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 complaints[^9] 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
orders[^100] 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 Act[^101] 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 forfeiture[^103] 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

+-----------+-----------+--------------------+------------------------+
| #         | # Fi      | # Complainant      | # Location             |
|           | le Number |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
| 1         | EB-       | Agnew, Robert      | New York               |
|           | 00-TC-006 |                    |                        |
+-----------+-----------+--------------------+------------------------+
| 2         | EB-       | Crawford, Phyllis  | New York               |
|           | 00-TC-006 |                    |                        |
+-----------+-----------+--------------------+------------------------+
| 3         | EB-       | Dinerman, David    | California             |
|           | 00-TC-006 |                    |                        |
+-----------+-----------+--------------------+------------------------+
| 4         | EB-       | Hanavan, Bernard   | California             |
|           | 00-TC-006 | L.                 |                        |
+-----------+-----------+--------------------+------------------------+
| 5         | EB-       | Krumwiede, Mari    | Montana                |
|           | 00-TC-006 |                    |                        |
+-----------+-----------+--------------------+------------------------+
| 6         | EB-       | Ortega, Tracie S.  | Texas                  |
|           | 00-TC-006 | and Greg L.        |                        |
+-----------+-----------+--------------------+------------------------+
| 7         | EB-       | Palachio, Sophia   | California             |
|           | 00-TC-006 |                    |                        |
+-----------+-----------+--------------------+------------------------+
| 8         | EB-       | Patterson, Thomas  | California             |
|           | 00-TC-006 | H.                 |                        |
+-----------+-----------+--------------------+------------------------+
| 9         | EB-       | Plunkett, Teresa   | Texas                  |
|           | 00-TC-006 | M.                 |                        |
+-----------+-----------+--------------------+------------------------+
| 10        | EB-       | Rosenberg, Steven  | Kentucky               |
|           | 00-TC-006 | R.                 |                        |
+-----------+-----------+--------------------+------------------------+
| 11        | EB-       | Schuerholz, Esta   | New York               |
|           | 00-TC-006 | M. and Jon         |                        |
+-----------+-----------+--------------------+------------------------+
| 12        | EB-       | Scott, David S.    | Georgia                |
|           | 00-TC-006 | and Vernice        |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+
|           |           |                    |                        |
+-----------+-----------+--------------------+------------------------+

![](media/image1.png){width="7.30625in"
height="5.9722222222222225e-2in"}

[^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.