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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
) File No. EB-04-TC-066
AT&T Corp. ) NAL/Acct. No. 200532170001
) FRN: 0010202638
Billing for )
Unauthorized Services )
ORDER
Adopted: November 30, 2004
Released: December 1, 2004
By the Chief, Enforcement Bureau:
1. In this Order, we adopt the attached Consent Decree
entered into between the Enforcement Bureau and AT&T Corp.
(``AT&T''). The Consent Decree terminates an investigation
initiated by the Enforcement Bureau regarding whether AT&T
violated section 201(b) of the Communications Act of 1934, as
amended (the ``Act''),1 by erroneously charging a $3.95 basic
rate monthly recurring charge to certain AT&T customers as well
as non-AT&T customers.
2. The Enforcement Bureau and AT&T 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 adopting the
Consent Decree and terminating the investigation.
4. Accordingly, IT IS ORDERED, pursuant to Section 4(i) of
the Communications Act of 1934, as amended,2 that the attached
Consent Decree IS ADOPTED.
5. IT IS FURTHER ORDERED that the above-captioned
investigation into the matters 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 )
)
AT&T Corp. ) File No. EB-04-TC-066
) NAL/Acct. No. 200532170001
Billing for ) FRN: 0010202638
Unauthorized Services )
CONSENT DECREE
I. INTRODUCTION
1. The Enforcement Bureau (``Bureau'') of the Federal
Communications Commission (the ``FCC'' or the ``Commission'') and
AT&T Corp. (``AT&T''), by their authorized representatives,
hereby enter into this Consent Decree to resolve an investigation
by the Bureau regarding whether AT&T violated section 201(b) of
the Communications Act of 1934, as amended (the ``Act''),3 by
erroneously charging a $3.95 basic rate monthly recurring charge
(``basic MRC'') to certain AT&T customers as well as non-AT&T
customers. The investigation was undertaken pursuant to sections
4(i), 4(j), 218, and 403 of the Act.4
II. BACKGROUND
2. AT&T states that, effective January 1, 2004, it began
charging the basic MRC to customers on its basic
rate state-to-state direct-dialed plan. AT&T
asserts that, prior to implementing the basic MRC,
AT&T sent written notice to its customers, posted
advance notice on its website, filed a tariff with
the Commission, and published a service guide
pursuant to its AT&T Consumer Service Agreement.
AT&T acknowledges that, after January 1, 2004, it
inadvertently billed the basic MRC to a total of
1,267,032 consumers, which included AT&T customers
who were not on the basic rate state-to-state
direct-dialed plan as well as non-AT&T customers
in 50 states and the District of Columbia,
primarily due to coding and systems processing
issues.
3. AT&T asserts that it (1) formed a team to resolve these
issues and provide adjustments to affected
consumers, (2) took steps to lessen additional
consumer inconvenience as a result of the billing
error, and (3) placed bill holds on the accounts
of consumers that AT&T determined could be
potentially affected as AT&T identified the
problems causing the errors. AT&T states that
these bill holds prevented the issuance of
additional erroneous bills for these consumers
while AT&T corrected the errors. In addition,
AT&T asserts that it stopped or prevented
collections efforts with respect to those
consumers that AT&T identified as being billed in
error. Also, AT&T states that it implemented a
process for its 1 800 222 0300 customer care
number so that non-AT&T customers who call about
erroneous bills are directed to an automated
message that explains the error and the automatic
credit/refund process.
4. AT&T disclosed the MRC billing error to the Commission
and met with the Consumer and Governmental Affairs
Bureau on March 1, 2004. AT&T subsequently
contacted the Commission several times to keep the
Commission apprised of the status of AT&T's
efforts to correct the error and provide credits
and refunds to affected consumers. AT&T states
that it rectified the coding and systems
processing errors that caused the billing error
and that it provided credits and refunds to all
the AT&T and non-AT&T consumers whom AT&T had
erroneously billed the basic MRC.
5. On June 22, 2004, the Bureau issued a Letter of Inquiry
to AT&T and initiated an investigation into
whether the basic MRC billing error violated
section 201(b) of the Act.5 The LOI requested
that AT&T provide certain information.
III. DEFINITIONS
6. 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
without change, addition or modification.
(b) ``AT&T'' or the ``Company'' means AT&T Corporation, and
any affiliate, d/b/a, predecessor-in-interest, parent
companies and any direct or indirect subsidiaries of such
parent companies, or other affiliated companies or
businesses, and their successors and assigns.
(c) ``Bureau'' means the Enforcement Bureau of the Federal
Communications Commission.
(d) ``Communications Act'' or ``Act'' means the
Communications Act of 1934, as amended, 47 U.S.C. § 151 et
seq.
(e) ``Effective Date'' means the date on which the Bureau
adopts 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) ``Investigation'' means the investigation commenced by
the Bureau's Letter of Inquiry dated June 22, 2004,6
together with complaints about the basic MRC against AT&T
received by the Commission prior to the Effective Date.
(h) ``Parties'' means AT&T and the Federal Communications
Commission. IV. AGREEMENT
7. AT&T agrees that the Commission has jurisdiction over
it and the matters contained in this Consent Decree and the
authority to enter into and adopt this Consent Decree.
8. AT&T 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. AT&T 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 AT&T respectively affirm and warrant that said
representative is acting in his/her capacity and within his/her
authority as a corporate officer of AT&T, and on behalf of AT&T
and that by his/her signature said representative is binding AT&T
to the terms and conditions of this Consent Decree.
9. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement of the Investigation.
In express reliance on the covenants and representations
contained herein, and in order to avoid the potential expenditure
of additional public resources, the Bureau agrees to terminate
the Investigation. The Bureau agrees that, in the absence of new
material evidence related to this matter, it will not use the
facts developed in the Investigation or the existence of this
Consent Decree to initiate, on its own motion, any new
proceedings, formal or informal, or take any actions on its own
motion, nor will the Bureau, on its own motion, seek any
administrative or other penalties from AT&T based on the
Investigation. 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
section 208 of the Act, 47 U.S.C. § 208, and to take any action
in response to such complaint.
10. The Parties agree that this Consent Decree does not
constitute either an adjudication on the merits or a factual or
legal finding regarding any compliance or noncompliance with the
requirements of the Act and the Commission's rules. The Parties
agree that this Consent Decree is for settlement purposes only
and that by agreeing to this Consent Decree, AT&T does not admit
or deny any wrongdoing, non-compliance, or violation of the Act
or the Commission's rules in connection with the matters that are
the subject of this Consent Decree.
11. In consideration for the termination of the
Investigation in accordance with the terms of this Consent
Decree, AT&T shall make a voluntary payment to the United States
Treasury, without further protest or recourse to a trial de novo,
in the amount of five hundred thousand dollars ($500,000) within
fifteen (15) business days after the Effective Date. The payment
must be made by check or similar instrument, payable to the order
of the Federal Communications Commission. The payment must
include the Acct. No. and FRN No. referenced above. Payment by
check or money order may be mailed to Forfeiture Collection
Section, Finance Branch, Federal Communications Commission, P.O.
Box 73482, Chicago, IL, 60673-7482. Payment by overnight mail
may be sent to Bank One/LB 73482, 525 West Monroe, 8th Floor
Mailroom, Chicago, IL 60661. Payment by wire transfer may be
made to ABA Number 071000013, receiving bank Bank One, and
account number 1165259.
12. For purposes of settling the matters set forth herein,
AT&T confirms that it has either completed or initiated and will
continue to implement the actions described below (i.e., the
Compliance Plan), with respect to the billing for traditional
telephone services in its residential billing system (the
residence account maintenance platform (``RAMP'')), to prevent
the similar occurrence of billing errors:7
(a) Implemented a new testing system to evaluate the
impacts on consumers of scheduled changes to AT&T's billing
system. This system allows AT&T to test, in advance of
implementation, billing system changes to identify the
impacts of such changes on a customer who should be affected
by the change (positive test case) and the impacts on a
customer who should not be affected by the change (negative
test case), and to better prevent billing errors before they
occur. AT&T will test between 20 and 1000 cases prior to
implementing each billing system change.
(b) Added at least 5,000 test cases to the regression test
bed for the residential billing system. The purpose of
regression testing is to verify that new system codes, table
updates, or process changes (collectively, ``new
applications'') implemented at a particular point in time do
not adversely affect the operation of existing applications
in the billing system. AT&T will perform such regression
testing within two weeks of implementing a new application.
This process will allow AT&T to compare the functioning of
the residential billing system before and after the new
applications are implemented.
(c) Established a checklist to validate each business rule
used to implement a change in the billing system, i.e., a
new functionality, in order to verify that existing
functionalities are not affected. Managers in the billing
operations organization will be instructed to incorporate
the checklist into their processes prior to implementing any
new functionality in the billing system.
(d) To verify the accuracy of its records for customer
primary interexchange carrier (``PIC'') status, AT&T will
compare its records for its basic schedule long distance
customers in all 50 states to the records of certain local
exchange carriers, including, at a minimum, Verizon, SBC,
Qwest, BellSouth, Citizens, TDS, and Alltel. If this
reconciliation process identifies any additional consumers
who have been or who are being erroneously billed the basic
MRC, AT&T will provide refunds or credits to those
consumers. The reconciliation and additional adjustment
processes will be completed no later than February 28, 2005.
AT&T agrees to file a report (with a request for
confidential treatment, as appropriate) with the Bureau no
later than April 30, 2005 detailing by state the number of
additional consumers who received adjustments and the total
amount of credits and refunds provided to those consumers.
(e) Assigned an additional five bill calculation/system
processing subject matter experts to assist with the
management of RAMP.
(f) Assigned additional analysts to AT&T's bill verification
unit, who will analyze random samples of bills before they
are released. The bill verification unit will sample and
review for accuracy at least .07% of its bills per month for
traditional telephone services issued through RAMP.
(g) AT&T will file reports (with requests for confidential
treatment, as appropriate) with the Bureau no later than six
months, one year, and two years after the Effective Date
that describe each billing error in RAMP involving
traditional telephone services, if any, that results in an
overcharge to consumers in an amount equal to more than one
percent (1%) of its residential customer base (regardless of
whether or not the affected consumers are AT&T customers) in
any month for the period covered by such report. The
reports will also describe the steps taken by AT&T to
correct such billing error. If no such billing error has
occurred, AT&T shall provide such confirmation to the Bureau
in its reports. AT&T shall also report its progress
implementing each step of this Compliance Plan.
(h) The requirements of this Compliance Plan shall expire
twenty-four (24) months from the Effective Date.
13. Nothing in this Compliance Plan shall alter AT&T's
obligation to otherwise comply with the Act and with the
Commission's rules and orders.
14. AT&T 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 Adopting Order, provided the Adopting Order
adopts the Consent Decree without change, addition, or
modification.
15. AT&T's decision to enter into this Consent Decree is
expressly contingent upon the issuance of an Adopting Order by
the Bureau that is consistent with this Consent Decree, and which
adopts the Consent Decree without change, addition, or
modification.
16. 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.
17. The Parties also agree that if any provision of this
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 AT&T does not
consent) that provision will be superseded by such Commission
rule or order.
18. By this Consent Decree, AT&T 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 AT&T's
compliance efforts under this Consent Decree, which would
otherwise be privileged or confidential, are 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.
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 AT&T nor the Commission shall contest the
validity of the Consent Decree or the Adopting Order, and AT&T
and the Commission will waive any statutory right to a trial de
novo with respect to the issuance of the Adopting Order and shall
consent to a judgment incorporating the terms of this Consent
Decree.
20. AT&T 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. This Consent Decree may be signed in counterparts.
For: AT&T Corp.
_____________________________ __________________________
Date (AT&T Signature)
For: Enforcement Bureau
Federal Communications Commission
______________________________
__________________________
Date David H. Solomon
Chief, Enforcement Bureau
_________________________
1 47 U.S.C. § 201(b).
2 47 U.S.C. § 154(i).
3 47 U.S.C. § 201(b)
4 47 U.S.C. §§ 154(i), 154(j), 218 and 403.
5 See Letter from Colleen Heitkamp, Chief, Telecommunications
Consumers Division, Enforcement Bureau, to Michael DelCasino,
Regulatory Division Manager, AT&T Corporation, June 22, 2004.
6 See id.
7 If the number of AT&T residential customer bills issued through
RAMP decreases 25% from the current monthly volume, AT&T may
periodically adjust the number of test cases, the percentage of
bills sampled, and the number of analysts or other personnel who
work on the billing system based on the number of customers and
bills that are issued but will not, in any case, discontinue such
testing. If AT&T makes any such adjustments, AT&T shall specify
the decreased volume and any such adjustment to the Compliance
Plan in the report(s) it files with the Bureau pursuant to
Section 11(g) below.