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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554

   In the Matter of )

   )

   Bright House Networks, LLC, et al., )

   )

   Complainants, ) File No. EB-08-MD-002

   )

   v. )

   )

   Verizon California, Inc., et al., )

   )

   Defendants. )

   +--+
   +--+

                              RECOMMENDED DECISION

   Adopted: April 11, 2008 Released: April 11, 2008

   By the Chief, Enforcement Bureau:

   I. introduction

    1. In this Recommended Decision, we recommend that the Commission deny in
       part a formal complaint filed against Defendants (collectively,
       "Verizon") pursuant to section 208 of the Communications Act of 1934,
       as amended ("Act"). For the reasons explained below, we recommend that
       the Commission deny Complainants' claims that Verizon is violating
       section 222(b) of the Act (Count I) and section 222(a) of the Act
       (Count II) by allegedly using, for customer retention marketing
       purposes, proprietary information of other carriers that it receives
       in the local number porting process. Because it is unclear whether
       this conduct violates section 201(b), and for other reasons described
       below, we do not reach a conclusion on Complainants' claim that this
       same conduct constitutes a violation of section 201(b). We further
       recommend that the Commission promptly issue a Notice of Proposed
       Rulemaking ("NPRM") regarding consumer and competitive benefits of
       customer retention marketing practices. Given the prevalence of
       intermodal and bundled service competition, we recommend that such an
       NPRM conclude that customer retention marketing practices be made
       consistent across all platforms.

   II. background

         A. The Parties

    2. Defendants are telecommunications carriers that operate as incumbent
       local exchange carriers (incumbent "LECs") in a number of states.
       Complainants Bright House Networks, LLC ("Bright House"), Comcast
       Corporation ("Comcast"), and Time Warner Cable Inc. ("Time Warner")
       (collectively, "Complainants") provide facilities-based voice services
       to retail customers using Voice over Internet Protocol ("VoIP") in
       competition with Verizon's local voice services. Complainants provide
       those services by relying on wholesale carriers ("Competitive
       Carriers") to interconnect with incumbent LECs and to provide
       transmission services, local number portability ("LNP") functions, and
       other functionalities. Bright House and Comcast rely on Competitive
       Carriers that are affiliated with them, while Time Warner relies on
       Sprint Communications Company L.P. ("Sprint").

     A. Local Number Portability and Verizon's Retention Marketing Program

    3. The Communications Act requires local exchange carriers to provide
       number portability, i.e., the ability to retain one's phone number
       when switching from one telecommunications carrier to another.  Thus,
       when customers decide to switch voice service from Verizon to one of
       the Complainants, they may choose to retain their telephone numbers.
       Such a choice triggers an inter-carrier process -- developed mainly by
       the industry -- by which the customer's telephone number is "ported"
       from Verizon to the Complainant's Competitive Carrier.

    4. The number porting process begins with a Competitive Carrier, at the
       direction of a Complainant, submitting a "Local Service Request"
       ("LSR") to Verizon. The LSR serves as both a request to cancel the
       customer's Verizon service and a request to port the customer's
       telephone number to the Competitive Carrier. Under current industry
       practices, the LSR includes at least the following information: the
       identity of the submitting carrier; the date and time for the
       disconnection of Verizon's retail service (and, by implication, the
       date and time for the initiation of Complainant's service); the name
       and location of the retail customer whose service is being switched;
       the Verizon retail account number; and whether the port involves one
       or more numbers. Thus, the LSR informs Verizon that, at a particular
       date and time, the customer's telephone number is to be ported to the
       Competitive Carrier, and the customer's existing Verizon voice service
       is to be disconnected, so that the Complainant served by the
       Competitive Carrier may initiate retail service using the customer's
       existing telephone number. After submitting the LSR to Verizon, the
       Complainant or Competitive Carrier sends the Number Portability
       Administration Center ("NPAC") a "create message" that is used to
       enter a pending subscription record with the necessary routing data
       for the number to be ported.

    5. Upon receiving the LSR, Verizon confirms that it contains sufficient
       information to accomplish the port, and then creates an internal
       service order, which it transmits to the appropriate downstream
       Operations Support Systems. The transmittal of the internal service
       order initiates several work steps for Verizon. First, Verizon's
       automated systems send the Complainant or Competitive Carrier a Local
       Service Request Confirmation (also known as a Firm Order Confirmation)
       that contains information specific to the individual request. In
       addition, Verizon creates a disconnect order scheduling a retail
       service disconnect on the requested due date. Moreover, Verizon
       establishes a "10-digit trigger" in the switch serving the retail
       customer to prevent the misrouting of certain calls in the short
       interval after the number has been ported but before disconnection of
       the customer's Verizon retail service has been completed. Finally,
       Verizon confirms the pending subscription record that the new provider
       previously created in the NPAC database. Meanwhile, the Complainant
       and/or Competitive Carrier perform any necessary work on their own
       networks to turn up the customer's service.

    6. Beginning around the summer of 2007, Verizon started a program of
       retention marketing. The program's first step is generating a
       marketing "lead list" of Verizon customers. To generate the lead list,
       Verizon begins with the universe of customers for whom there are
       retail-service disconnect orders pending, including disconnect orders
       that were prompted by the submission of an LSR. Verizon then
       eliminates from the lead list all those customers who are not
       switching their phone service and porting their telephone numbers from
       Verizon to a facilities-based service provider, such as Complainants.
       Verizon then contacts customers on the lead list and encourages them
       to remain with Verizon, offering price incentives such as discounts
       and American Express reward cards. Verizon conducts this marketing
       while the number-porting request is still pending, i.e.,  before the
       new provider (such as Complainants) has established service to the
       customer.

    7. If Verizon is successful in persuading a customer to cancel his or her
       order with the new service provider, Verizon cancels the internal
       service order relating to the port request, and Verizon's systems
       issue a "jeopardy notice" to the provider that submitted the port
       request. Verizon also puts the new provider's port request "into
       conflict" by sending a conflict code to NPAC. If the new service
       provider persuades the customer to switch after all, it can either
       seek resolution of the conflict code or, what is much more common,
       submit a new LSR.

     A. The Complaint

    8. On February 11, 2008, Complainants filed the Complaint, alleging that
       the Verizon customer retention marketing practices described above
       violate sections 222(b), 222(a), and 201(b) of the Act. Complainants
       seek an order enjoining Verizon from continuing such customer
       retention marketing. Complainants also seek an award of damages, but
       deferred that determination to a separate, subsequent proceeding
       pursuant to section 1.722(d) of the Commission's rules.

   III. LEGAL ANALYSIS

          A. Complainants Have Not Established a Violation of Section 222(b).

               1. Verizon Does Not Receive the Proprietary Information for
                  "Purposes of Providing Any Telecommunications Service"
                  Within the Meaning of Section 222(b).

    9. Section 222(b) provides that "[a] telecommunications carrier that
       receives or obtains proprietary information from another carrier for
       purposes of providing any telecommunications service shall use such
       information only for such purpose, and shall not use such information
       for its own marketing efforts." Section 222(b) thus prohibits a
       telecommunications carrier from using for its own marketing efforts
       any proprietary information that it receives from another carrier "for
       purposes of providing any telecommunications service...." Section
       222(b) does not expressly state whose provision of telecommunications
       services is covered. Specifically, section 222(b) does not expressly
       state whether its marketing ban applies when the receipt of
       proprietary information is for purposes of (i) the receiving carrier
       (here, Verizon) "providing any telecommunications service," or (ii)
       the submitting carrier (here, a Competitive Carrier) "providing any
       telecommunications service," or (iii) either the submitting carrier or
       the receiving carrier "providing any telecommunications service."
       Verizon contends that the first construction is the correct one,
       arguing that section 222(b) applies only when a carrier receives
       another carrier's proprietary information so that the receiving
       carrier can provide a telecommunications service. Complainants
       advocate the third construction, asserting that "section 222(b)
       encompasses any carrier-to-carrier service regardless of which carrier
       is providing it or to whom."

   10. We recommend that the Commission adopt the construction advocated by
       Verizon, because that construction provides the most natural,
       grammatically consistent reading of the statute. Under section 222(b),
       a carrier that receives proprietary information "for the purposes of
       providing any telecommunications service . . . shall use such
       information only for such purpose." Section 222(b) thus includes both
       an affirmative requirement and a prohibition. The requirement is that
       the carrier that receives information "shall use such information only
       for such purpose" - that is, "for purposes of providing any
       telecommunications service." If the receiving carrier is not using the
       information that it "receives" to provide "any telecommunications
       service," then section 222(b)'s affirmative requirement - that the
       information be used only for that purpose - cannot apply. The
       prohibition in the last clause of section 222(b) - which provides that
       a receiving carrier "shall not use such information for its own
       marketing efforts," - applies only in the same circumstance in which
       the affirmative requirement applies - to the receiving carrier's
       provision of telecommunications service. Section 222(b)'s marketing
       ban thus applies only when a carrier receives another carrier's
       proprietary information so that the receiving carrier can provide a
       telecommunications service.

   11. In turn, we also recommend that the Commission reject Complainants'
       alternative interpretation of section 222(b), which makes the
       marketing ban applicable even where the submitting carrier is the one
       providing the telecommunications service. Complainants would have us
       read section 222(b) to mean here that Verizon shall use the
       proprietary information it receives only "for purposes of" the
       Competitive Carriers' provision of service. This reading is
       grammatically awkward, as it suggests that Verizon would be using the
       information it receives "for purposes" of another carrier's service.
       The only textual support Complainants offer for this reading of
       section 222(b) is the use of the word "any" in the phrase "any
       telecommunications service." The word, "any," however, addresses what
       is provided, not who provides it. Moreover, Complainants have not
       cited a single Commission order that has construed section 222(b) to
       mean that the submitting carrier is the one who is "providing any
       telecommunications service...." Indeed, although several prior orders
       apply section 222(b) to customer retention practices, none of them
       focuses on the specific question of statutory interpretation that
       concerns us here, i.e., which carrier is the one "providing any
       telecommunications service" under section 222(b). The absence of any
       authority with a contrary construction of section 222(b) bolsters our
       recommended conclusion that Complainants can establish a violation of
       section 222(b) only if they can show that Verizon received proprietary
       information for the purpose of Verizon providing a telecommunications
       service.

   12. Complainants have failed to make such a showing here, because
       Verizon's role in the number porting process does not constitute the
       provision of a "telecommunications service" within the meaning of the
       Act. Under section 153(46) of the Act, the term "telecommunications
       service" means "the offering of telecommunications for a fee directly
       to the public, or to such classes of users as to be effectively
       available directly to the public, regardless of the facilities used."
       The term "telecommunications" is defined in section 153(43) as "the
       transmission, between or among points specified by the user, of
       information of the user's choosing, without change in the form or
       content of the information as sent and received."

   13. Applying those statutory definitions here, we recommend concluding
       that Verizon's role in the numbering porting process does not involve
       the provision of a "telecommunications service," for two distinct
       reasons. First, number porting does not involve transmission of a
       customer's information; rather, it entails carrier-to-carrier
       arrangements, coordinated with the NPAC, to ensure that future calls
       are properly routed to the customer's chosen carrier. In other words,
       although number portability requires carrier-to-carrier coordination,
       it does not involve the provision of a carrier-to-carrier
       "telecommunications service." By contrast, Verizon plainly provides
       telecommunications service to another carrier when, for example, it
       provides another carrier with unbundled network elements (UNEs),
       switched access service, or resale service. Second, Verizon does not
       charge a fee for its role in porting numbers.

   14. Because Complainants cannot show that Verizon provides any
       "telecommunications service" when it handles their Competitive
       Carriers' number porting requests, they cannot show that section
       222(b) applies, or was violated here. Accordingly, we recommend that
       the Commission deny Complainants' claim (i.e., Count I) alleging a
       violation of section 222(b).

      1. Bright House and Comcast Cannot Prove a Violation of Section 222(b)
         Even Under Their Own Construction of the Statute Because They Have
         Not Shown That Their Affiliated Competitive Carriers are
         "Telecommunications Carriers" Offering "Telecommunications Service."

   15. Even assuming, arguendo, that section 222(b) refers to the submitting
       carrier's provision of "telecommunications service," section 222(b)'s
       marketing ban would not apply to Verizon's receipt of information from
       Comcast's and Bright House's affiliated Competitive Carriers. That is
       because, as explained below, we recommend that the Commission conclude
       that the record lacks evidence that those Competitive Carriers provide
       "telecommunications service" to Comcast and Bright House.

   16. The Act defines "telecommunications service" as "the offering of
       telecommunications for a fee directly to the public, or to such
       classes of users as to be effectively available directly to the
       public, regardless of the facilities used."  This definition largely,
       if not entirely, incorporates the common law rule that, to be a common
       carrier, an entity must publicly "hold itself out" as offering
       telecommunications indiscriminately to whatever similarly situated
       customers might have use for such telecommunications. 

   17. Here, Bright House and Comcast have failed to show by a preponderance
       of the evidence that, with respect to the telecommunications provided
       to Bright House and Comcast, their affiliated Competitive Carriers
       publicly hold themselves out as offering those telecommunications
       indiscriminately to any and all potential customers. The record
       contains no evidence that the Competitive Carriers affiliated with
       Bright House and Comcast have ever provided the telecommunications at
       issue to any entity other than Bright House and Comcast, respectively.
       The record also lacks any evidence that the Competitive Carriers
       affiliated with Bright House and Comcast have ever offered the
       telecommunications at issue in any public written or oral
       communication, such as a tariff, an advertisement, a brochure, a
       hand-out, a press release, an industry trade-show presentation, or a
       website posting. This absence of any public written or oral offering,
       coupled with the absence of any non-affiliated customers, is
       dispositive.

   18. Bright House and Comcast rely heavily on the facts that their
       affiliated Competitive Carriers have obtained state certificates and
       interconnection agreements, arguing that those documents constitute
       public declarations of their willingness to provide telecommunications
       indiscriminately to all potential customers. Their arguments overlook
       the black-letter proposition that an entity may be a common carrier
       (i.e., an entity that provides "telecommunications service") with
       respect to some forms of telecommunications and not others. The
       Competitive Carriers' state certificates and interconnection
       agreements may suggest that the Competitive Carriers publicly offer
       some forms of telecommunications, but there is no evidence in the
       record that those documents constitute a public offering of the
       particular telecommunications provided by the Competitive Carriers to
       Bright House and Comcast.

   19. Bright House and Comcast also rely heavily on declarations filed in
       this proceeding of corporate officers asserting that their Competitive
       Carriers will serve all similarly situated customers indiscriminately.
       This post-hoc attempt to "self-certify" their common carrier status,
       though not inconsequential, falls short. Objective evidence regarding
       the substance of the Competitive Carrier's conduct trumps these
       belated characterizations of the Competitive Carriers' alleged
       subjective intent.

   20. Thus, in sum, we recommend that the Commission conclude that the
       record fails to demonstrate that, with respect to the
       telecommunications provided to Bright House and Comcast, the
       Competitive Carriers affiliated with Bright House and Comcast provide
       "telecommunications service" under the Act. Accordingly, even if
       section 222(b) referred to the submitting carrier's provision of
       telecommunications service, section 222(b)'s marketing ban would not
       apply to Verizon's receipt of information from Comcast's and Bright
       House's affiliated Competitive Carriers.

     A. Verizon's Customer Retention Marketing Practices Do Not Violate
        Section 222(a).

   21. Section 222(a) of the Act provides, in pertinent part, that "[e]very
       telecommunications carrier has a duty to protect the confidentiality
       of proprietary information of, and relating to, other
       telecommunications carriers...." Complainants assert that, inherent in
       the "duty to protect" the confidentiality of proprietary information
       of other telecommunications carriers is the duty not to use the
       proprietary information for any purpose other than the purpose for
       which the proprietary information was provided. Applying that
       interpretation of section 222(a) to the facts here, Complainants
       contend that Verizon can use the information contained in the LSRs
       only to port the customer's number and terminate the customer's
       existing Verizon service, and may not use the information to market
       the customer. Complainants argue, therefore, that Verizon's customer
       retention marketing practices violate section 222(a).

   22. We recommend that the Commission reject Complainants' construction of
       section 222(a). In our view, the more natural reading of section
       222(a) is that the "duty to protect" the confidentiality of
       proprietary information creates only a duty not to disclose the
       information to any third party. Section 222(a) simply does not address
       how a carrier may "use" such information internally. Instead, the
       usage issue is expressly addressed by section 222(b). Here,
       Complainants do not contend that Verizon discloses the information
       contained in the LSRs to any third party. Therefore, Complainants have
       not shown that Verizon's customer retention marketing practices
       violate section 222(a). Accordingly, we recommend denial of
       Complainants' claim (i.e., Count II) under section 222(a).

     A. Complainants' Claim that Verizon's Customer Retention Marketing
        Practices Violate Section 201(b) of the Act, and Other Retention
        Marketing Issues, Should be Addressed in a Subsequent Order and NPRM.

   23. Complainants also assert, in cursory fashion, that Verizon is
       violating section 201(b) of the Act because Verizon's customer
       retention marketing activities are "unjust and unreasonable." The
       staff order accepting this case onto the Accelerated Docket, however,
       referred only to claims under section 222, not 201(b). Thus, the
       section 201(b) claim was not accepted onto the Accelerated Docket, and
       is not subject to the 60-day deadline for staff rulings or
       recommendations in Accelerated Docket cases. That claim will be
       addressed in the ordinary course in a subsequent order.

   24. Although we defer addressing the claims that Verizon violated section
       201(b), the Bureau recommends that the Commission examine the claims
       therein further, and more broadly.

   25. The Commission does not yet have a consistent policy with regard to
       retention marketing. The Commission has, in the past, found certain
       retention marketing practices - but not others - to violate section
       222(b). Specifically, the Commission has found that a
       telecommunications carrier violates section 222(b) when it "exploits
       advance notice of a customer change by virtue of its status as the
       underlying network-facilities or service provider to market to that
       customer." By contrast, the Commission has also found that "section
       222(b) is not violated if the carrier has independently learned from
       its retail operations that a customer is switching to another
       carrier." Thus, section 222, standing alone, may create an environment
       where retention marketing to customers of non-facilities-based
       competitive LECs is unlawful, while retention marketing to customers
       of facilities-based providers is permitted. While this distinction may
       have been of less import several years ago, the Bureau suggests that
       the Commission consider whether it fairly promotes facilities-based
       competition of the sort the Commission has repeatedly said is likely
       to result in the greatest consumer benefits.

   26. Indeed, the market for all types of communications services differs
       significantly from what we saw only a few years ago. Customers have
       more choices among competing facilities-based providers of several
       different types of services, and, more and more, competitors are
       offering bundles of services, such as voice, video, and data, and are
       competing for customers across different delivery platforms. And
       today, the rules defining fair competition are not equivalent among
       those services.

   27. For example, in the video context, customers now have opportunities to
       switch to new, facilities-based providers of video services, such as
       legacy telephone companies that are deploying fiber to the home. One
       such provider, Verizon, has filed a petition for declaratory ruling
       regarding certain cable operators' retention marketing activities. In
       its petition, Verizon alleges that it has encountered a problem when
       it acquires new customers for its video service. Specifically, Verizon
       states that when it acquires a new video customer, it may obtain
       authorization from its new customer to do two things: (1) submit a
       cancellation request on behalf of its new customer to the customer's
       old video provider, and (2) return any of its customer's equipment
       belonging to the old video provider back to that provider. Verizon
       alleges, however, that when it acts upon this authorization and
       submits a cancellation request to its customer's old provider, some
       old providers refuse to accept the cancellation order. As a result,
       the customer must contact the old provider personally to cancel
       service. If the customer does not do this promptly or does not
       understand its obligation to do so, the customer may be double-billed
       during the period when the new service is operational yet the old
       service has not been canceled. Verizon asks the Commission to declare
       that "it constitutes an unfair method of competition or an unfair
       practice for an incumbent cable operator to refuse to accept its
       subscriber's order to cancel video service when such a cancellation
       request is communicated by a competing video provider as the
       subscriber's lawful agent." Verizon argues that the conduct it
       describes violates section 628(b) of the Act, which says that it is
       "unlawful for a cable operator . . . to engage in unfair methods of
       competition or unfair or deceptive acts or practices, the purpose or
       effect of which is to hinder significantly or to prevent any
       multichannel video programming distributor from providing [certain]
       programming to subscribers or consumers." Verizon further argues that
       this conduct thwarts the purposes of the Act as expressed in section
       706's mandate to promote the deployment of advanced telecommunications
       capability to all Americans, section 601's instruction to "promote
       competition in cable communications," and the overall purpose of the
       Act expressed in section 1.

   28. In the situation Verizon describes - where two facilities-based
       providers are competing for the same customer - it is not at all clear
       to the Bureau whether retention marketing should be allowed, or even
       encouraged as a form of vigorous competition, or whether it is a form
       of anticompetitive conduct. In fact, one could argue that, when the
       customer's existing provider offers to lower prices or expand services
       to prevent the customer from switching providers, the customer
       benefits. This type of aggressive competition to win and to keep
       customers can result in lower prices for consumers, the introduction
       of new services and technologies, and improved quality of service as
       carriers compete in the open marketplace.

   29. Many providers - such as "legacy" telephone companies, cable
       operators, and new entrants - compete not on the basis of individual
       services, but for bundles of services, including voice, video, and
       broadband. In fact, today's competitive marketplace for bundled
       services, and intermodal competition of providers of services within
       the bundle, may reduce the need for regulation. It is reasonable even
       to ask whether further deregulation would allow for even more vigorous
       competition for customers and bring with it the associated benefits of
       such competition. On the other hand, the application of our current
       rules, which may serve to restrict the activities of some competitors
       but not others, may provide an unfair advantage to the historically
       less regulated entity. For example, in the Verizon Petition, Verizon
       argues that certain cable providers refuse to respect Verizon's status
       and authority as the customer's agent to request disconnection of the
       customer's service. In contrast, the Complainants in the instant case
       do not dispute that Verizon, as it is required by our rules, respects
       the status of their affiliated competitive carriers to act as an agent
       for the customer in ordering the switch and associated disconnection
       of service. The Bureau strongly urges the Commission, in reviewing the
       actions at issue in the instant case, to consider whether such conduct
       is desirable by any provider of service; the same rules of conduct
       should apply in every retention marketing situation.

   30. Regulatory parity, whether by increased regulation or deregulation, is
       important to ensure a level playing field, despite possible historic
       differences in regulation of the various services in the bundle. When
       an old provider interferes with a customer's choice to switch to a new
       provider of bundled services, its interference with regard to any one
       service affects the new provider's ability and likelihood of providing
       all the services in the bundle. For example, in the voice context, the
       Commission has noted that where a service provider has no choice but
       to share proprietary information with a competitor, the receiving
       carrier gets the chance to use that proprietary information for its
       own marketing purposes and possibly persuade the customer not to
       switch providers. A cable operator has a similar opportunity to retain
       its customer if it requires the customer to call personally to cancel
       service, to stay home to wait for a technician to arrive to disconnect
       service, or if it requires that the customer personally return
       equipment to the cable provider's offices. Yet these practices affect
       not just the customer's choice of provider for a single service. In a
       market of bundles they affect the customer's choice of provider for
       all services. Indeed, as most of these bundles include broadband
       services, practices that affect competition for any one of the
       included services necessarily affect competition for broadband
       services - an issue of special interest for the Commission.

   31. It is not clear at all whether the conduct complained of in this case
       - or in the Verizon Petition, for that matter - warrants increased
       oversight and regulation. In fact, the Bureau suggests that, given the
       benefits of competition, the Commission should consider whether this
       conduct should be restricted at all. One thing, however, is very
       clear: this type of aggressive retention marketing behavior, whether
       engaged in by the incumbent telephony provider or by the cable
       provider, should be treated consistently.

   32. The Bureau therefore recommends that the Commission adopt a Notice of
       Proposed Rulemaking to seek comment on whether the Commission should
       adopt specific rules addressing certain practices, and, if so, what
       form those rules should take. Whatever form they take, the Bureau
       recommends that they be consistent across various service platforms.
       The Commission has acted in several areas to create parity across
       different platforms, and the Bureau suggests that the current market
       for bundled, facilities-based service requires consistency.

   33. As the Commission has stated on numerous occasions, the Act provides
       ample authority to impose rules on providers of all types of services
       under the Commission's jurisdiction. The Commission has authority
       under section 201(b) and other sections in Title II of the Act to
       prohibit unjust or unreasonable practices by common carriers. The
       Commission also has authority under section 628(b) to prohibit certain
       unfair methods of competition by cable operators. In addition, the
       Supreme Court has affirmed the Commission's authority to impose
       regulations on providers of information services, such as broadband
       Internet access services. The Bureau recommends that the Commission
       seek comment on the strongest source of authority to use to promulgate
       any rules in this area.

   34. The Bureau also recommends that the Commission seek comment on what
       services and service providers should be addressed. For example,
       should the Commission fashion rules for voice services, broadband
       Internet access services, any video services not addressed in section
       628, or any other services subject to the Commission's jurisdiction?
       Finally, the Bureau recommends that the Commission seek comment on
       whether it should require (as it already does in the voice context)
       that any service provider accept a cancellation request from a
       customer's authorized agent.

   IV. Conclusion and REcommendationS

   35. In sum, for all of the foregoing reasons, and pursuant to sections
       4(i), 4(j), 201(b), 208, 222, and 303(r) of the Act, and sections
       1.720-1.736 of the Commission's rules, we recommend that the
       Commission (i) DENY Complainants' claim (i.e., Count I) that Verizon's
       customer retention marketing practices violate section 222(b) of the
       Act; and (ii) DENY Complainants' claim (i.e., Count II) that Verizon's
       customer retention marketing practices violate section 222(a) of the
       Act. Complainants' claim (i.e., Count III) that Verizon's customer
       retention marketing practices violate section 201(b) of the Act will
       be addressed in due course in a subsequent order. We also recommend
       that the Commission promptly issue a Notice of Proposed Rulemaking
       regarding customer retention marketing practices.

   FEDERAL COMMUNICATIONS COMMISSION

   Kris Anne Monteith

   Chief, Enforcement Bureau

   Formal Complaint, File No. EB-08-MD-002 (filed Feb. 11, 2008)
   ("Complaint").

   47 U.S.C. S: 208. Before the Complaint was filed, the Enforcement Bureau
   issued a letter order, pursuant to section 1.730 of the Commission's
   rules, 47 C.F.R. S: 1.730, granting Complainants' request to file a
   Complaint against Verizon alleging violations of section 222 of the Act on
   the Commission's Accelerated Docket. See Complaint at Ex. T.

   See, e.g., Joint Statement, File No. EB-08-MD-002 (filed Feb. 29, 2009)
   ("Joint Statement") at 3-4, P: 4. The Defendants are: Verizon California
   Inc.; Verizon Delaware LLC; Verizon Florida LLC; Contel of the South,
   Inc.; Verizon South Inc.; Verizon New England Inc.; Verizon Maryland Inc.;
   Verizon New Jersey Inc.; Verizon New York Inc.; Verizon Northwest Inc.;
   Verizon North Inc.; Verizon Pennsylvania Inc.; GTE Southwest Incorporated
   d/b/a Verizon Southwest; Verizon Virginia Inc.; and Verizon Washington,
   D.C. Inc. See, e.g., id. at 3-5, P:P: 4-5.

   See, e.g., Joint Statement at 2-3, P:P: 1-3; Complaint at 3-4, P:P: 2-3.
   Complainants provide their retail VoIP service through affiliated
   entities. See, e.g., Joint Statement at 1-3, P:P: 1-3. For convenience, we
   include those affiliates when we refer to "Complainants" herein.

   See, e.g., Joint Statement at 5, P: 6.

   See, e.g., Joint Statement at 6, P:P: 8-9.

   See, e.g., Joint Statement at 6, P: 7.

   See, e.g., 47 U.S.C. S: 251(b)(2); 47 U.S.C. S: 153(30) (providing that
   "number portability" means the ability of users of telecommunications
   services to retain, at the same location, existing telecommunications
   numbers without impairment of quality, reliability, or convenience when
   switching from one telecommunications carrier to another). See also 47
   C.F.R. S:S: 52.11, 52.21-26.

   See, e.g., Complaint at 8, P: 10, and at Ex. E;  Answer of Verizon, File
   No. EB-08-MD-002 (filed Feb. 21, 2008) ("Answer") at Exs. 22-27; In the
   Matter of Telephone Number Portability,  Second Report and Order, 12 FCC
   Rcd 12281, 12315-16 at P:P: 55-56 (1997).

   See, e.g.,  Joint Statement at 9, P: 20. The Competitive Carrier may
   submit the LSR directly to Verizon, or through a contractor. Id.

   See, e.g., Joint Statement at 9, P: 18.

   See, e.g., Joint Statement at 11, P: 25.

   See, e.g., Joint Statement at 9, P: 20.

   The Number Portability Administration Center, or NPAC, was created to
   support the implementation of local number portability by operating
   regional number portability databases. See generally www.npac.com.

   See, e.g., Joint Statement at 11, P: 28.

   See, e.g., Joint Statement at 10, P: 23.

   See, e.g., Joint Statement at 10, P: 24.

   See, e.g., Joint Statement at 12, P: 29.

   See, e.g., Joint Statement at 12-13, P:P: 30-31.

   See, e.g., Joint Statement at 13, P: 32.

   See, e.g., Joint Statement at 11-12, P: 28.

   See, e.g., Joint Statement at 14-17, P:P: 35-45.

   See, e.g., Joint Statement at 15, P:P: 37-38. .

   See, e.g., Joint Statement at 15, P: 37; Supp. Joint Statement at 2, P: 1
   (stating that Verizon's retention marketing lead list is generated from
   disconnect orders, including disconnect orders that are generated as a
   result of receiving LSRs). Of course, disconnect orders may stem from
   circumstances other than an LSR, such as a customer move out of the local
   service area. See, e.g., Reply Brief of Verizon, File No. EB-08-MD-002
   (filed Mar. 14, 2008) at 1.

   See, e.g.,  Joint Statement at 15, P: 37. Toward that end, Verizon
   eliminates from the lead list customers who (i) are switching to a service
   provider that is either a Verizon wholesale customer (such as a reseller
   of Verizon service or a customer of Verizon's Wholesale Advantage product)
   or a Verizon affiliate (e.g., Verizon Wireless), or (ii) contacted Verizon
   directly to terminate service. Verizon also excludes those disconnecting
   customers who are on do-not-call, do-not-solicit, do-not-mail, or
   do-not-email lists. Id.

   See, e.g., Joint Statement at 15-16, P:P: 39-40.

   See, e.g., Joint Statement at 16, P: 41. Any marketing that Verizon
   conducts after the number port and disconnect of Verizon service have
   occurred is not at issue here. See, e.g.,  Complaint at 13-14; Answer at
   1.

   See, e.g., Joint Statement at 17, P: 44.

   See, e.g., Joint Statement at 17, P: 45.

   47 U.S.C. S:S: 222(b), 222(a), 201(b).

   Complaint at 31, P: 59 (asking the Commission to "enjoin Verizon from
   continuing its retention marketing based on carrier change information").
   The Commission generally labels as "retention marketing" any marketing to
   a customer by the customer's existing provider that occurs while the
   carrier-change/number-porting request applicable to that customer is
   pending; the Commission generally labels as "winback marketing" any
   marketing to a customer by the customer's former provider that occurs
   after the carrier-change/number-porting request applicable to that
   customer has been effectuated. See, e.g., In the Matter of
   Telecommunications Carriers' Use of Customer Proprietary Network
   Information and Other Customer Information,  Order on Reconsideration and
   Petitions for Forbearance, 14 FCC Rcd 14409, 14443-4, P: 65 (1999) ("CPNI
   Reconsideration Order"). The Complaint challenges only Verizon's retention
   marketing, and only Verizon's retention marketing that stems, directly or
   indirectly, from the submission of an LSR. See, e.g., Complaint at 14.
   Thus, this Recommended Decision applies only to such retention marketing,
   and not to any winback marketing.

   Complaint at 31, P: 59 (citing 47 C.F.R. S: 1.722(d)).

   47 U.S.C. S: 222(b).

   47 U.S.C. S: 222(b).

   Answer at 39.

   Complainants' Reply to Defendants' Answer and Separate Statement, File No.
   EB-08-MD-001 (filed Feb. 29, 2008) ("Reply") at 32. See, e.g., Complaint
   at 19-20; Reply at 33; Complainants' Supplemental Reply Brief, File No.
   EB-08-MD-001 (filed Mar. 14, 2008) at 2.

   47 U.S.C. S: 222(b) (emphases added).

   47 U.S.C. S: 222(b) (emphasis added).

   Complaint at 19-20; Reply at 32, 33: Complainants' Supplemental Reply
   Brief at 2.

   Policies and Rules Concerning Unauthorized Changes of Consumers Long
   Distance Carriers, Second Report and Order and Further Notice of Proposed
   Rulemaking, 14 FCC Rcd 1508, 1572, 1575-76, P:P: 106-111 (1998) ("1998
   Slamming Order"); CPNI Reconsideration Order, 14 FCC Rcd at 14449-50, P:
   77-79; In the Matter of Implementation of the Telecommunications Act of
   1996: Telecommunications Carriers' Use of Customer Proprietary Network
   Information and Other Customer Information,  Third Report and Order and
   Third Further Notice of Proposed Rulemaking, 17 FCC Rcd 14860, 14918-19,
   P:P: 131-134 (2002) ("CPNI 3rd Report & Order"); Implementation of the
   Subscriber Carrier Selection Changes Provisions of the Telecommunications
   Act of 1996; Policies and Rules Concerning Unauthorized Changes of
   Consumers' Long Distance Carriers, Third Order on Reconsideration and
   Second Further Notice of Proposed Rulemaking, 18 FCC Rcd 5099, 5109-10,
   P:P: 25-28 (2003) ("Third Slamming Reconsideration Order").

   47 U.S.C. S: 153(46).

   47 U.S.C. S: 153(43).

   Further Supplemental Joint Statement, File No. EB-08-MD-002 (filed Mar.
   10, 2008) at 4, P: 3.

   47 U.S.C. S: 153(46). See 47 U.S.C. S: 153(43) (providing that "[t]he term
   `telecommunications' means the transmission, between or among points
   specified by the user, of information of the user's choosing, without
   change in the form or content of the information as sent and received");
   47 U.S.C. S: 153(44) (providing that "[t]he term `telecommunications
   carrier' means any provider of telecommunications services").

   See, e.g., Virgin Islands Telephone Corp. v. FCC, 198 F.3d 921 (D.C. Cir.
   1999) (affirming the Commission's use of the "common carrier" test in
   National Association of Regulatory Utility Commissioners v. FCC, 525 F.2d
   630 (D.C. Cir. 1976) ("NARUC I") to help ascertain the meaning of the term
   "telecommunications service" in 47 U.S.C. S: 153(46)). See also, United
   States Telecom Ass'n. v. FCC, 295 F.3d 1326 (D.C. Cir. 2002); Southwestern
   Bell Telephone Co. v. FCC, 19 F.3d 1475 (D.C. Cir. 1994); National
   Association of Regulatory Utility Commissioners v. FCC, 533 F.2d 601 (D.C.
   Cir. 1976) ("NARUC II").

   We recognize that "[o]ne may be a common carrier though the nature of the
   service rendered is sufficiently specialized as to be of possible use to
   only a fraction of the total population." NARUC I, 525 F.2d at 608.
   Nevertheless, the fact that the Competitive Carriers have, to date,
   provided telecommunications only to their own affiliates has significant
   probative value concerning whether the Competitive Carriers have held
   themselves out publicly to all potential customers.

   There apparently is one exception: Comcast's Competitive Carrier in
   Pennsylvania did file a tariff regarding the telecommunications at issue
   here. Comcast's Supplemental Statement, File No. EB-08-MD-002 (filed Mar.
   10, 2008) at 5, 12 n.41 (and attachments referenced therein). That tariff
   has yet to be approved by the Pennsylvania Public Service Commission,
   however, and Comcast's 16 other Competitive Carriers lack such tariffs.
   See, e.g., Comcast's Supplemental Statement at 4-5, 12 n.41, 14-15 (and
   attachments referenced therein). Moreover, Comcast did not submit this
   evidence with the Complaint or the Reply, as it should have. See 47 C.F.R.
   S:S: 1.721(a)(5), 1.726(e); Complainants' Reply to Defendant's Answer and
   Separate Statement, File No. EB-08-MD-002 (filed Feb. 29, 2008) ("Reply").
   Therefore, we accord little significance to this evidence.

   See generally Appropriate Framework for Broadband Access to the Internet
   Over Wireline Facilities, Report and Order and Notice of Proposed
   Rulemaking, 20 FCC Rcd 14853, 14901, P: 90 (2005) (subsequent history
   omitted) (holding that wireline broadband providers that choose to offer
   the transmission component of a wireline broadband Internet access service
   as a telecommunications service may do so without filing tariffs setting
   forth the rates, terms, and conditions under which they will provide that
   transmission, but only if the providers "include those rates, terms, and
   conditions in generally available offerings posted on their websites");
   Consolidated Communications of Fort Bend Co. v. Public Utility Commission
   of Texas, 497 F.Supp.2d 836, 845-46 (W.D. Tex. 2007) (holding that Sprint
   provided "telecommunications services," based, in part, on the fact that
   Sprint advertised its wholesale interconnection service "over the
   Internet, through product brochures, and at relevant industry trade
   shows").

   See, e.g., Complaint at 2-4; Complaint at Ex. B, P:P: 8-27, 45-61;
   Complaint at Ex. E, P:P: 2-3; Comcast's Supplemental Statement at 2-15
   (and attachments referenced therein); Bright House Network's Supplemental
   Statement, File No. EB-08-MD-002 (filed Mar. 10, 2008) at 6-10 (and
   attachments referenced therein).

   See, e.g., 47 U.S.C. S:153(44) ("A telecommunications carrier shall be
   treated as a common carrier under this Act only to the extent that it is
   engaged in providing telecommunications services...."); Southwestern Bell
   v. FCC, 19 F.3d at 1481.

   The Comcast Competitive Carriers have tariffs, but those tariffs do not
   pertain to the telecommunications at issue here, so they lack probative
   value for the same reasons applicable to the state certificates and
   interconnection agreements. See, e.g., Comcast's Supplemental Statement at
   14-15.

   Comcast's Supplemental Statement at 2-15 (and attachments referenced
   therein); Bright House Network's Supplemental Statement at 6-10 (and
   attachments referenced therein).

   See generally Thibodeaux v. Executive Jet Int'l, Inc., 328 F.3d 742, 750
   (5th Cir. 2003) (noting that the test for common-carrier status "is an
   objective one, relying upon what the carrier actually does rather than
   upon the label which the carrier attaches to its activity or the purpose
   which motivates it") (internal quotation marks omitted).

   47 U.S.C. S: 222(a).

   See, e.g., Complaint at 28-30; Reply at 42-43.

   We need not and do not reach whether the LSRs contain "proprietary
   information" within the meaning of section 222(a).

   Complaint at 30-31; Reply at 44-45. See 47 U.S.C. S: 201(b) (providing
   that "any charge, practice, classification, or regulation that is unjust
   or unreasonable is hereby declared to be unlawful").

   Complaint Ex. T; see Answer at 56.

   See In the Matter of Implementation of the Telecommunications Act of 1996,
   Amendment of Rules Governing Procedures to Be Followed When Formal
   Complaints are Filed Against Common Carriers, Second Report and Order, 13
   FCC Rcd 17018 (1998).

   CPNI Reconsideration Order, 14 FCC Rcd at 14450, P: 78.

   Id. at 14450, P: 79

   See, e.g., Promotion of Competitive Networks in Local Telecommunications
   Markets,  Report and Order, 2008 WL 762860 (Mar. 21, 2008) at P: 2 (noting
   that 1996 Telecommunications Act was designed to eliminate barriers to
   facilities-based competition); In the Matter of Unbundled Access to
   Network Elements, Order on Remand, 20 FCC Rcd 2533, 2535, P: 3 (2005)
   (subsequent history omitted) (adopting rules intended to "spread the
   benefits of facilities-based competition to all consumers"); Review of the
   Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, 
   Report and Order on Remand and Further Notice of Proposed Rulemaking, 18
   FCC Rcd 16978, 17025, P: 70 (2003) (noting that facilities-based
   competition serves the Act's overall goals) (subsequent history omitted);
   In the Matter of Performance Measurements and Standards for Unbundled
   Network Elements and Interconnection, Notice of Proposed Rulemaking, 16
   FCC Rcd 20641, 20644-45, P: 5 (2001) (subsequent history omitted) (stating
   that "facilities-based competition, of the three methods of entry mandated
   by the Act, is most likely to bring consumers the benefits of competition
   in the long run"); Time Warner Wholesale Services Order, 22 FCC Rcd at
   3519, P: 13 (referring to Commission's goal of promoting facilities-based
   competition).

   Indeed, the rules we have relied on in the transition from a monopoly
   environment to a competitive environment may not apply, or even make
   sense, in a vigorously competitive environment where the former monopoly
   may even find itself dealing with potential "bottlenecks" caused by
   incumbent providers of other services in the bundled offering.

   See Petition of Verizon for Declaratory Ruling Confirming That Incumbent
   Cable Companies Must Accept Subscriber Cancellation Orders When Delivered
   by Competitive Multichannel Video Programming Distributors as Lawful
   Agents (filed Mar. 26, 2008) ("Verizon Petition").

   See Verizon Petition at 5.

   See id.

   Verizon Petition at 11.

   47 U.S.C. S: 548(b).

   47 U.S.C. S: 157 nt.

   47 U.S.C. S: 521(6).

   47 U.S.C. S: 151.

   See, e.g., MDU Video Nonexclusivity Order at P: 19; Promotion of
   Competitive Networks in Local Telecommunications Markets, WT Docket No.
   99-217, FCC 08-87, Report and Order, P:P: 5, 9 (rel. Mar. 21, 2008) ("MTE
   Nonexclusivity Order").

   1998 Slamming Order, 14 FCC Rcd at 1572, 1575-76, P:P: 106, 109; CPNI
   Reconsideration Order, 14 FCC Rcd at 14449-50, P: 77-8; CPNI 3rd Report &
   Order,  17 FCC Rcd at 14918-19, P:P: 131, 134; Third Slamming
   Reconsideration Order,  18 FCC Rcd at 5110, P:P: 26, 28.

   Compare Exclusive Service Contracts for Provision of Video Services in
   Multiple Dwelling Units and Other Real Estate Developments, Report and
   Order and Further Notice of Proposed Rulemaking, 22 FCC Rcd 20235, P: 44
   (2007) ("MDU Video Nonexclusivity Order"), appeal pending sub nom.
   National Cable & Telecommunications Ass'n v. FCC, No. 08-1016 (D.C. Cir.)
   with MTE Nonexclusivity Order; see also note 78, infra (citing four orders
   establishing similar regulatory frameworks for broadband provided over
   four different platforms).

   47 U.S.C. S: 548(b).

   See 47 U.S.C. S: 151; National Cable & Telecommunications Ass'n v. Brand X
   Internet Servs., 545 U.S. 967, 976 (2005) ("Brand X") ("Information
   service providers, by contrast, are not subject to mandatory
   common-carrier regulation under Title II, though the Commission has
   jurisdiction to impose additional regulatory obligations under its Title I
   ancillary jurisdiction to regulate interstate and foreign communications .
   . . .").

   As to one particular type of voice service, the Commission has not
   determined whether interconnected VoIP is a telecommunications service or
   an information service, but has found in either event that it is subject
   to the Commission's jurisdiction under Title I or also Title II. See,
   e.g., Implementation of the Telecommunications Act of 1996:
   Telecommunications Carrier's Use of Customer Proprietary Network
   Information and Other Customer Information, Report and Order and Further
   Notice of Proposed Rulemaking, 22 FCC Rcd 6927 P: 54 (2007), pet. for
   review pending sub nom. National Cable & Telecommunications Ass'n v. FCC,
   No. 07-1312 (D.C. Cir.).

   The Commission has held that several different types of broadband Internet
   access services are information services, including wireline, cable modem,
   powerline, and wireless-based services.  See Appropriate Regulatory
   Treatment for Broadband Access to the Internet Over Wireless Networks,
   Declaratory Ruling, 22 FCC Rcd 5901 (2007); Appropriate Framework for
   Broadband Access to the Internet over Wireline Facilities, Report and
   Order and Notice of Proposed Rulemaking, 20 FCC Rcd 14853 (2005) (Wireline
   Broadband Internet Access Services Order), aff'd, Time Warner Telecomms.
   Inc. v. FCC, 507 F.3d 205 (3d Cir. 2007); Inquiry Concerning High-Speed
   Access to the Internet Over Cable and Other Facilities; Internet Over
   Cable Declaratory Ruling; Appropriate Regulatory Treatment for Broadband
   Access to the Internet Over Cable Facilities, Declaratory Ruling and
   Notice of Proposed Rulemaking, 17 FCC Rcd 4798 (2002) (Cable Modem
   Declaratory Ruling), aff'd, Brand X, 545 U.S. at 967; United Power Line
   Council's Petition for Declaratory Ruling Regarding the Classification of
   Broadband over Power Line Internet Access Service as an Information
   Service, Memorandum Opinion and Order, 21 FCC Rcd 13281 (2006).  These
   services are subject to Commission jurisdiction. See supra note 76.

   Cf. 47 C.F.R. S: 64.1120(a)(1) ("No submitting carrier shall submit a
   change on the behalf of a subscriber in the subscriber's selection of a
   provider of telecommunications service prior to obtaining . . .
   [a]uthorization from the subscriber; and . . . [v]erification of that
   authorization . . . ."); id. S: 64.1130(a) ("A telecommunications carrier
   may use a written or electronically signed letter of agency to obtain
   authorization . . . ."); see also Verizon Petition.

   47 U.S.C. S:S: 154(i), 154(j), 201(b), 208, 222, and 303(r).

   47 C.F.R. S:S: 1.720-1.736.

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   Federal Communications Commission DA 08-860