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 Federal  Communications  Commission  DA  04-  850 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 


 In  the  Matter  of 


 PowerNet  Global 
 Complaint  Regarding  Unauthorized  Change  of 
 Subscribers  Telecommunications  Carrier 


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 IC  No.  02-  S80269 


 ORDER 
 Adopted:  March  25,  2004  Released:  March  31,  2004 
 By  the  Deputy  Chief,  Policy  Division,  Consumer  &  Governmental  Affairs  Bureau: 
 1.  In  this  Order,  we  consider  the  complaint  1  alleging  that  PowerNet  Global  (PowerNet)  changed  Complainants  telecommunications  service  provider  without  obtaining 
 authorization  and  verification  from  Complainant  in  violation  of  the  Commissions  rules.  2  We  conclude  that  PowerNet  has  responded  fully  to  the  Complainants  complaint  and  has  taken  action 
 to  resolve  the  complaint. 
 2.  In  December  1998,  the  Commission  released  the  Section  258  Order  in  which  it  adopted  rules  to  implement  Section  258  of  the  Communications  Act  of  1934  (Act),  as  amended 
 by  the  Telecommunications  Act  of  1996  (1996  Act).  3  Section  258  prohibits  the  practice  of 
 1  Informal  Complaint  No.  IC  02-  S80269,  August  2,  2003. 
 2  See  47  C.  F.  R.    64.  1100    64.  1190. 
 3  47  U.  S.  C.    258(  a);  Telecommunications  Act  of  1996,  Pub.  L.  No.  104-  104,  110  Stat.  56  (1996); 
 Implementation  of  the  Subscriber  Carrier  Selection  Changes  Provisions  of  the  Telecommunications  Act  of  1996;  Policies  and  Rules  Concerning  Unauthorized  Changes  of  Consumers  Long  Distance  Carriers,  CC  Docket  No. 


 94-  129,  Second  Report  and  Order  and  Further  Notice  of  Proposed  Rule  Making,  14  FCC  Rcd  1508  (1998)  (Section  258  Order),  stayed  in  part,  MCI  WorldCom  v.  FCC,  No.  99-  1125  (D.  C.  Cir.  May  18,  1999);  First  Order  on 
 Reconsideration,  15  FCC  Rcd  8158  (2000);  stay  lifted,  MCI  WorldCom  v.  FCC,  No.  99-  1125  (D.  C.  Cir.  June  27,  2000);  Third  Report  and  Order  and  Second  Order  on  Reconsideration,  15  FCC  Rcd  15996  (2000),  Errata,  DA  No. 
 00-  2163  (rel.  Sept.  25,  2000),  Erratum,  DA  No.  00-  2192  (rel.  Oct.  4,  2000),  Order,  FCC  01-  67  (rel.  Feb.  22,  2001);  Third  Order  on  Reconsideration  and  Second  Further  Notice  of  Proposed  Rule  Making,  18  FCC  Rcd  5099  (2003); 
 Order,  FCC  03-  116,  (rel.  May  23,  2003).  Prior  to  the  adoption  of  Section  258,  the  Commission  had  taken  various  steps  to  address  the  slamming  problem.  See,  e.  g.,  Policies  and  Rules  Concerning  Unauthorized  Changes  of 
 Consumers'  Long  Distance  Carriers,  CC  Docket  No.  94-  129,  Report  and  Order,  10  FCC  Rcd  9560  (1995),  stayed  in  part,  11  FCC  Rcd  856  (1995);  Policies  and  Rules  Concerning  Changing  Long  Distance  Carriers,  CC  Docket 
 No.  91-  64,  7  FCC  Rcd  1038  (1992),  reconsideration  denied,  8  FCC  Rcd  3215  (1993);  Investigation  of  Access  and  Divestiture  Related  Tariffs,  CC  Docket  No.  83-  1145,  Phase  I,  101  F.  C.  C.  2d  911,  101  F.  C.  C.  2d  935, 
 reconsideration  denied,  102  F.  C.  C.  2d  503  (1985). 
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 slamming,  the  submission  or  execution  of  an  unauthorized  change  in  a  subscribers  selection  of  a  provider  of  telephone  exchange  service  or  telephone  toll  service.  4  In  the  Section  258  Order, 
 the  Commission  adopted  aggressive  new  rules  designed  to  take  the  profit  out  of  slamming,  broadened  the  scope  of  the  slamming  rules  to  encompass  all  carriers,  and  modified  its  existing 
 requirements  for  the  authorization  and  verification  of  preferred  carrier  changes.  The  rules  require,  among  other  things,  that  a  carrier  receive  individual  subscriber  consent  before  a  carrier 
 change  may  occur.  5  Pursuant  to  Section  258,  carriers  are  absolutely  barred  from  changing  a  customer's  preferred  local  or  long  distance  carrier  without  first  complying  with  one  of  the 
 Commission's  verification  procedures.  6  Specifically,  a  carrier  must:  (1)  obtain  the  subscriber's  written  or  electronically  signed  authorization  in  a  format  that  meets  the  requirements  of 
 Section  64.1130  authorization;  (2)  obtain  confirmation  from  the  subscriber  via  a  toll-  free  number  provided  exclusively  for  the  purpose  of  confirming  orders  electronically;  or  (3)  utilize  an 
 independent  third  party  to  verify  the  subscriber's  order.  7 
 3.  The  Commission  also  has  adopted  liability  rules.  These  rules  require  the  carrier  to  absolve  the  subscriber  where  the  subscriber  has  not  paid  his  or  her  bill.  In  that  context,  if  the 
 subscriber  has  not  already  paid  charges  to  the  unauthorized  carrier,  the  subscriber  is  absolved  of  liability  for  charges  imposed  by  the  unauthorized  carrier  for  service  provided  during  the  first  30 
 days  after  the  unauthorized  change.  8  Where  the  subscriber  has  paid  charges  to  the  unauthorized  carrier,  the  Commissions  rules  require  that  the  unauthorized  carrier  pay  150%  of  those  charges 
 to  the  authorized  carrier,  and  the  authorized  carrier  shall  refund  or  credit  to  the  subscriber  50%  of  all  charges  paid  by  the  subscriber  to  the  unauthorized  carrier.  9  Carriers  should  note  that  our 
 actions  in  this  order  do  not  preclude  the  Commission  from  taking  additional  action,  if  warranted,  pursuant  to  Section  503  of  the  Act.  10 


 4.  We  received  Complainants  complaint  on  August  2,  2002,  alleging  that  Complainants  telecommunications  service  provider  had  been  changed  to  PowerNet  without 
 Complainants  authorization.  Pursuant  to  Section  1.719  and  64.1150  of  our  rules,  11  we  notified  PowerNet  of  the  complaint  and  PowerNet  responded  on  September  4,  2003.  12  PowerNet  has 


 4  47  U.  S.  C.    258(  a). 
 5  See  47  C.  F.  R.    64.  1120. 
 6  47  U.  S.  C.    258(  a). 


 7  See  47  C.  F.  R.    64.  1120(  c).  Section  64.  1130  details  the  requirements  for  letter  of  agency  form 
 and  content  for  written  or  electronically  signed  authorizations.  47  C.  F.  R.    64.  1130. 
 8  See  47  C.  F.  R.    64.  1140,  64.  1160.  Any  charges  imposed  by  the  unauthorized  carrier  on  the 
 subscriber  for  service  provided  after  this  30-  day  period  shall  be  paid  by  the  subscriber  to  the  authorized  carrier  at  the  rates  the  subscriber  was  paying  to  the  authorized  carrier  at  the  time  of  the  unauthorized  change.  Id. 


 9  See  47  C.  F.  R.    64.  1140,  64.1170. 
 10  See  47  U.  S.  C.    503. 
 11  47  C.  F.  R.    1.719  (Commission  procedure  for  informal  complaints  filed  pursuant  to  Section  258 
 of  the  Act);  47  C.  F.  R.    64.  1150  (procedures  for  resolution  of  unauthorized  changes  in  preferred  carrier). 
 12  PowerNets  Response  to  Informal  Complaint  No.  IC  02-  S80269,  September  4,  2003. 
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 fully  absolved  Complainant  of  all  charges  assessed  by  Company  in  a  manner  consistent  with  the  Commissions  liability  rules.  13  Based  on  the  information  before  us,  we  therefore  find  that  the 
 complaint  referenced  herein  has  been  resolved.  14 
 5.  Accordingly,  IT  IS  ORDERED  that,  pursuant  to  Section  258  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    258,  and  Sections  0.141,  0.361  and 
 1.719  of  the  Commissions  rules,  47  C.  F.  R.    0.141,  0.361,  1.719,  the  complaint  against  PowerNet  IS  RESOLVED. 


 6.  IT  IS  FURTHER  ORDERED  that  this  Order  is  effective  upon  release. 
 FEDERAL  COMMUNICATIONS  COMMISSION 
 Nancy  A.  Stevenson,  Deputy  Chief,  Policy  Division  Consumer  &  Governmental  Affairs  Bureau 


 13  See  47  C.  F.  R.    64.  1160. 
 14  If  Complainant  is  unsatisfied  with  the  resolution  of  this  complaint,  Complainant  may  file  a 
 formal  complaint  with  the  Commission  pursuant  to  Section  1.721  of  Commissions  rules,  47  C.  F.  R.    1.  721.  Such  filing  will  be  deemed  to  relate  back  to  the  filing  date  of  Complainants  informal  complaint  so  long  as  the  formal 


 complaint  is  filed  within  45  days  from  the  date  this  order  is  mailed  or  delivered  electronically  to  Complainant.  See  47  C.  F.  R.    1.719. 
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