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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
In the Matter of ) File No. EB-09-TC-458
Verizon Wireless ) Account No. 201132170001
Data Usage Charges ) FRN 0019212406
)
)
CONSENT DECREE
The Enforcement Bureau of the Federal Communications Commission and Cellco
Partnership d/b/a Verizon Wireless, by their authorized representatives,
hereby enter into this Consent Decree for the purpose of terminating the
Bureau's Investigation into potential violations of Section 201(b) of the
Communications Act of 1934, as amended (the "Act"), and Section 64.2401 of
the Commission's Rules.
I. DEFINITIONS
1. For the purposes of this Consent Decree, the following definitions
shall apply:
a. "Act" means the Communications Act of 1934, as amended, 47 U.S.C. S:
151 et seq.
b. "Adopting Order" means an Order of the Bureau adopting the terms of
this Consent Decree without change, addition, deletion, or
modification.
c. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
d. "Commission" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
e. "Consumer Commitments and Business Initiatives" means the obligations
that Verizon Wireless has agreed to undertake to address customer
billing issues as set forth at paragraph 8 of this Consent Decree.
f. "Customer Service Employees" means Verizon Wireless employees or
contractors whose primary job responsibility involves responding to
customer inquiries and complaints, whether via calls to Verizon
Wireless's customer care toll-free phone number, or via the Internet,
and their supervisors.
g. "Effective Date" means the date on which the Bureau releases the
Adopting Order.
h. "Investigation" means the inquiry undertaken by the Enforcement Bureau
regarding the Company's compliance with Section 201(b) of the Act, 47
U.S.C. S: 201(b), and Section 64.2401 of the Rules, 47 C.F.R. S:
64.2401, in connection with the Verizon Wireless $1.99 per megabyte
("MB") data usage charge to Paygo Customers (as defined below), in
File No. EB-09-TC-458.
i. "Parties" means Verizon Wireless and the Bureau, each of which is a
"Party."
j. "Paygo Customers" means those Verizon Wireless customers who are
billed for all of their data usage at a rate of $1.99 per MB on a
pay-as-you-go basis.
k. "Verizon Wireless" or "Company" means Cellco Partnership d/b/a Verizon
Wireless and its predecessors-in-interest and successors-in-interest.
l. "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
II. BACKGROUND
2. In response to consumer complaints and press reports that some Verizon
Wireless customers had observed unexpected data charges on their
bills, the Enforcement Bureau initiated an Investigation into the
potential overcharges. Specifically, on January 14, 2010, the Bureau
issued a Letter of Inquiry ("LOI") to Verizon Wireless seeking
detailed information about Verizon Wireless's $1.99 per MB data usage
charge for certain customers. The Bureau sought to assess whether
violations of Section 201(b) of the Act, which prohibits common
carriers from engaging in unjust and unreasonable practices, or of the
Commission's truth-in-billing rules, had occurred. The Bureau's
Investigation followed an initial letter by the Commission's Wireless
Telecommunications Bureau and Consumer and Governmental Affairs Bureau
seeking information about Verizon Wireless Mobile Web charges.
3. Verizon Wireless responded to the Bureau's January LOI on March 1,
2010, and supplemented its response on March 15, April 9, April 23,
and September 10, 2010. To clarify the record further, the Bureau
issued a second LOI to Verizon Wireless on July 1, 2010. Verizon
Wireless responded to the second LOI on August 2, 2010, supplementing
its responses on August 27, September 1, 22, and 30, and October 1,
2010. On September 30, 2010, Verizon Wireless reported that it had
concluded a comprehensive, internal investigation concerning the data
charges and was able to make representations regarding the scale and
scope of the underlying problems.
4. The Bureau and the Company entered into several tolling agreements to
extend the statute of limitations for taking enforcement action for
potential violations of the Act and Rules under investigation and to
enable the Parties to engage in negotiations regarding a potential
resolution of the Investigation through a consent decree. Verizon
Wireless and the Bureau agree that this Consent Decree constitutes a
settlement of the Investigation. This Consent Decree does not
constitute either an adjudication on the merits, or a factual or legal
finding or determination regarding any compliance or noncompliance
with, or applicability of, the Act or the Rules.
III. TERMS OF AGREEMENT
5. Adopting Order. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Bureau by
incorporation of such provisions by reference in the Adopting Order
without change, addition, modification, or deletion.
6. Effective Date; Violations. The Parties agree that this Consent Decree
shall become effective on the Effective Date as defined herein. Upon
the Effective Date, the Adopting Order and this Consent Decree shall
have the same force and effect as any other order of the Commission.
Any violation of the Adopting Order or of the terms 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.
7. Termination of Investigation. In express reliance on the covenants and
representations in this Consent Decree and to avoid further
expenditure of public resources, the Bureau agrees to terminate the
Investigation. In this regard, Verizon Wireless represents that: (i)
the Company conducted a comprehensive, good-faith, internal
investigation into whether Paygo Customers had been incorrectly billed
for data usage; (ii) based on the internal investigation, the Company
has concluded that the majority of the erroneous charges involved data
exchanges caused by third-party software built into certain customers'
phones, while other charges resulted from, inter alia, customers
accessing certain web links that should not have incurred charges,
devices that incurred charges for attempts to access data when there
was insufficient network coverage to complete the transfer, and
unwanted third-party data transfers affecting customers with content
filters; (iii) based on the internal investigation, the Company has
further determined that a total of approximately 15 million Paygo
Customers were, or may have been, erroneously billed for data usage
from November 2007 to the Effective Date; and (iv) based on the
internal investigation, including a review of billing records and
other relevant data, the Company estimates that the total amount of
the refunds and credits that should be paid to those Paygo Customers
is approximately $52.8 million. In consideration for the termination
of the Investigation, Verizon Wireless agrees to the terms,
conditions, and procedures contained herein. The Bureau agrees that
absent new material evidence that the Company's representations
contained herein are inaccurate, it will not use the facts developed
in the Investigation through the Effective Date, or the existence of
this Consent Decree, to institute on its own motion or refer to the
Commission, any new proceeding, formal or informal, or to take on its
own motion or refer to the Commission, any action against Verizon
Wireless concerning the matters that were the subject of the
Investigation or with respect to Verizon Wireless's basic
qualifications, including its character qualifications, to be a
Commission licensee or hold Commission authorizations.
8. Consumer Commitments and Business Initiatives. Verizon Wireless agrees
that it has taken, or shall take, reasonable, affirmative steps to
cease applying the mistaken data charges identified in the Company's
internal investigation. The Company further agrees that it has
implemented, or shall implement, the following actions as required
below, which are designed to ensure prompt refunds to certain Paygo
Customers, as set forth at paragraph 8(b) below, enhanced training of
Verizon Wireless employees regarding data charges, and changes to its
business practices. The provisions of this paragraph 8 shall remain in
effect for two (2) years from the Effective Date.
(a) Immediate Actions. No later than ten (10) business days after the
Effective Date, Verizon Wireless shall have implemented or shall begin
implementing the following actions:
i. providing new customer service materials, including scripts, to
assist Customer Service Employees in responding to questions from
customers regarding the Credit/Refund Plan, as set forth below in
paragraph 8(b). Customer Service Employees shall be provided
information regarding, among other things, (1) the manner in which
the credits or refunds will be made, (2) how credits will be
reflected on customer bills, (3) the availability of new popup
windows in certain systems to remind Customer Service Employees about
the Credit/Refund Plan, and (4) the timing of the Credit/Refund Plan.
ii. establishing for certain categories of Paygo Customers a monthly
data usage allowance of no less than 50 kilobytes, below which no
per MB data charges apply, for at least ninety (90) days after the
Effective Date.
iii. posting information in an easily-accessible location on its website
for customers explaining the Credit/Refund Plan and how Paygo
Customers can manage their data usage, including the availability
of data blocks.
(b) Customer Credit/Refund Plan. Verizon Wireless shall make a good faith
effort to refund incorrect $1.99 per MB charges to Affected Customers.
Within forty-five (45) days after the Effective Date, Verizon Wireless
shall provide credits or refunds to those existing and former Paygo
Customers it has identified pursuant to its internal investigation (as
described in paragraph 7 above) who were, or may have been, incorrectly
billed $1.99 per MB for data usage from November 2007 through the
Effective Date and who have not previously received a credit or refund for
all such overcharges ("Affected Customers"), pursuant to paragraph
8(b)(i). Verizon Wireless shall also provide additional credits or refunds
pursuant to paragraph 8(b)(ii), separate and apart from the estimate
provided in paragraph 7. If Verizon Wireless becomes aware of additional
categories of Paygo Customers who were mistakenly charged a $1.99 per MB
fee, it shall provide refunds or credits to those customers.
i. Issuance of Credits/Refunds to Affected Customers. Verizon Wireless
shall distribute to the approximately 15 million Affected Customers
credits or refunds totaling approximately $52.8 million as described
in this paragraph 8(b)(i). Verizon Wireless shall (1) provide to
Affected Customers a credit on the bill issued to them during the
October or November bill cycle, or a refund in the form of a check,
and (2) provide to former Affected Customers a refund in the form of
a check. The bills on which Affected Customers receive credits, or
refund notices, shall include a statement that explains that the
credit is being issued because the customer may have been mistakenly
billed for data usage.
ii. Customer-Initiated Data Charges Review. Should any Paygo Customer
contact Verizon Wireless after the Company has completed the
credit/refund process described in this paragraph 8 asserting that
he or she should have received a credit or refund under paragraph
8(b)(i) but did not, Verizon Wireless shall promptly initiate a
review of the customer's past data usage and charges to determine
whether he or she is entitled to a reimbursement, and if so, Verizon
Wireless shall issue a credit or refund. Verizon Wireless shall seek
in good faith to resolve such requests within thirty (30) days after
the Company has the necessary information, either from its own
databases or from the customer. If a customer is dissatisfied with
the resolution of his or her request, the request shall be promptly
escalated to the Data Charge Task Force discussed in paragraph 8(e)
below.
iii. Credit/Refund Reporting. Within three (3) months after the
Effective Date, Verizon Wireless shall provide to the Bureau a
report on the specific amount actually reimbursed and/or credited
pursuant to this paragraph 8(b), and the number of customers who
received such credits and/or reimbursements ("Initial Reimbursement
Report"). Within six (6) months after the Effective Date, Verizon
Wireless shall provide a Final Reimbursement Report that shall
identify the specific amount of any additional credits and/or
reimbursements provided and the number of customers who received
such credits and/or reimbursements based on Verizon Wireless's
actions as set forth above.
(c) Revised Customer Service Training Materials. Within sixty (60) days
after the Effective Date, Verizon Wireless shall develop for all Customer
Service Employees additional training materials relating to data charges
for Paygo Customers. At a minimum, these materials shall:
i. include detailed information about (1) the circumstances under which
a Paygo Customer may incur a $1.99 per MB data usage charge; (2)
whether the charge is imposed for application downloads; (3) whether
the charge is imposed for browsing or other data usage; (4) how
Customer Service Employees can access information to answer questions
from Paygo Customers about the basis for data usage charges,
including the date, time, and amount of data used, if that
information is sufficiently recent to be available in the billing
system; (5) how credits should be given or checks issued to Paygo
Customers who question their data usage charges when a review of the
customer's charges shows that a credit should be applied; (6) how
such information will be made available for Spanish-speaking Paygo
Customers; and (7) the availability of the online bill tutorial
created pursuant to paragraph 8(g) below;
ii. instruct Customer Service Employees to escalate complaints or
questions when the Customer Service Employee lacks access to the
data required to address the question or complaint;
iii. instruct Customer Service Employee supervisors who regularly
monitor calls to Customer Service Employees and track the issues
raised in those calls, to include in their monthly tracking reports
any issues relating to complaints about per MB data charges from
Paygo Customers and communicate all such issues to the Data Charge
Task Force to be established under paragraph 8(e) below;
iv. instruct Customer Service Employees to offer data blocks as an
option to Paygo Customers who ask how to avoid or reduce per MB data
usage charges, and instruct Customer Service Employees that they are
not discouraged from suggesting data blocks when appropriate.
(d) Training of Customer Service Employees. Within ninety (90) days after
the Effective Date, Verizon Wireless shall train all Customer Service
Employees on the range of data usage options, including data blocks, and
on resolving Paygo Customer complaints related to data usage. The training
shall include, at a minimum, the information specified in the customer
service training materials described in paragraph 8(c). Such training
shall be provided to each new Customer Service Employee prior to the date
that he or she first takes calls from customers or otherwise responds to
customers' inquiries or questions by him or herself. Verizon Wireless
shall provide additional training as warranted to address per MB data
charge issues identified by the Data Charge Task Force. In addition,
Verizon Wireless shall provide a communication to all managers of
Company-owned stores that contains the information set forth in the
training materials developed under paragraph 8(c), as modified for store
operations. Managers shall be directed to communicate such information to
customer-facing store employees.
e. Data Charge Task Force. Within thirty (30) days after the Effective
Date, Verizon Wireless shall establish a Data Charge Task Force ("Task
Force") and specify a Task Force leader who will report directly to
the Staff Vice President of Customer Service Operations. The Task
Force's responsibilities shall include: (i) reviewing customer appeals
of refund denials as described in paragraph 8(b); (ii) addressing
issues regarding complaints from Paygo Customers brought to their
attention as set forth in paragraph 8(c); and (iii) ensuring Customer
Service Employees are notified of any widespread or systemic billing
errors relating to per MB data usage charges. The Task Force shall
include an appropriate number of employees who are fluent in Spanish.
All complaints referred to Verizon Wireless through the Federal
Communications Commission, any state public utilities commission, any
state Attorney General's office, or the Better Business Bureau in
which a Paygo Customer disputes a per MB data usage charge shall be
sent to the Task Force, which shall be responsible for ensuring that
the complaint is addressed in writing as promptly as possible and in
any event within thirty (30) days of receipt by the Company. Verizon
Wireless shall file a Complaint Response Report with the Bureau every
six (6) months after the Effective Date, for a period of two (2)
years, which discloses and describes each complaint referred to the
Task Force and its disposition, explaining the reasons for any
denials.
(f) Plain-Language Explanation of Data Charges and Data Tracking Tools.
Within ninety (90) days after the Effective Date, for existing Paygo
Customers, and on an ongoing basis for new Paygo Customers, Verizon
Wireless shall begin providing a plain-language description of: (i) the
circumstances under which a Paygo Customer may incur a $1.99 per MB charge
for data usage; (ii) whether the charge is imposed for application
downloads; (iii) whether the charge is imposed for browsing or other data
usage; (iv) how customers may get additional information about the basis
for data usage charges (e.g., by phone or online); (v) the free tools that
are available both online and on the wireless device for tracking data
usage (e.g., the MyVerizon usage meter that provides the amount of data
usage incurred during a bill cycle, and the #DATA feature that provides
data usage information to customers directly on their devices); and (vi)
the availability and location of an online bill tutorial created pursuant
to paragraph 8(g) below. This communication shall be provided as follows:
(1) Existing Customers: in a written bill insert for Paygo Customers
receiving paper bills, and either an online bill message or a separate
mailing to Paygo Customers who receive online bills. The process of
sending written bill inserts to existing Paygo Customers receiving paper
bills shall be completed within one hundred and twenty (120) days after
the Effective Date.
(2) New Customers: in the welcome letter to new Paygo Customers who
receive paper welcome letters, or as part of the online welcome notice to
new Paygo Customers who receive welcome letters online or via e-mail.
(3) Spanish-speaking Customers: Verizon Wireless shall provide any bill
insert, online message, welcome message, or other communication in Spanish
to all customers who have elected to receive their bills in Spanish, or
who request a bill in Spanish.
(g) Online Bill Tutorial. Within sixty (60) days after the Effective Date,
Verizon Wireless shall include in an easily-identifiable location on its
website an online video tutorial explaining in detail the types of charges
that may be reflected on customer bills and how customers can obtain
additional information about such charges and their bills. A
Spanish-language version of the tutorial shall be available for
Spanish-speaking customers. The communications described in paragraph 8(f)
shall reference the availability of an online bill tutorial and explain
where customers can find the tutorial on Verizon Wireless's website.
9. Compliance Reports. Verizon Wireless shall submit Compliance Reports
to the Bureau within three (3), six (6), twelve (12), eighteen (18),
and twenty-four (24) months after the Effective Date. The Company also
shall disclose any failure to comply with the terms and conditions of
this Consent Decree within fifteen (15) business days after discovery
of such failure to comply.
(a) Each Compliance Report shall describe the Company's actions to comply
with the terms of the Consent Decree and shall include a compliance
certificate from an officer, as an agent of the Company, stating that the
officer has personal knowledge that the Company has complied with each
term of the Consent Decree, including the Consumer Commitments and
Business Initiatives, at all times since the Effective Date. If the
officer is not able to so certify, he or she shall explain fully the
reasons therefor.
(b) All Compliance Reports and other disclosures required by this Consent
Decree shall be in writing and shall be directed to the Chief,
Telecommunications Consumers Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, S.W., Washington, DC 20554.
The certification must comply with Section 1.16 of the Rules and must be
substantially in the form set forth therein.
10. Voluntary Contribution. Verizon Wireless agrees to make a voluntary
contribution to the U.S. Treasury in the amount of twenty-five million
dollars ($25,000,000). The payment must be made by check or similar
instrument, payable to the order of the Federal Communications
Commission within five (5) days after the Adopting Order becomes a
final order. The payments must include the Account Number and FRN
Number referenced in the caption of the Adopting Order. Payment by
check or money order may be mailed to the 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. Payment by
wire transfer may be made to ABA Number 021030004, receiving bank
TREAS/NYC, and account number 27000001. Verizon Wireless shall also
send electronic notification on the date said payment is made to the
Chief, Telecommunications Consumers Division, Enforcement Bureau,
Federal Communications Commission.
11. Waivers. Verizon Wireless 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, provided the Bureau issues an
order adopting the Consent Decree without change, addition,
modification, or deletion. Verizon Wireless shall retain the right to
challenge Commission interpretation of the Consent Decree or any terms
contained herein. If either Party (or the United States on behalf of
the Commission) brings a judicial action to enforce the terms of the
Adopting Order or Consent Decree, neither Verizon Wireless nor the
Commission shall contest the validity of the Consent Decree or the
Adopting Order, and Verizon Wireless shall waive any statutory right
to a trial de novo. Verizon Wireless hereby agrees to waive any claims
it may otherwise have under the Equal Access to Justice Act, 5 U.S.C.
S: 504 and 47 C.F.R. S: 1.1501 et seq., relating to the matters
addressed in this Consent Decree.
12. Subsequent Rule or Order. The Parties agree that if any provision of
this Consent Decree conflicts with any subsequent Rules or orders
adopted by the Commission (except an order specifically intended to
revise the terms of this Consent Decree to which Verizon Wireless does
not expressly consent), this Consent Decree shall be amended in a
manner consistent with the future Rules or orders.
13. Successors and Assigns. Verizon Wireless agrees that the provisions of
this Consent Decree shall be binding on its successors, assigns, and
transferees.
14. Final Settlement. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement between the Parties to the
Investigation.
15. Modifications. This Consent Decree cannot be modified or amended
without the advance written consent of both Parties.
16. Paragraph Headings. The headings of the paragraphs in this Consent
Decree are inserted for convenience only and are not intended to
affect the meaning or interpretation of this Consent Decree.
17. Authorized Representative. Each Party represents and warrants to the
other that it has full power and authority to enter into this Consent
Decree.
18. Section 208 Complaints; Subsequent Investigations. Nothing in this
Consent Decree shall prevent the Commission or its delegated authority
from adjudicating complaints filed pursuant to Section 208 of the Act
against Verizon Wireless or its affiliates for alleged violations of
the Act, or for any other type of alleged misconduct, regardless of
when such misconduct took place. The Commission's adjudication of any
such complaint will be based solely on the record developed in that
proceeding. Except as expressly provided in this Consent Decree, this
Consent Decree shall not prevent the Commission from investigating
evidence of noncompliance by Verizon Wireless of the Act or the Rules.
19. Invalidity. In the event that this Consent Decree in its entirety 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.
20. Counterparts. This Consent Decree may be signed in any number of
counterparts (including by facsimile), each of which, when executed
and delivered, shall be an original, and all of which counterparts
together shall constitute one and the same fully executed instrument.
__________________________________________
P. Michele Ellison
Chief, Enforcement Bureau
Federal Communications Commission
__________________________________________
Date
__________________________________________
John T. Scott, III
Vice President - Deputy General Counsel
Verizon Wireless
__________________________________________
Date
47 C.F.R. S: 1.16.
Federal Communications Commission DA 10-2068
3
Federal Communications Commission DA 10-2068