Before the

Federal Communications Commission

**Washington, D.C. 20554**

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| In the Matter of                     | * | IC No. 08-S002066          |
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| New Century Telecom, Inc.            | ) |                            |
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| Complaint Regarding                  | * |                            |
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| Unauthorized Change of               | * |                            |
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**ORDER**

**Adopted: December 19, 2008 Released: December 23, 2008**

By the Deputy Chief, Consumer Policy Division, Consumer & Governmental
Affairs Bureau:

1.  In this Order, we consider the complaint[^1] alleging that New
    Century Telecom, Inc. (NCT) changed Complainant's telecommunications
    service provider without to obtaining authorization and verification
    from Complainant in violation of the Commission's rules.[^2] We
    conclude that NCT's actions did result in an unauthorized change in
    Complainant's telecommunications service provider and we grant
    Complainant 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; (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 June 19, 2008, alleging that
    Complainant's telecommunications service provider had been changed
    from its authorized carrier to Global Crossing Telecommunications,
    Inc. (Global) without Complainant's authorization. Pursuant to
    Sections 1.719 and 64.1150 of our rules,[^11] we notified Global of
    the complaint and Global responded on July 17, 2008.[^12] Global
    states that the change in the Complainant's service was initiated by
    its reseller, NOS Communications (NOS). Pursuant to Sections 1.719
    and 64.1150 of our rules,[^13] we notified NOS of the complaint. ANI
    Networks responded on behalf of NOS on August 26, 2008.[^14]
    Pursuant to Sections 1.719 and 64.1150 of our rules,[^15] we served
    Quasar based on ANI's response. Quasar responded on October 17,
    2008.[^16] Pursuant to Sections 1.719 and 64.1150 of our rules,[^17]
    we served NCT, based on Quasar's response. NCT has failed to respond
    to the complaint.[^18] The failure of NCT to respond or provide
    proof of verification is presumed to be clear and convincing
    evidence of a violation.[^19] Therefore, we find that NCT's actions
    resulted in an unauthorized change in Complainant's
    telecommunications service provider and we discuss NCT's liability
    below.[^20] We also will forward a copy of the record of this
    proceeding to our Enforcement Bureau to determine what additional
    action may be necessary.

5.  NCT must remove all charges incurred for service provided to
    Complainant for the first thirty days after the alleged unauthorized
    change.[^21] We have determined that Complainant is entitled to
    absolution for the charges incurred during the first thirty days
    after the unauthorized change occurred and that neither their
    authorized carrier nor NCT may pursue any collection against
    Complainant for those charges.[^22]

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 against New Century Telecom, Inc. IS
GRANTED.

7.  IT IS FURTHER ORDERED that, pursuant to Section 64.1170(d) of the
    Commission's rules, 47 C.F.R. § 64.1170(d), Complainant is entitled
    to absolution for the charges incurred during the first thirty days
    after the unauthorized change occurred to the Complainant and
    neither their authorized carrier nor New Century Telecom, Inc. may
    pursue any collection against Complainant for those charges.

8.  IT IS FURTHER ORDERED that this Order is effective upon release.

> FEDERAL COMMUNICATIONS COMMISSION

Nancy A. Stevenson, Deputy Chief

> Consumer Policy Division
>
> Consumer & Governmental Affairs Bureau

[^1]: Informal Complaint No. IC 08-S002066, filed June 19, 2008.

[^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, FCC 01-67 (rel. Feb. 22, 2001);
    Third Order on Reconsideration and Second Further Notice of Proposed
    Rule Making, 18 FCC Rcd 5099 (2003); Order, 18 FCC Rcd 10997 (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 (Commission procedure 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]: ^?^ Global's Response to Informal Complaint No. IC 08-S002066,
    received July 17, 2008.

[^13]: ^?^ 47 C.F.R. § 1.719 (Commission procedure 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).

[^14]: ^?^ ANI Network on behalf of NOS Communications's response to
    Informal Complaint No. 08-S002066, received August 26, 2008.

[^15]: ^?^ 47 C.F.R. § 1.719 (Commission procedure 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).

[^16]: ^?^ Quasar's Response to Informal Complaint No. IC 08-S002066,
    received October 17, 2008.

[^17]: ^?^ 47 C.F.R. § 1.719 (Commission procedure 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).

[^18]: ^?^ Notice of Informal Complaint No. IC 08-S002066 was mailed on
    October 17, 2008. On November 4, 2008 the Commission received the
    certified mail return receipt confirming delivery.

[^19]: ^?^ *See* 47 C.F.R. § 64.1150(d).

[^20]: If Complainant is unsatisfied with the resolution of this
    complaint, Complainant may file a formal complaint with the
    Commission pursuant to Section 1.721 of the Commission's rules, 47
    C.F.R. § 1.721. Such filing will be deemed to relate back to the
    filing date of Complainant's informal complaint so long as the
    formal complaint is filed within 45 days from the date this order is
    mailed or delivered electronically to Complainant. *See* 47 C.F.R. §
    1.719.

[^21]:
    > *See* 47 C.F.R. § 64.1160(b).

[^22]:
    > *See* 47 C.F.R. § 64.1160(d).