Regulatory News - Strike Two Against Verizon Long Distance

Posted: 12/2000

Strike Two Against Verizon Long Distance
By Kim Sunderland

For the second time this year, Verizon Communications (www.verizon.com) has cut a deal with federal regulators to pay a hefty amount to the U.S. Treasury (www.ustreas.gov) in exchange for its termination of an investigation against the BOC.

In each instance, the FCC (www.fcc.gov) was investigating the company, formerly known as Bell Atlantic Communications Inc. It now operates as Verizon Long Distance.

Last March, the FCC entered into a consent decree with Bell Atlantic regarding the company's loss or mishandling of thousands of electronic orders submitted by local service competitors. The FCC ended its investigation when Bell Atlantic agreed to pay, voluntarily, $3 million to the U.S. Treasury, with additional liability of up to $24 million. Bell Atlantic also was required to file regular performance reports with the FCC regarding its compliance with certain performance measurements.

In this most recent event, the FCC's Enforcement Bureau ended its investigation into possible violations of FCC rules by Verizon (the merger of Bell Atlantic and GTE Corp.). According to the bureau, the alleged violations border on slamming, but it adds it received no evidence to indicate that Verizon changed customers' preferred IXC without proper authorization.

"Accordingly, the issues before us solely relate to third-party verification [TPV] and record maintenance, and not to the practice commonly known as 'slamming,'" the FCC said.

Verizon now will contribute, voluntarily, $250,000 to the U.S. Treasury, and will take steps to ensure that it properly conducts TPV of consumer authorizations for carrier changes and retains the records of such verification.

FCC rules require telecom carriers to conduct TPV of consumer authorizations to change their service providers, and to retain records regarding such verification for a period of two years.

Verizon had disclosed to the FCC Enforcement Bureau that it could not locate TPV records for 34,000 residential consumers, which it had switched to Verizon's long-distance service in New York state.

Verizon also is taking steps to correct and prevent reoccurrence of the problem, according to the FCC. These steps include:

1. Contacting consumers for whom it could not locate their TPV records to provide a credit for long-distance charges up to the date of the completed TPV or the date of the consumer's stated desire to switch to another carrier;

2. Holding monthly performance review meetings with its TPV contractor;

3. Enhancing its ordering systems to prevent completion of an order for service before TPV has been obtained;

4. Instituting additional oversight mechanisms for its employees and TPV contractors; and

5. Reporting to the Enforcement Bureau on its compliance with the consent decree.

"Although the consent decree terminates the bureau's investigation, the FCC Enforcement Bureau can investigate and take enforcement action against Verizon if the commission receives consumer complaints or other information indicating that Verizon may have failed to obtain consumer authorization for carrier changes," the FCC said.