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Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D. C. 20554
In the Matter of )
) File No. EB-00-TC-006
AT&T Communications, Inc. )
)
Apparent Liability for Forfeiture ) NAL/Acct. No.
200132170015
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: December 21, 2000 Released:
December 21, 2000
By the Commission:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture
(NAL),1 we find that AT&T Communications, Inc. (AT&T) apparently
willfully or repeatedly violated section 258 of the
Communications Act of 1934, as amended (the Act),2 as well as
Commission rules and orders, by changing the designated preferred
carriers for 14 telephone lines without the consumers'
authorization, a practice commonly know as ``slamming.'' Based
upon our review of the facts and circumstances surrounding the
violations, we find AT&T apparently liable for a forfeiture in
the amount of $40,000 for each of 12 violations and $80,000 for
each of two violations, resulting in a total proposed forfeiture
amount of $640,000.
II. BACKGROUND
2. Section 258 of the Act makes it unlawful for any
telecommunications carrier to "submit or execute a change in a
subscriber's selection of a provider of telephone exchange
service or telephone toll service except in accordance with such
procedures as the Commission shall prescribe." 3 Pursuant to
section 258, carriers are thus barred from changing a consumer's
preferred local or long distance carrier without first complying
with the Commission's procedures, which are codified at section
64.1100 of the Commission's rules. Specifically, section 64.1150
lays out the various approved methods carriers can use to verify
consumer requests to change a preferred telephone service
provider.4 For example, a carrier may elect to use a letter of
agency (LOA) as the basis for submitting a carrier change order.
Pursuant to section 64.1160, the LOA must be signed ``by the
subscriber to the telephone line(s) requesting the preferred
carrier change.''5
3. An alternative to LOA verification involves the use of
an independent, third party to verify carrier change requests.
If a carrier elects to use this method of verification, the
carrier must ensure that ``[t]he content of the verification . .
. include[s] clear and conspicuous confirmation that the
subscriber has authorized a preferred carrier change.''6
Furthermore, section 64.1100 provides that ``[w]here a carrier is
selling more than one type of telecommunications service . . .
that carrier must obtain separate authorization from the
subscriber for each service sold.''7 This section also requires
the carrier submitting a change request to ``maintain and
preserve records of verification of subscriber authorization for
a minimum period of two years after obtaining such
verification.''8
4. During the course of this year, the Commission has
received over 1,000 consumer complaints9 alleging that AT&T has
switched the consumers' preferred telecommunications service
provider without authorization. In response to the high volume
of complaints against AT&T, Commission staff has investigated
many of the allegations contained in the complaints. This
enforcement action is based upon 12 of these consumer complaints
(see Appendix A) involving 14 telephone lines.
III. DISCUSSION
5. For purposes of assessing AT&T's apparent liability,
the Commission must determine, on the basis of the available
evidence, that 1) the complainant did not authorize a preferred-
carrier change and 2) AT&T submitted a preferred-carrier change
request to the complainant's local exchange carrier.10 The
statements contained in the 12 consumer complaints profiled in
this NAL,11 and AT&T's responses, provide strong evidence that
AT&T converted 14 consumer lines without proper authorization.
Indeed, AT&T does not dispute the consumers' statements in six of
the cases.12 Specifically, AT&T acknowledges that it did not
obtain authorization for the carrier changes alleged in the
complaints submitted by Ms. Phyllis Crawford, Mr. and Mrs. David
Scott, Mr. and Mrs. Jon Schuerholz, Mr. Bernard Hanavan, Mr.
David Dinerman, and Mr. Steven Rosenberg. In another five cases,
AT&T has failed to provide sufficient evidence to rebut the
allegations contained in the complaints submitted by Mr. and Mrs.
Greg Ortega, Mr. Thomas Patterson, Ms. Teresa Plunkett, Ms. Mari
Krumwiede and Mr. Robert Agnew. Finally, AT&T relied on an LOA
that appears to contain a forged or falsified signature as the
basis for converting two lines identified in Ms. Sophia Palacio's
complaint. Each of these complaints is discussed below.
A. Undisputed Conversions
6. In a written complaint, Ms. Crawford alleges that AT&T
switched her preferred long distance provider from MCI to AT&T
without authorization.13 Ms. Crawford states that she called
AT&T on February 25, 2000, to inquire about AT&T's local service
options. After she agreed to subscribe to AT&T's local service,
Ms. Crawford says AT&T tried to convince her to select AT&T for
her long distance service. Ms. Crawford, however, was not
interested; as she recalls stating several times during the call,
she was satisfied with MCI's calling plan and favorable
international rates to the countries she called frequently.14
Despite her explicit statements to AT&T that she was not
interested in their long distance service, AT&T nevertheless
switched Ms. Crawford's long distance service on March 2, 2000.15
Ms. Crawford states that she first learned of the conversion when
she failed to receive an expected call from an associate in
India.16 When Ms. Crawford eventually called the associate, she
learned that her MCI ``Call Home'' option had been terminated
because AT&T had switched her preferred long distance provider.17
On March 22, 2000, Ms. Crawford called MCI to reinstate them as
her long distance carrier.
7. Upon receipt of her March phone bill, Ms. Crawford
called AT&T to discuss the conversion of her long distance
service and the resultant higher charges. According to Ms.
Crawford, AT&T said it would retrieve the tape recording of the
call in which she purportedly verified the change request and
advise Ms. Crawford of the results.18 Ms. Crawford subsequently
filed an informal complaint with the Commission.19 Ms. Crawford
also submitted a signed declaration attesting to the fact that
she did not authorize the switch to AT&T long distance service.20
Ms. Crawford's declaration also notes that AT&T failed to provide
her with information regarding the contents of the purported
taped verification conversation.21
8. Commission staff forwarded Ms. Crawford's complaint to
AT&T and directed AT&T to respond to Ms. Crawford's
allegations.22 AT&T replied that one of its representatives had
spoken with Ms. Crawford on June 7 and had told her that the
unauthorized conversion of her long distance service was due to
``a processing error that caused both local and long distance
service to be switched.''23 Staff sent AT&T another letter of
inquiry (LOI) on July 24, 2000, asking for a more detailed
explanation of the processing error.24 AT&T responded that it
had manually processed Ms. Crawford's order for local service
because the electronic linkages between AT&T's telemarketer and
third party verifier were temporarily inoperative.25 AT&T
further states that AT&T inadvertently ordered long distance
service during the manual order processing.26
9. AT&T similarly admits changing Mr. Scott's long
distance service without his consent. In his complaint, Mr.
Scott states that he changed his local service provider to
MediaOne, now AT&T Broadband,27 on March 28, 2000.28 Mr. Scott
further notes that he did not change his long distance
provider.29 Mr. Scott states that when he received an invoice
for AT&T long distance calls, he immediately called AT&T to
inform them that he had not selected AT&T for long distance
service. According to Mr. Scott, the AT&T representative would
neither adjust the charges (which Mr. Scott claims were twice as
high as MCI's) nor accept responsibility for the alleged slam.30
Mr. Scott then filed a complaint with the Commission, which staff
forwarded to AT&T.
10. AT&T responded to the complaint by stating that the
long distance carrier change was the ``result of a local phone
company sending AT&T an install order to do so. No orders were
initiated by AT&T or Mr. Scott.''31 But in a subsequent response
to a second staff inquiry, AT&T states that MediaOne executed an
order to provide both local and long distance service ``at Mrs.
Scott's request and with her authorization.''32 AT&T notes that
the ``local service authorization was recorded on MediaOne's
voice log script,''33 but provides no verification whatever of
the claimed authorization for the long distance change. Rather,
as the explanation for that change, AT&T merely states that ``the
telemarketing representative mistakenly used the voice log
verification script for the local service request instead of the
script for local and long distance combined requests.''34
Because Mr. Scott represents that he requested local service
only, and AT&T's verification records do not indicate otherwise,
it appears that AT&T erred in ordering the long distance service,
not in using the wrong script to verify the consumer's request.
11. The four remaining undisputed complaints similarly
allege that AT&T changed the consumers' preferred telephone
service provider without authorization. In response to the
allegations contained in the complaints submitted by Ms. and Mrs.
Schuerholz, Mr. Hanavan, Mr. Dinerman, and Mr. Rosenberg, AT&T
concedes that it improperly changed the consumers' preferred
service providers. For example, Mrs. Schuerholz alleges that in
July 2000, AT&T changed her and her husband's preferred long
distance service provider without consent.35 In response to this
allegation, AT&T admits that it improperly converted the
Schuerholz's long distance service ``due to a coding error when
the transaction [for local and regional toll] was processed,'' so
that ``AT&T was also mistakenly selected as the interLATA
carrier.''36 Similarly, AT&T admits that it did not have
authority to change Mr. Hanavan's local toll service. In
response to Mr. Hanavan's allegation that AT&T converted his
local toll service without permission,37 AT&T acknowledges that
one of its representatives had entered ``inaccurate customer
information under Mr. Hanavan's telephone number on February 23,
2000.''38
12. AT&T states that similar errors resulted in improper
changes to the Dinerman and Rosenberg accounts. AT&T concedes
that Mr. Dinerman authorized AT&T to provide only his local
service during a June 27, 2000 call with AT&T.39 According to
AT&T, a telemarketer from one of AT&T's cable service affiliates
apparently submitted an order incorrectly requesting that AT&T be
designated as Mr. Dinerman's preferred local, local toll, and
long distance carrier.40 AT&T states that an independent third
party discovered the discrepancy when verifying Mr. Dinerman's
order for local service; AT&T, however, failed to reconcile the
conflicting information and submitted the incorrect original
order ``due to a clerical error.''41 AT&T thus improperly
changed Mr. Dinerman's local toll and long distance carriers.
Likewise, AT&T concedes that it did not obtain proper
authorization to change Mr. Rosenberg's local toll service.
According to Mr. Rosenberg, he called AT&T at the end of July
2000 and authorized AT&T to provide his long distance service
only.42 Mr. Rosenberg later received a bill for AT&T local toll
service. In response to Mr. Rosenberg's allegation that he did
not authorize AT&T to provide local toll service, AT&T admits
that the ``service choice was not properly verified.''43
13. AT&T attributes its conversions of these consumers' six
lines to inadvertent error or mistake. Even if we accept at face
value AT&T's statements that these conversions were due to error
or mistake, however, neither the Act nor our rules requires
specific intent to violate the statute or rules.44 The
Commission has stated that:
holding carriers liable for both inadvertent and intentional
unauthorized changes to subscribers' preferred carriers will
reduce the overall incidence of slamming and is consistent
with 258. We find that the rights of the consumer and the
authorized carrier to remedies for slamming should not be
affected by whether the slam was an intentional or
accidental act. Regardless of the intent, or lack thereof,
behind the unauthorized change, the consumer and the
authorized carrier have suffered injury.45
Because the Act and our rules do not require us to find that a
carrier had specific intent to violate the Act or our rules, we
therefore find AT&T apparently liable for the unauthorized
conversion of the six telephone lines identified by these six
complainants.
B. LOA Complaint
14. AT&T's response to an allegedly forged LOA fails to
rebut the consumer's allegations. In a written complaint to the
Commission, Ms. Palacio recounts that on February 28, 2000, MCI,
her preferred carrier, advised her that two of her lines had been
changed to AT&T.46 Ms. Palacio then called her local provider
and asked them to reinstate MCI as her long distance provider.
She also called AT&T's executive complaint department to express
her dissatisfaction with the conversions and to close the
accounts.
15. During the course of her communications with AT&T, Ms.
Palacio requested a copy of the letter of authorization AT&T
relied on as the basis of its purported authority to change her
designated service provider. On or about March 22, 2000, AT&T
faxed Ms. Palacio a copy of a signed LOA that included a copy of
one of her business cards affixed next to the signature. Upon
receipt of the faxed LOA, Ms. Palacio realized that the signature
was not hers but that the business card was.47 Ms. Palacio then
recalled that a man and a woman had stopped by her business in
February 2000 and asked if she would be interested in changing
carriers. Ms. Palacio told them she was not interested, and when
she watched the couple leave, she observed the woman take one of
Ms. Palacio's business cards that was displayed on a counter.48
16. Commission staff forwarded Ms. Palacio's complaint to
AT&T, along with a copy of the LOA and a request for a detailed
response to Ms. Palacio's allegations (including the possibility
of forgery).49 In its response, AT&T states that it submitted
orders to change the long distance and local toll carrier for
both lines based on a written letter of authorization bearing the
signature of Sophia Palacio.50 AT&T acknowledges that the
customer disputed the authorization and states that it credited
all charges and closed the account on May 6, 2000.51 AT&T offers
no other evidence to rebut Ms. Palacio's allegation that AT&T
changed her preferred carrier based on a forged LOA.
17. AT&T was aware that the LOA signature might have been
forged as a result of Ms. Palacio's complaint and the
Commission's inquiries. AT&T's response, however, did not
address the possibility that the signature could have been
forged. Our own examination of the signature on the LOA and the
exemplar provided by the complainant leads us to conclude that
there is little similarity between the signatures, thus
supporting Ms. Palacio's allegations. We therefore find that the
complainant has provided credible evidence that she did not
authorize AT&T to provide local toll or long distance service for
her two telephone lines, and we accept her allegations for
purposes of this Notice.
C. Remaining Complaints
18. For the remaining complaints that form the basis of
this NAL, AT&T fails to provide evidence sufficient to rebut the
complainants' allegations that AT&T changed their service without
consent. AT&T either fails to address the allegations, as
charged in the complaints submitted by Mr. and Mrs. Ortega and
Mr. Patterson, or fails to provide documentation that would
establish its authority to submit a request to change the
consumers' preferred carriers (see the complaints submitted by
Ms. Plunkett, Ms. Krumwiede, and Mr. Agnew, discussed below).
For example, in the case involving Mr. and Mrs. Ortega, AT&T
states that on July 22, 2000, an independent, third party
verifier spoke with a Dwight Lewis to confirm a request to change
the Ortegas' long distance provider.52 A few days later, the
Ortegas' local carrier called to advise them that AT&T had been
designated as their long distance carrier. Because neither of
the Ortegas had requested a change of long distance carrier, the
Ortegas called AT&T to protest the unauthorized conversion of
their service.53 AT&T responded to their complaint via the
August 5 Letter and stated that AT&T's marketing representative
had confirmed that one Dwight Lewis was authorized to make
decisions regarding the Ortegas' account.54 The Ortegas,
however, state that they did not request a change and declare
that they do not know anyone named Dwight Lewis.55 When the
Ortegas eventually received an AT&T bill addressed to Greg
Ortega, they filed a complaint with the Commission.
19. AT&T's response to the Ortegas' allegation fails to
rebut the Ortegas' assertion that Dwight Lewis was not authorized
to change their service. In response to a Commission staff
inquiry, AT&T states that the authorization was obtained during
an outbound marketing call and that TeleTech, a third party
verifier, confirmed the alleged change request.56 In support of
its statements, AT&T provided a copy of a TeleTech memo stating
that Dwight Lewis authorized AT&T to provide long distance and
local toll service.57 The memo lists the Ortegas' telephone
number but indicates that the ``Customer (billing) Name'' for the
account was Dwight Lewis, not the Ortegas.58 AT&T does not
provide any other evidence to rebut the Ortegas' allegation. The
fact that the Ortegas complained of the carrier change
immediately upon learning of the conversion, coupled with AT&T's
response that Dwight Lewis confirmed a change for an account
billed to himself (as opposed to the Ortegas), leads us to
conclude, for the purposes of this Notice, that the Ortegas did
not authorize a change in carriers.
20. The complaint filed by Mr. Patterson mirrors the
complaint filed by Mr. and Mrs. Ortega. Mr. Patterson states
that AT&T changed his long distance carrier without his
authorization.59 Mr. Patterson became aware of the change when
he received an AT&T long distance bill in January 2000. Mr.
Patterson states that he promptly contacted AT&T to complain
about the conversion, and states that AT&T advised him that the
person who had the telephone number before Mr. Patterson was the
one who requested the change.60 Mr. Patterson states that he was
perplexed by this explanation, however, because he has had the
telephone number for the past four years.61
21. In response to a staff inquiry to AT&T regarding this
allegation, AT&T states that it became Mr. Patterson's long
distance service on December 27, 1999, based on the verified
request provided by one Sam Carrillo.62 Mr. Patterson, however,
avers that he does not know anyone named Sam Carrillo.63 In
response to a second staff inquiry, AT&T explains that during an
outbound sales call on December 23, 1999, one of its marketing
representatives confirmed that Sam Carrillo was authorized to
make changes to Mr. Patterson's account.64 AT&T included a
memorandum from TeleTech, a third party verifier, indicating that
Sam Carrillo was the authorized party who confirmed the change
request.65 The third party verifier's memorandum, however, lists
the ``Customer (Billing Name)'' as Sam Carrillo, not Mr.
Patterson.66 As in the case involving the Ortegas, Mr.
Patterson's statements, coupled with AT&T's responses, lead us to
conclude that, for purposes of this Notice, Mr. Patterson did not
authorize AT&T to be his long distance carrier.
22. In her written complaint, Ms. Plunkett
alleges that AT&T, her preferred long distance provider,
converted her local service from Southwestern Bell (SWBT)
without authorization.67 Ms. Plunkett states that on March
24, 2000, her local service was disconnected from SWBT and
subsequently connected to AT&T, although she never
authorized such a change.68 According to Ms. Plunkett, she
promptly called AT&T to request a disconnect; the
representative said she would turn in a ``slam form'' and
issue the disconnect order; and the rep assured Ms. Plunkett
that she would not have to contact AT&T again regarding this
matter.69
23. On March 31, one week after the alleged slam, Ms.
Plunkett states that she spoke with SWBT, who advised her that
AT&T had not yet completed the disconnect order.70 Ms. Plunkett
spoke to SWBT on April 5 and was again advised that AT&T had not
completed the disconnect order.71 By letter dated April 10,
2000, Ms. Plunkett asked the Federal Communications Commission to
intervene on her behalf.72 Staff forwarded Ms. Plunkett's
complaint to AT&T and directed AT&T to state whether it had
submitted a request to change Ms. Plunkett's preferred local
telephone service provider and, if so, upon what authority.73
AT&T's response states that ``Ms. Plunkett was not slammed to
AT&T for local service'' and that ``an order was placed on
February 28, 2000 for AT&T and the order became complete on March
24, 2000.''74 AT&T further states that it issued Ms. Plunkett a
$51.80 credit for local service billing, and that ``Ms.
Plunkett's account was forwarded to Dallas for an outploc [sic],
to insure Ms. Plunkett's lines are released from AT&T local
service.''75
24. Commission staff issued a second letter to AT&T
directing the company to provide more details regarding the
conversion of Ms. Plunkett's service.76 AT&T's second response
indicates that it had implemented the change request on March 24,
2000, and states that J.C. Penney, an independent third party,
verified the change request on February 8, 2000.77 This response
included what AT&T termed a ``statement'' from the verifier that
purportedly confirmed the change request.78 The proffered
statement, however, consists of an unsigned sheet of paper with
no letterhead and contains a table implying that on February 8,
2000, Teresa Plunkett had given a ``pass'' for local, intraLATA,
and interLATA ``TPV Type'' categories.79 AT&T provided no other
documentation.
25. AT&T's verification ``statement'' fails to rebut Ms.
Plunkett's contention that she did not authorize AT&T to provide
her local service. First, the purported verification is
unsigned, does not indicate when it was created, and does not
state that it is an accurate representation of a contact with Ms.
Plunkett. Nor does it indicate whether the verifier obtained
separate verifications for each service offered, as required by
our rules. Second, the accuracy of the purported authorization
is questionable. Ms. Plunkett asserts that AT&T had been her
designated long distance provider prior to February 8, 2000.80
The document, however, indicates that on February 8, 2000, Ms.
Plunkett provided a ``pass'' in the long distance category, as
well as the local and local toll categories. AT&T apparently
interpreted the term ``pass'' to mean that Ms. Plunkett
authorized AT&T to become her preferred service provider for
these services. Because AT&T was providing Ms. Plunkett's long
distance service prior to February 8, 2000, however, it is
unclear to us that the term ``pass'' can be deemed an
authorization to change carriers. Accordingly, for the reasons
discussed above, we find that the purported verification does not
provide confirmation that Ms. Plunkett authorized a preferred
carrier change. We thus accept, for purposes of this Notice, Ms.
Plunkett's statement that she did not authorize AT&T to provide
local service.
26. Similarly, AT&T fails to offer evidence sufficient to
rebut the allegations contained in the complaints filed by Ms.
Krumwiede and Mr. Agnew. Indeed, AT&T fails to provide any
evidence of how it obtained authority to change three of these
complainants' lines. In her written complaint, Ms. Krumwiede
states that she received a bill for AT&T local and long distance
service in March 2000.81 While Ms. Krumwiede acknowledges that
she requested literature about AT&T's One Rate plan in response
to a telemarketing call she received in January, she did not
authorize any change in her service providers.82 After receiving
a bill from AT&T, Ms. Krumwiede states that she called AT&T
several times to correct the situation, but when AT&T had not
resolved the matter by July, she filed a complaint with the
Commission. In response to a staff request for information
regarding Ms. Krumwiede's allegations,83 AT&T states that it
``has been unable to date to retrieve the detailed evidence of
the third party verification for this carrier selection due to a
data corruption problem.''84 AT&T's inability to produce
evidence supporting the purported authorization leads us to
accept as true Ms. Krumwiede's statement that AT&T converted her
local and long distance service without her consent.
27. Likewise, AT&T has failed to offer evidence to rebut
Mr. Agnew's allegation that AT&T converted the local and long
distance service of both his business and residential lines
without proper authorization.85 In response to a staff inquiry
regarding these allegations, AT&T states that it changed Mr.
Agnew's service ``based on authorization provided during a
telemarketing call to his business on April 5, 2000.''86 AT&T's
August 16, 2000 response further states that it ``has requested a
copy of the authorization from the vendor and will provide
results upon receipt.''87 To date, staff has not received any
evidence related to Mr. Agnew's disputed verification.
Therefore, in the absence of an argument or rebuttal evidence to
the contrary, we conclude that AT&T has apparently changed the
local and long distance service of Mr. Agnew's business and
residential lines without proper authorization.
D. Forfeiture Amount
28. AT&T's actions, as described above, persuade us that a
significant forfeiture is warranted against AT&T for its apparent
willful or repeated violations of section 258 of the Act and the
Commission's rules and orders.88 These actions include: (1) the
use of an apparently forged or falsified LOA to effect changes in
long distance service; (2) the use of verbal authorizations from
individuals who were apparently without authority to effectuate a
change; and (3) the submission of apparently unauthorized carrier
change orders.
29. Section 503(b) of the Communications Act authorizes the
Commission to assess a forfeiture of up to $110,000 for each
violation of the Act or of any rule, regulation, or order issued
by the Commission under the Act.89 In exercising such authority,
we are required to take into account "the nature, circumstances,
extent, and gravity of the violation and, with respect to the
violator, the degree of culpability, any history of prior
offenses, ability to pay, and such other matters as justice may
require."90 The Commission's forfeiture guidelines currently
establish a standard forfeiture amount of $40,000 for violations
of our rules and orders regarding unauthorized changes of
preferred interexchange carriers. 91 These policies and
guidelines, however, include upward adjustment criteria that
warrant a higher forfeiture amount based on the particular facts
and circumstances of the violation(s).92 These include the
egregiousness of the misconduct, ability or inability to pay,
whether the violation was intentional, whether substantial harm
resulted from the violations, history of compliance with
Commission requirements, whether the violator realized
substantial economic gain from the misconduct, and whether the
violation is repeated or continuous.93
30. We note that on several occasions, the Commission has
sternly admonished carriers that it would take swift and decisive
enforcement action, including the imposition of substantial
monetary forfeitures, against any carrier found to have engaged
in slamming, including through the use of forged LOAs.94 More
recently, the Commission has issued several NALs assessing
forfeitures at $80,000 per violation for the use of forged
LOAs.95 In those orders, the Commission found that the higher
forfeiture amount was warranted by the egregiousness of
misconduct.96
31. In the instant case, the evidence before us indicates
that AT&T has apparently willfully or repeatedly changed
consumers' preferred telecommunications service providers without
proper authorization. Moreover, in one of the complaints before
us, it appears that AT&T relied on a forged LOA which, as we have
explained in earlier NALs, we find to be a particularly egregious
form of slamming.97 We thus find that the upward adjustment
criterion related to egregious misconduct is applicable in this
case. Based on the facts alleged by Ms. Palacio, we conclude
that it is appropriate to propose a forfeiture amount that is
double the base amount contained in our forfeiture guidelines for
the two lines AT&T converted based on a forged LOA. Because AT&T
converted two telephone numbers without proper authorization, we
find that AT&T has committed two separate violations. We thus
propose a forfeiture of $80,000 for each violation resulting from
AT&T's reliance on a forged LOA, or $160,000.
32. For each of the remaining 12 violations, we will apply
the $40,000 base slamming forfeiture amount, or $480,000. Thus,
we find that AT&T is apparently liable for a total proposed
forfeiture of $640,000 for the unauthorized conversion of 14
telephone lines. AT&T will have the opportunity to submit
further evidence and arguments in response to this NAL to show
that no forfeiture should be imposed or that some lesser amount
should be assessed.98
33. We note that this case involves several instances in
which the consumer authorized AT&T to provide one type of
service, and then apparently had additional unauthorized services
switched by AT&T.99 We remind AT&T and other carriers that they
must obtain separate authorization from the subscriber for each
type of service for which the carrier requests a change.
IV. CONCLUSIONS AND ORDERING CLAUSES
34. We have determined that AT&T has apparently violated
section 258 of the Act and the Commission's preferred carrier
change rules and orders100 by converting the preferred telephone
service providers for 14 telephone lines identified in the 12
consumer complaints discussed above, on the dates and in the
manner described herein. We have further determined that AT&T
Communications, Inc. is apparently liable for forfeitures in the
amount of $80,000 for each of the two conversions based on an
apparently forged letter of agency, and $40,000 for each of the
remaining 12 violations, resulting in a total forfeiture amount
of $640,000.
35. Accordingly, IT IS ORDERED, pursuant to section 503(b)
of Communications Act of 1934, as amended, 47 U.S.C. § 503(b),
section 1.80 of the Commission's rules, 47 C.F.R. § 1.80, that
AT&T Communications, Inc. IS HEREBY NOTIFIED of an Apparent
Liability for Forfeiture in the amount of $640,000 for willful or
repeated violations of section 258 of the Act101 and the
Commission's preferred carrier change rules and orders as
described in the paragraphs above.102
36. IT IS FURTHER ORDERED, pursuant to section 1.80 of the
Commission's rules, 47 C.F.R. § 1.80, that within thirty (30)
days of the release of this Notice, AT&T Communications, Inc.
SHALL PAY the full amount of the proposed forfeiture103 OR SHALL
FILE a response showing why the proposed forfeiture should not be
imposed or should be reduced.
37. IT IS FURTHER ORDERED that a copy of this Notice of
Apparent Liability for Forfeiture SHALL BE SENT by certified mail
to, AT&T Communications, Inc., 295 North Maple Avenue, Basking
Ridge, New Jersey, 07920.
FEDERAL COMMUNICATIONS COMMISSION
Magalie Roman Salas
Secretary
F- Complainant Location
ile
Number
1 EB-00-TC-006 Agnew, Robert New York
2 EB-00-TC-006 Crawford, Phyllis New York
3 EB-00-TC-006 Dinerman, David California
4 EB-00-TC-006 Hanavan, Bernard L. California
5 EB-00-TC-006 Krumwiede, Mari Montana
6 EB-00-TC-006 Ortega, Tracie S. and Texas
Greg L.
7 EB-00-TC-006 Palachio, Sophia California
8 EB-00-TC-006 Patterson, Thomas H. California
9 EB-00-TC-006 Plunkett, Teresa M. Texas
10 EB-00-TC-006 Rosenberg, Steven R. Kentucky
11 EB-00-TC-006 Schuerholz, Esta M. New York
and Jon
12 EB-00-TC-006 Scott, David S. and Georgia
Vernice
APPENDIX B
Customer's TPV Record
_________________________
1 See 47 U.S.C. § 503(b)(4)(A). The Commission has authority
under this section of the Act to assess a forfeiture penalty
against a common carrier if the Commission determines that the
carrier has "willfully or repeatedly" failed to comply with the
provisions of the Act or with any rule, regulation, or order
issued by the Commission under the Act. For a violation to be
willful, it need not be intentional. Southern California
Broadcasting Co., 6 FCC Rcd 4387 (1991).
2 47 U.S.C. § 258.
3 Id. The Commission's rules and orders prescribe that a
carrier wishing to effectuate an authorized change in a
consumer's designated preferred carrier shall submit the
preferred carrier change order to an executing carrier, who is
then obligated to make the change absent some indication that the
request is not legitimate. See 47 C.F.R. §§ 64.1100, 64.1150.
Sections 64.1100 and 64.1150 are now codified at section 64.1120.
65 FR 47678, 47690 (2000). Because the apparent violations
occurred prior to November 28, 2000, the effective date of the
revised rules, sections 64.1100 and 64.1150 were the applicable
Commission rules in effect during the relevant time period.
4 See 47 C.F.R. § 64.1150.
5 47 C.F.R. § 64.1160(b). Effective November 28, 2000,
section 64.1160 was redesignated as section 64.1130; see note 3,
supra.
6 47 C.F.R. § 64.1150(d).
7 47 C.F.R. § 64.1100(b).
8 47 C.F.R. § 64.1100 (a)(1)(ii).
9 From January 1, 2000 to September 22, 2000, the Commission's
Consumer Information Bureau received 1,143 complaints alleging
unauthorized preferred carrier changes by AT&T.
10 See 47 U.S.C. § 258; 47 C.F.R. §§ 64.1100, 64.1150. See
also Vista Service Corporation, Order of Forfeiture, FCC 00-378,
at ¶ 7 (rel. Oct. 23, 2000) recon. pending.
11 See Appendix A.
12 Catherine Seidel, Chief, Telecommunications Consumers
Division (Division Chief), issued a series of letters of inquiry
to AT&T, in which she provided copies of the complaints and
directed AT&T to respond to the consumers' allegations. See
Letter of Inquiry dated May 19, 2000, from Catherine Seidel,
Division Chief, to Margaret R. Berry, District Manager, AT&T, and
Letters of Inquiry dated July 24, 2000, September 22, 2000,
October 12, 2000, October 30, 2000, from Catherine Seidel,
Division Chief, to James Cicconi, General Counsel, AT&T. AT&T
duly responded; see AT&T Responses dated July 26, 2000, August
14, 2000, August 16, 2000, October 13, 2000, November 3, 2000,
and November 21, 2000.
13 Complaint dated April 12, 2000, from Phyllis Crawford
(Crawford Complaint).
14 Id.
15 AT&T Response dated August 16, 2000, from Peter H. Jacoby,
General Attorney, to Catherine Seidel, Division Chief (August 16
Response).
16 Crawford Complaint.
17 Id.
18 Id.
19 Id.
20 See Declaration of Phyllis Crawford dated June 27, 2000.
21 Id.
22 See Letter of Inquiry dated May 19, 2000, from Catherine
Seidel, Division Chief, to Margaret R. Berry, District Manager,
AT&T (May 19 LOI).
23 AT&T Response dated June 8, 2000, from Margaret R. Berry,
District Manager, to Catherine Seidel, Division Chief (June 8
Response).
24 See Letter of Inquiry dated July 24, 2000, from Catherine
Seidel, Division Chief, to James Cicconi, General Counsel, AT&T
(July 24 LOI).
25 August 16 Response.
26 Id.
27 According to an AT&T press release dated August 23, 2000,
several former MediaOne properties would begin doing business as
AT&T Broadband Systems, effective August 23, 2000.
28 Complaint dated May 15, 2000, from David S. Scott (Scott
Complaint).
29 Declaration of Mr. and Mrs. David Scott dated December 13,
2000.
30 Id.
31 AT&T Response dated July 26, 2000, from Margaret R. Berry,
District Manager, to the Common Carrier Bureau, Enforcement
Division (July 26 Response).
32 AT&T Response dated August 14, 2000, from Eddie H. Cooper,
Contract Attorney, to Catherine Seidel, Division Chief (August 14
Response).
33 Id.
34 Id.
35 Complaint from Esta Schuerholz dated August 10, 2000
(Schuerholz Complaint). Mrs. Schuerholz acknowledges that during
an outbound telemarketing call, she did authorize AT&T to provide
local and local toll service.
36 AT&T Response dated October 13, 2000, from Peter H. Jacoby,
General Attorney, to Catherine Seidel, Division Chief (October 13
Response).
37 Complaint dated March 15, 2000, from Bernard L. Hanavan.
38 July 26 Response.
39 AT&T Response dated November 21, 2000, from Peter H. Jacoby,
General Attorney, to Catherine Seidel, Division Chief (November
21 Response).
40 Id.
41 Id.
42 Complaint dated September 5, 2000, from Steven R. Rosenberg.
43
AT&T Response dated November 3, 2000, from Kathleen M.
Cronin, Senior Attorney, to Catherine Seidel, Division Chief
(November 3 Response).
44 Implementation of the Subscriber Carrier Selection Changes
Provisions of the Telecommunications Act of 1996 and Policies and
Rules Concerning Unauthorized Changes of Consumers' Long Distance
Carriers, CC Docket. No. 94-129, Second Report and Order and
Further Notice of Proposed Rulemaking, 14 FCC Rcd 1508 (1998)
(1998 Second Order & FNPRM).
45 Id. at 1540.
46 Complaint dated April 18, 2000, from Sophia Palacio d/b/a
Palace Frame Company.
47 Id.
48 Id.
49 Letter of Inquiry dated September 22, 2000, from Catherine
Seidel, Division Chief, to James Cicconi, General Counsel, AT&T
(September 22 LOI).
50 October 13 Response.
51 Id.
52 Letter dated August 5, 2000, from Stephanie Scow, AT&T Case
Manager, to Greg Ortega (August 5 Letter).
53 Complaint dated August 29, 2000, from Tracie Ortega.
54 August 5 Letter.
55 Declaration of Greg and Tracie Ortega dated September 27,
2000.
56 October 13 Response.
57 Id. at Appendix F.
58 Id.
59 Declaration of Thomas H. Patterson dated June 6, 2000.
60 Id.
61 Id.
62 AT&T Response dated April 26, 2000, from Margaret R. Berry,
District Manager, to the Enforcement Bureau.
63 Declaration of Thomas H. Patterson dated September 30, 2000.
64 August 16 Response.
65 Id. at Appendix C.
66 Id.
67 Complaint dated April 10, 2000, from Theresa M. Plunkett
(Plunkett Complaint).
68 Id.
69 Id.
70 Id.
71 Id.
72 Id.
73 May 19 LOI.
74 AT&T Response dated June 8, 2000, from Margaret R. Berry,
District Manager, to Catherine Seidel, Division Chief.
75 Id.
76 July 24 LOI.
77 August 16 Response.
78 Id. at Appendix C.
79 Id. See also Appendix B.
80 See Plunkett Complaint. Southwestern Bell Telephone, Ms.
Plunkett's local carrier on February 8, 2000, corroborated Ms.
Plunkett's statement that AT&T was her designated long distance
provider prior to February 8, 2000. See Letter dated May 30,
2000 from Bruce Logan, Associate Director - Appeals, SBC, to
Catherine Seidel. See also Memo dated December 12, 2000 from
Bruce Logan to Dana E. Leavitt, staff attorney.
81 See Complaint dated July 27, 2000, from Mari Krumwiede.
82 Id.
83 See Letter of Inquiry dated October 12, 2000, from Catherine
Seidel, Division Chief, to James Cicconi, General Counsel, AT&T.
84 November 3 Response.
85 See Complaint dated June 21, 2000, from Robert Agnew.
86 Letter dated August 9, 2000, from Margaret M. Berry,
District Manager, to Enforcement Division, Common Carrier Bureau.
87 Id.
88 See Commission's Forfeiture Policy Statement and Amendment
of Section 1.80 of the Rules to Incorporate the Forfeiture
Guidelines, Report and Order, 12 FCC Rcd 17087 (1997).
89 47 U.S.C. § 503(b)(2)(B); 47 C.F.R. § 1.80. The Commission
recently amended its rules to increase the maximum penalties to
account for inflation since the last adjustment of the penalty
rates. The new rates will apply to violations that occur after
November 13, 2000. In the Matter of Amendment of Section 1.80(b)
of the Commission's Rules and Adjustment of Forfeiture Maxima to
Reflect Inflation, Order, FCC-347 (rel. Sep. 19, 2000).
90 See 47 U.S.C. § 503(b)(2)(D).
91 Section 503(b)(2)(B) provides for forfeitures up to $100,000
for each violation or a maximum of $1,000,000 for each continuing
violation by common carriers or an applicant for any common
carrier license, permit, certificate or similar instrument. 47
U.S.C. § 503(b)(2)(B). The Debt Collection Improvement Act of
1996 (DCIA), Pub L. No. 104-134, § 31001, 110 Stat. 1321 (1996),
requires, however, that civil monetary penalties assessed by the
federal government be adjusted for inflation based on the formula
outlined in the DCIA. The current statutory maxima pursuant to
Section 503(b)(2)(B) are $110,000 and $1,100,000 and have
increased to $120,000 and $1,200,000 respectively, for violations
occurring after November 13, 2000. See note 89, supra.
92 Id.
93 Id. See also 47 U.S.C. § 503(b)(2)(D).
94 See, e.g., Nationwide Long Distance, Inc. NAL, 11 FCC Rcd
3087, 3089 (Com. Car. Bur. 1996). The Commission has also
emphasized on numerous occasions that the actions of a carrier's
marketing agents do not relieve a carrier of its independent
obligation to ensure compliance with the rules. Rather, under
the Communications Act, the acts or omissions of an agent or
other person acting for a common carrier are deemed to be the
acts or omissions of the carrier itself. See 47 U.S.C. § 217;
see also Heartline Communications, Inc. 11 FCC Rcd 18487, 18494
(1996).
95 Brittan Communications International Corp., 15 FCC Rcd 4852
(2000) (Brittan Forfeiture Order); Amer-I-Net Services Corp., 15
FCC Rcd 3118 (2000) (Amer-I-Net Forfeiture Order); All American
Telephone Company, Inc., 13 FCC Rcd 15040 (1998).
96 See, e.g., Brittan Forfeiture Order, 15 FCC Rcd at 4855.
97 See Amer-I-Net Forfeiture Order, 15 FCC Rcd at 3119, 3122;
See also Excel Telecommunications Incorporated, 11 FCC Rcd 19765,
19767 (Com. Car. Bur. 1996).
98 See 47 U.S.C. § 503(b)(4)(C); 47 C.F.R. § 1.80(f)(3).
99 See, e.g., the Crawford, Scott, Schuerholz, and Plunkett
Complaints.
100 47 U.S.C. § 258; 47 C.F.R. §§ 64.1100, 64.1150. See also
1998 Second Order & FNPRM, 14 FCC Rcd 1508; Further Notice of
Proposed Rule Making and Memorandum Opinion and Order on
Reconsideration, 12 FCC Rcd 10674 (1997) (1997 FNPRM & Order on
reconsideration.).
101 47 U.S.C. § 258.
102 See 47 C.F.R. §§ 64.1100, 64.1150; 1998 Second Order &
FNPRM;14 FCC Rcd 1508; 1997 FNPRM & Order on reconsideration, 12
FCC Rcd 10674.
103 The forfeiture amount should be paid by check or money order
drawn to the order of the Federal Communications Commission.
AT&T should include the reference ``NAL/Acct. No. 200132170015''
on AT&T Communications, Inc.'s check or money order. Such
remittance must be mailed to Forfeiture Collection Section,
Finance Branch, Federal Communications Commission, P.O. Box.
73482, Chicago, Illinois 60673-7482.