Before the

**FEDERAL COMMUNICATIONS COMMISSION**

**Washington, D. C. 20554**

In the Matter of )

) File No. EB-00-TC-164

America's Tele-Network Corp. )

)

Apparent Liability for Forfeiture ) NAL/Acct. No. 200132170016

**NOTICE OF APPARENT LIABILITY FOR FORFEITURE**

**AND ORDER**

# 

# Adopted: March 12, 2001 Released: March 13, 2001

By the Commission:

##  I. INTRODUCTION

1 In this Notice of Apparent Liability for Forfeiture (NAL),[^1] we find
that America's Tele-Network Corporation (ATNC) 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 of 16 consumers without their
authorization, a practice commonly know as "slamming." Based upon our
review of the facts and circumstances surrounding the violations, we
find ATNC apparently liable for a forfeiture in the amount of
\$1,020,000.

2\. Last year, the Commission received 263 consumer complaints against
ATNC. Commission staff investigated many of these allegations, directing
ATNC to provide proof that it had verified the complainants'
conversions[^3] in accordance with the Commission's rules. Based on the
complaints received and the documents and tapes ATNC has provided, we
conclude that ATNC has apparently violated section 258 of the Act and
sections 64.1100 and 64.1150 of the Commission's rules.[^4] Accordingly,
we propose a fine of \$40,000 for each of 17 apparent violations
represented by the 16 consumer complaints listed in Appendix A, for a
forfeiture of \$680,000. We further propose increasing the fine by 50%
based upon ATNC's apparent pattern of intentional and egregious
misconduct, for a total proposed forfeiture of \$1,020,000.

**II. BACKGROUND**

3\. ATNC is a nationwide reseller of long distance telephone
services[^5] and is headquartered in Roswell, Georgia.[^6] Counsel for
ATNC states that the company uses telemarketers to solicit consumer
change request orders[^7] and then confirms those authorizations via an
automated system[^8] operated by an independent third party.[^9]
Apparently, ATNC's telemarketer dials a toll-free number to connect the
consumer to the verifier's automated voice-response unit (VRU), which
records the consumer's purported verification. Counsel states that ATNC
connects the consumer to the verifier "right after the telemarketing
call to ensure that the change is voluntary and authorized."[^10] The
ATNC telemarketer remains on the line while the consumer responds to the
VRU prompts.[^11]

4\. All of the complaints forming the basis of this NAL contain
allegations that ATNC did not verify the purported authorizations. For
illustrative purposes, we profile three complaints that may shed light
on ATNC's marketing and verification procedures. On May 11, 2000, Amber
Baxter filed a complaint with the Commission, alleging that ATNC
switched her preferred long distance provider from AT&T to ATNC without
authorization.[^12] In support of that complaint, Ms. Baxter also filed
a declaration, which stated in part:

> On April 6, 2000, I received a telephone call from a telemarketer
> claiming to be with AT&T. \[The telemarketer\] said her name was Kacey
> Williams and knew that I had the AT&T 7-cent plan. \[Ms. Williams\]
> said that some customers had been over-billed and that she was going
> to send me a \$100 check courtesy of AT&T. I became very suspicious
> and asked again if she was with AT&T. \[Ms. Williams\] confirmed this
> several times. I questioned Kacey why AT&T wouldn't credit my phone
> bill. She said that this was the reason for the call. She said that
> they had to 'simply' confirm my name and address with a third party
> verifier in order to send the check. I answered the verifier by saying
> "yes" to name and address, then confirmed by giving my birthda\[te\].
> The third party verifier was a recording. At no time did I give ATNC
> permission, verbal or otherwise, to change my long distance service. I
> hung up and immediately called AT&T. The AT&T representative informed
> me that they were not mailing out any such checks.

#### 

#### When I received my May telephone bill, I realized that my long distance service had been changed to ATNC without my permission. . . . On May 12, 2000, I called ATNC and spoke with Desiree Jones. She insisted that I had knowledge of the switch . . . because I had talked with a third party verifier. Ms. Jones also denied that ATNC had misrepresented themselves as AT&T. I told Ms. Jones that 

#### I was going to file a complaint. She responded 'fine, we have a recording where you agree to be switched.'[^13]

5\. On September 12, 2000, Jose Valcarcel filed a complaint with the
Commission alleging that ATNC had converted his long distance carrier
from AT&T to ATNC. In support of the complaint, Mr. Valcarcel
subsequently filed a declaration, in which he states that an ATN
telemarketer called him on June 28, 2000, offering to switch his long
distance telephone account from AT&T to ATNC in exchange for \$100.[^14]
Mr. Valcarcel states he declined the offer. On August 4, 2000, however,
he received a telephone bill from ATNC for \$285.37. Upon learning of
the conversion, Mr. Valcarcel contacted ATNC to advise them that he had
not authorized the change.[^15] According to Mr. Valcarcel, ATNC stated
that he had authorized the switch, and they played a recording of his
conversation with a telemarketer. While Mr. Valcarcel concedes that he
"had answered 'yes' to a few questions" (i.e. his date of birth and
whether he was a legal resident of Key Largo), he avers that he did not
authorize ATNC to change his long distance provider.[^16]

6\. On November 8, 2000, David Womack filed a complaint with the
Commission alleging that ATNC had changed his preferred long distance
provider not once, but twice, during the fall of 2000. In support of his
complaint, Mr. Womack filed a declaration with the Commission on
February 26, 2001, in which he describes the circumstances surrounding
the two conversions.[^17] Mr. Womack states that he first learned of the
initial conversion sometime in late September 2000, when his preferred
long distance carrier, MCI, called to find out why he had changed
carriers. Mr. Womack states that he didn't recall speaking with any ATNC
telemarketers and was thus unaware that his designated long distance
carrier had been changed. After speaking with MCI about this
unauthorized conversion, Mr. Womack directed his local carrier, Verizon,
to change his service back to MCI.[^18] Mr. Womack eventually received
an invoice from ATNC but, despite numerous attempts to contact the
carrier, never reached anyone. This scenario recurred at the beginning
of November, when Mr. Womack received another call from MCI asking why
he had changed carriers. Mr. Womack again contacted Verizon, who
restored MCI as his preferred carrier on November 8, 2000.[^19]

> 7\. Based on the facts alleged in these and the other 13 complaints at
> issue, staff

forwarded to ATNC the names and phone numbers of the complainants[^20]
and directed ATNC to provide sworn, written responses to general
inquiries regarding ATNC's marketing and verification procedures and to
provide specific evidence pertaining to the disputed verifications. In
response, ATNC provided a copy of its verification script and 13 audio
tape recordings representing "the entire recorded conversation between
the telemarketing agent and the consumer."[^21] (ATNC states that it is
unable to forward the verification tape for Mr. Womack[^22] and that the
tapes for Ms. Ayersmann and Ms.Park were damaged. [^23]) ATNC also
described two promotions it had offered during the relevant time period
and provided a copy of the marketing script its telemarketers had
used.[^24] One promotion offered consumers "a \$100 check for those
persons who became an ATN customer and utilized ATN's services for a
period of at least 180 days."[^25] The other promotion offered a calling
card with 100 free minutes of usage, which was enclosed in ATNC's
welcome package.[^26]

III\. DISCUSSION

8\. 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.\"[^27] The rules the Commission adopted prescribe that no
carrier "shall submit a change on the behalf of a subscriber . . . prior
to obtaining: (i) Authorization from the subscriber and (ii)
Verification of that authorization in accordance with the procedures
prescribed in § 64.1150."[^28] The Commission's rules thus expressly bar
telecommunications providers from changing a consumer's preferred
carrier without first obtaining the consumer's consent, and then
confirming that consent.

9\. The Commission's rules provide some latitude in the methods carriers
can use to obtain consumer authorizations and verifications of carrier
change requests. For example, a carrier may elect to use telemarketing
representatives or direct face-to-face contact to solicit consumer
authorizations for carrier-change requests. The carrier can then elect
to verify that authorization through one of three options, including the
use of an independent third party. There is no latitude, however, in the
requirement that carriers obtain both authorization and verification
prior to submitting a carrier change request. Thus, for those carriers
who use an independent third party to verify the consumer's
authorization, our rules require that "\[t\]he content of the
verification . . . include **clear and conspicuous confirmation that the
subscriber has authorized a preferred carrier change**."[^29] The rules
are similarly clear that:

> \[w\]here a carrier is selling more than one type of
> telecommunications service \[e.g., local exchange service, regional
> toll, or interstate long distance\], . . . that carrier must obtain
> separate authorization from the subscriber for each service sold,
> although the authorizations may be made within the same solicitation.
> **Each authorization must be verified separately from any other
> authorizations obtained in the same solicitation** . . . in accordance
> the verification procedures prescribed."[^30]

Carriers must also "maintain and preserve records of verification of
subscriber authorization for a minimum period of two years after
obtaining such verification."[^31]

10\. All of the consumers who filed the complaints that form the basis
of this NAL state unequivocally that they did not authorize ATNC to
change their designated, preferred long distance providers.[^32] ATNC
does not dispute that it changed the complainants' preferred carrier
selections. ATNC does, however, contend that the complainants authorized
the change requests and that ATNC verified the authorizations.
Specifically, ATNC asserts that its verification procedures comply with
our rules because they produce "clear and conspicuous confirmation" that
the consumer has authorized a carrier change. As discussed below, we
disagree.

##### A. Verification Script

11\. Counsel for ATNC confirm that the following verification
script[^33] was the only script used during the period January 1, 2000
through October 7, 2000, the date ATNC states it voluntarily stopped
marketing its services.[^34] The script is published in its entirety
\[for clarity, we have numbered each clause\]:

Customer Rep Dials FCG's 800#

Rep Enters 5 digit Room & Rep \#

Bring customer online, then press "1" to begin verification.

> \[1.\] Automated message: Thank you for choosing America's
> Tele-Network as your long distance and local provider. In addition to
> the \$100.00 check awarded once you have been online for 180 days, you
> have been selected to receive a free bonus gift . . . a 100 minute
> pre-paid calling card! Please answer the following questions. When
> finished with each of your responses, press one to continue or nine to
> re-record.
>
> \[2.\] At the tone, please say your name and address clearly. Spell
> your name if necessary.
>
> \[3.\] Are you authorized to choose America's Tele-Network as your
> long distance and local long distance provider? Please say "YES" at
> the tone.
>
> \[4.\] To confirm your identity, at the tone please state your Date of
> Birth or your mother's maiden name.
>
> \[5.\] Your Welcome package will be sent to you, which will include
> any information you need.[^35]

12\. None of the 13 tapes ATNC submitted to Commission staff included
the introduction thanking the customer for selecting ATNC and advising
the consumer of the disclaimers associated with receiving the \$100
check (clause 1). Instead, 12 of the tapes begin at the point where the
voice-response unit asks for the consumer's name and address (clause 2).
Twelve of these 13 tapes record an affirmative response to the question
"are you authorized to select" ATNC (clause 3). The two tapes for Ms.
Garcia and Ms. Pastrana, however, indicate consumer confusion regarding
that question. Ms. Garcia replied to the question "are your authorized
to select" ATNC by stating in Spanish "I do not know what that is." The
ATNC agent responded by stating in English the initials "A.T.N.," and
then stating in Spanish: "I believe that they translate it in Spanish
'A.T.N.'" Ms. Garcia then responded yes. There was similar confusion
regarding the purported verification of Lisette Pastrana's account.
According to the tape, ATNC spoke with Lisette Pastrana's mother,
Adelaida. In response to the question "are you authorized to select"
ATNC, Adelaida started to provide her name but then changed her mind and
provided her daughter's name, Lisette Pastrana. When asked for the zip
code, Adelaida stated "Let me see. Let me find a letter because you
know. . . ." The ATNC agent again asked whether Adelaida was authorized
to select ATNC, and the tape contained an abrupt "yes."

13\. The remaining tape differs from the others in that the tape begins
with a male ATNC agent questioning the consumer, Ms. Hovieda. In that
purported verification, the agent begins the conversation by stating
"O.K., say your name the way you want it on the check." Ms. Hovieda
provided her name and address, and then the tape cuts to the automated
VRU question "are you authorized to select" ATNC (clause 3). No response
to this question was recorded.

14\. In 1991, when the Commission first proposed the option of using
third-party verification, we published a sample verification
script.[^36] The script includes the following relevant disclosures and
questions to be read to the consumer: "Hello, my name is \_\_\_\_\_\_\_
from \_\_\_\_\_, an independent verification company. I'm calling to
confirm your order for \[carrier name\] long distance service." "Did you
. . . recently receive a call asking you to select \[carrier name\] as
your long distance company?" "I'd like to confirm that you have selected
\[carrier name\] to carry long distance calls." "I will now process the
order."[^37] The sample script thus provides a model of what the
Commission deemed acceptable verification language: the verifier states
that she is calling to confirm an order for "XYZ" company's long
distance service and, more importantly, expressly asks the consumer to
verify that statement.

##### 

15\. When compared to this standard, ATNC's verification script is
clearly deficient. First, the statement "thank you for choosing
America's Tele-Network as your long distance and local provider" merely
conveys ATNC'S hope or presumption that the consumer has authorized a
change. This clause does not directly elicit the consumer's confirmation
that he actually intends to authorize a carrier change. Second, the
clause "are you authorized to choose America's Tele-Network as your long
distance provider" merely elicits confirmation that ATNC is speaking to
someone with authority to request a change, not whether the consumer
authorizes a change. [^38] Furthermore, the script directs the consumer
to respond "yes" to that question. Finally, the script does not elicit
two separate confirmations for a change in local long distance and
interstate long distance, as required by our rules.[^39] In short, the
verification script is void of any "clear and conspicuous confirmation,"
*i.e*., an unambiguous, definitive, direct response from the consumer
that he or she is confirming a request that ATNC provide telephone
service. Such basic deficiencies raise serious questions as to the
legitimacy of ATNC's purportedly verified change orders. These
deficiencies are made even more serious by ATNC's apparent failure to
follow its defective script.

##### B. ATNC's Verification Process

16\. ATNC contends that one must look at the "net impression" conveyed
by both the verification and telemarketing scripts to determine whether
a reasonable consumer would understand the nature of the
solicitation.[^40] According to counsel, "ATN finds it improbable that

any reasonable person would not understand the intentions of ATN and
what product they were selling," based on the language of both the
verification and telemarketing scripts.[^41]

17\. By invoking "the intentions of ATN" in defense of its verification
process, ATNC demonstrates a fundamental misunderstanding of the purpose
of the Commission's verification rules: to provide consumers with an
opportunity, separate from the solicitation, to confirm the consumer's
intent to authorize a change in telecommunications providers. Our rules
and orders are quite explicit that authorization and verification are
two separate and distinct functions, not a continuous process as ATNC
suggests. To find otherwise would undermine the very rationale for
requiring verification, which is to curb overzealous telemarketers from
presuming a sale. Our verification rules thus provide the consumer an
additional opportunity to comprehend the import of the oral offer and to
confirm his or her request to change carriers, if such change was
intended.

18\. Moreover, it is anything but clear that by completing ATNC's
verification process consumers would understand that they have changed
carriers. For example, the agent who spoke with Ms. Hovieda indicated
that he wanted her name and address in order to send her a check, not to
establish an ATNC billing account. Ms. Hovieda duly provided her name
and address. Notably, she did not respond to the oblique inquiry into
whether she was authorized to select ATNC. The "net impression" conveyed
to us by Ms. Hovieda's recorded conversation is that she expected to
receive a check, not authorize a carrier change.

19\. Ms. Amber Baxter's complaint corroborates our impression that ATNC
did not make clear the nature of the call. According to Ms. Baxter, she
believed she was providing her name and address in order to receive a
refund check, not to confirm an authorization to change carriers. The
tape ATNC provided did not contain the preamble thanking the consumer
for selecting ATNC and advising her that she had to remain on-line for
180 days before receiving the check. We similarly note the call to Ms.
Garcia and her evident confusion regarding the meaning of the initials
"ATN" in response to the question "are your authorized to choose
America's Tele-Network as your long distance and local provider." ATNC
likewise failed to obtain authorization to convert Lisette Pastrana's
carrier. Finally, ATNC did not provide any evidence to rebut the
allegations of Ms. Ayermann, Ms. Park, and Mr. Womack, and the evidence
ATNC did provide for the remaining complainants fails to demonstrate
that ATNC obtained clear and conspicuous confirmation that the consumers
authorized a carrier change.

IV\. FORFEITURE AMOUNT

20\. 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.[^42] 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.\"[^43] 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. [^44] 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).[^45] 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.[^46] As provided by the Commission's rules,
the Commission and its staff retain the discretion to issue a higher or
lower forfeiture, as permitted by statute.[^47]

21\. On several occasions, the Commission has sternly warned 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. [^48] In the instant case, the
evidence before us indicates that ATNC has apparently willfully and
repeatedly changed consumers' preferred telecommunications service
providers without their consent. ATNC's apparent intentional failure to
verify the purported authorizations to switch the preferred carriers of
the 16 consumers identified in this NAL convinces us that a significant
forfeiture is warranted, notwithstanding ATNC' decision to cease
marketing. ATNC's verification script is, on its face, grossly deficient
in that it does not elicit a "clear and conspicuous" confirmation that
the consumer is authorizing a carrier change. Nor does the script elicit
separate verification from any other authorizations obtained in the same
solicitation. ATNC could not provide proof that it had verified the
disputed changes alleged by three of the complainants, one of whom
states that ATNC slammed him twice (one incident occurring after the
date ATNC represented it had ceased its marketing operations). As for
the tapes ATNC did provide, two fail to establish that ATNC was speaking
with the subscriber (the Hovieda and Pastrana tapes), and the remaining
tapes demonstrate that ATNC's script failed to elicit a "clear and
conspicuous" confirmation of the consumers' purported change requests,
as required by our rules.

22\. ATNC acknowledges that its "fundamental problem and it's \[sic\]
failure in doing business as a telecommunications service provider stem
from a lack of obtaining quality personnel in the three most important
parts of its business: (a) customer service; (b) marketing; and (c) MIS
department."[^49] We would add to this list an apparent failure to
institute procedures that conform to Commission requirements. The gross
deficiencies of ATNC's verification process, coupled with its inability
to produce clear evidence that it properly obtained and verified the
carrier changes at issue, lead us to conclude that ATNC apparently
intentionally and egregiously violated section 64.1100 and 64.1150 of
the Commission's rules and orders. We thus find that the upward
adjustment criterion related to intentional and egregious misconduct is
applicable in this case. We therefore propose applying the base
forfeiture amount of \$40,000 for each of the 17 apparent violations of
section 258 of the Act and sections 64.1100 and 64.1150 of the
Commission's rules, or \$680,000, and increasing this amount by 50%, for
a total proposed forfeiture of \$1,020,000. ATNC 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.[^50]

23\. We note that ATNC has represented to the Commission that it has
ceased all telemarketing activity. If and when ATNC resumes such
activity, we direct the company to inform the Commission in advance and
to file with the Commission a compliance plan that details actions ATNC
will take and procedures it will establish and follow to comply with the
Act and the Commission's rules and orders. The Commission will monitor
closely the level and content of consumer complaints to determine
whether the changes in ATNC's practices result in fewer unauthorized
carrier changes. Continued violations of our rules could result in
issuance of a show cause order why ATNC's operating authority should not
be revoked.[^51]

V. CONCLUSIONS AND ORDERING CLAUSES

24\. We have determined that America's Tele-Network Corp has apparently
violated section 258 of the Act and the Commission\'s preferred carrier
change rules and orders[^52] by converting the preferred telephone
service providers of 16 consumers identified in the complaints discussed
above, on the dates and in the manner described herein. We have further
determined that America's Tele-Network Corp is apparently liable for a
forfeiture in the amount of \$40,000 for each of 17 apparent violations.
ATNC's apparent intentional and repeated misconduct represents a gross
dereliction of its verification obligations; accordingly, we propose
increasing the forfeiture by 50%, resulting in a total proposed
forfeiture of \$1,020,000.

25\. 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 America's
Tele-Network Corp IS HEREBY NOTIFIED of an Apparent Liability for
Forfeiture in the amount of \$1,020,000 for willful or repeated
violations of section 258 of the Act[^53] and the Commission\'s
preferred carrier change rules and orders as described in the paragraphs
above.[^54]

26\. 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, America's Tele-Network Corp. SHALL PAY the
full amount of the proposed forfeiture[^55] OR SHALL FILE a response
showing why the proposed forfeiture should not be imposed or should be
reduced.

27\. IT IS FURTHER ORDERED, pursuant to sections 4(i) and 218 of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 218, that,
in the event that America's Tele-Network Corp engages in any
telemarketing activity after the date of issuance of this Notice, it
shall inform the Commission in advance and SHALL FILE with the
Commission, within thirty (30) days of engaging in such activity, a
compliance plan detailing the actions America's Tele-Network Corp will
take and the procedures it will establish to ensure compliance with
section 258 of the Act and the Commission's rules and orders relating to
preferred carrier changes. The compliance plan shall set forth the
revisions America's Tele-Network Corp shall make to bring its marketing
and verification scripts into compliance with the Act and the
Commission's preferred carrier change rules and orders.

28\. IT IS FURTHER ORDERED that a copy of this Notice of Apparent
Liability for Forfeiture and Order SHALL BE SENT by certified mail to
America's Tele-Network Corp. in care of Charles H. Helein, Esq., The
Helein Law Group, P.C., 8180 Greensboro Drive, Suite 700, McLean,
Virginia 22102, and to 720 Hembree Place, Roswell, Georgia 30076,
attention: John W. Little, President.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

APPENDIX A

+-----+------------------------+-----------------+--------------------+
| #   | # **COMPLAINANT**      | # **LOCATION**  | # **CONVERSION**   |
|     |                        |                 |                    |
|     |                        |                 | # **DATE**         |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
| 1   | AYERSMANN, MARYANN     | WEST VIRGINIA   | 05/27/00           |
+-----+------------------------+-----------------+--------------------+
| 2   | BAXTER, AMBER          | DELAWARE        | 05/11/00           |
+-----+------------------------+-----------------+--------------------+
| 3   | BERGER, SUSAN          | WASHINGTON,     | 07/26/00           |
|     |                        | D.C.            |                    |
+-----+------------------------+-----------------+--------------------+
| 4   | BRAUCKSIEKER, LEE      | MISSOURI        | 03/16/00           |
+-----+------------------------+-----------------+--------------------+
| 5   | CHASE, JUDITH          | RHODE ISLAND    | 05/27/00           |
+-----+------------------------+-----------------+--------------------+
| 6   | ESPINOZA, RUBIDIO      | FLORIDA         | 03/14/00           |
+-----+------------------------+-----------------+--------------------+
| 7   | GARCIA, IMELDA         | FLORIDA         | 03/14/00           |
+-----+------------------------+-----------------+--------------------+
| 8   | GATTO, CAROLINE        | FLORIDA         | 03/16/00           |
+-----+------------------------+-----------------+--------------------+
| 9   | HOVIEDA, FARAH         | FLORIDA         | 03/14/00           |
+-----+------------------------+-----------------+--------------------+
| 10  | PADRON, ERNESTO        | FLORIDA         | 09/20/00           |
+-----+------------------------+-----------------+--------------------+
| 11  | PARK, SARITA           | FLORIDA         | 04/27/00           |
+-----+------------------------+-----------------+--------------------+
| 12  | PASTRANA, LISETTE      | FLORIDA         | 03/16/00           |
+-----+------------------------+-----------------+--------------------+
| 13  | RUIZ, MARIA            | FLORIDA         | 05/27/00           |
+-----+------------------------+-----------------+--------------------+
| 14  | VALCARCEL, JOSE        | FLORIDA         | 07/26/00           |
+-----+------------------------+-----------------+--------------------+
| 15  | VALDEZ, ANA            | FLORIDA         | 03/23/00           |
+-----+------------------------+-----------------+--------------------+
| 16  | WOMACK, DAVID          | NEW YORK        | 9/26/00 and        |
|     |                        |                 | 11/3/00            |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+
|     |                        |                 |                    |
+-----+------------------------+-----------------+--------------------+

**APPENDIX B**

Sample Script for Third Party Verification

*1991 Rulemaking,* 6 FCC Rcd 1689, Appendix A

Hello, my name is \_\_\_\_\_\_\_\_\_\_\_ from \_\_\_\_\_\_\_\_\_\_, an
independent verification company. I'm calling to confirm your order for
\[IXC\] long distance service.

Q1. I'd like to confirm your name, address and telephone number(s). IF
AVAILABLE ON SCREEN, READ BACK. Is that correct? TAKE ANY CORRECTIONS.
IF NOT ON SCREEN, ASK FOR EACH ITEM AND RECORD.

Q1.A Did you or another person in your household recently receive a call
asking you to select \[IXC\] as your long distance company?

Q2. I'd to like confirm that you have decided to select \[IXC\] to carry
long distance calls from this (these) telephone(s). Is that correct?

Q3. I'd like to confirm that you are an adult resident of this
household. Is that correct? IF QUESTIONED BY CUSTOMER, MAY STATE THAT
PURPOSE IS TO DETERMINE IF YOU ARE A DECISION MAKER FOR LONG DISTANCE
SERVICE FOR THE HOUSEHOLD.

Q4. I'd like to confirm that you were advised that the local telephone
company may charge a fee for switching to \[IC\]. Is that correct? IF
CUSTOMER ASKS HOW MUCH, VERIFIER MAY STATE AMOUNT FROM LEC TARIFFS.

Q5. Finally, to show that I've spoken to you, please give me the last
four digits of your Social Security Number. RECORD INFORMATION; IF
CUSTOMER REFUSES, TRY DATE OF BIRTH OR MOTHER'S MAIDEN NAME.

I will now process the order. Thank you and goodbye.

IF RESPONSE IS NEGATIVE ON ANY ITEM, INFORM CUSTOMER THAT YOU CANNOT
PROCESS THE ORDER AND THAT THE CUSTOMER MAY SPEAK DIRECTLY WITH IXC OR
MAY CALL THE LOCAL PHONE COMPANY TO ORDER THE SWITCH IN SERVICE TO THE
IXC. ANY QUESTIONS (EXCEPT THOSE IN THE Q AND A) ABOUT THE LONG DISTANCE
SERVICES OR RATES ARE TO BE REFERRED BACK TO THE IXC.

Would you like me to return you to an IXC representative? IF YES, THE
CALL CAN GO BACK TO THE IXC REPRESENTATIVE.

[^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). *See also* *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*, CC Docket No. 94-129, Second Report and Order,
    14 FCC Rcd 1508, 1539 (1998)(*1998* *Second Report and Order*).

[^2]: 47 U.S.C. § 258.

[^3]: Letters of Inquiry from Catherine Seidel, Chief,
    Telecommunications Consumers Division (TCD), Enforcement Bureau,
    Federal Communications Commission, to John W. Little, c/o Charles H.
    Helein, Esq., dated October 6, 2000 and October 27, 2000.

[^4]: 47 U.S.C. § 258; 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.

[^5]: Letter dated December 11, 2000, from Charles H. Helein, Esq., ATNC
    counsel, to Dana E. Leavitt, staff attorney, Telecommunications
    Consumers Division (TCD), Enforcement Bureau, Federal Communications
    Commission (December 11 Response).

[^6]: Dun & Bradstreet report number 93-388-6905 dated January 29, 2001.
    According to the report, John W. Little started the company in 1995.

[^7]: Response dated October 20, 2000 from Craig Riegler and Kirk
    Salzmann, The Helein Law Group, P.C., to Dana Leavitt, TCD (October
    20 Response).

[^8]: *Id*. at 2.

[^9]: *Id*. at 10. Counsel for ATNC states that Federal Communications
    Group, Inc., (F.C.G.), of Bellevue, Washington, provides
    verification services for ATNC.

[^10]: October 20 Response at 10.

[^11]: ATNC provided 13 audio tape recordings of the purported
    verifications for the following complainants: Ms. Baxter, Ms.
    Berger, Mr. Braucksieker, Ms. Chase, Mr. Espinoza, Ms. Garcia, Ms.
    Gatto, Ms. Hovieda, Mr. Padron, Ms. Pastrana, Ms. Ruiz, Mr.
    Valcarcel, and Ms. Valdez. The tapes apparently have captured the
    voices of the complainants, various ATNC telemarketers, and a
    pre-recorded female "voice" associated with the voice-response unit.

[^12]: Complaint dated May 11, 2000, from Amber Baxter.

[^13]: Declaration dated February 14, 2001, from Amber Baxter.

[^14]: Declaration dated February 5, 2001 from Jose Valcarcel.

[^15]: *Id*.

[^16]: *Id*.

[^17]: Declaration dated February 26, 2001 from David Womack.

[^18]: In response to a letter of inquiry regarding changes to Mr.
    Womack's service, Verizon stated that it had processed
    carrier-initiated requests to change his preferred long distance
    provider on September 26, 2000, and again on November 3, 2000. *See*
    letter dated February 14, 2001, from Marie Breslin, Director,
    Federal Regulatory Affairs, Verizon, to Catherine Seidel, Chief,
    TCD.

[^19]: *Id*.

[^20]: See note 4, *supra.*

[^21]: December 11 Response.

[^22]: *See* Response dated February 12, 2001, from Kirk Salzmann, Esq.,
    The Helein Law Group, P.C., to Dana E. Leavitt, TCD.

[^23]: Response dated November 9, 2000, from Craig Riegler and Kirk
    Salzmann, The Helein Law Group, P.C., to Dana E. Leavitt, TCD
    (November 9 Response)..

[^24]: October 20 Response at 10.

[^25]: *Id*.

[^26]: *Id*.

[^27]: 47 U.S.C. § 258.

[^28]: 47 C.F.R. §§ 64.1100(a)(1)(i); 64.1100(a)(1)(ii). The Commission
    adopted these rules on December 17, 1998 in the *Second Report and
    Order*, and the rules became effective February 16, 1999 (64 FR
    7759).

[^29]: 47 C.F.R. § 64.1150(d) (emphasis added).

[^30]: 47 C.F.R. § 64.1100(b) (emphasis added).

[^31]: 47 C.F.R. § 64.1100 (a)(1)(ii).

[^32]: *See* Declarations filed by Amber Baxter (February 14, 2001),
    Jose Valcarcel (February 5, 2001) and David Womack (February 26,
    2001). *See also* informal complaints filed by Maryann Ayersmann
    (June 27, 2000), Susan Berger (September 1, 2000), Diana Brake
    (April 25, 2000), Lee Braucksieker (May 30, 2000), Judith Chase
    (June 14, 2000), Rubidio Espinoza (August 21, 2000), Imdelda Garcia
    (May 5, 2000), Caroline Gatto (March 27, 2000), Farah Hovieda (May
    19, 2000), Ernesto Padron (September 20, 2000), Sarita Park (June 8,
    2000), Lisette Pastrana (May 16, 2000), Maria Ruiz (August 15,
    2000), and Ana Valdez (August 23, 2000).

[^33]: ATNC's president, John Little, drafted the verification script
    with the help of F.C.G. personnel. *See* November 9 Response.

[^34]: Counsel for ATNC states that "ATN stopped marketing its services
    \[nationwide\] on or about October 7, 2000. In large part, this was
    due to the Enforcement Bureau's civil investigative demand ("CID").
    Prior, ATN had been stopping its marketing practices in those states
    where it knew it had a problem." December 11 Response.

[^35]: November 9 Response, Exhibit 1.

[^36]: *See American Telephone and Telegraph Company; Petition for
    Rulemaking*, RM 7245, Notice of Proposed Rulemaking, 6 FCC Rcd 1689,
    Appendix A (1991)(*1991 Rulemaking*).

[^37]: *See* Appendix B for a copy of the entire sample script.

[^38]: The Commission has previously determined that asking a consumer
    if he or she is "authorized" to request a carrier change does not
    produce clear and conspicuous confirmation that the consumer is
    actually *authorizing* a carrier change request. *See Coleman
    Enterprises, Inc., d/b/a Local Long Distance, Inc., Notice of
    Apparent Liability for Forfeiture*, 14 FCC Rcd 13786 (1999), where
    the Commission found purported verification language such as "are
    you the authorized person to have Local Long Distance provide long
    distance service?" deficient. The Commission noted that "at no time
    during the 'verification' is the consumer directly asked if he or
    she is authorizing" a carrier change, as mandated by the
    Commission's rules. Moreover, ATNC was aware that its own
    verification script was problematic at least as early as August 18,
    1998, when the Alabama Public Service Commission (PSC) issued a show
    cause hearing as to why ATNC's operating authority should not be
    revoked, based on 63 slamming complaints. ATNC and the PSC resolved
    the matter in November 1998, when the PSC adopted a settlement order
    based on ATNC's promise to, *inter alia*, submit all telemarketing
    and verification scripts to the PSC for review. When the PSC
    continued to receive an excessive number of slamming complaints
    after adopting the settlement order, however, the PSC scheduled the
    show cause hearing for March 7, 2000. The hearing was triggered by
    ATNC's apparent failure to comply with the terms of the settlement
    order, including an apparent failure to submit verification scripts
    to the PSC for review. Testimony of Ray Paul Richards adduced at the
    hearing reveals that ATNC's verification asked Mr. Richards whether
    he was authorized to change carriers, but "did not ask if he was
    actually authorizing the change of service to ATN." *See* *Alabama
    Public Service Commission v. America's Tele-Network*, Corp., Docket
    Number 25084, May 25, 2000.

[^39]: 47 C.F.R. § 64.1100(b).

[^40]: November 9 Response at 13.

[^41]: *Id*.

[^42]: 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).

[^43]: *See* 47 U.S.C. § 503(b)(2)(D); *see also* *Forfeiture Policy
    Statement*, 12 FCC Rcd 17087.

[^44]: 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 44, *supra*.

[^45]: *See* 47 U.S.C. § 503(b)(2)(D). *See also* *The Commission's
    Forfeiture Policy Statement and Amendment of Section 1.80 of the
    Commission's Rules*, 12 FCC Rcd 17087, 17100-01 (1997); *recon
    denied* 15 FCC Rcd 303 (1999); 47 C.F.R. § 1.80(b)(4).

[^46]: *Id.*

[^47]: *See* 47 C.F.R. § 1.80(b)(4).

[^48]: *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).

[^49]: December 11 Response. Counsel for ATNC provided a list of "state
    administrative actions that ATN has been party to" during the last
    two years: Mississippi Public Service Commission (PSC); California
    (actions taken by both the Public Utilities Commission and the
    Orange County District Attorney's office); Indiana Utility
    Regulatory Commission \[in a settlement reached January 11, 2000,
    ATNC agreed to cease marketing in Indiana for six months and pay
    \$50,000 for unauthorized conversions of consumers preferred
    carriers; *see* Docket Number 41546 SC01, consolidated with Docket
    Number 41546 SC01\]; State of Arkansas; Tennessee Regulatory
    Authority; South Carolina Public Service Commission; Oklahoma
    Corporation Commission; Iowa (actions taken by both the Iowa
    Utilities Board and the Iowa Office of the Attorney General);
    Florida Public Service Commission; Kentucky Public Service
    Commission; and the Alabama Public Service Commission.

[^50]: *See* 47 U.S.C. § 503(b)(4)(C); 47 C.F.R. § 1.80(f)(3).

[^51]: *See* *CNN, Inc., et al,* Order to Show Cause and Notice of
    Opportunity for Hearing, 12 FCC Rcd 8547 (1997) (the "Fletcher
    Companies").

[^52]: 47 U.S.C. § 258; 47 C.F.R. §§ 64.1100, 64.1150. *See also Second
    Report and Order,* 14 FCC Rcd 1508 (1998) and *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*, CC
    Docket No. 94-129, Further Notice of Proposed Rulemaking and
    Memorandum Opinion and Order on Reconsideration, 12 FCC Rcd 10674
    (1997)(*1997 FNPRM & Order on Reconsideration.*).

[^53]: 47 U.S.C. § 258.

[^54]: *See* 47 C.F.R. §§ 64.1100, 64.1150; *see also* *1998* *Second
    Report and Order*; *1997 FNPRM & Order on Reconsideration*.

[^55]: The forfeiture amount should be paid by check or money order
    drawn to the order of the Federal Communications Commission. ATNC
    should include the reference "NAL/Acct. No. 200132170016" on
    America's Tele-Network Corp'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. Requests for full payment under an installment
    plan should be sent to: Chief, Credit and Debt Management Center,
    445 12^th^ Street, S.W., Washington, D.C. 20554. *See* 47 C.F.R. §
    1.1914.