Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of )

) File No. EB-01-TC-057

Yestel, Inc. ) FRN No. 0007322456

)

**ORDER**

#### Adopted: October 16, 2002; Released: October 17, 2002

#### 

#### By the Chief, Enforcement Bureau:

1.  In this Order, we adopt a Consent Decree terminating an
    investigation regarding unauthorized preferred carrier conversions
    by Yestel, Inc. (Yestel).

2.  The Bureau and Yestel have negotiated the terms of a Consent Decree
    that would resolve this matter and the staff\'s investigation. A
    copy of the Consent Decree is attached and is incorporated by
    reference.

3.  We have reviewed the terms of the Consent Decree, and we conclude
    that the public interest would be served by approving the Consent
    Decree and terminating the investigation.

4.  Based on the record before us, and in the absence of material new
    evidence relating to this matter, we conclude that there are no
    substantial and material questions of fact as to whether Yestel
    possesses the basic qualifications, including its character
    qualifications, to hold or obtain any FCC licenses or
    authorizations.

5.  Accordingly, IT IS ORDERED, pursuant to sections 4(i) and 503(b) of
    the Communications Act, 47 U.S.C. §§ 154(i), 503(b), and the
    authority delegated in sections 0.111 and 0.311 of the Commission's
    rules, 47 C.F.R. §§ 0.111, 0.311, that the attached Consent Decree
    IS ADOPTED.

6.  IT IS FURTHER ORDERED that the above-captioned case as well as the
    Commission staff inquiry into the matter described herein ARE
    TERMINATED.

    FEDERAL COMMUNICATIONS COMMISSION

    David H. Solomon

    Chief, Enforcement Bureau

# CONSENT DECREE

1.  The Enforcement Bureau of the Federal Communications Commission
    ("FCC" or "Commission") and Yestel, Inc., (Yestel) hereby enter into
    a Consent Decree terminating an informal Bureau investigation into
    possible violations of section 258 of the Communications Act and the
    Commission's rules relating to unauthorized preferred interexchange
    carrier ("PIC") conversions and third party verification
    procedures.[^1] Yestel is a reseller of interstate interexchange
    telecommunications services as well as international
    telecommunications services and is subject to the Commission's
    regulations pursuant to its status as a common carrier. This Consent
    Decree is the result of an informal investigation that was initiated
    on November 14, 2001.

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7.  For the purposes of this Consent Decree the following definitions
    shall apply:

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a)  "Commission" or "FCC" means the Federal Communications Commission;

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b)  "Bureau" means the Enforcement Bureau of the Federal Communications
    Commission;

c)  "Division" means the Telecommunications Consumers Division of the
    Enforcement Bureau;

d)  "Yestel " means Yestel, Inc., its successors and assigns;

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e)  "Parties" means Yestel and the Commission or Bureau;

f)  "Adopting Order" means an Order of the Bureau adopting the terms and
    conditions of this Consent Decree;

g)  "Effective Date" means the date on which the Commission adopts the
    Adopting Order.

h)  "Preferred carrier change" shall mean an order or request submitted
    by a carrier to a local exchange carrier ("LEC") to effect a change
    in the customer's preferred carrier;

i)  "Informal Complaint" or "Consumer Complaint" means a complaint filed
    under 47 C.F.R. § 1.716;

j)  "Formal Complaint" means a complaint filed under 47 U.S.C. § 208;

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8.  The Parties agree that the provisions of this Consent Decree shall
    be subject to final approval by the Bureau by incorporation of such
    provisions by reference in an Adopting Order of the Bureau.

9.  The Parties agree that this Consent Decree shall become effective on
    the date on which the Bureau releases the Adopting Order. Upon
    release, the Adopting Order and this Consent Decree shall have the
    same force and effect as any other Order of the Commission and any
    violation of the terms of this Consent Decree shall constitute a
    violation of a Commission Order entitling the Commission to exercise
    any and all rights and to seek any and all remedies authorized by
    law for the enforcement of a Commission Order.

10. Yestel admits the jurisdiction of the Commission for purposes of
    this Consent Decree and any Adopting Order.

11. Yestel waives any rights that it may have to further procedural
    steps and any rights it may have to seek judicial review or
    otherwise challenge or contest the validity of the Adopting Order or
    this Consent Decree.

12. Yestel waives any rights it may have under any provision of the
    Equal Access to Justice Act, 5 U.S.C. § 504.

    **Terms of Settlement**

13. Yestel represents and warrants that it is the properly named party
    to this Consent Decree and is solvent and has sufficient funds
    available to meet fully all financial and other obligations set
    forth herein. Yestel further represents and warrants that it has
    caused this Consent Decree to be executed by its authorized
    representative, as a true act and deed, as of the date affixed next
    to said representative's signature. Said representative and Yestel
    respectively affirm and warrant that said representative is acting
    in his capacity and within his authority as a corporate officer of
    Yestel, and on behalf of Yestel and that by his signature said
    representative is binding Yestel to the terms and conditions of this
    Consent Decree. Yestel also represents that it has been represented
    by counsel of its choice in connection with this Decree and is fully
    satisfied with the representation of counsel.

14. Yestel represents and warrants that it shall not effect any change
    in its form of doing business or its organizational identity or
    participate directly or indirectly in any activity to form a
    separate entity or corporation which engages in acts prohibited in
    this Consent Decree or for any other purpose which would otherwise
    circumvent any part of this Decree or the obligations of this
    Decree.

15. In consideration for the termination by the Bureau of its
    investigation into whether Yestel has violated the Communications
    Act and/or Commission rules or orders, and in accordance with the
    terms of this Consent Decree, Yestel agrees to the following terms.

16. The Bureau and Yestel agree that this Consent Decree does not
    constitute either an adjudication on the merits or a factual or
    legal finding or determination regarding any compliance or
    noncompliance with the requirements of the Communications Act or the
    Commission's rules, including section 258 of the Act. The parties
    agree that this Consent Decree is for settlement purposes only and
    that by agreeing to this Consent Decree, Yestel does not admit or
    deny any liability for violating the Act or Commission rules in
    connection with the matters that are the subject of this Consent
    Decree.

17. Yestel shall make a voluntary contribution to the United States
    Treasury in the total amount of \$150,000 (one hundred fifty
    thousand dollars). This amount shall be paid within 30 days of the
    date the order adopting this Consent Decree becomes final. Such
    contribution shall be made, without further protest or recourse, by
    certified check, cashier's check, or money order drawn to the order
    of the Federal Communications Commission, and shall be mailed to the
    Federal Communications Commission, P.O. Box 73482, Chicago, Illinois
    60673-7482.

18. Yestel agrees to reimburse in full all affected consumers whose long
    distance service was switched without authorization to Yestel's
    network. Specifically, Yestel agrees to reimburse, through billing
    credits for unpaid balances and through issuance of checks for
    amounts already paid, all affected consumers the full amount of any
    unauthorized Yestel charges whether or not the consumer paid the
    charges in error or disputed them. Yestel also agrees to return
    affected consumers, where necessary, to their preferred carriers of
    choice and order all collection agencies to close out all
    outstanding disputes and remove any negative credit reports for all
    affected consumers. Furthermore, Yestel agrees to notify all
    affected consumers verbally of the unauthorized conversion and
    apprise them of their credit for Yestel charges; if after two
    attempts to reach the consumer, Yestel is unable to speak to the
    consumer, Yestel will notify the consumer in writing of the
    unauthorized conversion and credit. No attempt will be made by
    Yestel personnel to market Yestel services to the consumer in these
    notification efforts. All preferred carrier change charges
    associated with the switch of the consumer back to his or her
    preferred long distance carrier shall be paid by Yestel. All credits
    and checks will be issued no later than sixty (60) days from the
    date on which this Consent Decree is adopted.

19. In addition, Yestel agrees to ensure that all preferred carrier
    change notifications are the product of current and valid third
    party verification procedures. Yestel shall not, under any
    circumstances, rely on communications from its underlying carrier to
    effectuate a preferred carrier change for any customer, \-- former,
    current, or prospective. Yestel will also create a task force to
    ensure, more generally, that information regarding customer records
    is kept current and updated monthly. Yestel will meet these
    obligations no later than sixty (60) days from the date on which
    this Consent Decree is adopted.

20. Yestel agrees that it will send each consumer whose line was
    switched to Yestel without authorization, a \$10.00 prepaid Yestel
    calling card within sixty (60) days of the date on which the Consent
    Decree is adopted. Yestel is giving these prepaid cards as an
    additional gesture of goodwill and apology. It will be made clear
    that acceptance and use of this prepaid card in no way constitutes a
    request by the recipient for Yestel direct-dial service. Yestel
    shall not include marketing materials in this mailing. A sample of
    this mailing shall be provided to the Bureau ten (10) calendar days
    before it is used.

21. Yestel agrees that, in the future, it shall not knowingly submit to
    any LEC any preferred carrier change request unless Yestel has
    complied with all Commission rules and orders concerning preferred
    carrier changes, in effect or as they may be hereafter modified or
    amended. In the event that Yestel discovers that its procedures for
    acquiring customers have been compromised by poor communication with
    its underlying carrier, or by any actions taken by its employees or
    its authorized agents, resulting in the unauthorized conversion of a
    consumer's line to Yestel, Yestel agrees to notify such consumer
    verbally of the unauthorized conversion; if after two attempts to
    reach the consumer, Yestel is unable to speak to the consumer,
    Yestel will notify the consumer in writing of the unauthorized
    conversion. No attempt will be made by Yestel personnel to market
    Yestel services to the consumer in these notification efforts.
    Yestel shall take any and all necessary and reasonable steps to
    ensure that the customer is promptly returned to his or her
    authorized carrier with the least possible inconvenience to the
    customer. Yestel further agrees to credit such consumer in full for
    all Yestel charges incurred between the date on which the consumer
    was switched to the Yestel network until the consumer is switched
    back if desired. Yestel further agrees to reimburse the consumer for
    any switching fees assessed by the local exchange carrier as a
    result of the unauthorized conversion and return the consumer to his
    or her preferred carrier.

22. Yestel agrees to subject all of its employees and agents to the
    following oversight mechanisms to help ensure compliance with the
    Commission's regulations:

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a)  Yestel shall require each employee or agent both at the time of
    hiring and at least twice a year thereafter to receive formal
    training on the Commission's rules regarding preferred carrier
    change requests. Should those rules and orders change, Yestel will
    ensure that its employees and agents are promptly apprised of such
    changes and that the training material is updated to reflect the new
    rules.

b)  Yestel shall observe its employees and agents, through on-site or
    telephonic monitoring, as they process orders for service and
    complaints to ensure that Yestel employees and agents are operating
    in compliance with the Commission's preferred carrier change rules.
    The telephonic monitoring shall take place weekly, with the calls
    monitored on a random basis. Should Yestel receive information
    indicating that a particular employee or agent has engaged in
    practices that may violate the Commission's preferred carrier change
    rules, either knowingly or inadvertently, Yestel shall monitor the
    calls of that agent for a period of time sufficient to determine
    whether he or she is operating in compliance with the Commission's
    rules and orders. If Yestel discovers noncompliance, such agent
    shall be terminated in accordance with Yestel's standard termination
    procedures.

c)  Yestel shall further ensure that its third party verifier collects
    all required information pursuant to section 64.1120(c)(3)(iii) of
    the Commission's rules.

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23. While this Consent Decree is in effect, Yestel agrees to maintain
    and make available to the Bureau, on a quarterly basis and within 14
    days of the receipt of any specific written request from the Bureau,
    business records demonstrating compliance with the terms and
    provisions of this Consent Decree.

24. In light of the covenants and representations in this Consent
    Decree, and in particular, in light of the fact that Yestel
    apparently took steps to correct the problem causing the
    unauthorized preferred carrier conversions shortly after it was
    discovered, the Bureau agrees to terminate its investigation into
    unauthorized conversions described above, without any finding of
    liability on the part of Yestel. The Bureau further agrees that, in
    the absence of substantial additional and material facts, the Bureau
    shall not on its own motion institute against Yestel new proceedings
    of any kind relating to any allegation of unauthorized preferred
    carrier changes that may have occurred as a result of the unlawful
    actions described above and up to the date on which this Consent
    Decree is adopted.

25. Nothing in this Consent Decree shall prevent the Commission from
    adjudicating complaints against Yestel for alleged misconduct
    regarding unauthorized preferred carrier changes or for any other
    type of alleged misconduct regardless of when such misconduct took
    place, or from instituting new investigations or enforcement
    proceedings against Yestel in the event of alleged future
    misconduct. If such enforcement proceeding is initiated, Yestel's
    earlier conduct may be adduced, but not for the purpose of assessing
    monetary forfeitures.

26. The Parties agree that any provision of the Consent Decree that
    conflicts with any subsequent rule or order adopted by the
    Commission will be superseded by such Commission rule or order.

27. The Parties agree that this Consent Decree shall expire in three (3)
    years from the release date of the Order adopting this Consent
    Decree. Yestel shall issue a report to the Bureau within 60 days
    from the release date demonstrating compliance with the terms and
    provisions herein.

28. This Consent Decree may be signed in counterparts.

    For the Enforcement Bureau, For Yestel, Inc.

    Federal Communications Commission

    \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
    \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

    David H. Solomon Robert Wu

    Chief President

    \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
    \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

    Date Date

[^1]: *See* 47 C.F.R. §§ 64.1100; 64.1120.