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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
In the Matter of
)
Verizon
) File No. EB-09-TC-228
Compliance with the Commission's
) NAL/Acct. No. 201032170003
Rules and Regulations Governing
Customer ) FRN: 0016304214
Proprietary Network Information )
)
)
ADOPTING ORDER
Adopted: June 25, 2010 Released: June 28, 2010
By the Chief, Enforcement Bureau:
1. In this Order, we adopt the attached Consent Decree entered into
between the Enforcement Bureau of the Federal Communications
Commission ("Bureau") and Verizon. The Consent Decree terminates an
investigation initiated by the Bureau regarding Verizon's compliance
with section 222(c)(1) of the Communications Act of 1934, as amended
("Communications Act" or "Act"), 47 U.S.C. S: 222(c)(1), and section
64.2007 of the Commission's rules, 47 C.F.R. S: 64.2007.
2. The Bureau and Verizon have negotiated the terms of a Consent Decree
that would resolve these matters 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. We also conclude that, in the absence
of material new information not previously disclosed to the
Commission, the matters raised in the investigation do not raise any
substantial and material questions of fact regarding Verizon's
qualifications to be a Commission licensee.
4. Accordingly, IT IS ORDERED, pursuant to Section 4(i) of the
Communications Act of 1934, as amended, that the attached Consent
Decree IS ADOPTED.
5. IT IS FURTHER ORDERED that the above-captioned matter IS TERMINATED.
FEDERAL COMMUNICATIONS COMMISSION
P. Michele Ellison
Chief, Enforcement Bureau
Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
In the Matter of
)
Verizon
) File No. EB-09-TC-228
Compliance with the Commission's
) NAL/Acct. No. 201032170003
Rules and Regulations Governing
Customer ) FRN: 0016304214
Proprietary Network Information )
)
)
CONSENT DECREE
I. INTRODUCTION
1. The Enforcement Bureau ("Bureau") of the Federal Communications
Commission and Verizon, by their authorized representatives, hereby
enter into this Consent Decree for the purpose of terminating the
Bureau's investigation regarding Verizon's compliance with section
222(c)(1) of the Communications Act of 1934, as amended
("Communications Act" or "Act"), 47 U.S.C. S: 222(c)(1), and section
64.2007 of the Commission's rules, 47 C.F.R. S: 64.2007.
II. BACKGROUND
2. On January 27, 2009, pursuant to section 64.2009(f) of the Commission's
rules, Verizon filed a notice with the Commission reporting failures in
its opt-out mechanism for obtaining customers' approval for use of their
customer proprietary network information ("CPNI"). The notice stated that,
on January 16, 2009, Verizon discovered that the total number of opt-out
customers compiled by its vendor was greater than the number in its
database by approximately 3,400. This discrepancy was attributed to the
absence of opt-out records in the database from three weeks in 2004 (July
6, July 13 and November 18) and four weeks in 2008 (April 22 through May
13).
3. On March 4, 2009, the Bureau sent a Letter of Inquiry ("LOI") to
Verizon. Verizon submitted its response to the LOI on April 17, 2009.
III. DEFINITIONS
4. For purposes of this Consent Decree, the following definitions shall
apply:
a. "Act" means the Communications Act of 1934, as amended.
b. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
c. "Commission" or "FCC" means the Federal Communications Commission.
d. "Effective Date" means the date on which the Commission releases the
Adopting Order.
e. "Investigation" means the investigation commenced by the Bureau's
March 4, 2009 Letter of Inquiry to Verizon.
f. "Order" or "Adopting Order" means an Order of the Bureau adopting the
terms and conditions of this Consent Decree without change, addition,
or modification, and formally terminating the above-captioned
Investigation.
g. "Parties" means Verizon and the Bureau.
h. "Significant Account Change" means the change or creation of a
password, customer response to a back-up means of authentication for
lost or forgotten passwords, online account, or address of record.
i. "Verizon" means the regulated, wholly owned subsidiaries of Verizon
Communications, Inc. and their successors and assigns.
IV. AGREEMENT
5. Verizon agrees that the Commission has jurisdiction over it and the
subject matters contained in this Consent Decree and the authority to
enter into and adopt this Consent Decree.
6. 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 to avoid the
potential expenditure of additional public resources, the Bureau agrees to
terminate the Investigation. In consideration for the termination of this
matter and in accordance with the terms of this Consent Decree, Verizon
agrees to the terms, conditions, and procedures contained herein.
7. 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 Verizon 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, Verizon does not admit or
deny any noncompliance, violation, or liability associated with or arising
from its actions or omissions involving the Act or the Commission's rules
that are the subject of this Consent Decree.
8. In consideration for the termination of the Investigation in accordance
with the terms of this Consent Decree, Verizon agrees to make a voluntary
contribution to the United States Treasury, without further protest or
recourse to a trial de novo, in the amount of ninety thousand dollars
($90,000) within thirty (30) days after the Effective Date. This voluntary
payment does not constitute a fine or penalty for, or admission of, the
violation of any law. The payment must be made by check or similar
instrument, payable to the Order of the Federal Communications Commission.
The payment must include the Account Number and FRN Number referenced in
the caption to the Adopting Order. Payment by check or money Order may be
mailed to Federal Communications Commission, P.O. Box 979088, St. Louis,
MO 63197-9000. Payment by overnight mail may be sent to U.S. Bank -
Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis,
MO 63101. Payments by wire transfer may be made to ABA Number 021030004,
receiving bank Federal Reserve Bank of New York, and account number
27000001.
Compliance Plan
9. To resolve and terminate the Investigation, and to ensure compliance
with the Commission's CPNI opt-out rules, Verizon agrees to implement the
following Compliance Plan ("Plan"). The Plan shall be applicable to the
following companies with respect to those customers that are provided
opt-out notification pursuant to 47 C.F.R. S:S: 64.2007 - 64.2009: Verizon
Delaware LLC, Verizon Maryland Inc., Verizon Pennsylvania Inc., Verizon
Virginia Inc., Verizon West Virginia Inc., Verizon Washington, DC Inc.,
Verizon New Jersey Inc., Verizon New England Inc., Verizon New York Inc.,
GTE Midwest Incorporated, Verizon South Inc., Verizon Florida LLC, GTE
Southwest Incorporated (d/b/a Verizon Southwest), Contel of the South,
Inc., Verizon Northwest Inc., Verizon North Inc., Verizon California
Inc., Verizon Long Distance LLC, Verizon Select Services Inc., MCI
Communications Services, Inc. d/b/a Verizon Business Services, MCImetro
Access Transmission Services LLC d/b/a Verizon Access Transmission
Services, MCImetro Access Transmission Services of Virginia, Inc. d/b/a
Verizon Access Transmission Services of Virginia, MCImetro Access
Transmission Services of Massachusetts, Inc. d/b/a Verizon Access
Transmission Services of Massachusetts, MCI International Services, Inc.,
MCI International, Inc., Metropolitan Fiber Systems of New York, Inc.,
Teleconnect Long Distance Services & Systems Company, and TTI National
Inc.
A. Monthly Validation Tests: Verizon will perform a validation test on a
monthly basis to ensure that customer opt-out records have been
successfully transferred and added to its systems. To the extent a
validation test uncovers any customer opt-out that was not properly added
to Verizon's systems, Verizon shall take prompt action to restrict the use
of that customer's CPNI for marketing service offerings that are within a
category of service to which the customer does not already subscribe.
B. Regular Checks for Transaction Errors: Verizon agrees to undertake a
regular (at least weekly) check for transaction errors in its Significant
Account Change notifications processes and to initiate proper customer
notification, in a manner set forth by 47 C.F.R. S:64.2010(f), with
respect to any such notifications.
C. Validation Tests Prior to Material Changes: Verizon agrees that prior
to making any material changes in the systems implementing opt-out
preferences or providing Significant Account Change notifications, it
shall perform appropriate validation tests to verify proper performance of
such systems in implementing opt-out requests and distribution of
Significant Account Change notices.
D. Training: Verizon shall reinforce its existing annual CPNI training
to Database Marketing employees responsible for managing the processes by
which customer opt-outs are transferred and recorded and marketing lead
lists are created, and to those employees responsible for managing the
process by which notices of a Significant Account Change are distributed
to customers. Such training will be modified to place added focus on the
federal CPNI opt-out requirements, Significant Account Change notification
requirements, and the terms of the Compliance Plan. The Database Marketing
employees will focus on ensuring that Verizon's opt-out system and
processes comply with the CPNI rules pertaining to customer opt-outs. In
particular, the yearly training will emphasize the importance of
identifying all the opt-out elections registered through the 1-800 opt-out
mechanism and ensuring that they are properly transferred from the vendor
administering that system and incorporated into Verizon's opt-out
database.
E. Compliance Oversight: Verizon shall include CPNI Compliance as a
specific topic in Verizon's compliance management processes. Verizon's
compliance organization reviews methods and procedures, regularly assesses
the adequacy of such procedures, reviews training materials, initiates
quality observations and commissions internal audits. The compliance
organization shall identify compliance with Significant Account Change
notification requirements and with opt-out provisions.
10. Reporting Non-Compliance
Verizon shall report any non-compliance with the Compliance Plan described
in paragraph 9 to the Enforcement Bureau within thirty (30) days after the
discovery of non-compliance.
11. Compliance Review
Verizon will file a report summarizing compliance with the Compliance Plan
described in paragraph 9 within thirty (30) days after the one-year
anniversary of the Effective Date of this Consent Decree. Verizon will
file a final report on compliance with this Plan thirty (30) days prior to
the termination date of this Consent Decree. The reports shall address in
detail Verizon's compliance with each separate provision of the Compliance
Plan as described in paragraph 9 of this Consent Decree. Verizon must mail
its reports to Kimberly A. Wild, Assistant Division Chief,
Telecommunications Consumers Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, S.W., Washington, D.C. 20554,
and must include the file number listed above. Verizon will also send an
electronic copy of its reports to Kurt A. Schroeder, Acting Division
Chief, at Kurt.Schroeder@fcc.gov.
12. Term of the Plan
Verizon will implement this Compliance Plan within sixty (60) days of the
Effective Date of this Consent Decree. The terms of this Compliance Plan
will expire two (2) years after the Effective Date of this Consent Decree
or upon the termination of the opt-out requirements set forth in sections
64.2001-2009 of the Commission's rules, 47 C.F.R. S:S: 64.2001-2009,
whichever is earlier.
13. The Bureau agrees that, in the absence of new material evidence
related to these matters, it will not use the facts developed in these
matters through the Effective Date or the existence of this Consent Decree
to initiate, on its own motion, any new proceeding, formal or informal, or
take any action on its own motion against Verizon, including any other
enforcement action, nor will the Bureau seek on its own motion any
administrative or other penalties from Verizon, concerning the matters
that were the subject of the Investigation. The Bureau also agrees that it
will not use the facts developed in these matters through the Effective
Date or the existence of this Consent Decree to initiate, on its own
motion, any proceeding, formal or informal, or take any action on its own
motion against Verizon with respect to Verizon's basic qualifications,
including its character qualifications, to be a Commission licensee or
authorized common carrier. Consistent with the foregoing, nothing in this
Consent Decree limits the Commission's authority to consider and
adjudicate any complaint that may be filed pursuant to section 208 of the
Act, 47 U.S.C. S: 208, and to take any action in response to such
complaint. The Commission's adjudication of any such complaint will be
based solely on the record developed in that proceeding.
14. Verizon's decision to enter into this Consent Decree is expressly
contingent upon the Bureau's issuance of an Adopting Order. Provided the
Bureau issues an Adopting Order, Verizon waives any and all rights it may
have to seek administrative or judicial reconsideration, review, appeal or
stay, or to otherwise challenge or contest the validity of this Consent
Decree and the Adopting Order.
15. If either Party (or the United States on behalf of the Commission)
brings a judicial action to enforce the terms of the Adopting Order,
neither Verizon nor the Commission shall contest the validity of the
Consent Decree or the Adopting Order, and Verizon 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.
16. In the event that this Consent Decree is rendered invalid by a court
of competent jurisdiction, it shall become null and void and may not be
used in any manner in any legal proceeding.
17. By this Consent Decree, Verizon neither waives nor alters 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.
18. Verizon agrees that any violation of the Order or of this Consent
Decree shall constitute a separate violation of a Commission order,
entitling the Commission to exercise any rights and remedies attendant to
the enforcement of a Commission order.
19. The Parties agree that if any provision of this Consent Decree is
inconsistent with any subsequent rule or order adopted by the Commission,
that provision will be superseded by such Commission rule or order.
20. This Consent Decree may be signed in counterparts.
For: Verizon For: Enforcement Bureau
__________ _______________________ __________ ______________________
Date John Wimsatt Date P. Michele Ellison
Senior Vice President - Chief, Enforcement Bureau
Product Marketing
Verizon Services Organization Inc.
Verizon means the regulated, wholly owned subsidiaries of Verizon
Communications, Inc. and their successors and assigns.
47 U.S.C. S: 154(i).
Verizon means the regulated, wholly owned subsidiaries of Verizon
Communications, Inc. and their successors and assigns.
47 C.F.R. S: 64.2009(f) states, "Carriers must provide written notice
within five business days to the Commission of any instance where the
opt-out mechanisms do not work properly, to such a degree that consumers'
inability to opt-out is more than an anomaly." 47 C.F.R. S:64.2009(f).
See Notification Under Section 64.2009(f), CC Docket No. 96-115, Letter
from Donna Epps, Vice President, Federal Regulatory, Verizon, to Julie
Veach, Acting Chief, Competition Policy Division, Wireline Competition
Bureau, and Erica McMahon, Chief, Consumer Policy Division, Consumer &
Governmental Affairs Bureau, (filed January 27, 2009) ("January 27, 2009
Opt-Out Failure Notice").
See Letter of Inquiry from Marcy Greene, Division Deputy Chief,
Telecommunications Consumers Division, Enforcement Bureau, to Kathleen
Grillo, Vice President, Federal Regulatory Advocacy, Verizon (March 4,
2009) ("March 4, 2009 LOI").
See Letter from Kathleen M. Grillo, Vice President, Federal Regulatory,
Verizon, to Marcy Greene, Assistant Division Chief, Telecommunications
Consumers Division, Enforcement Bureau (April 17, 2009), ("April 17, 2009
Response").
On May 21, 2010, the Commission approved the application for assignment or
transfer of control of certain assets and/or telephone exchanges from
Verizon to Frontier Communications Corporation ("Frontier").
See Applications Filed by Frontier Communications Corporation and Verizon
Communications Inc. for Assignment of Transfer of Control, FCC 10-87 (rel.
May 21, 2010) ("Applications"). The Applications identify the operations
subject to transfer and include the companies Contel of the South, Inc.,
Verizon North Inc. (other than certain of its operations, including those
in Pennsylvania), Verizon Northwest Inc., Verizon West Coast Inc. and
Verizon West Virginia Inc.; certain territories within Verizon South Inc.
and Verizon California Inc.; and certain long distance customer
relationships of Verizon Long Distance LLC and Verizon Enterprise
Solutions LLC that use central office switching provided by operations in
these territories. Verizon and Frontier anticipate closing the
transaction on July 1, 2010. Frontier has told the Bureau that, after a
thorough review of both Verizon's and its own CPNI processes and
procedures, it intends to implement within the subject telephone exchanges
what it deems to be the best CPNI practices and procedures. Accordingly,
the Bureau has agreed that these companies or applicable
exchanges therein will be exempt from the instant compliance plan upon
Frontier providing the Bureau with a copy of said practices and
procedures.
Federal Communications Commission DA 10-1118
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Federal Communications Commission DA 10-1118