Before the

Federal Communications Commission

**Washington, D.C. 20554**

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| In the Matter of                 | * | IC No. 02-S81501             |
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| Liberty OnLine                   | ) |                              |
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| Complaint Regarding              | * |                              |
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| Unauthorized Change of           | * |                              |
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**ORDER ON RECONSIDERATION**

**Adopted: June 11, 2003 Released: June 12, 2003**

By the Deputy Chief, Consumer & Governmental Affairs Bureau:

1.  In this Order, we reconsider on our own motion our Prior Order, DA
    03-1693 (Prior Order), released on May 15, 2003.[^1] In the Prior
    Order, we found that Liberty OnLine (Liberty) changed the
    above-referenced Complainant's telecommunications service provider
    without obtaining proper authorization and verification.[^2] On
    reconsideration, we conclude that Liberty's actions did not result
    in an unauthorized change in Complainant's telecommunications
    service provider; and we, therefore, modify our findings in the
    Prior Order and deny Complainant's complaint.

2.  In December 1998, the Commission released the *Section 258 Order* in
    which it adopted rules to implement Section 258 of the
    Communications Act of 1934 (Act), as amended by the
    Telecommunications Act of 1996 (1996 Act).[^3] Section 258 prohibits
    the practice of "slamming," the submission or execution of an
    unauthorized change in a subscriber's selection of a provider of
    telephone exchange service or telephone toll service.[^4] In the
    *Section 258 Order*, the Commission adopted aggressive new rules
    designed to take the profit out of slamming, broadened the scope of
    the slamming rules to encompass all carriers, and modified its
    existing requirements for the authorization and verification of
    preferred carrier changes. The rules require, among other things,
    that a carrier receive individual subscriber consent before a
    carrier change may occur.[^5] Pursuant to Section 258, carriers are
    absolutely barred from changing a customer\'s preferred local or
    long distance carrier without first complying with one of the
    Commission\'s verification procedures.[^6] Specifically, a carrier
    must: (1) obtain the subscriber\'s written or electronically signed
    authorization in a format that meets the requirements of

Section 64.1130 authorization; (2) obtain confirmation from the
subscriber via a toll-free number provided exclusively for the purpose
of confirming orders electronically; or (3) utilize an independent third
party to verify the subscriber\'s order.[^7]

3.  The Commission also has adopted liability rules. These rules require
    the carrier to absolve the subscriber where the subscriber has not
    paid his or her bill. In that context, if the subscriber has not
    already paid charges to the unauthorized carrier, the subscriber is
    absolved of liability for charges imposed by the unauthorized
    carrier for service provided during the first 30 days after the
    unauthorized change.[^8] Where the subscriber has paid charges to
    the unauthorized carrier, the Commission's rules require that the
    unauthorized carrier pay 150% of those charges to the authorized
    carrier, and the authorized carrier shall refund or credit to the
    subscriber 50% of all charges paid by the subscriber to the
    unauthorized carrier.[^9] Carriers should note that our actions in
    this order do not preclude the Commission from taking additional
    action, if warranted, pursuant to Section 503 of the Act.[^10]

4.  We received Complainant's complaint on November 5, 2002, alleging
    that in October 2002, complainant's telecommunications service
    provider had been changed from their authorized carrier to Liberty
    without Complainant's authorization. Pursuant to Sections 1.719 and
    64.1150 of our rules,[^11] we notified Liberty of the complaint and
    Liberty responded on December 26, 2002. [^12] Liberty provided a
    third party verification and we found in the Prior Order that
    Liberty's actions resulted in an unauthorized change of
    Complainant's telecommunications service provider.[^13] Upon
    reconsideration, however, we find that Liberty is a company that
    "provides Internet solutions for the small business enterprise" and
    that the disputed charge was for the provision of a customized
    website, e-mail addresses and other internet service provider
    services.[^14] We find, therefore, that Liberty's actions did not
    result in an in an unauthorized change of Complainant's
    telecommunications service provider, and we deny Complainant's
    complaint.

5.  Accordingly, IT IS ORDERED, pursuant to Section 1.108 of the
    Commission\'s rules, 47 C.F.R §1.108, that In the Matter of Liberty
    OnLine, DA 03-1693, IS AMENDED TO THE EXTENT INDICATED HEREIN.

6.  Accordingly, IT IS ORDERED that, pursuant to Section 258 of the
    Communications Act of 1934, as amended, 47 U.S.C. § 258, and
    Sections 0.141, 0.361 and 1.719 of the Commission's rules, 47 C.F.R.
    §§ 0.141, 0.361, 1.719, the complaint filed by Complainant (IC No.
    02-S81501) against Liberty OnLine IS DENIED.

> FEDERAL COMMUNICATIONS COMMISSION

Margaret M. Egler, Deputy Chief

> Consumer & Governmental Affairs Bureau

[^1]: ^?^ *See* *In the Matter of Liberty Online, Complaint Regarding
    Unauthorized Change of Subscriber\'s Telecommunications Carrier*, DA
    No. 03-1693 (rel. May 15, 2003).

[^2]: ^?^ *See* 47 C.F.R. §§ 64.1100 -- 64.1190.

[^3]: 47 U.S.C. § 258(a); Telecommunications Act of 1996, Pub. L. No.
    104-104, 110 Stat. 56 (1996); *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 and Further Notice of Proposed Rule Making, 14 FCC
    Rcd 1508 (1998) (*Section 258 Order), stayed in part, MCI WorldCom
    v. FCC*, No. 99-1125 (D.C. Cir. May 18, 1999); First Order on
    Reconsideration, 15 FCC Rcd 8158 (2000); *stay lifted, MCI WorldCom
    v. FCC*, No. 99-1125 (D.C. Cir. June 27, 2000); Third Report and
    Order and Second Order on Reconsideration, 15 FCC Rcd 15996 (2000),
    Errata, DA No. 00-2163 (rel. Sept. 25, 2000), Erratum, DA No.
    00-2192 (rel. Oct. 4, 2000), Order, 16 FCC Rcd 4999 (2001); Third
    Order on Reconsideration and Second Further Notice of Proposed Rule
    Making, 18 FCC Rcd 5099 (2003); Order, FCC 03-116, (rel. May 23,
    2003). Prior to the adoption of Section 258, the Commission had
    taken various steps to address the slamming problem. *See*, *e.g.*,
    *Policies and Rules Concerning Unauthorized Changes of Consumers\'
    Long Distance Carriers*, CC Docket No. 94-129, Report and Order, 10
    FCC Rcd 9560 (1995), *stayed in part*, 11 FCC Rcd 856 (1995);
    *Policies and Rules Concerning Changing Long Distance Carrier*s, CC
    Docket No. 91-64, 7 FCC Rcd 1038 (1992), *reconsideration denied*, 8
    FCC Rcd 3215 (1993); Investigation of Access and Divestiture Related
    Tariffs, CC Docket No. 83-1145, Phase I, 101 F.C.C.2d 911, 101
    F.C.C.2d 935, *reconsideration* *denied*, 102 F.C.C.2d 503 (1985).

[^4]: 47 U.S.C. § 258(a).

[^5]: *See* 47 C.F.R. § 64.1120.

[^6]: 47 U.S.C. § 258(a).

[^7]: *See* 47 C.F.R. § 64.1120(c). Section 64.1130 details the
    requirements for letter of agency form and content for written or
    electronically signed authorizations. 47 C.F.R. § 64.1130.

[^8]: ^?^ *See* 47 C.F.R. §§ 64.1140, 64.1160. Any charges imposed by
    the unauthorized carrier on the subscriber for service provided
    after this 30-day period shall be paid by the subscriber to the
    authorized carrier at the rates the subscriber was paying to the
    authorized carrier at the time of the unauthorized change. *Id.*

[^9]: ^?^ *See* 47 C.F.R. §§ 64.1140, 64.1170.

[^10]: ^?^ *See* 47 U.S.C. § 503.

[^11]: ^?^ 47 C.F.R. § 1.719 (procedures for informal complaints filed
    pursuant to Section 258 of the Act); 47 C.F.R. § 64.1150 (procedures
    for resolution of unauthorized changes in preferred carrier).

[^12]: ^?^ *See* *Liberty Response*, December 26, 2002.

[^13]: ^?^ *See* *Prior Order* at 3.

[^14]: ^?^ *See Liberty Response* at 1.