**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of )

)

Bright House Networks, LLC, *et al.,* )

)

Complainants, ) File No. EB-08-MD-002

)

v.  )

> )

Verizon California, Inc., *et al.*, )

)

Defendants. )

**MEMORANDUM OPINION AND ORDER**

**Adopted: June 20, 2008 Released: June 23, 2008**

By the Commission: Commissioners Copps and McDowell issuing separate
statements; Chairman Martin dissenting and issuing a statement.

#  {#section .unnumbered}

**I. INTRODUCTION**

1.  In this Memorandum Opinion and Order, we reject the Enforcement
    Bureau's April 11, 2008, *Recommended Decision*[^1] in this
    Accelerated Docket proceeding, and grant in part a formal
    complaint[^2] filed against Defendants (collectively, "Verizon")
    pursuant to section 208 of the Communications Act of 1934, as
    amended ("Act").[^3] For the reasons explained below, we conclude
    that Verizon is violating section 222(b) of the Act[^4] by using,
    for customer retention marketing purposes, proprietary information
    of other carriers that it receives in the local number porting
    process, and we order Verizon immediately to cease and desist from
    such unlawful conduct.

2.  The *Recommended Decision* recommended that we (i) deny the
    Complaint's claims under sections 222(b) and 222(a) of the Act
    (Counts I and II, respectively); (ii) rule on the Complaint's claim
    under section 201(b) of the Act[^5] in a separate, subsequent order;
    and (iii) initiate a rulemaking regarding customer retention
    marketing practices. Complainants filed comments challenging the
    *Recommended Decision*, and Verizon filed comments supporting
    it.[^6] We have carefully reviewed the *Recommended Decision* and
    are not persuaded by its reasoning. Consequently, we reject its
    recommendations to deny Counts I and II of the Complaint, and to
    defer decision on Count III. Instead, we grant Count I, and dismiss
    Counts II and III without prejudice because it is unnecessary to
    reach those two Counts. We will take under further advisement the
    recommendation to initiate a rulemaking.

# background

## The Parties

3.  Defendants are telecommunications carriers that operate as incumbent
    local exchange carriers (incumbent "LECs") in a number of
    states.[^7] Complainants Bright House Networks, LLC ("Bright
    House"), Comcast Corporation ("Comcast"), and Time Warner Cable Inc.
    ("Time Warner") (collectively, "Complainants") provide
    facilities-based voice services to retail customers using Voice over
    Internet Protocol ("VoIP") in competition with Verizon's local voice
    services.[^8] Complainants provide those services by relying on
    wholesale competitive local exchange carriers ("Competitive
    Carriers") to interconnect with incumbent LECs and to provide
    transmission services, local number portability ("LNP") functions,
    and other functionalities.[^9] Bright House and Comcast rely on
    Competitive Carriers that are affiliated with them,[^10] while Time
    Warner relies on Sprint Communications Company L.P. ("Sprint").[^11]

## Local Number Portability and Verizon's Retention Marketing Program

4.  The Communications Act requires local exchange carriers to provide
    number portability, *i.e.*, the ability to retain one's phone number
    when switching from one telecommunications carrier to another.[^12]
    Thus, when customers decide to switch voice service from Verizon to
    one of the Complainants, they may choose to retain their telephone
    numbers. Such a choice triggers an inter-carrier process \--
    developed mainly by the industry \-- by which the customer's
    telephone number is "ported" from Verizon to the Complainant's
    Competitive Carrier.[^13]

5.  The number porting process begins with the Competitive Carrier, at
    the direction of a Complainant, submitting a "Local Service Request"
    ("LSR") to Verizon.[^14] The LSR serves as both a request to cancel
    the customer's Verizon service and a request to port the customer's
    telephone number to the Competitive Carrier.[^15] Under current
    industry practices, the LSR includes at least the following
    information: the identity of the submitting carrier; the date and
    time for the disconnection of Verizon's retail service (and, by
    implication, the date and time for the initiation of Complainant's
    service);[^16] the name and location of the retail customer whose
    service is being switched; the Verizon retail account number; and
    whether the port involves one or more numbers.[^17] Thus, the LSR
    informs Verizon that, at a particular date and time, the customer's
    telephone number is to be ported to the Competitive Carrier, and the
    customer's existing Verizon voice service is to be disconnected, so
    that the Complainant served by the Competitive Carrier may initiate
    retail service using the customer's existing telephone number. After
    submitting the LSR to Verizon, the Complainant or Competitive
    Carrier sends the Number Portability Administration Center
    ("NPAC")[^18] a "create message" that is used to enter a pending
    subscription record with the necessary routing data for the number
    to be ported.[^19]

6.  Upon receiving the LSR, Verizon confirms that it contains sufficient
    information to accomplish the port, and then creates an internal
    service order, which it transmits to the appropriate downstream
    Operations Support Systems.[^20] The transmittal of the internal
    service order initiates several work steps for Verizon. First,
    Verizon's automated systems send the Complainant or Competitive
    Carrier a Local Service Request Confirmation (also known as a Firm
    Order Confirmation, or "FOC") that contains information specific to
    the individual request.[^21] In addition, Verizon creates a
    disconnect order scheduling a retail service disconnect on the
    requested due date.[^22] Moreover, Verizon establishes a "10-digit
    trigger" in the switch serving the retail customer to prevent the
    misrouting of certain calls in the short interval after the number
    has been ported but before disconnection of the customer's Verizon
    retail service has been completed.[^23] Finally, Verizon confirms
    the pending subscription record that the new provider previously
    created in the NPAC database.[^24] Meanwhile, the Complainant and/or
    Competitive Carrier perform any necessary work on their own networks
    to turn up the customer's service.[^25]

7.  Beginning around the summer of 2007, Verizon started a program of
    retention marketing directed specifically at retail customers who
    are in the midst of the carrier-changing/number-porting process just
    described.[^26] The program's first step is generating \-- on a
    frequent, if not daily, basis \-- a marketing "lead list" of Verizon
    customers to be contacted by Verizon that is based on the LSRs
    explained above.[^27] To generate the lead list, Verizon begins with
    the universe of customers for whom there are retail-service
    disconnect orders pending, including disconnect orders that were
    prompted by the submission of an LSR.[^28] Verizon then *eliminates*
    from the lead list *all* those customers who are *not* switching
    their phone service and porting their telephone numbers from Verizon
    to a facilities-based service provider, such as Complainants. Put
    differently, Verizon *keeps on* the lead list *only* those customers
    who *are* switching their phone service and porting their telephone
    numbers from Verizon to a facilities-based service provider, such as
    Complainants.[^29] Verizon is able to carry out this sifting
    because, *inter alia*, the disconnect orders stemming from the
    Competitive Carriers' LSRs differ from all other disconnect orders.
    Specifically, disconnect orders stemming from the Competitive
    Carriers' LSRs contain "additional entries that are required to
    facilitate the actual porting of the telephone number to the new
    provider."[^30]

8.  Upon completion of the lead list, Verizon immediately \-- sometimes
    within 24 hours of receiving the LSR \-- contacts customers on the
    lead list, by express mail, e-mail, and/or automated telephone
    message. Those contacts encourage customers to remain with Verizon,
    offering price incentives such as discounts and American Express
    reward cards.[^31] Verizon conducts this marketing while the
    number-porting request is still pending, *i.e.*, before the new
    provider (such as Complainants) has established service to the
    customer.[^32]

9.  If Verizon is successful in persuading a customer to cancel his or
    her order with the new service provider, Verizon cancels the
    internal service order relating to the port request, and Verizon's
    systems issue a "jeopardy notice" to the provider that submitted the
    port request.[^33] Verizon also puts the new provider's port request
    "into conflict" by sending a conflict code to NPAC. That conflict
    code cannot be overridden by the new provider. If the new service
    provider persuades the customer to switch after all, it can either
    seek resolution of the conflict code or, what is much more common,
    submit a new LSR.[^34]

## The Complaint

10. On February 11, 2008, Complainants filed the Complaint alleging,
    *inter alia*, that the Verizon customer retention marketing
    practices described above violate section 222(b) of the Act.[^35]
    Complainants seek an order enjoining Verizon from continuing such
    customer retention marketing.[^36] Complainants also seek an award
    of damages, but defer that determination to a separate, subsequent
    proceeding pursuant to section 1.722(d) of the Commission's
    rules.[^37] Thus, this Order addresses only the question of
    Verizon's alleged liability.[^38]

# LEGAL ANALYSIS

11. Section 222(b) provides that "\[a\] telecommunications carrier that
    receives or obtains proprietary information from another carrier for
    purposes of providing any telecommunications service shall use such
    information only for such purpose, and shall not use such
    information for its own marketing efforts."[^39] Thus, a
    telecommunications carrier violates section 222(b) when it (a)
    receives or obtains proprietary information; (b) from another
    carrier; (c) for purposes of providing any telecommunications
    service; and (d) fails to use such information "only" for such
    purpose, or uses the information "for its own marketing
    efforts."[^40] For the reasons discussed below, we find that
    Verizon's retention marketing program violates section 222(b) of the
    Act. Specifically, we find that Verizon, a telecommunications
    carrier, receives proprietary information from the Competitive
    Carriers; that this information is contained in number porting
    requests that were submitted for the purpose of the Competitive
    Carriers providing telecommunications service to the Complainants,
    and for the purpose of Verizon providing telecommunications service
    to the Competitive Carriers; and that Verizon uses the proprietary
    information for its own marketing efforts.

## A. The LSRs Submitted by the Competitive Carriers to Verizon Contain "Proprietary Information from Another Carrier" Within the Meaning of Section 222(b). {#a.-the-lsrs-submitted-by-the-competitive-carriers-to-verizon-contain-proprietary-information-from-another-carrier-within-the-meaning-of-section-222b. .unnumbered}

12. As described above, when a Competitive Carrier, working in
    conjunction with one of the Complainants, submits an LSR to Verizon,
    Verizon receives advance notice that the Complainant (again, working
    in conjunction with the Competitive Carrier) will supplant Verizon
    as the voice service provider to a particular customer on a
    particular date. Complainants provide this highly sensitive
    information to their competitor, Verizon, only because they must do
    so in order to serve their newly-won customer properly.[^41]
    Specifically, Complainants have no choice but to provide this
    information (via a Competitive Carrier) to Verizon in order to
    effectuate a number port in accordance with industry processes.

13. The Commission has already found that advance notice of a carrier
    change that one carrier is required to submit to another is carrier
    "proprietary information" under section 222(b).[^42] These rulings
    stem from the inherently sensitive nature of the information itself
    and from a concern that carriers not unfairly exploit such
    information received in advance through necessary carrier-to-carrier
    interactions. As the Commission has observed, "competition is harmed
    if any carrier uses carrier-to-carrier information . . . to trigger
    retention marketing campaigns, and \[we\] consequently prohibit such
    actions accordingly."[^43] Therefore, under Commission precedent,
    the carrier change information that the Competitive Carriers must
    submit to Verizon in the LSRs is plainly "proprietary" within the
    meaning of section 222(b).[^44]

14. Verizon proffers several arguments for concluding that the foregoing
    Commission precedent does not apply to the information at issue
    here. As explained below, all of those arguments lack merit.

15. First, in Verizon's view, the information that the Competitive
    Carriers submit to Verizon in an LSR is actually Verizon's
    information, not another carrier's. Specifically, according to
    Verizon, the fact that its own customer has cancelled his or her
    retail Verizon voice service on a certain date is information that
    Verizon, as the current retail carrier, requires to carry out the
    last portion of its retail service \-- timely disconnection.[^45]
    This argument distorts the nature of the information contained in
    the LSRs. Although the LSR does contain information that Verizon
    needs to disconnect a customer, it also contains additional, highly
    sensitive competitive information that is independent of the
    mechanics of disconnection. Specifically, the LSR discloses in
    advance that a competing carrier has convinced a particular Verizon
    customer to switch to the competing carrier's voice service on a
    particular date. This is the information that is proprietary.
    Significantly, even Verizon does not dispute that information on the
    LSR revealing the identity of the new carrier is proprietary
    information.[^46] And, as explained in more detail later, it is
    precisely that information -- *i.e.*, the fact that a retail
    customer has chosen not only to disconnect Verizon service but also
    to switch to a competitor on a particular date -- that Verizon
    employs in its retention marketing program.[^47]

16. Verizon also argues that the carrier-change information in the LSR
    is the customer's information, and the Competitive Carrier is merely
    conveying that information as the customer's agent.[^48] We
    disagree. It is true that a Verizon retail customer has every right
    to contact Verizon directly to state that she intends to switch to a
    Complainant's voice service. Indeed, the Commission has already
    recognized that truth and held that, if a customer makes such a
    contact, the carrier-change information conveyed by the customer to
    Verizon is not "proprietary" within the meaning of section 222(b)
    and may be used to engage in retention marketing.[^49] In the
    absence of such a direct customer contact, however, the
    carrier-change information conveyed in carrier-to-carrier
    communications remains proprietary.[^50] Moreover, labeling the
    Complainant (or Competitive Carrier) as merely the "agent" of the
    customer is misleading. By transmitting the information in the LSR,
    the Competitive Carrier is certainly acting to help effectuate the
    customer's choice of carrier, but it is also acting to promote its
    own commercial interests, which requires conveying its own
    proprietary information. Verizon's agency theory also conflicts with
    the approach the Commission has taken in applying section 222(b) in
    the slamming context. Just as in the context of a number porting
    request, a customer can effect a change of carrier by authorizing
    the new carrier to make the change request on the customer's
    behalf.[^51] Nevertheless, the Commission banned the use of carrier
    change requests for marketing purposes as inconsistent with section
    222(b).[^52] By Verizon's reasoning, a carrier submitting a carrier
    change request on behalf of a customer would seemingly be acting
    only as the customer's agent, and the marketing ban would not apply.
    That was clearly not the approach taken by the Commission.

17. Verizon further contends that the LSRs do not convey proprietary
    information "from another carrier" within the meaning of section
    222(b), because Complainants are not "telecommunications
    carriers."[^53] Verizon's contention lacks merit, even assuming,
    *arguendo*, that (i) the statute's reference to "carrier" means
    "telecommunications carrier"; (ii) Complainants are not
    "telecommunications carriers;"[^54] and (iii) the "proprietary
    information" must concern the carrier who conveys it.[^55] Due to
    the closeness of the operational partnership between Complainants
    and their respective Competitive Carriers,[^56] we hold that
    information regarding a Verizon customer's decision to switch from
    Verizon to a Complainant is as proprietary to the Competitive
    Carrier as it is to the Complainant. Moreover, as explained below,
    the Competitive Carriers are "telecommunications carriers" under
    section 222(b).[^57] Thus, when a Competitive Carrier conveys
    carrier-change information in an LSR to Verizon, Verizon is
    receiving such information "from a carrier" under section
    222(b).[^58]

18. In sum, for all of the foregoing reasons, the LSRs submitted by the
    Competitive Carriers to Verizon contain "proprietary information
    from another carrier" within the meaning of section 222(b).

## B. When a Competitive Carrier Submits an LSR to Verizon, Verizon Receives It "For Purposes of \[the Competitive Carrier\] Providing Telecommunications Service" to a Complainant Within the Meaning of Section 222(b).  {#b.-when-a-competitive-carrier-submits-an-lsr-to-verizon-verizon-receives-it-for-purposes-of-the-competitive-carrier-providing-telecommunications-service-to-a-complainant-within-the-meaning-of-section-222b. .unnumbered}

19. Section 222(b) prohibits a telecommunications carrier from using for
    its own marketing efforts any proprietary information that it
    receives from another carrier "for purposes of providing any
    telecommunications service...."[^59] Section 222(b) does not
    expressly state *whose* provision of telecommunications services is
    covered. Specifically, section 222(b) does not expressly state
    whether its marketing ban applies when the receipt of proprietary
    information is for purposes of (i) the *submitting* carrier (here, a
    Competitive Carrier) "providing any telecommunications service,"
    or (ii) the *receiving* carrier (here, Verizon) "providing any
    telecommunications service," or (iii) either the submitting carrier
    or the receiving carrier "providing any telecommunications service."

20. The parties do not dispute that section 222(b) applies when the
    *receiving* carrier provides telecommunications service. The issue
    here is whether section 222(b) also applies when a
    telecommunications carrier's receipt of proprietary information from
    another carrier is for purposes of the *submitting* carrier
    providing telecommunications services.[^60] For the following
    reasons, and consistent with Commission precedent in a similar
    context, we conclude that section 222(b)'s marketing ban applies in
    the latter situation as well.

21. Our conclusion rests on a reasonable construction of the statutory
    language. Indeed, in addressing the meaning of section 222(b), the
    Commission has already held that "information contained in a carrier
    change request is by its very nature proprietary \[and\] ... may
    only be used by the executing carrier to effectuate the provision of
    service *by the submitting carrier to its customer.*"[^61] Applied
    in the context of this case, it is reasonable to read section 222(b)
    as stating that, when Verizon "receives or obtains proprietary
    information from a \[Competitive Carrier\] for purposes of \[the
    Competitive Carrier\] providing any telecommunications service ...
    \[, Verizon\] shall use such information only for such purpose
    \[*i.e.*, the Competitive Carrier providing a telecommunications
    service\], and shall not use such information for its own marketing
    efforts."

22. Our conclusion is also compelled by the Commission's prior
    assessment of the fundamental objective of section 222(b): to
    protect from anti-competitive conduct carriers who, in order to
    provide telecommunications services to their own customers, have no
    choice but to reveal proprietary information to a competitor.[^62]
    To achieve that objective, the Commission has repeatedly construed
    section 222(b) to mean that, when a customer's current carrier
    obtains carrier-change information from a competing carrier solely
    because of the current carrier's existing relationship with the
    customer, the current carrier may not use that information to
    attempt to disrupt the carrier change.[^63] The existing carrier
    must remain "neutral," and not act as a competitor, until the
    carrier change is completed and the new carrier has begun providing
    telecommunications service. At bottom, the Commission has focused on
    preventing the receiving carrier from hindering the submitting
    carrier's ability to initiate its provision of telecommunications
    service to its customers.

23. In accordance with our view of section 222(b)'s overriding goal, as
    just described, we conclude that section 222(b)'s marketing ban
    applies when a telecommunications carrier's receipt of proprietary
    information from another carrier is for purposes of the *submitting*
    carrier providing telecommunications service, and is not limited to
    situations where the information is received for purposes of the
    *receiving* carrier providing service. Otherwise, section 222(b)'s
    protection could have irrational gaps, such as situations where the
    receiving carrier provides no "telecommunications service" to the
    submitting carrier.

24. Applying that construction of section 222(b) here, section 222(b)'s
    requirements squarely encompass Verizon's retention marketing. In
    order to initiate its provision of telecommunications service to a
    Complainant to serve a particular new customer, the Competitive
    Carrier has no choice but to notify Verizon of the customer's
    decision to switch service from Verizon to the Complainant. Thus, as
    the receiving carrier under section 222(b), Verizon may use that
    carrier-change information only for purposes of helping effectuate
    the initiation of the Competitive Carrier's (*i.e.*, the submitting
    carrier's) telecommunications service.

25. Verizon contends that, as a grammatical matter, the "purpose"
    referenced twice in section 222(b) must concern only the *receiving*
    carrier -- and not the *submitting* carrier -- providing
    telecommunications service.[^64] Put differently, Verizon contends
    that section 222(b) must be read to apply *only* when the receipt of
    proprietary information is for purposes of the *receiving* carrier
    providing telecommunications service.[^65] We disagree. As described
    above, we find, consistent with the Commission's statements in the
    slamming context, that the language of section 222(b) does not
    require such a reading. The statutory language is reasonably
    susceptible of meaning that the "purpose" includes the submitting
    carrier providing telecommunications service. And that
    interpretation more comprehensively achieves section 222(b)'s
    objectives, as previously explained.

26. Verizon also asserts that the Commission has already construed
    section 222(b)'s marketing ban to apply only where, unlike here, the
    receiving carrier is providing a wholesale telecommunications
    service to the submitting carrier, such as resale or access.[^66] We
    see no such limiting construction in any Commission order. When the
    Commission has referred to the receiving carrier's "wholesale
    operations" or "wholesale service" or "carrier-to-carrier service"
    and the like, it has done so merely to identify the source of the
    carrier-change information as something other than the receiving
    carrier's direct communications with its retail customer; it has
    *not* done so to limit section 222(b)'s scope to situations where
    the receiving carrier is providing a wholesale "telecommunications
    service" to the submitting carrier.[^67]

27. Moreover, such a limiting construction would contravene what the
    Commission has repeatedly described as a fundamental policy of the
    Act -- to promote facilities-based local competition.[^68]
    Specifically, if Verizon's interpretation of the Commission's
    retention marketing orders were correct, those orders would have
    prevented receiving carriers from retention marketing against
    resellers and UNE competitors, but allowed receiving carriers to
    retention market against facilities-based competitors. Verizon has
    not proffered any sensible basis for the Commission to have made
    such a distinction, and we can discern none. Quite the contrary.
    While their number-port requests are pending with a receiving
    carrier, facilities-based carriers are just as vulnerable as
    resellers to any anti-competitive conduct by the receiving carrier.

28. Finally, in Verizon's view, even assuming, *arguendo*, that section
    222(b) generally applies when the submitting carrier is the one
    "providing telecommunications service," section 222(b) does not
    apply here, because the information contained in the LSRs does not
    relate to the specific telecommunications services provided by the
    Competitive Carriers to Complainants.[^69] We disagree. Verizon
    focuses only on the services provided by the submitting carrier, but
    the language of section 222(b) is not so limited, requiring only
    that the proprietary information be submitted for the purpose of
    providing *any* telecommunications service. That purpose is
    certainly satisfied here. A Competitive Carrier submits the LSR to
    Verizon so that, upon completion of the number port and service
    disconnection, the Competitive Carrier can provide
    telecommunications service to a Complainant.[^70]

29. In sum, when a Competitive Carrier submits an LSR to Verizon,
    Verizon receives that LSR "for purposes of providing any
    telecommunications service" within the meaning of section 222(b).
    That conclusion, combined with the conclusion reached above about
    the LSR's proprietary nature, means that section 222(b) forbids
    Verizon from using the information in the LSR for its own marketing
    efforts.

30. Moreover, even if Verizon were correct that section 222(b) applies
    only when the carrier that receives proprietary information uses it
    for the purpose of providing telecommunications service, we would
    find that Verizon's retention marketing practices violate the
    statute because Verizon's provision of LNP constitutes a
    telecommunications service.

31. Verizon argues that LNP is not a telecommunications service because
    it does not constitute transmission, and because it is not offered
    for a fee.[^71] Number portability, however, is a wholesale input
    that is a necessary component of a retail telecommunications
    service. We have previously found that services or functions that
    are "incidental or adjunct to common carrier transmission service"
    -- i.e., they are "an integral part of, or inseparable from,
    transmission of communications" -- should be classified as
    telecommunications services.[^72] For instance, the Commission has
    found that central office space for collocation,[^73] certain
    billing and collection services,[^74] and validation and screening
    services[^75] should be treated for regulatory purposes in the same
    manner as the transmission services underlying them, notwithstanding
    that none of these services actually entails transmission.

32. LNP similarly constitutes such an "adjunct to basic" service.
    Verizon's provision of LNP is a vital part of the telecommunications
    services that it provides to the Competitive Carriers.[^76] Without
    the number port, Verizon could not route traffic to its former
    customer, as required under its interconnection agreements with the
    Competitive Carriers. Moreover, implementing LNP requires Verizon to
    be involved in properly switching and transmitting calls to the new
    carrier -- these are unquestionably "telecommunications" functions.
    For instance, the parties have stipulated that for LNP to work,
    Verizon must provide the transmission necessary to route calls in
    its role as the "N-1" carrier (the next-to-last carrier in the call
    sequence).[^77]

33. For all of the above reasons, we find that Verizon's provision of
    LNP constitutes a telecommunications service for purposes of section
    222(b).

## Verizon's Retention Marketing Program Makes Use of Other Carriers' Proprietary Information. 

34. An examination of the way Verizon handles the proprietary
    information it receives from the Competitive Carriers via LSRs
    confirms that Verizon uses this information "for its own marketing
    efforts," in violation of section 222(b). As stated above, the
    proprietary information at issue is the fact that, at a particular
    date and time in the near future, a Complainant will, in conjunction
    with a Competitive Carrier, begin to provide facilities-based, voice
    service to a specific customer who presently is being served by
    Verizon. Verizon uses that very information to swiftly identify
    exactly to whom it will engage in retention marketing. In
    particular, Verizon uses that information to help winnow from the
    universe of its daily disconnect orders all customers who are
    disconnecting service for *any* reason *other* than that they are
    switching service to a facilities-based, competing service provider
    like Complainants. This "threshing of the wheat from the chaff"
    leaves Verizon with a lead list consisting *only* of those customers
    who *are* switching their service to a facilities-based, competing
    provider like Complainants. Thus, the proprietary information
    contained in LSRs is a key organizing tool used by Verizon to
    determine which customers will receive retention marketing.[^78]

35. Verizon asserts that its retention marketing depends only on the
    non-proprietary fact that Verizon's own retail customer has
    cancelled voice service and seeks disconnection -- information that
    Verizon says it obtains legitimately, and of necessity, as part of
    its retail voice operations.[^79] Verizon's own description of how
    it targets customers for retention marketing belies that assertion.
    Verizon acknowledges that, in order to identify its retention
    marketing audience, Verizon relies specifically on two facts -- both
    the fact that the disconnect request stems from a switch in carriers
    rather than some other reason (such as moving or otherwise exiting
    the market), and the fact that the new carrier is a facilities-based
    provider.[^80] Verizon has identified no source for either of those
    facts other than the proprietary information contained in the LSRs
    submitted to Verizon by the Competitive Carriers. That such
    information finds its way into a "retail" disconnect order does not
    mean that Verizon refrains from using it to target customers for
    retention marketing.

36. Verizon also contends that, because it does not mention any
    Complainant's name in any of its oral or written retention
    marketing, Verizon does not "use" proprietary information.[^81]
    Verizon's contention misses the point. The Complainants' names,
    standing alone, are not the information at issue. What is at issue
    is the carrier change information, which, as discussed above, lies
    at the heart of Verizon's retention marketing program.

## The Bright House and Comcast-affiliated Competitive Carriers are "Telecommunications Carriers" Offering "Telecommunications Service."

37. Verizon argues that, even if section 222(b) refers to the submitting
    carriers' provision of "telecommunications service," section
    222(b)'s marketing ban does not apply to Verizon's receipt of
    information from Comcast's and Bright House's affiliated Competitive
    Carriers. That is because, according to Verizon, the record lacks
    evidence that those Competitive Carriers provide "telecommunications
    services" to Comcast and Bright House.[^82] This argument hinges on
    the statutory definitions of "telecommunications,"[^83]
    telecommunications carrier,"[^84] and "telecommunications
    service,"[^85] as well as on the Commission's determination that the
    common law concept of "common carrier" sheds significant light on
    the meaning of those statutory definitions.[^86]

38. Verizon's argument boils down to an assertion that, with respect to
    the telecommunications provided to Comcast and Bright House, the
    record lacks evidence that the Comcast and Bright House Competitive
    Carriers engage in "offering" those telecommunications "directly to
    the public, or to such classes of users at to be effectively
    available directly to the public...."[^87] Put in common law terms,
    Verizon asserts that the Comcast and Bright House Competitive
    Carriers do not "hold themselves out" to the public regarding the
    telecommunications they provide to their Complainant affiliates.
    Neither the Communications Act nor the case law describes exactly
    what is required to "offer" telecommunications "directly to the
    public, or to such classes of users at to be effectively available
    directly to the public." Therefore, whether a provider has made such
    an offering must be determined on a case-by-case basis.[^88]

39. Based on the specific record in this specific case, we find that the
    Bright House and Comcast-affiliated Competitive Carriers are common
    carriers for purposes of section 222(b). As an initial matter, the
    Comcast and Bright House Competitive Carriers "self-certify" that
    they do and will operate as common carriers and attest that they
    will serve all similarly situated customers equally.[^89] We give
    significant weight to these attestations because being deemed a
    "common carrier" (*i.e.,* being deemed to be providing
    "telecommunications services") confers substantial responsibilities
    as well as privileges, and we do not believe these entities would
    make such statements lightly.[^90] Further supporting our conclusion
    are the public steps the Comcast and Bright House Competitive
    Carriers have taken, consistent with their undertaking to serve the
    public indifferently. Specifically, each of the Comcast and Bright
    House Competitive Carriers has obtained a certificate of public
    convenience and necessity (or a comparable approval) from the state
    in which it operates.[^91] Moreover, each of the Comcast and Bright
    House Competitive Carriers has entered into a publicly-available
    interconnection agreement with Verizon, filed with and approved by
    the relevant state commission pursuant to sections 251 and 252 of
    the Act.[^92] These facts, in combination, establish a prima facie
    case that the Comcast and Bright House Competitive Carriers are
    indeed telecommunications carriers for purposes of section 222(b).

40. To try to rebut Complainants' prima facie case, Verizon points out
    that the Comcast and Bright House Competitive Carriers (i) serve
    only their affiliates, and (ii) lack a tariff or website posting or
    any other advertisement regarding the telecommunications at
    issue.[^93] We find these facts in isolation insufficient to
    overcome Complainants' showing for purposes of section 222(b).
    First, it is well-established that "\[o\]ne may be a common carrier
    though the nature of the service rendered is sufficiently
    specialized as to be of possible use to only a fraction of the total
    population."[^94] Verizon has submitted no credible evidence that
    the Competitive Carriers are unwilling to provide telecommunications
    services to unaffiliated entities on a nondiscriminatory basis.[^95]
    Second, the telecommunications services at issue here need not be
    federally tariffed,[^96] and Verizon has not argued that state
    tariffs are required.[^97] Furthermore, by obtaining publicly
    available state certificates and interconnection agreements, the
    Comcast and Bright House Competitive Carriers have given notice that
    telecommunications services are available to the particular class of
    potential customers that might be interested in the services at
    issue here.[^98] If a voice services provider similarly situated to
    Comcast and Bright House were looking for a provider of these
    services, the Comcast and Bright House Competitive Carriers would be
    obvious choices. Finally, prior to the dispute at issue here,
    Verizon itself appears to have treated these entities as
    telecommunications carriers.[^99]

41. In sum, based on the particular facts in this record regarding the
    telecommunications provided to Comcast and Bright House by their
    affiliated Competitive Carriers, we conclude that Comcast and Bright
    House have shown, by a preponderance of the evidence, that the
    Competitive Carriers are telecommunications carriers for purposes of
    section 222(b) of the Act and provide "telecommunications services"
    to Comcast and Bright House within the meaning of section 222(b) of
    the Act.  We stress, however, that our holding is limited to the
    particular facts and the particular statutory provision at issue in
    this case.  The U.S. Court of Appeals for the D.C. Circuit has made
    clear that an agency may interpret an ambiguous term "differently in
    two separate sections of a statute which have different
    purposes."[^100]  Here, section 222(b) has a different purpose --
    privacy protection -- than many other provisions of the
    Communications Act, and we believe that this purpose argues for a
    broad reading of the provision.  As a result, our decision holding
    the Competitive Carriers to be "telecommunications carriers" for
    purposes of section 222(b) does not mean that they are necessarily
    "telecommunications carriers" for purposes of all other provisions
    of the Act.  We leave those determinations for another day.  While
    the Act does provide a definition of the term "telecommunications
    carrier," "the presence of a definition does not necessarily make
    the meaning clear.  A definition only pushes the problem back to the
    meaning of the defining terms."[^101]  Therefore, we believe that it
    may be permissible to interpret an ambiguous but defined term
    differently in different statutory provisions that serve distinct
    purposes.  

    **E. Verizon's Policy and Constitutional Arguments Do Not Justify
    its Proposed Reading of Section 222(b).**

42. Verizon argues that interpreting section 222(b) so as to allow its
    retention marketing program would promote competition and benefit
    consumers, and has submitted the declaration of an economist to
    support this assertion.[^102] Verizon also suggests that we should
    construe section 222(b) to permit the challenged customer retention
    marketing practices because doing so would help level the playing
    field on which voice providers compete for video and Internet
    customers, and video and Internet providers compete for voice
    customers.[^103]

43. Verizon's policy arguments might be appropriately raised anew in
    some other context, such as a request to forbear from application of
    section 222(b) or a notice of proposed rulemaking under section
    201(b) of the Act, but do not persuade us to adopt Verizon's
    interpretation of section 222(b) in this adjudication. The
    Commission has already evaluated the policy concerns underlying
    section 222(b) and adopted a construction that balances the concerns
    of protecting proprietary information and promoting
    competition.[^104] Our decision here is fully in accord with those
    prior decisions. Verizon's policy arguments, and its economist's
    declaration, simply fail to consider the importance the Commission
    has placed on protecting proprietary information that voice carriers
    are required to share with their competitors. Moreover, Verizon's
    "level playing field" argument ignores the fact that the statute
    itself treats different services differently -- on its face, section
    222 applies to telecommunications services, but not to video or
    other services.[^105] That different statutory treatment reflects
    the fact that only a competing voice service provider must
    communicate and coordinate with a customer's existing voice service
    provider in order to initiate service to that new customer. Where,
    as here, a provider has no choice but to communicate competitively
    sensitive information to its rival, the rival cannot use that
    information for marketing.

44. Verizon also asserts that the interpretation of section 222(b)
    advanced by Complainants "would severely restrict lawful,
    non-misleading speech and accordingly would raise significant First
    Amendment concerns."[^106] More specifically, Verizon argues that no
    legitimate government interest could be served by restricting
    marketing "for the sole reason that it is based on information
    submitted by a service provider on behalf of the customer rather
    than by the customer him or herself."[^107] As even Verizon notes,
    however, the government may restrict truthful communications if such
    restriction is narrowly tailored to serve a substantial government
    interest.[^108] The Commission previously found that this test was
    met when it interpreted section 222(b) as prohibiting retention
    marketing based on the use of carrier change information.[^109] The
    same analysis applies here concerning retention marketing based on
    the use of carrier change information embedded in number porting
    requests.

# Conclusion and Relief Awarded

45. In sum, we find that, under section 222(b) of the Act, the
    number-porting/carrier-change information obtained by Verizon from
    the Competitive Carriers is "proprietary" to the Competitive
    Carriers; Verizon obtains the proprietary information "for purposes
    of \[the Competitive Carriers\] providing ... telecommunications
    service" to Complainants, and for purposes of Verizon providing a
    telecommunications service to the Competitive Carriers; each of the
    Competitive Carriers is providing "telecommunications service" to a
    Complainant; and Verizon uses that proprietary information for a
    purpose other than the Competitive Carriers providing
    telecommunications service to Complainants, namely, "its own
    marketing efforts." Consequently, we hold that Verizon's customer
    retention marketing activities, as described above, violate section
    222(b) of the Act. In turn, we grant Complainants' claim under
    section 222(b) of the Act (*i.e.*, Count I), and award the requested
    injunctive relief. Specifically, we hereby order Verizon to
    immediately cease and desist from engaging in the customer retention
    marketing activities described above.

    **V. ORDERING CLAUSES**

46. Accordingly, IT IS ORDERED, pursuant to sections 4(i), 4(j), 201(b),
    208, 222, and 303(r) of the Act,[^110] and sections 1.720-1.736 of
    the Commission's rules,[^111] that the Enforcement Bureau's April
    11, 2008, *Recommended Decision* in File No. EB-08-MD-002 IS
    REJECTED.

47. IT IS FURTHER ORDERED, pursuant to sections 4(i), 4(j), 201(b), 208,
    222, and 303(r) of the Act,[^112] and sections 1.720-1.736 of the
    Commission's rules,[^113] that Count I of the Complaint is GRANTED,
    and that Counts II and III are DISMISSED without prejudice.

48. IT IS FURTHER ORDERED, pursuant to sections 4(i), 4(j), 208, 222,
    and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.
    §§ 154(i), 154(j), 208, 222, and 303(r), and sections 1.720-1.736 of
    the Commission's rules, 47 C.F.R. §§ 1.720-1.736 that Verizon SHALL
    IMMEDIATELY CEASE AND DESIST from engaging in the customer retention
    marketing activities described in this Order.

    FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

**STATEMENT OF**

**CHAIRMAN KEVIN J. MARTIN, DISSENTING**

*Re: Bright House Networks, LLC et al., Complainant, v. Verizon
California Inc., et al., Defendants*.

I have consistently maintained that it is important to create a
regulatory environment that promotes competition and investment, setting
rules of the road so that all players can compete on a level playing
field. Today, a majority of the Commission voted to allow
complainants\--players providing a bundle of services over one platform
(cable VoIP)---to gain an advantage over their competitors---players
providing those same bundled services over a different platform
(traditional telephone service). Specifically, the majority decided to
prohibit some companies from marketing to retain their customers, even
though the marketing practices prohibited today are similar to the
aggressive marketing techniques engaged in by the complainants
themselves (when they provide cable video service). To reach this
result, the majority has created new law, holding that these
complainants are "telecommunications carriers" for purposes of obtaining
this competitive advantage, but that they are not "telecommunications
carriers" for other purposes, such as complying with the obligations of
"telecommunications carriers."

I am concerned that today's decision promotes regulatory arbitrage and
is outcome driven; it could thwart competition, harm rural America, and
frustrate regulatory parity. Therefore, I must dissent from today's
decision.

In its *Recommended Decision*, the Enforcement Bureau (Bureau)
recommended that the Commission, among other things, deny the cable
Complainants' claims that Verizon's practices violate section 222(b) of
the Act.[^114] The Bureau interpreted section 222(b) to apply only where
a telecommunications carrier receives another carrier's proprietary
information so that the *receiving carrier* can provide a
telecommunications service. The Bureau concluded that Verizon's actions,
as the receiving carrier, did not violate section 222(b) because
Verizon's role in the number porting process does not involve the
provision of a "telecommunications service." Although number portability
requires carrier-to-carrier coordination, it does not involve the
provision of a carrier-to-carrier "telecommunications service."

The Bureau further concluded that even assuming *arguendo* that section
222(b) could be construed to refer to the *submitting carrier's*
provision of "telecommunications service," section 222(b)'s marketing
ban would not apply to Verizon's receipt of information from Comcast's
and Bright House's affiliates because the record lacked evidence that
those affiliates are, in fact, "telecommunications carriers." Comcast
and Bright House pointed to their affiliates' state certificates and
interconnection agreements, and to self-certifications during the
proceeding that the affiliates are common carriers. However, the Bureau
found that Complainants failed to show that the affiliates publicly hold
themselves out as offering telecommunications indiscriminately to any
and all potential customers.

As I have said before, all consumers should enjoy the benefits of
competition. Competition is the best protector of the consumer's
interest and the best method of delivering the benefits of choice,
innovation, and affordability to American consumers. Customer retention
marketing is a form of aggressive competition that has the potential to
benefit consumers through lower prices and expanded service offerings.
Moreover, the cable companies engage in such practices to keep their
video customers from switching to other providers. I am therefore
disappointed that the Commission would prohibit these practices, which
promote competition and benefit consumers and particularly disappointed
that they would do so and prohibit practices from only one class of
companies.

I also fear that today's decision will have a negative impact on rural
carriers and customers in rural America. Today's action rests in part on
a questionable conclusion that Comcast's and Bright House's affiliates
are "telecommunications carriers." This finding affords the affiliates
the privileges of a "telecommunications carrier," including the right to
interconnection, even though there is scant evidence that the affiliates
have ever offered telecommunications to the public and no evidence that
they have provided telecommunications to any entity other than Bright
House and Comcast. This will bind our hands and have far-reaching
consequences, particularly for small rural local exchange carriers
around the country, such as Vermont Telephone Company, who may be forced
to interconnect with similar entities that have no intention of
providing telecommunications to the public or assuming the obligations
of a "telecommunications carrier." For example, will such entities
assume the obligations of "telecommunications carriers," such as the
disabilities access requirements of section 255, the slamming
requirements of section 258, and the CALEA requirements?

Part of the job of being a Commissioner is that you are required to make
hard or difficult decisions and those decisions have implications for
the entire industry. For example, what constitutes a "telecommunications
carrier"?

Here the majority wants to grant the Complaint but not really answer
that question. They have avoided making a difficult decision by
embracing the novel idea that a company can be classified as a carrier
for a provision or even a subprovision of a statute but not another
provision or subprovision of the very same statute. Naturally, they do
so without citing any statutory basis or authority for such an
inherently arbitrary approach. Yet they had no choice but to create such
an argument if they were to find in favor of Comcast and Bright House.

The majority's attempt to dodge the issue and deny the consequences of
today's action by holding that we are determining that the Competitive
Carriers are carriers for purposes of 222(b) based on the specific
record and specific facts of this case but not for other purposes makes
no sense and is not legally sustainable. A provider either is or is not
a "telecommunications carrier." This "pick and choose, rule by rule"
approach is the very height of arbitrary and capricious conduct by the
Commission, and is a thinly veiled attempt by the majority to reach a
desired result without accepting responsibility for the legal
consequences of their action.

Indeed if such an approach were possible it would allow industry players
and the Commission to circumvent the entire statutory scheme applied by
picking and choosing which provisions and subprovisions of the statute
applied by classifying and declassifying carriers without any factual or
statutory distinction or basis.

Almost by definition this approach is arbitrary and capricious as it
acknowledges that it does not want to be bound by the logic and legal
rationale of the decision for any other purpose and preserves the
flexibility to not apply the same statutory definition to any other
aspect of the statute.

It is indefensible to say that these entities are telecommunications
carriers under one part of the Act and not others; the Act makes no such
distinction. The majority attempts to find precedent to support its
approach. However, that precedent should not apply because
"telecommunications carrier" is a specific statutory definition. The
majority's refusal to say that these entities are "telecommunications
carriers" for all purposes shows that, clearly, their holding is outcome
driven, advances regulatory arbitrage, and reflects a cavalier refusal
to live with the legal consequences of their decision.

In addition, this approach will bind our hands going forward, with broad
implications for other rural carriers and consumers around the country,
and will raise a host of questions. If these entities are
"telecommunications carriers," as the majority holds today, I presume
they are subject to the obligations of a "telecommunications carrier",
such as the disabilities access requirements of section 255, the
slamming requirements of section 258, and the CALEA requirements.

Here, however, the majority is not providing regulatory consistency, nor
are they providing certainty, except for the certainty of providing a
competitive advantage to one type of service provider platform over
other platforms. Thus, consumers will be treated differently based on
the platform over which they receive service.

In the past, some Commissioners have warned the Commission of the
dangers of "inconsistent and arbitrary application" of the Commission's
rules. Specifically, in concurring in the Commission's decision to
uphold a Media Bureau denial of a set-top box waiver request, they
stated that "\[t\]he result of these inconsistent decisions is that
consumers will be treated differently, based on where they live and
which MVPD they choose."[^115] I agree that "\[a\]ll market players
deserve the certainty and regulatory even-handedness necessary to spark
investment, speed competition, empower consumers, and make America a
stronger player in the global economy."[^116] It is unfortunate that the
majority did not follow that advice here.

Indeed, the majority does not respond to Verizon's claims.

> Section 222(b) protects proprietary information of telecommunications
> carriers. But the supposedly proprietary information at issue here, if
> it did belong to the service provider, would belong to the
> complainants (cable VoIP providers), not the CLEC submitting the
> information to Verizon -- indeed, the CLECs are not even complainants.
> And complainants here do not claim to be telecommunications carriers
> under the Act. The Commission cannot designate a cable VoIP provider a
> telecommunications carrier for purposes of extending privileges
> granted under section 222(b) without subjecting those carriers to the
> *obligations* set forth in Title II. There is a single definition of
> "telecommunications carrier" in the Act. The Commission never has and
> could not classify the same service as a "telecommunications service"
> -- and thus the entity that provides the service as a
> "telecommunications carrier" -- for the purposes of one provision but
> not another *within the same statute*. *See Clark v. Martinez*, 543
> U.S. 371, 378 (2005) (meaning of words in a statute cannot change with
> statute's application); *cf. American Council on Educ. v. FCC*, 451
> F.3d 226, 234 (D.C. Cir. 2006) (noting that CALEA's text is "more
> inclusive" than definition of "telecommunications carrier" in the
> Act). [^117]

I am also troubled about the impact of today's decision on our ability
to promote regulatory parity. Last month, I proposed to my fellow
Commissioners a Notice of Proposed Rulemaking (NPRM) that would initiate
an inquiry into customer retention marketing practices, including how to
ensure that such practices are treated consistently across all platforms
used to provide voice, video, and broadband Internet service.

I am concerned, however, that today's decision will preclude our ability
to apply a consistent regulatory framework across platforms. Indeed, I
anticipate that when the time comes, some of the same members of the
majority will preserve today's competitive advantage for one industry
over another by claiming that we lack statutory authority to establish
such a consistent approach or regulatory level playing field. Despite
the fact that the inconsistencies are a result of a novel interpretation
of what can constitute a telecommunications carrier that they themselves
established.

Indeed, the action we take today to afford the affiliates the full
benefits of a telecommunications carrier without the corresponding
obligations, coupled with a potential lack of statutory authority to
later impose those obligations, is in direct conflict with any stated
intent to provide regulatory parity through the NPRM.

**STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

Re: *Bright House Networks, LLC, et al., Complainants, v. Verizon
California. Inc., et al., Defendants*; Memorandum Opinion and Order
(June 23, 2008)

Today's decision is good news for consumers and competition.

First, there is nothing pro-consumer about allowing Verizon to wait
until a customer decides to terminate service before making the
company's best and final offer. After today's ruling, Verizon will have
additional incentive to focus on making sure that ***all*** its
customers are happy with their service, rather than reserving the red
carpet treatment for those who have already decided to leave but whose
transfer has not yet been technically implemented.

Second, it is essential to understand that this entire situation arises
only because incumbents control the technical process---which still
takes inexplicably up to four days, in distinct contrast to the switch
between wireless carriers, which takes as little as four hours---that
allows a customer to retain his or her phone number while switching to a
competitive carrier. The FCC plainly needs to ensure that incumbents do
not tamper with this process in order to discourage customers from
switching, especially by using proprietary information that competitive
carriers must share in order to initiate the process. Competitive
telephone service will never take hold if incumbents are permitted to
manipulate the system to interfere with customers seeking better terms
and conditions with another carrier.

Third, I am surprised and disappointed with the argument that the
majority should not have taken efforts to limit the scope of the
statutory interpretation in today's item to the facts of this case. The
critical point to remember here is that today's decision is reached in
the context of a proceeding that is "restricted" under the Commission's
rules---meaning that the record reflects only the comments of direct
parties to the case.\
A "restricted" proceeding is most assuredly not the right venue for
interpreting a statutory term in a way that carries broader implications
for the public and other stakeholders not represented in this
proceeding. Yet, in order to decide the case before us, we must resolve
this term as it applies to a particular section of the Communications
Act---and I recognize that this decision may indeed bear on how we
resolve it in future contexts.

But make no mistake, the real villain here is ***not*** the decision we
reach today. It is the fact that this basic statutory question has not
yet been decided, even ***years*** after it first became clear that the
Commission needed to do so in order to dispel the unwelcome uncertainty
that presently infects this set of issues. This is most decidedly
***not*** a situation of my choosing. Indeed, as I have stated on
countless occasions over the past few years, we should have dispelled
this regulatory fog years ago---when broadband and VoIP were still
emerging technologies and not the mainstream offerings they are
today---through an open, general proceeding that solicits comment from
the public as well as all affected industries and stakeholders.

Nevertheless, despite my strenuous and frequent objections, important
statutory questions remain unanswered. So how can the Commission make
the best of this sad state of affairs? One argument that has been made
is that the Commission should reach a result that would allow us to
avoid the question. But this would propel
putting-the-cart-before-the-horse to new and unheard of levels. It would
in fact require reaching an ***anti-consumer, anti-competitive*** result
in the case before us---just because the Commission has been derelict in
its duty (for several years now) to resolve the statutory question in a
broader, more open proceeding. The American public plainly deserves
better. Another path would be to decide the question for all time and in
all contexts, without giving the public or other interested parties an
opportunity to comment on this important issue. Though some might
describe that as decisively resolving a hard case, I see it as moving
forward blindly and irresponsibly -- not the way for a regulatory agency
to conduct the people's business. The essence of reasoned agency
decision-making is that it be based on a full record, and with wide
input from the public and all affected stakeholders. I see no virtue to
departing from those principles in this case.

The only responsible decision that I can see in this context is a third
path---the one we take today. That is to decide the statutory question
before us in this case in a way that will benefit consumers and
competition---but to make our decision as narrow as possible pending a
further, non-"restricted" consideration of the issues. Today's decision
accomplishes this much.

Our work in this area must not end with today's decision. The next
logical step is to (at long last) create clear statutory and regulatory
rules of the road for VoIP and broadband technologies. And---of critical
importance---we must reach this decision on the basis of broad comment
from the public and all affected stakeholders and industries. I have
advocated this step for years now and it gives me no pleasure to say
that today's difficult situation simply underscores the cost of the
Commission's unwillingness to heed this call.

**STATEMENT OF**

**COMMISSIONER ROBERT M. McDOWELL**

*Re:* *Bright House Networks, LLC, et al.¸Complainants v. Verizon
California, Inc., et al., Defendants*.

American consumers deserve the benefits that come from robust
competition, especially in the telecommunications marketplace. It is the
FCC's mission to promote such consumer-friendly competition.
Additionally, Congress has required that we protect consumer privacy.
Section 222 of the Communications Act clearly prohibits carriers from
using confidential customer information for marketing efforts.
Consistent with Congress's intent and Commission precedent in the
long-distance context, today we carry out Congress's unambiguous mandate
to protect consumer privacy in local markets as well.

Carriers are free to initiate customer retention marketing campaigns
before a consumer gives the order to switch from his or her current
phone service provider to a new provider. Under the law, carriers are
also permitted to launch "win-back" campaigns after consumers have
switched. Today's action underscores long-held Commission policy that
using proprietary customer information for marketing efforts cannot take
place during the window of time when a customer's phone number is being
switched to a new provider.

Our March, 2007, action granting the Time-Warner petition for
declaratory ruling on interconnection with incumbent LECs held that
cable and other VoIP providers must be able to use local phone numbers
and be allowed to put calls through to other phone networks. Our action
then was premised on the belief that we were working to increase
meaningful competition in local telephone service. Similarly, today's
action ensures that consumers in all areas of the country reap the
benefits of competition in the form of lower prices, innovative services
and more choice.

[^1]: *Bright House Networks, LLC v. Verizon California, Inc.*,
    Recommended Decision, File No. EB-08-MD-002, 2008 WL 1722033 (Enf.
    Bur., rel. Apr. 11, 2008) ("*Recommended Decision*"). *See* 47
    C.F.R. § 1.730(i) ("If parties to the proceeding file comments to
    the recommended decision, the Commission will issue its decision
    adopting or modifying the recommended decision within 30 days of the
    filing of the final comments.")

[^2]: Formal Complaint, File No. EB-08-MD-002 (filed Feb. 11, 2008)
    ("Complaint").

[^3]: 47 U.S.C. § 208.

[^4]: 47 U.S.C. § 222(b).

[^5]: 47 U.S.C. § 201(b). *See* Count III of the Complaint.

[^6]: Comments Challenging Recommended Decision, File No. EB-08-MD-002
    (filed Apr. 28, 2008); Comments of Verizon in Support of Recommended
    Decision, File No. EB-08-MD-002 (filed May 13, 2008); Complainants'
    Reply Comments Challenging the Recommended Decision ("Reply
    Comments"), File No. EB-08-MD-008 (filed May 23, 2008).

[^7]: *See, e.g.*, Joint Statement, File No. EB-08-MD-002 (filed Feb.
    29, 2009) ("Joint Statement") at 3-4, ¶ 4. The Defendants are:
    Verizon California Inc.; Verizon Delaware LLC; Verizon Florida LLC;
    Contel of the South, Inc.; Verizon South Inc.; Verizon New England
    Inc.; Verizon Maryland Inc.; Verizon New Jersey Inc.; Verizon New
    York Inc.; Verizon Northwest Inc.; Verizon North Inc.; Verizon
    Pennsylvania Inc.; GTE Southwest Incorporated d/b/a Verizon
    Southwest; Verizon Virginia Inc.; and Verizon Washington, D.C. Inc.
    *See, e.g.*, *id.* at 3-5, ¶¶ 4-5.

[^8]: *See, e.g.*, Joint Statement at 2-3, ¶¶ 1-3; Complaint at 3-4, ¶¶
    2-3. Complainants provide their retail VoIP service through
    affiliated entities. *See, e.g.*, Joint Statement at 1-3, ¶¶ 1-3.
    For convenience, we include those affiliates when we refer to
    "Complainants" herein.

[^9]: *See, e.g.*, Joint Statement at 5, ¶ 6. The services provided by
    the Competitive Carriers to Complainants are similar, if not
    identical, to the wholesale services discussed in *Time Warner Cable
    Request for Declaratory Ruling that Competitive Local Exchange
    Carriers May Obtain Interconnection Under Section 251 of the
    Communications Act, as Amended, to Provide Wholesale
    Telecommunications Services to VoIP Providers*, Memorandum Opinion
    and Order, 22 FCC Rcd 3513 (Wireline Comp. Bur. 2007) (*"Time Warner
    Wholesale Services Order"*).

[^10]: *See, e.g.*, Joint Statement at 6, ¶¶ 8-9. As described below,
    each of the Comcast and Bright House Competitive Carriers has a
    state certificate and an interconnection agreement with Verizon.
    *See* Section III.D, *infra*.

[^11]: *See, e.g.*, Joint Statement at 6, ¶¶ 7-9.

[^12]: *See, e.g.*, 47 U.S.C. § 251(b)(2); 47 U.S.C. § 153(30)
    (providing that "number portability" means the ability of users of
    telecommunications services to retain, at the same location,
    existing telecommunications numbers without impairment of quality,
    reliability, or convenience when switching from one
    telecommunications carrier to another). *See also* 47 C.F.R. §§
    52.11, 52.21-26.

[^13]: *See, e.g.*, Complaint at 8, ¶ 10, and at Ex. E; Answer of
    Verizon, File No. EB-08-MD-002 (filed Feb. 21, 2008) ("Answer") at
    Exs. 22-27; *In the Matter of Telephone Number Portability*, Second
    Report and Order, 12 FCC Rcd 12281, 12315-16 at ¶¶ 55-56 (1997).

[^14]: *See, e.g.*, Joint Statement at 9, ¶ 20. The Competitive Carrier
    may submit the LSR directly to Verizon, or through a contractor.
    *Id.*

[^15]: *See, e.g.*, Joint Statement at 9, ¶ 18.

[^16]: *See, e.g.*, Joint Statement at 11, ¶ 25. As the parties aptly
    indicate, "\[w\]hen a customer migrates from one provider to
    another, it is important that the retail service being provided by
    the old service provider be terminated contemporaneously with the
    establishment of new service. This ensures that the customer is not
    left without service for any significant period of time and does not
    wind up being required to pay two providers for duplicative
    service." *Id*.

[^17]: *See, e.g.*, Joint Statement at 9, ¶ 20.

[^18]: The Number Portability Administration Center, or NPAC, was
    created to support the implementation of local number portability by
    operating regional number portability databases. *See generally*
    [www.npac.com](http://www.npac.com/).

[^19]: *See, e.g.*, Joint Statement at 11, ¶ 28.

[^20]: *See, e.g.*, Joint Statement at 10, ¶ 23.

[^21]: *See, e.g.*, Joint Statement at 10, ¶ 24.

[^22]: *See, e.g.*, Joint Statement at 12, ¶ 29. The submission of an
    LSR by the Competitive Carrier notifying Verizon of the porting of a
    Verizon customer's number is the only submission that is required
    (and, typically, the only communication that is received) to
    generate a disconnect order within Verizon's internal systems.
    Supplemental Joint Statement, File No. EB-08-MD-002 (filed Mar. 5,
    2008) ("Supp. Joint Statement") at 2, ¶ 1.

[^23]: *See, e.g.*, Joint Statement at 12-13, ¶¶ 30-31. Use of 10-digit
    triggers is routine in the industry, but it is not required by
    industry process flows, which permit coordinated migration as an
    alternative. *Id.* at 13, ¶ 31.

[^24]: *See, e.g.*, Joint Statement at 13, ¶ 32. This "confirmation"
    step is permitted, but not required, by industry process flows.
    *Id.* Additional work steps that Verizon undertakes include:
    physically disconnecting the wire serving the customer from the
    frame in the central office; using a service order to deliver
    information to the E911 database to unlock the customer's record so
    that it can be modified by the new carrier; implementing any
    requested changes to the retail customer's directory listing; and,
    after service is disconnected, informing the billing systems to
    cease billing for service. *Id.* at 12, ¶ 29.

[^25]: *See, e.g.*, Joint Statement at 11-12, ¶ 28.

[^26]: *See, e.g.*, Joint Statement at 14-17, ¶¶ 35-45.

[^27]: *See, e.g.*, Joint Statement at 15, ¶¶ 37-38. The record contains
    no specific reference to how frequently the lead list is developed.
    Given the nature of the retention marketing program, however, it is
    reasonable to infer that the lead list is generated on approximately
    a daily basis.

[^28]: *See, e.g.*, Joint Statement at 15, ¶ 37; Supp. Joint Statement
    at 2, ¶ 1 (stating that Verizon's retention marketing lead list is
    generated from disconnect orders, including disconnect orders that
    are generated as a result of receiving LSRs). Of course, disconnect
    orders may stem from circumstances other than an LSR, such as a
    customer move out of the local service area. *See, e.g.*, Reply
    Brief of Verizon, File No. EB-08-MD-002 (filed Mar. 14, 2008) at 1.

[^29]: *See, e.g.*, Joint Statement at 15, ¶ 37. Toward that end,
    Verizon eliminates from the lead list customers who (i) are
    switching to a service provider that is either a Verizon wholesale
    customer (such as a reseller of Verizon service or a customer of
    Verizon's Wholesale Advantage product) or a Verizon affiliate
    (*e.g.*, Verizon Wireless), or (ii) contacted Verizon directly to
    terminate service. Verizon also excludes those disconnecting
    customers who are on do-not-call, do-not-solicit, do-not-mail, or
    do-not-email lists. *Id.*

[^30]: Answer at 10, ¶ 20. The record reveals no other means by which
    Verizon could identify and eliminate customers who are not switching
    their phone service to a facilities-based competitor.

[^31]: *See, e.g.*, Joint Statement at 15-16, ¶¶ 39-40.

[^32]: *See, e.g.*, Joint Statement at 16, ¶ 41. Any marketing that
    Verizon conducts after the number port and disconnect of Verizon
    service have occurred is not at issue here. *See*, *e.g*., Complaint
    at 13-14; Answer at 1.

[^33]: Joint Statement at 17, ¶ 44.

[^34]: Joint Statement at 17, ¶ 45.

[^35]: 47 U.S.C. § 222(b). The Complaint also alleges that Verizon's
    customer retention marketing practices violate sections 222(a) and
    201(b) of the Act. *See, e.g.*, Complaint at 28-31 (citing 47 U.S.C.
    §§ 222(a), 201(b)). Because Complainants prevail on their claim
    under section 222(b), and that victory will afford Complainants all
    the relief to which they would be entitled under sections 222(a) and
    201(b), we need not and do not reach their claims under sections
    222(a) and 201(b). Accordingly, we dismiss those claims (*i.e.*,
    Counts II and III) without prejudice.

[^36]: Complaint at 31, ¶ 59 (asking the Commission to "enjoin Verizon
    from continuing its retention marketing based on carrier change
    information"). In the context of section 222(b) of the Act, the
    Commission generally labels as "retention marketing" any marketing
    to a customer by the customer's existing provider that occurs while
    the carrier-change/number-porting request applicable to that
    customer is pending; the Commission generally labels as "winback
    marketing" any marketing to a customer by the customer's former
    provider that occurs after the carrier-change/number-porting request
    applicable to that customer has been effectuated. *See, e.g.*, *In
    the Matter of Telecommunications Carriers' Use of Customer
    Proprietary Network Information and Other Customer Information*,
    Order on Reconsideration and Petitions for Forbearance, 14 FCC Rcd
    14409, 14443-4, ¶ 65 (1999) ("*CPNI Reconsideration Order*")**.**
    The Complaint challenges only Verizon's retention marketing, and
    only Verizon's retention marketing that stems, directly or
    indirectly, from the submission of an LSR. *See, e.g.*, Complaint at
    14. Thus, this Order applies only to such retention marketing, and
    not to any winback marketing.

[^37]: Complaint at 31, ¶ 59 (citing 47 C.F.R. § 1.722(d)).

[^38]: Pursuant to section 1.730 of the Commission's rules, at the
    Complainants' request, the Enforcement Bureau accepted the Complaint
    on the Commission's Accelerated Docket. 47 C.F.R. § 1.730. *See*
    Complaint at Ex. T.

[^39]: 47 U.S.C. § 222(b).

[^40]: 47 U.S.C. § 222(b).

[^41]: *See, e.g.*, Complaint at Ex. A, ¶ 7, Ex. E ¶ 6.

[^42]: *See*, *e.g.*, *CPNI Reconsideration Order*, 14 FCC Rcd at 14449,
    ¶ 78 (1999) ("\[C\]arrier change information is carrier proprietary
    information under section 222(b)."); *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*, Second
    Report and Order and Further Notice of Proposed Rulemaking, 14 FCC
    Rcd 1508, 1572, ¶ 106 (1998) ("*1998 Slamming Order*") ("\[C\]arrier
    change information is carrier proprietary information and,
    therefore, pursuant to section 222(b), the executing carrier is
    prohibited from using such information to attempt to change the
    subscriber's decision to switch to another carrier.").

[^43]: *CPNI Reconsideration Order,* 14 FCC Rcd at 14449-50, ¶ 77.

[^44]: Verizon contends that a different process not involving the
    transmission of carrier-change information to Verizon *could* have
    been established, *see, e.g.*, Answer at 7, but the existence of
    that hypothetical alternative has no bearing on the legal
    requirements applicable to the processes currently in place.

[^45]: *See*, *e.g.*, Answer at 37-38, 43-44, 48-50; Comments of Verizon
    in Support of Recommended Decision at 19-20.

[^46]: *See*, *e.g*., Answer at 16 (explaining that Verizon instructs
    its customer retention marketing representatives to refrain from
    looking at the name of the new carrier or mentioning the name of the
    new carrier to the target customer); 43 ("assuming for the sake of
    argument that the *identity* of the winning carrier is proprietary
    information").

[^47]: *See* Section III.C, *infra.*

[^48]: *See*, *e.g.*, Answer at 45, 49-50; Comments of Verizon in
    Support of Recommended Decision at 20**.**

[^49]: *See, e.g.*, *CPNI Reconsideration Order*, 14 FCC Rcd at 14450, ¶
    79 (holding that "section 222(b) is not violated if the carrier has
    independently learned from its retail operation that a customer is
    switching to another carrier"); *In the Matter of Implementation of
    the Telecommunications Act of 1996: Telecommunications Carriers' Use
    of Customer Proprietary Network Information and Other Customer
    Information*, Third Report and Order and Third Further Notice of
    Proposed Rulemaking, 17 FCC Rcd 14860, 14917, ¶ 131 and n.302 (2002)
    ("*CPNI 3^rd^ Report & Order*") (recognizing that "a carrier's
    retail operations may, without using information obtained in
    violation of section 222(b), legitimately obtain notice that a
    customer plans to switch to another carrier," but noting that "such
    instances are the exception, not the rule").

[^50]: In this vein, Verizon states: "Complainants are left to argue
    that, if a consumer calls to cancel service, retention marketing is
    permitted and beneficial, but that, if the customer authorizes a
    service provider to cancel on his or her behalf, retention marketing
    is prohibited and harmful. That nonsensical distinction finds no
    support in the Act or the Commission's rules and is so irrational as
    to render the restriction ... an unconstitutional restriction on
    Verizon's speech." Opening Brief of Verizon, File No. EB-08-MD-002
    (filed Mar. 12, 2008) at 1. Yet the Commission plainly made that
    distinction in prior orders, and neither Verizon nor anyone else
    challenged it as "nonsensical" or "irrational." Indeed, we are not
    aware of any carrier, including Verizon prior to the summer of 2007,
    acting contrary to that distinction.

[^51]: *See*, *e.g.*, *1998 Slamming Order*, 14 FCC Rcd at 1510, ¶ 1.

[^52]: *Id.* at 1572-73, ¶ 106.

[^53]: *See*, *e.g.*, Opening Brief of Verizon at 5; Answer at 42.

[^54]: We note that none of the Complainants claims to be a
    "telecommunications carrier" within the meaning of section 222(b).

[^55]: We emphasize that these are assumptions, not conclusions.

[^56]: *See, e.g.*, Joint Statement at 5-6; Complaint at 7-9. *See also*
    *In the Matter of Telephone Number Requirements for IP-Enabled
    Services Providers*, Report and Order, Declaratory Ruling, Order on
    Remand, and Notice of Proposed Rulemaking, 22 FCC Rcd 19531 (2007)
    ("VoIP LNP Order and Declaratory Ruling") (observing in a closely
    analogous context that interconnected VoIP providers and wholesale
    interconnection providers work in partnership to provide competitive
    voice services to end-users); *Time W**arner Wholesale Services
    Order*, *supra* (same point as *VoIP LNP Order and Declaratory
    Ruling*).

[^57]: *See* Section III.D, *infra*.

[^58]: Verizon cursorily asserts that, if the LSR's carrier-change
    information is deemed to be proprietary to the Competitive Carriers,
    then the Complainants lack standing to prosecute this Complaint.
    Opening Brief of Verizon at 5-6. Verizon's assertion overlooks the
    last sentence of section 208, which provides that "\[n\]o complaint
    shall at any time be dismissed because of the absence of direct
    damage to the complainant." 47 U.S.C. § 208. At a minimum,
    Complainants have clearly experienced indirect damage from Verizon's
    customer retention marketing program, even if each Complainant is
    not a "carrier" whose proprietary information is protected by
    section 222(b). Thus, Complainants have standing under section 208
    to obtain a ruling regarding the lawfulness of Verizon's conduct.
    Whether Complainants also have standing to obtain a ruling awarding
    monetary damages to them is a question we need not reach unless and
    until they file a supplemental complaint for damages pursuant to 47
    C.F.R. § 1.722.

[^59]: 47 U.S.C. § 222(b).

[^60]: *See, e.g.,* Joint Statement at 23, ¶ 68 ("Complainants assert
    that one legal issue is whether provision of 'telecommunication
    service' by the Competitive Carriers, but not by Verizon,
    constitutes 'providing any telecommunications service' within the
    meaning of section 222(b). Defendants assert that one legal issue is
    whether provision of 'telecommunications service' by a carrier that
    submits information . . . implicates section 222(b)"); Comments of
    Verizon in Support of Recommended Decision at 11-14.

[^61]: *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*, Third Order on Reconsideration and Second Further Notice
    of Proposed Rulemaking, 18 FCC Rcd 5099, 5109-10, ¶ 25 (2003)
    ("*Third Slamming Reconsideration Order*") (emphasis added).

[^62]: *1998 Slamming Order*, 14 FCC Rcd at 1572, 1575-76, ¶¶ 106, 109
    (stating that section 222(b) "promotes competition and protects
    consumer choices by prohibiting executing carriers from using
    information gained solely from the carrier change transaction to
    thwart competition by using the carrier proprietary information of
    the submitting carrier to market the submitting carrier's
    subscribers"); *CPNI Reconsideration Order*, 14 FCC Rcd at 14449-50,
    ¶ 77 (stating that "competition is harmed if any carrier uses
    carrier-to-carrier information . . . to trigger retention marketing
    campaigns"); ¶ 78 (stating that "where a carrier exploits advance
    notice of a customer change by virtue of its status as the
    underlying network-facilities or service provider to market to that
    provider, it does so in violation of section 222(b)"); *CPNI 3^rd^
    Report & Order*, 17 FCC Rcd at 14918-19, ¶¶ 131, 134; *Third
    Slamming Reconsideration Order*, 18 FCC Rcd at 5110, ¶ 26 (accepting
    the view that "Congress intended by the express terms of section
    222(b) to prevent carriers from using information obtained from
    another to be used for the carrier's own marketing efforts against
    the submitting carrier"); ¶ 28 (stating that "carrier change request
    information transmitted to executing carriers in order to effectuate
    a carrier change cannot be used for any purpose other than to
    provide the service requested by the submitting carrier").

[^63]: *1998 Slamming Order*, 14 FCC Rcd at 1575, ¶ 106 (stating that
    "when an executing carrier receives a carrier change request,
    section 222(b) prohibits the executing carrier from using that
    information to market services to that consumer"); *CPNI
    Reconsideration Order*, 14 FCC Rcd at 14449-50, ¶¶ 77-79 (stating
    that a carrier that exploits advance notice of a customer change
    violates section 222(b)); *CPNI 3^rd^ Report & Order*, 17 FCC Rcd at
    14917, ¶ 131 (stating that a carrier that receives carrier change
    information in its role as executing carrier is prohibited from
    using that information to attempt to change the subscriber's
    decision); *Third Slamming Reconsideration Order*, 18 FCC Rcd at
    5110, ¶ 28 (stating that carrier change information provided in
    order to execute carrier change cannot be used for any other
    purpose).

[^64]: *See, e.g.*, Answer at 39; Comments of Verizon in Support of
    Recommended Decision at 12-13.

[^65]: Comments of Verizon in Support of Recommended Decision at 11-14.

[^66]: *See*, *e.g.*, Answer at 2-3, 37, 40, 51; Opening Brief of
    Verizon at 4.

[^67]: *1998 Slamming Order*, 14 FCC Rcd at 1572-73, ¶106; *CPNI
    Reconsideration Order*, 14 FCC Rcd at 14450, ¶¶ 78-79.

[^68]: *See*, *e.g.*, *Promotion of Competitive Networks in Local
    Telecommunications Markets*, Report and Order, 23 FCC Rcd 5385
    (2008) at ¶ 2 (noting that 1996 Telecommunications Act was designed
    to eliminate barriers to facilities-based competition); *In the
    Matter of Unbundled Access to Network Elements*, Order on Remand, 20
    FCC Rcd 2533, 2535, ¶ 3 (2005) (subsequent history omitted)
    (adopting rules intended to "spread the benefits of facilities-based
    competition to all consumers"); *In the Matter of Review of the
    Section 251 Unbundling Obligations of Incumbent Local Exchange
    Carriers*, Report and Order on Remand and Further Notice of Proposed
    Rulemaking, 18 FCC Rcd 16978, 17025, ¶ 70 (2003) (noting that
    facilities-based competition serves the Act's overall goals)
    (subsequent history omitted); *In the Matter of Performance
    Measurements and Standards for Unbundled Network Elements and
    Interconnection*, Notice of Proposed Rulemaking, 16 FCC Rcd 20641,
    20644-45, ¶ 5 (2001) (subsequent history omitted) (stating that
    "facilities-based competition, of the three methods of entry
    mandated by the Act, is most likely to bring consumers the benefits
    of competition in the long run"); *Time Warner Wholesale Services
    Order*, 22 FCC Rcd at 3519, ¶ 13 (referring to Commission's goal of
    promoting facilities-based competition).

[^69]: *See*, *e.g.*, Answer at 42, Opening Brief of Verizon at 5-6.

[^70]: In any event, contrary to Verizon's suggestion, the LSR's
    information *is* related to the Competitive Carriers' transmission
    services: the information is critical to Complainants' acquisition
    of a new customer, which, in turn, drives Complainants' purchase of
    the Competitive Carriers' telecommunications service.

[^71]: Answer at 38-39.

[^72]: *Implementation of the Non-Accounting Safeguards of Sections 271
    and 272 of the Communications Act of 1934, as Amended*, First Report
    and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd
    21905, 21958 ¶ 107 (1996); *see also, e.g., Beehive Telephone v. The
    Bell Operating Companies*, Memorandum Opinion and Order, 10 FCC Rcd
    10562, 10566 ¶ 21 (1995); *AT&T Corp. Petition for Declaratory
    Ruling Regarding Enhanced Prepaid Calling Card Services, Regulation
    of Prepaid Calling Card Services,* Order and Notice of Proposed
    Rulemaking, 20 FCC Rcd 4826, 4831 ¶ 16 & n. 28 (2005);
    *Federal-State Joint Board on Universal Service, Appeal of
    Administrator's Decision, Radiant Telecom, Inc.,* Order, 22 FCC Rcd
    11811, 11813-14 ¶ 9 (WCB 2007).

[^73]: *Local Exchange Carriers' Rates, Terms, and Conditions for
    Expanded Interconnection Through Physical Collocation for Special
    Access and Switched Transport*, Second Report and Order, 12 FCC Rcd
    18730, 18744 ¶ 20.

[^74]: *Detariffing Billing and Collection Services,* Report and Order,
    102 FCC2d 1150, 1167-69 ¶ 31 (1986).

[^75]: *Policies and Rules Concerning Local Exchange Carrier Validation
    and Billing Information for Joint Use Calling Cards,* Report and
    Order and Request for Supplemental Comment, 7 FCC Rcd 3528, 3531 ¶
    19 (1992).

[^76]: Complainants' Supplemental Reply Brief at 2; Complainants' Reply
    at 36-38; Complaint at ¶¶ 40-41.

[^77]: Further Supplemental Joint Statement, File No. EB-0-MD-002 (filed
    Mar. 10, 2008) at ¶ 2.a.

[^78]: Verizon argues: "That Verizon includes in its lead list
    disconnecting customers who are porting their numbers to another
    service provider does not mean that Verizon is using another
    carrier's proprietary information. Verizon seeks to reach out to
    customers who have not spoken with a Verizon representative -- and
    who are leaving Verizon's network -- to ensure that they are
    informed about Verizon's competitive pricing and retention offers;
    Verizon assembles its lead list with that goal." Answer at 44. The
    point is that Verizon would not know which customers to reach with
    its retention marketing but for its use of the LSRs' proprietary
    information.

[^79]: *See, e.g.*, Answer at 37-38, 43-44, 48-50; Comments of Verizon
    in Support of Recommended Decision at 21-24.

[^80]: *See, e.g.*, Answer at 14; Joint Statement at 15, ¶ 37.

[^81]: *See, e.g.*, Answer at 16, 45-46.

[^82]: Answer at 22-24, 42-43; Verizon Response to Supplemental
    Statements of Comcast and BHN, File No. EB-08-MD-002 (filed Mar. 12,
    2008) ("Verizon's 3/12 Response"); Comments of Verizon in Support of
    Recommended Decision at 35-39. Verizon does not dispute that Sprint
    provides "telecommunications service" to Time Warner. *Id*.

[^83]: The Act provides that "\[t\]he term 'telecommunications' means
    the transmission, between or among points specified by the user, of
    information of the user's choosing, without change in the form or
    content of the information as sent and received." 47 U.S.C. §
    153(43).

[^84]: The Act provides, in pertinent part, that "\[t\]he term
    'telecommunications carrier' means any provider of
    telecommunications services." 47 U.S.C. § 153(44).

[^85]: The Act provides that "\[t\]he term 'telecommunications service'
    means the offering of telecommunications for a fee directly to the
    public, or to such classes of users as to be effectively available
    directly to the public, regardless of the facilities used." 47
    U.S.C. § 153(46).

[^86]: *See, e.g.*, *Virgin Islands Telephone Corp. v. FCC*, 198 F.3d
    921 (D.C. Cir. 1999) (affirming the Commission's use of the "common
    carrier" test in *National Association of Regulatory Utility
    Commissioners v. FCC*, 525 F.2d 630 (D.C. Cir. 1976) ("*NARUC I*")
    to help ascertain the meaning of the term "telecommunications
    service" in 47 U.S.C. § 153(46)).

[^87]: 47 U.S.C. § 153(46).

[^88]: *See, e.g.*, *United States Telecom Ass'n. v. FCC*, 295 F.3d 1326
    (D.C. Cir. 2002); *Southwestern Bell Telephone Co. v. FCC*, 19 F.3d
    1475 (D.C. Cir. 1994); *National Association of Regulatory Utility
    Commissioners v. FCC*, 533 F.2d 601 (D.C. Cir. 1976) ("*NARUC II*");
    *NARUC I*, *supra*.

[^89]: *See, e.g.*, Supplemental Affidavit of Susan Jin Davis, File No.
    EB-08-MD-002 (filed Mar. 10, 2008) ("Supp. Davis Aff.") at ¶¶ 5, 7;
    Second Affidavit of Marva B. Johnson, File No. EB-08-MD-002 (filed
    Mar. 10, 2008) ("Supp. Johnson Aff.") at ¶¶ 8-9.

[^90]: *See, e.g.*, 47 U.S.C. §§ 201, 202, 208, 254. Perhaps that is why
    we know of no case in which a provider has chosen to act as a common
    carrier and yet ultimately has been found not to meet the test.

[^91]: *See, e.g.*, Complaint at Ex. B, ¶¶ 8-27; Ex. E at ¶ 2. *See
    also* *VoIP LNP Order and Declaratory Ruling*, 22 FCC Rcd at 19542,
    ¶ 20 n.62 (stating that, although the Commission has not determined
    whether interconnected VoIP service should be classified as a
    telecommunications service, and although only telecommunications
    carriers are entitled to obtain direct access to numbering
    resources, "\[t\]o the extent that an interconnected VoIP provider
    is licensed or certificated as a carrier, that carrier is eligible
    to obtain numbering resources directly from NANPA, subject to all
    relevant rules and procedures applicable to carriers").

[^92]: *See, e.g.*, Complaint at Ex. B, ¶¶ 45-61; Ex. E at ¶ 3.

[^93]: Answer at 22-24, 42-43;Verizon's 3/12 Response at 3-6. Verizon
    also contends that we should disregard any factual evidence on this
    subject not filed with the Complaint. Verizon's 3/12 Response at
    1-2. Verizon's contention lacks merit, because the only "new" facts
    on which we rely here -- the nature of the potential customer base,
    and the "self-certification" as common carriers -- were suggested by
    the Complaint itself, and are not complex. Thus, Verizon has had an
    adequate opportunity to respond. Accordingly, to the extent that our
    rules require those facts to be alleged more clearly in the
    Complaint, we waive those rules for good cause shown. *See* 47
    C.F.R. §§ 1.3, 1.721, 1.726.

[^94]: *See* *NARUC I*, 525 F.2d at 608.

[^95]: As mentioned previously, "\[o\]ne may be a common carrier though
    the nature of the service rendered is sufficiently specialized as to
    be of possible use to only a fraction of the total population."
    *NARUC I*, 525 F.2d at 608. This undermines the probative value of
    the fact that the Comcast and Bright House Competitive Carriers
    presently serve only their affiliates. Given the nature of their
    services, it could well be that there are only a few potential
    customers other than their affiliates.

[^96]: *See generally Hyperion Telecommunications, Inc. Petition
    Requesting Forbearance*, Memorandum Opinion and Order and Notice of
    Proposed Rulemaking, 12 FCC Rcd 8596 (1997) (subsequent history
    omitted); *Time Warner Wholesale Services Order*, *supra.*

[^97]: *See generally* *Consolidated Communications of Fort Bend Co. v.
    Public Utility Commission of Texas*, 497 F.Supp.2d 836 (W.D. Tex.
    2007) (holding that Sprint's provision of service similar, if not
    identical, to the service at issue here was "telecommunications
    service," despite the absence of a state tariff).

[^98]: The segment of the "public" to which the Comcast and Bright House
    Competitive Carriers seek to provide telecommunications consists of
    sophisticated entities -- other carriers -- knowledgeable about
    state regulatory processes and the ramifications of state
    certificates and interconnection agreements. *See, e.g.*,Supp. Davis
    Aff. at ¶ 5; Supp. Johnson Aff. at ¶ 9. We note that, had the
    Comcast and Bright House Competitive Carriers simply posted on their
    websites some indication of the general availability of the
    telecommunications they provide to their affiliates, Verizon might
    not have challenged their status as "telecommunications carriers."
    *See generally* *Appropriate Framework for Broadband Access to the
    Internet Over Wireline Facilities*, Report and Order and Notice of
    Proposed Rulemaking, 20 FCC Rcd 14853, 14901, ¶ 90 (2005)
    (subsequent history omitted) (holding that wireline broadband
    providers that choose to offer the transmission component of a
    wireline broadband Internet access service as a telecommunications
    service may do so without filing tariffs setting forth the rates,
    terms, and conditions under which they will provide that
    transmission, but only if the providers "include those rates, terms,
    and conditions in generally available offerings posted on their
    websites").

[^99]: Verizon entered into interconnection agreements with the Comcast
    and Bright House Competitive Carriers, which Verizon is statutorily
    obligated to do only with "telecommunications carriers," and these
    agreements were approved by the state commissions, and made public,
    pursuant to section 252 of the Act. *See, e.g.*, 47 U.S.C §§
    251(a)(1), 251(c)(2), 252(a); Complaint at Ex. B, ¶¶ 45-61; Ex. E at
    ¶ 3. We also note that Verizon did not draw any distinctions between
    the services provided to Time Warner by Sprint -- which Verizon
    admits is a telecommunications carrier -- and those provided to
    Comcast and Bright House by the Comcast and Bright House Competitive
    Carriers. *See, e.g.*, Complaint at Ex. B, ¶ 7, Ex. E at 1-2; Bright
    House Supplemental Statement, File No. EB-08-MD-002 (filed Mar. 10,
    2008) at 3, Ex. 1 at 2-4.

[^100]: *Abbott Laboratories v. Young,* 920 F.2d 984, 987 (D.C. Cir.
    1990); *see* *Common Cause v. Federal Election Commission*, 842 F.2d
    436, 441 (D.C. Cir. 1988) (upholding agency decision to interpret
    the same term -- "name" -- differently in two Federal Election
    Campaign Act provisions). 

[^101]: *Goldstein v. Securities and Exchange Commission*, 451 F.3d 873,
    878 (D.C. Cir. 2006). 

[^102]: Declaration of Jeffrey Eisenach, File No. EB-08-MD-002 (filed
    Feb. 29, 2008).

[^103]: *See, e.g.*, Answer at 56-58; Opening Brief of Verizon at 7-9;
    Comments of Verizon in Support of Recommended Decision at 24-29.
    Verizon points out, and Complainants acknowledge, that Complainants
    typically require customers to contact them directly to cancel video
    or broadband Internet access service; and when customers do so,
    Complainants offer incentives to remain customers in some instances.
    Letter from Matthew A. Brill to Marlene Dortch, Secretary, Federal
    Communications Commission, File No. EB-08-MD-002 (filed Mar. 6,
    2008). In Verizon's view, because Complainants are allowed to engage
    in such retention marketing of their video and Internet services,
    Verizon should be allowed to engage in retention marketing of its
    voice service.

[^104]: *See 1998 Slamming Order*, 14 FCC Rcd at 1572, 1575-76, ¶¶ 106,
    109; *CPNI Reconsideration Order*, 14 FCC Rcd at 14449-50, ¶ 77;
    *CPNI 3^rd^ Report & Order*, 17 FCC Rcd at 14918-19, ¶ 134; *Third
    Slamming Reconsideration Order*, 18 FCC Rcd at 5110, ¶ 28. For just
    one example, the Commission has already acknowledged what Verizon's
    economist principally asserts -- that in the short term retention
    marketing may benefit some consumers. *CPNI Reconsideration Order*,
    14 FCC Rcd at 14452-53, ¶¶ 84-85. The Commission went on to hold,
    nevertheless, that retention marketing's long-term harm to
    competition in the market as a whole outweighs any short-term
    benefits to individuals. *Id*. Moreover, Verizon's economist simply
    assumes, with no support, that material competition in the
    residential voice market would continue to exist despite the
    barriers to competition that retention marketing would entail.

[^105]: Verizon has not identified any analogue to section 222 in Title
    I or Title VI or any other part of the Act.

[^106]: Opening Brief of Verizon at 9. *See, e.g.,* Comments of Verizon
    in Support of Recommended Decision at 30-31.

[^107]: Opening Brief of Verizon at 10.

[^108]: Opening Brief of Verizon at 9 (citing *Central Hudson Gas &
    Elec. Corp. v. Public Serv. Comm'n*, 447 U.S. 557 (1980)).

[^109]: *1998 Slamming Order*, 14 FCC Rcd at 1573-75, ¶¶ 107-111.

[^110]: 47 U.S.C. §§ 154(i), 154(j), 201(b), 208, 222, and 303(r).

[^111]: 47 C.F.R. §§ 1.720-1.736.

[^112]: 47 U.S.C. §§ 154(i), 154(j), 201(b), 208, 222, and 303(r).

[^113]: 47 C.F.R. §§ 1.720-1.736.

[^114]: *In the Matter of Bright House Networks, LLC, et al. v. Verizon
    California, Inc., et al.*, File No. EB-08-MD-002, Recommended
    Decision, DA 08-860 (EB rel. Apr. 11, 2008) (*Recommended
    Decision*).

[^115]: Joint Statement of Commissioners Robert M. McDowell and Jonathan
    S. Adelstein Concurring, *Comcast Corporation Request for Waiver of
    Section 76.1204(a)(1) of the Commission's Rules, CSR-7012-Z,
    Implementation of Section 304 of the Telecommunications Act of 1996:
    Commercial Availability of Navigation Devices: Application for
    Review*, CS Docket No. 97-80, Memorandum Opinion and Order, 22 FCC
    Rcd 17113 (2007).

[^116]: Statement of Commissioner Robert M. McDowell, *Appropriate
    Regulatory Treatment for Broadband Access to the Internet Over
    Wireless Networks*, WT Docket No. 07-53, Declaratory Ruling, 22 FCC
    Rcd 5901 (2007).

[^117]: Letter from Aaron M. Panner, Counsel to Verizon, to Marlene H.
    Dortch, Secretary, FCC, File No. EB-08-MD-002, at 1 (filed June 20,
    2008).