Before the

Federal Communications Commission

**Washington, D.C. 20554**

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| In the Matter of                 | * | IC No. 03-S83430             |
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| Z-Tel                            | ) |                              |
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| Complaint Regarding              | * |                              |
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| Unauthorized Change of           | * |                              |
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**RECONSIDERATION ORDER**

**Adopted: July 21, 2003 Released: July 23, 2003**

By the Deputy Chief, Consumer & Governmental Affairs Bureau:

1.  In this Order, we reconsider on our own motion, our Order, DA
    03-2052 (Prior Order), released on July 23, 2003. In the Prior
    Order, we found that Z-Tel changed complainant's telecommunications
    service provider without obtaining authorization and verification
    from Complainant in violation of the Commission's rules.[^1] In the
    Prior Order, we noted that Z-Tel had failed to separate
    authorizations as required by our rules.[^2] In this Order, we
    modify the Prior Order and conclude that Z-Tel's actions did not
    result in an unauthorized change in Complainant's telecommunications
    service provider. We, therefore, 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 April 14, 2003, alleging that
    complainant's telecommunications service provider had been changed
    from their authorized carrier to Z-Tel without Complainant's
    authorization in March 2001. Pursuant to Sections 1.719 and 64.1150
    of our rules,[^11] we notified Z-Tel of the complaint and Z-Tel
    responded on July 10, 2001.[^12] Z-Tel stated that it verified
    Complainant's Order through a third party verifier. Although we
    initially found in the Prior Order that Z-Tel had not obtained
    separate authorizations for each service sold to the Complainant,
    upon further review of Z-Tel's verification recording, we find that
    the carrier change to Z-Tel was valid.[^13] We find, therefore, that
    Z-Tel has complied with our carrier change rules and we deny
    complainant's complaint.

5.  Accordingly, IT IS ORDERED, pursuant to Section 1.106 of the
    Commission\'s rules, 47 C.F.R §1.106, that In the Matter of Z-Tel
    Communications, Inc., DA 03-2052, IS MODIFIED 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 against
    Z-Tel IS DENIED.

> FEDERAL COMMUNICATIONS COMMISSION

Margaret M. Egler, Deputy Chief

> Consumer & Governmental Affairs Bureau

[^1]: ^?^ *See* 47 C.F.R. §§ 64.1100 -- 64.1190.

[^2]: ^?^ *See* 47 C.F.R. § 64.1150 (d).

[^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, 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 (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]:
    > Z-Tel's Response to Informal Complaint No. 02-03-S83430, July 10,
    > 2001.

[^13]: ^?^ *See Third Report and Order and Second Order on
    Reconsideration*, 15 FCC Rcd 15996 at 16016 (2000).