
consumer telemarketing, and small business
telemarketing departments, and all outside
telemarketing and data clearinghouse vendors,
describing Qwest's practice in all OBTM calls aimed
at acquiring new residential local service customers
to notify such potential customers, if they choose
to order Qwest local service, of their right to
select a long distance provider of their choice, and
upon such customers' request, customers will be
provided with a list of the companies available for
selection by the customer. Qwest will require each
such Qwest employee or vendor to execute a pledge
indicating it has read and understands the policies
and procedures.
10. In express reliance on the covenants and
representations contained herein, the Bureau agrees to
terminate the Investigation.
11. Qwest agrees that it will make a voluntary
contribution to the United States Treasury in the
amount of one hundred thousand dollars ($100,000)
within 10 calendar days after the Effective Date of the
Adopting Order. Qwest must make this payment by check,
wire transfer, or money order drawn to the order of the
Federal Communications Commission. The check, wire
transfer, or money order should refer to ``Acct. No.
200432080142'' and ``FRN No. 0003605953.'' If Qwest
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 Qwest makes this payment by
wire transfer, it must wire such payment in accordance
with Commission procedures for wire transfers.
12. The Bureau agrees that, in the absence of material
new evidence related to this matter, it will not use
the facts developed in this Investigation through the
Effective Date of the Consent Decree or the existence
of this Consent Decree to institute, on its own motion,
any new proceeding, formal or informal, or take any
action on its own motion against Qwest concerning the
matters that were the subject of the Investigation.
The Bureau also agrees that, in the absence of material
new evidence related to this matter, it will not use
the facts developed in this Investigation through the
Effective Date of this Consent Decree or the existence
of this Consent Decree to institute on its own motion
any proceeding, formal or informal, or take any action
on its own motion against Qwest with respect to Qwest's
basic qualifications, including its character
qualifications, to be a Commission licensee. Nothing
in this Consent Decree shall prevent the Commission or
its delegated authority from adjudicating complaints
filed pursuant to section 208 or 271 of the Act against
Qwest or its affiliates for alleged violations of the
Act, or for any other type of alleged misconduct,
regardless of when such misconduct took place. The
Commission's adjudication of any such complaint will be
based solely on the record developed in that
proceeding.
13. Qwest 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 Degree and the
Order adopting this Consent Decree, provided the Bureau
issues an Order adopting the Consent Decree without
change, addition or modification.
14. Qwest's decision to enter into this Consent Decree
is expressly contingent upon the Bureau's issuance of
an Order that is consistent with this Consent Decree,
and which adopts the Consent Decree without change,
addition, or modification.
15. 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.
16. 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 Qwest nor the
Commission shall contest the validity of the Consent
Decree or the Adopting Order, and Qwest shall waive any
statutory right to a trial de novo.
17. 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.
18. 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 Qwest does not consent) that
provision will be superseded by such Commission rule or
order.
19. This Consent Decree may be signed in counterparts.
________________________________
David H. Solomon
Chief, Enforcement Bureau
Federal Communications
Commission
________________________________
Date
________________________________
Dan L. Poole
Vice President, Regulatory Law
Qwest Communications
International Inc.
________________________________
Date
_________________________
1 See Letter from William H. Davenport, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission to Melissa E. Newman, Vice President-
Federal Regulatory, Qwest, dated December 15, 2003.
21 See Letter from William H. Davenport, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau,
Federal Communications Commission, to Melissa E. Newman,
Qwest, dated December 15, 2003 (``Letter of Inquiry'').
32 47 U.S.C. § 272(g)(2).
43 In the Matter of Qwest Communications International
Inc. and US West, Inc., Applications for Transfer of Control
of Domestic and International Sections 214 and 310
Authorizations and Application to Transfer Control of a
Submarine Cable Landing License, CC Docket 99-272,
Memorandum Opinion and Order, 15 FCC Rcd 5376 (2000);
Memorandum Opinion and Order, 15 FCC Rcd 11909 (2000)
(collectively, ``Qwest Merger Orders'').
54 In the Matter of Qwest Communications International
Inc., Order, 18 FCC Rcd 10299 (2003).
65 See Letter from Melissa E. Newman, Vice President-
Federal Regulatory, Qwest to Maureen Del Duca, Chief,
Investigations and Hearings Division, Enforcement Bureau,
Federal Communications Commission, dated November 13, 2003
(``Qwest November 13 Letter'').
76 See Letter of Inquiry.
87 See Qwest Response to December 15, 2003 Letter of
Inquiry, dated January 26, 2004; Qwest Supplemental Response
to December 15, 2003 Letter of Inquiry, dated January 29,
2004; Qwest Second Supplemental Response to December 15,
2003 Letter of Inquiry, dated March 2, 2004.