Opinion ID: 793859
Heading Depth: 2
Heading Rank: 1

Heading: Structure of the Billing System

Text: 4 The defendants-appellants' billing system operated as follows: When a computer user visited a website providing adult-entertainment services, the website offered the user the ability to buy adult content using a downloadable dialer program. The user downloaded the dialer program after clicking through a series of website disclosures containing the terms and conditions of use and an explanation that charges for the adult content would be billed to the telephone-line subscriber as the cost of an international phone call. The computer user then initiated the dialer program, and if the computer was connected by modem to a telephone line, the dialer program placed an international phone call to a Madagascar telephone number, bypassing the line subscriber's designated carrier in favor of AT & T and later Sprint. 5 Either AT & T or Sprint carried the call to London where it handed off the call to a separate carrier, AT & T U.K. (later renamed Viatel). Instead of routing the call to Madagascar for completion, AT & T U.K./Viatel carried the call to a designated internet server in the United Kingdom, a practice known as short-stopping the call. That internet server finalized the connection between the user's computer and the website providing the desired adult entertainment. 6 Charges for accessing the adult entertainment appeared on bills sent to the consumers whose telephone lines were used. AT & T and Sprint identified the telephone-line subscribers by the Automatic Number Identification (ANI) system, the standard means by which telephone companies bill for phone calls. These bills, at first telephone bills from AT & T and later separate bills designed by Verity and sent using information provided by Sprint, charged line subscribers for long-distance phone calls to Madagascar. 7 Notably, this billing system did not have a mechanism to ensure that a telephone-line subscriber authorized the computer user to access a given adult-entertainment service. The absence of such a mechanism allowed line subscribers to receive bills for adult-entertainment access about which they had no knowledge, which prompted the FTC to bring this lawsuit. 8