********************************************************    
                                         NOTICE
    ********************************************************
                                
                This document was converted from
               WordPerfect to ASCII Text format.
                                
   Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
             will not show up in this text version.
                                
All text attributes such as bold, italic, underlining, etc. from the
    original document will not show up in this text version.
                                
        Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
           will not be preserved in the text version.
                                
        If you need the complete document, download the
  WordPerfect version or Adobe Acrobat version, if available.
                                
*****************************************************************
                                                           Before the
               FEDERAL COMMUNICATIONS COMMISSION
                    Washington, D.C.  20554
                                   

In the Matter of                        )    
                                   )
CCN, Inc.,                              )    
Church Discount Group, Inc.,            )    
Discount Calling Card, Inc.,                 )
Donation Long Distance, Inc.            )              
Long Distance Services, Inc.,           )
Monthly Discounts, Inc.,                     )
Monthly Phone Services, Inc., and            )
Phone Calls, Inc.,                      )    CC Docket No. 97-144
                                   )    
                                   )    
Order to Show Cause and                 )    
Notice of Opportunity for Hearing            )


                     ORDER TO SHOW CAUSE AND
                NOTICE OF OPPORTUNITY FOR HEARING

        Adopted:  June 12, 1997; Released:  June 13, 1997

By the Commission:

                         I.  INTRODUCTION

     1.   In this Order to Show Cause and Notice of Opportunity for Hearing (hereafter, "Show
Cause Order"), we initiate enforcement action against CCN, Inc., Church Discount Group, Inc.,
Discount Calling Card, Inc., Donation Long Distance, Inc., Long Distance Services, Inc., Monthly
Discounts, Inc., Monthly Phone Services, Inc., and Phone Calls, Inc. (collectively, the "Fletcher
Companies").   As discussed below, the information obtained as a result of the staff's investigation
of numerous consumer complaints filed against the Fletcher Companies persuades us that an
evidentiary hearing is required to determine whether the operating authority of the Fletcher
Companies should be revoked and whether the principal or principals of the Fletcher Companies
and the Fletcher Companies should be ordered to cease and desist from any future provision of
interstate common carrier services without the prior consent of the Commission.

                         II.  BACKGROUND

     2.   The Fletcher Companies operate as common carriers subject to Title II of the Act. 
Specifically, the Fletcher Companies currently provide or have provided resale interstate long
distance telecommunications services to consumers in various states around the country including,
but not limited to, Alabama, California, Florida, Louisiana, Maryland, New York, Pennsylvania,
and Virginia.   Under the regulatory scheme established by the Act and the Commission's
Competitive Carrier proceeding, the Fletcher Companies are classified as nondominant
interexchange carriers.  As such, they are considered to have "blanket" authority to operate domestic
common carrier facilities within the meaning of Section 214 of the Act.  Accordingly, the Fletcher
Companies may "construct, acquire, or operate" any transmission line for domestic
telecommunications service without obtaining prior written authorization from the Commission. 
 

     3.   At all times relevant to this enforcement action, the Fletcher Companies were required
to file and maintain with the Commission tariffs containing schedules of the charges, terms, and
conditions of their common carrier offerings in the manner prescribed by Section 203 (a) of the Act
and the Commission's rules and orders.  In addition, as common carriers, the Fletcher Companies
are required by Section 413 of the Act to file with the Secretary of the Commission the name of a
designated agent for service of all notices and process, orders, and requirements of the Commission,
and by Section 416(c) of the Act to observe and comply with all Commission orders. 

     4.   The Commission has consistently emphasized the critical importance of enforcement
through its complaint process to ensure that common carriers do not charge unjust and unreasonable
rates, engage in unjust, unreasonable, or unreasonably discriminatory practices, or otherwise conduct
their common carrier operations in a manner that may be harmful to consumers and to competition. 
The Commission has established rules and procedures specifically designed to enable consumers to
bring to the Commission's attention allegations of misconduct by carriers and to obtain relief from
rates and practices found to be unlawful or otherwise contrary to the public interest.  Pursuant to
these rules, the Common Carrier Bureau's ("Bureau") Enforcement Division, upon receipt of a
consumer complaint, routinely issues an "Official Notice of Informal Complaint" ("Official Notice")
to all carriers identified in the complaint or that may, in the staff's view, assist in the resolution of
the complaint.  The Official Notice requires the common carrier to satisfy or answer the complaint
and respond to the Commission's Official Notice with a written report, a copy of which must be sent
directly to the complainant.  The Official Notice also outlines the following consequences of failing
to respond to the Official Notice within the time specified:

     Failure of any person to answer any lawful Commission inquiry is considered a
     misdemeanor punishable by a fine under Section 409(m) of the Communications Act,
     47 U.S.C.  409(m).  Further, failure to comply with any order of the Commission
     can result in prosecution under Section 401(b) of the Act, 47 U.S.C.  401(b). 
     Section 501 of the Act, 47 U.S.C.  501, and Section 503(b)(1)(B) of the Act, 47
     U.S.C.  503(b)(1)(B), provide for forfeiture penalties against any person who
     willfully fails to follow the directives of the Act or of a Commission order.  The
     Commission can impose forfeiture penalties of up to $1,100,000 for certain types of
     violations.

     A.   Consumer Complaints Against the Fletcher Companies

     5.   In 1993, the Commission began receiving complaints from consumers alleging, inter
alia, that certain of the Fletcher Companies had changed their primary interexchange carriers or
"PICs" from their presubscribed carriers to one of the Fletcher Companies without their knowledge
and authorization, a practice commonly referred to as "slamming."  Most of these complaints
contain allegations that the Fletcher Companies used misleading and, in some cases, fraudulent,
marketing practices in order to effect the unauthorized PIC changes.  In particular, a number of
consumers have provided information in their complaints indicating that the Fletcher Companies
converted their long distance service providers by submitting, directly or through marketing agents,
forged or falsified letters of agency ("LOAs") to the local exchange carriers responsible for effecting
the PIC changes.

     6.   In certain complaints filed against Phone Calls, Inc. ("PCI"),  consumers allege that
PCI not only converted their long distance providers to PCI without their authorization through the
use of forged or falsified LOAs, but that PCI also billed them for long distance calls that they did
not place to unfamiliar telephone numbers.  In some cases, complainants provided copies of
telephone bills that contain charges for calls to numbers that the consumers claim were not working
numbers.

     7.   In still other complaints filed against Discount Calling Card ("DCC"), consumers
allege that they were enrolled in a so-called "discount calling card service" offered by DCC, and
assessed monthly fees for the service without their knowledge or authorization.  It appears that
these consumers were able to determine the existence of DCC and their involvement with the
unauthorized charges only after contacting the billing agents listed on their telephone bills, who
would typically inform them that the discount calling card service fee had been billed on behalf of
one of the Fletcher Companies.

     8.   The complaints described in the paragraphs above are just examples of the numerous
consumer complaints filed against the Fletcher Companies since 1993 that reflect a pervasive pattern
of questionable business and marketing practices under the Commission's rules.  In accordance with
the rules and procedures described above, the Bureau's Enforcement Division forwarded each of the
consumer complaints filed against the Fletcher Companies to the appropriate company with the
requisite Official Notice.  Records maintained by the Bureau's Enforcement Division reveal that
the Fletcher Companies failed to respond to the vast majority of the Notices issued by the staff.  The
Appendix to this Show Cause Order identifies those Official Notices that have not been responded
to by various Fletcher Companies.

     9.   In the few instances in which the Fletcher Companies filed responses to the
Commission's Official Notices, the responses were poorly prepared, failed to "satisfy" the complaints
within the meaning of Sections 208 of the Act and 1.717 of our rules, and otherwise fell far short
of the information required by the staff to further investigate the complaints and make
determinations about the carriers' compliance with the Act and our rules and orders.  Generally, the
responses contain what amount to vague denials of the complainants' allegations and convey
virtually no specific information about the carriers' practices or about any facts and circumstances
pertinent to the complainants' allegations.  Moreover, the responses appear designed to further
mislead the Commission and to frustrate the staff's efforts to obtain information about the Fletcher
Companies and their practices toward consumers, rather than a legitimate attempt to resolve the
complaints.  For example, in June 1995, in response to an Official Notice concerning a slamming
complaint filed by Israela R. Franklin of Rydal, Pennsylvania, against CCN, Inc. ("CCN") on
November 10, 1994, CCN filed a letter signed by "Dan Fletcher," stating only that CCN had
obtained the LOA that it relied upon to switch Franklin's long distance provider from an
"independent marketing agency."  The letter does not identify the marketing agency involved; nor
does it list a business address or telephone number at which Fletcher could be reached.  Consistent
with Fletcher's usual practice, the return address on the letter is merely a post office box.

     10.   Since June 1996, a number of Official Notices issued by the staff to the Fletcher
Companies concerning consumer complaints have been returned to the Commission by the U.S.
Postal Service marked "unclaimed," "moved," or "refused."  Starting in June 1996, the staff
attempted repeatedly to contact representatives of the Fletcher Companies by telephone but was
unable to complete calls to any of the telephone numbers designated by the Fletcher Companies. 
On August 20, 1996, an individual identifying himself as "Dan Fletcher," apparently aware of the
staff's repeated efforts to contact him and his companies regarding the unresolved consumer
complaints, left a voice mail message on the telephone line of an Enforcement Division staff member
in which he represented that all Official Notices concerning complaints filed against the Fletcher
Companies should be mailed to the following address:  Long Distance Services, 2117 L Street,
N.W., No. 293, Washington, D.C., 20037.  The individual further stated that any Official Notices
sent to this new address would be received and responded to promptly.  Subsequently, the
Commission mailed Official Notices to the address designated by Fletcher.  To date, neither the
Fletcher Companies nor Dan Fletcher himself have responded to any of these Official Notices either
in writing or by telephone.   

     11.  In renewed efforts to reach principals of the Fletcher Companies regarding the
growing number of consumer complaints, Enforcement Division staff obtained "Dun & Bradstreet"
reports.  These reports reveal what is best described as a tangled web of corporate entities with
Daniel Fletcher as the common thread.  For example, "Daniel H. Fletcher" is listed in a report as the
president of  PCI, while "Daniel M. Fletcher" is listed in separate reports as the registered agent for
Long Distance Services, Inc. ("LDSI") and DCC.   According to the reports, some of the Fletcher
Companies share the same business address, with certain of the companies indicating multiple
business addresses.  For instance, the reports list 3220 "N" Street, N.W., Suite 100, Washington,
D.C., as a business address for PCI, LDSI, and DCC.  Another address, 2200 Wilson Boulevard,
Suite 102-H, Arlington, Virginia, is shared by PCI and Monthly Discounts, Inc.  

     12.  The staff's investigation has disclosed that all of the addresses listed in the Dun &
Bradstreet reports for the Fletcher Companies are mail drop locations rather than business locations
maintained or operated by the Fletcher Companies.  Information contained in the Dun & Bradstreet
reports reveals that in May 1996, a representative of PCI informed Dun & Bradstreet that it operated
5,000 square feet at the 3220 N Street, N.W., Washington, D.C. location and that PCI employed
90 people.  Dun & Bradstreet advised the staff, however, that its investigation disclosed that the
address provided to it by PCI and the other Fletcher Companies is simply a mail drop location.  The
reports obtained from Dun & Bradstreet further indicate that repeated efforts by Dun & Bradstreet
representatives to contact PCI representatives regarding this information proved futile.   
 
     13.  Like the addresses described above, the telephone numbers provided by the Fletcher
Companies have required Commission staff as well as consumers to maneuver a complex maze of
interrelated companies in an effort to contact principals or representatives of the Fletcher Companies. 
Basil D. Hunt of St. Louis, Missouri, for example, asserts in his slamming complaint that even
though his telephone bill identified PCI as the company that carried his long distance calls, he
reached a company identifying itself as "Charity Long Distance" when he called the toll-free number
on his bill to inquire about the unauthorized conversion of his long distance service provider. 
Similarly, other consumers have been frustrated in their efforts to contact company  representatives
at purported customer service telephone numbers designated by the Fletcher Companies.  For
example, numerous consumers report that the Companies' telephone numbers were not in service,
while other consumers complain that the phone lines were continuously busy or went unanswered,
despite ringing for minutes at a time.  In some instances, consumers were told to call or write to
a customer service center in Rowlette, Texas.  None of the consumers who called or sent
correspondence to this center, however, received assistance with their complaints.
     B.   The Fletcher Companies' Tariff Filing Practices

     14.  The staff's review of the files maintained by the Bureau's Competitive Pricing
Division revealed that only two of the Fletcher Companies, DCC and PCI, had tariffs on file with
the Commission at any time relevant to this proceeding.  On November 29, 1994, DCC filed
Transmittal No. 1 to introduce its Tariff F.C.C. No. 1, which established the rates, terms, and
conditions for the provision of DCC's domestic calling card service within the United States.  On
August 1, 1996, PCI, which was incorporated in the state of Virginia on December 27, 1995, filed
its "Original Tariff F.C.C. No. 1" to establish the rates, terms, and conditions for the provision of
domestic resale interexchange telecommunications service.  Based on the Competitive Pricing
Division's records and the complaints before us, however, it appears that PCI provided
telecommunications service prior to August 2, 1996, the effective date of Tariff F.C.C. No. 1.  For
example, complainants Consuelo Guera of Manvel, Texas, and Basil D. Hunt of Saint Louis,
Missouri, who allege that PCI switched their long distance providers from AT&T Corporation
("AT&T") to PCI without their authorization, received telephone bills indicating that PCI had carried
their domestic long distance calls between March 31, 1996 and June 19, 1996, prior to the effective
date of PCI's Tariff F.C.C. No. 1.

     15.  Besides PCI and DCC, there are no indications that any other Fletcher Company has
ever had a domestic tariff on file with the Commission.  Nevertheless, the staff's investigation
revealed that at least one Fletcher Company, LDSI, apparently provides or has provided domestic
telecommunications service at rates not established by tariff, in violation of Section 203(a) of the
Act.  For example, complainant Nisar Ahmad of Severna Park, Maryland, who asserts that LDSI
switched his long distance provider from AT&T to LDSI without his authorization, submits a copy
of a bill from LDSI for numerous domestic calls carried by LDSI between May 15 and May 23,
1996.  We note that even if LDSI, as one of the Fletcher Companies, could properly provide service
pursuant to PCI's Tariff F.C.C. No. 1, that tariff did not become effective until August 2, 1996.

                         III.  DISCUSSION

     16.  Under the pro-competitive, deregulatory framework established by the Act and the
Commission's implementing rules and orders, nondominant carriers enjoy significant flexibility in
their provision of telecommunications services and products.  This flexibility, however, is balanced
by the Act and our rules and orders with requirements designed to promote fair competition in all
markets, and to ensure that consumers derive the full benefit of such competition and are otherwise
protected against harmful rates and practices.  Slamming is one of the most prevalent types of
illegal practices by common carriers.  The Commission has declared the practice of slamming
through the use of forged or falsified LOAs to be particularly egregious because it undermines the
competitive nature of the interexchange marketplace and deprives consumers of their right to select
the services of particular interexchange carriers to satisfy their long distance service needs. 
Carriers have been strongly admonished not to engage in slamming, and many have been the subject
of enforcement actions, including significant forfeitures, when they have failed to heed the
Commission's warnings.  

     17.  In the instant case, it appears that the Fletcher Companies are either unwilling or
unable to conduct lawful common carrier operations -- even within the broad parameters established
by the Act and our rules and orders governing nondominant carriers.   Many of the consumer
complaints described in this Show Cause Order involve allegations that one or more of the Fletcher
Companies changed consumers' primary interexchange carriers without their authorization, in
violation of the Commission's slamming rules and orders.  The Commission's PIC-change rules and
orders require, among other things, that interexchange carriers obtain signed LOAs or, in the case
of telemarketing solicitations, complete one of four telemarketing verification procedures before
submitting PIC-change requests to LECs on behalf of consumers.  Viewed together, the multitude
of consumer complaints, most of which have gone unanswered by the Fletcher Companies, provide
substantial evidence that the Fletcher Companies have ignored the PIC-change verification
procedures prescribed under the Commission's rules and orders, and have also routinely submitted
PIC-change requests to LECs based on forged or falsified LOAs. 

     18.  To further compound the egregious nature of their slamming practices through the
apparent use of forged or falsified LOAs and other misleading practices, the Fletcher Companies
have failed to respond to, and in some cases refused to accept, Official Notices issued by the staff
in response to consumer complaints.  Our records show that LDSI, PCI, and DCC each failed to
respond to at least 20 Official Notices of Informal Complaint and refused to accept numerous
others.   The Fletcher Companies also failed to designate agents for the receipt of official notices,
orders, or other correspondence issued by the Commission, as required by Section 413 of the Act. 
Moreover, it appears that Daniel Fletcher and the Fletcher Companies have deliberately acted to
frustrate the staff's efforts to investigate consumer complaints and inquire into the Companies'
practices by failing to provide legitimate business addresses or telephone numbers where Fletcher
or his companies might be reached.  

     19.  The Fletcher Companies' apparent failure to file tariffs to establish rates and charges
for the common carrier service offerings that have been implicated in the numerous consumer
complaints filed with the Commission, in violation of Section 203(a) of the Act, raises additional
troubling questions about the operations of the Fletcher Companies.   Files maintained by the
Bureau's Competitive Pricing Division reflect that only two of the Fletcher Companies -- DCC and
PCI -- have filed tariffs with the Commission.  Nevertheless, as evidenced by the numerous
slamming complaints we have received, at least one Fletcher Company, LDSI, has provided
domestic interexchange services without having appropriate tariffs on file with the Commission. 
In this regard, we note that although this Commission recently adopted a complete detariffing policy
for the domestic services of nondominant, interexchange carriers, the Fletcher Companies were
nonetheless required to follow Section 203(a) of the Act concerning the filing of tariffs by
nondominant carriers.   

     20.  The totality of the information obtained as a result of the staff's investigation
persuades us that an evidentiary hearing is required to determine whether the continued operation
of the Fletcher Companies as common carriers would serve the public convenience and necessity
within the meaning of Section 214 of the Act.  Further, the egregious nature of the Fletcher
Companies' apparently unlawful common carrier activities and their demonstrated refusal to respond
to official inquiries and correspondence from the Commission raise a reasonable likelihood of the
defiance of a revocation order, particularly under the deregulatory framework established by the
Act and our rules and orders.  Therefore, pursuant to Section 312(b) of the Act, the principal or
principals of the Fletcher Companies and the Fletcher Companies will be required to show cause
why an order to cease and desist from the provision of any interstate common carrier services
without the prior consent of the Commission should not be issued.

     21.  ACCORDINGLY, IT IS ORDERED that, pursuant to Sections 4(i), 214, and 312 of
the Communications Act of 1934, as amended, the principal or principals of the Fletcher Companies
ARE DIRECTED TO SHOW CAUSE why the operating authority bestowed on CCN, Inc., Church
Discount Group, Inc., Discount Calling Card, Inc., Donation Long Distance, Inc., Long Distance
Services, Inc., Monthly Discounts, Inc., Monthly Phone Services, Inc., and Phone Calls, Inc.
pursuant to Section 214 of the Communications Act of 1934, as amended, and the Commission's
Competitive Carrier proceeding should not be REVOKED. 

     22.  IT IS FURTHER ORDERED that the principal or principals of the Fletcher
Companies and the Fletcher Companies ARE DIRECTED TO SHOW CAUSE why an order
directing them TO CEASE AND DESIST FROM THE PROVISION OF ANY INTERSTATE
COMMON CARRIER SERVICES without the prior consent of the Commission should not be
issued.  

     23.  IT IS FURTHER ORDERED that the hearing shall be held at a time and location to
be specified by the Chief Administrative Law Judge in a subsequent order, upon the following
issues:

          (a)  To determine the facts and circumstances surrounding the
          primary interexchange carrier changes made or requested by the
          Fletcher Companies that are the subject of various informal
          complaints listed in the Appendix to this Show Cause Order.

          (b)  To determine the facts and circumstances surrounding Long
          Distance Services, Inc.'s, Phone Calls, Inc.'s, and Discount Calling
          Card, Inc.'s failure to accept and/or respond to Official Notices of
          Informal Complaint issued by the staff that are identified in the
          Appendix to this Show Cause Order, and the Companies' inadequate
          responses to certain Official Notices of Informal Complaint.

          (c)  To determine the facts and circumstances surrounding Long
          Distance Services, Inc.'s failure to file tariffs covering its interstate
          telecommunications service offerings during the period from May 1,
          1996 to the present.

          (d)  To determine the facts and circumstances surrounding the
          Fletcher Companies' failure to file with the Secretary of the
          Commission the name of a designated agent for service of all notices
          and process, orders, and requirements of the Commission. 

          (e)  To determine, in view of the evidence adduced on  issues (a)
          through (d) above, whether any or all of the Fletcher Companies
          violated one or more of the following provisions of the
          Communications Act of 1934, as amended, and the Commission's
          rules:  47 U.S.C.   203(a), 208(a), 413, and 416(c) and 47 C.F.R. 
          1.717, 64.1100, and 64.1150.

          (f)  To determine, in view of the evidence adduced on the foregoing
          issues, whether the continued operation of the Fletcher Companies as
          common carriers would serve the public convenience and necessity.

          (g)  To determine, in view of the evidence adduced on the foregoing
          issues, whether the issuance of an order restraining the principal or
          principals of the Fletcher Companies and the Fletcher Companies
          from future provision of interstate common carrier services is in the
          public interest. 

     24.  IT IS FURTHER ORDERED that the Chief, Common Carrier Bureau, shall be a
party to the designated hearing.  Pursuant to Section 312(d) of the Communications Act of 1934, as
amended, both the burden of proceeding and the burden of proof shall be upon the Common Carrier
Bureau as to issues (a) through (g) inclusive.
     
     25.  IT IS FURTHER ORDERED that, to avail themselves of the opportunity to be heard,
the principal or principals of the Fletcher Companies, pursuant to Section 1.91(c) of the
Commission's Rules, SHALL FILE with the Commission within 30 days of the mailing of this
Show Cause Order a WRITTEN APPEARANCE stating that the Fletcher Companies' principals or
other legal representative will appear at the hearing and present evidence on the matters specified
in the Show Cause Order.  If the Fletcher Companies fail to file a written appearance within the time
specified, the Fletcher Companies' right to a hearing SHALL BE DEEMED TO BE WAIVED.  In
the event the right to a hearing is waived, the Presiding Judge, or the Chief, Administrative Law
Judge if no Presiding Judge has been designated, SHALL TERMINATE the hearing proceeding and
CERTIFY this case to the Commission in the regular course of business, and an appropriate order
shall be entered.

     26.  IT IS FURTHER ORDERED that, if it is determined that any or all of the Fletcher
Companies have willfully or repeatedly violated any provision of the Act or the Commission's rules
cited in this Show Cause Order, it shall further be determined whether an Order for Forfeiture shall
be issued pursuant to:  (1) Section 503(b) of the Communications Act of 1934, as amended, in the
amount of: (a) $15,000 for each unauthorized conversion of complainants' long distance service in
violation of 47 C.F.R.  64.1100 and/or 64.1150;  b) $5,000 for each failure to respond to an
Official Notice of Informal Complaint or inadequate response to an Official Notice of Informal
Complaint in violation of 47 U.S.C.  208(a) and 416(c) and 47 C.F.R.  1.717; c) $1,000 for
violation of  47 U.S.C.  413; and (2) Section 203(e) of the Communications Act of 1934, as
amended, in the amount of $6,000 for each failure to comply with the requirements of 47 U.S.C.
 203(a), plus $300 for each and every day of the continuance of each such violation.

     27.  IT IS FURTHER ORDERED that this document constitutes a NOTICE OF
OPPORTUNITY FOR HEARING pursuant to Section 503(b)(3)(A) of the Communications Act of
1934, as amended, for violations of 47 U.S.C.  208(a), 203(a), 413, and 416(c), and 47 C.F.R.
 1.717, 64.1100, and 64.1150. 

     28.  IT IS FURTHER ORDERED that a copy of this ORDER TO SHOW CAUSE AND
NOTICE OF OPPORTUNITY FOR HEARING shall be sent by certified mail, returnreceipt requested, to Daniel Fletcher, Phone Calls, Inc., and Monthly Phone Services, Inc., 201 West
Broad Street, Suite 181, Falls Church, Virginia, 22206.


                         FEDERAL COMMUNICATIONS COMMISSION


                         William F. Caton
                         Acting Secretary
Appendix