Before the

Federal Communications Commission

**Washington, D.C. 20554**

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| In the Matter of                  | * | IC No. 08-S002202            |
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| Pulse Telecom, LLC                | ) |                              |
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| Complaint Regarding               | * |                              |
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| Unauthorized Change of            | * |                              |
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**ORDER**

**Adopted: November 26, 2008 Released: November 28, 2008**

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

1.  In this Order, we consider the complaint filed by Complainant[^1]
    alleging that Pulse Telecom, LLC (Pulse) changed Complainant's
    telecommunications service provider without obtaining authorization
    and verification from Complainant in violation of the Commission's
    rules.[^2] We conclude that Pulse's actions did result in an
    unauthorized change in Complainant's telecommunications service
    provider and we grant 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; (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 October 17, 2008, alleging
    that Complainant's telecommunications service provider had been
    changed to Pulse without Complainant's authorization. Pursuant to
    Sections 1.719 and 64.1150 of our rules,[^11] we notified Pulse of
    the complaint and Pulse responded on November 13, 2008.[^12] While
    stating that Complainant has bee a customer of Pulse, Pulse,
    however, did not submit a third party verification or letter of
    agency, as required by our rules.[^13] Therefore, we find that
    Pulse's actions resulted in an unauthorized change in Complainant's
    telecommunications service provider and we discuss Pulse's liability
    below.[^14]

5.  Pursuant to Section 64.1170(b) our rules, Pulse must forward to
    Startec Global Communications (Startec) an amount equal to 150% of
    all charges paid by the subscriber to Pulse along with copies of any
    telephone bills issued from Pulse to the Complainant.[^15] Within
    ten days of receipt of this amount, Startec shall provide a refund
    or credit to Complainant in the amount of 50% of all charges paid by
    Complainant to Pulse. Complainant has the option of asking Startec
    to re-rate Pulse charges based on Startec rates and, on behalf of
    Complainant, seek from Pulse, any re-rated amount exceeding 50% of
    all charges paid by Complainant to Pulse. Pulse must also send a
    notice to the Commission, referencing this Order, stating that is
    has given a refund or credit to Complainant. [^16] If Startec has
    not received the reimbursement required from Pulse within 45 days of
    the release of this Order, Startec must notify the Commission and
    Complainant accordingly. Startec also must notify the Complainant of
    his or her right to pursue a claim against Pulse for a refund of all
    charges paid to Pulse.[^17]

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
    Pulse IS GRANTED.

7.  IT IS FURTHER ORDERED that, pursuant to Section 64.1170(b) of the
    Commission's rules, 47 C.F.R. § 64.1170(b), that Pulse must forward
    to Startec an amount equal to 150% of all charges paid by the
    subscriber along with copies of any telephone bills issued from the
    company to the Complainant within ten (10) days of the release of
    this order.

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-S002202, filed October 17, 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]: ^?^ Pulse's Response to Informal Complaint No. IC 08-S002202,
    received November 13, 2008.

[^13]: ^?^ *See* 47 C.F.R § 64.1120-64.1130.

[^14]: 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 such Complainant. *See* 47
    C.F.R. § 1.719.

[^15]: ^?^ See 47 C.F.R § 64.1170(b)(1)(2).

[^16]: ^?^ *See* 47 C.F.R. § 64.1170(c).

[^17]: ^?^ *See* 47 C.F.R. § 64.1170(e).