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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) EB Docket No. 03-96
)
NOS Communications, Inc., ) File No. EB-02-TC-119
Affinity Network Incorporated and )
NOSVA Limited Partnership ) NAL/Acct. No.
200332170003
)
Order to Show Cause and ) FRN: 0004942538
Notice of Opportunity for Hearing )
ORDER TO SHOW CAUSE AND
NOTICE OF OPPORTUNITY FOR HEARING
Adopted: April 2, 2003 Released: April 7, 2003
By the Commission:
I. INTRODUCTION
1. In this Order to Show Cause and Notice of Opportunity
for Hearing, we commence an evidentiary hearing to determine
whether: (1) the Commission should revoke the operating authority
of NOS Communications, Inc. (``NOS''), Affinity Network
Incorporated (``ANI''), and NOSVA Limited Partnership (``NOSVA'')
(collectively ``NOS/ANI'' or the ``Companies'')1; (2) NOS/ANI and
its principals should be ordered to cease and desist from any
future provision of interstate common carrier services without
the prior consent of the Commission; and (3) a forfeiture against
NOS/ANI is warranted and, if so, the amount of the forfeiture.
2. As set forth in detail below, it appears that NOS/ANI
may have willfully or repeatedly violated sections 201(b) of the
Communications Act of 1934, as amended (the "Act"),2 by
conducting a misleading marketing campaign (the ``Winback
Campaign'') apparently designed to improperly induce former
customers into authorizing switches back to NOS/ANI. These
improper inducements apparently included the Companies contacting
their former customers and describing ``problems'' that the
customers' chosen carriers were allegedly having in completing
the customers' requests to establish new service. NOS/ANI
apparently threatened their former customers with loss of service
unless they agreed to retain NOS/ANI services as a ``temporary
measure.'' Under coercion, some of these customers signed
Letters of Agency (``LOAs'') that authorized the Companies to be
their preferred carriers, believing that doing so was necessary
to keep receiving service while their new preferred carriers
completed their switches. The representations of NOS/ANI to
their former customers appear to be knowingly false. In reality,
the consumers had already been switched to their new preferred
carriers and the Companies' marketing campaign was an apparently
misleading scheme to trick consumers into returning to the
Companies' services. The Companies' apparent campaign to
misleadingly induce former customers into signing LOAs raise
serious questions regarding whether NOS/ANI and its principals
are qualified to be certified to provide interstate
telecommunications services. The hearing will address these
questions, as well as whether a forfeiture should be issued to
NOS/ANI for the apparent willful and repeated violation of
section 201(b) of the Act's3 prohibition against unjust and
unreasonable practices.
II. BACKGROUND
3. NOS/ANI are switchless resellers of MCI long distance
service.4 Their customers are primarily small and medium-sized
companies. NOS/ANI operates as a common carrier subject to Title
II of the Act. Specifically, NOS/ANI currently provides or has
provided resale interstate long distance telecommunications
services to consumers in numerous states. Under the regulatory
scheme established by the Act and the Commission's rules, NOS/ANI
is classified as a nondominant interexchange carrier.5 As such,
it is considered to have ``blanket'' authority to operate
domestic common carrier facilities within the meaning of section
214 of the Act.6
4. The Enforcement Bureau (the ``Bureau'') initiated this
investigation against the companies after receiving information
about the Companies' marketing campaign from Mr. Robert Faulkner,
a former NOS/ANI employee.7 Based upon the information provided
by Mr. Faulkner,8 the Bureau contacted numerous consumers to
investigate the allegations. All of the consumers who form the
basis of this Order have signed declarations under penalty of
perjury stating that NOS/ANI contacted them after they switched
to new carriers and told them that their new carriers had not
picked up all of their lines, and that as result, their lines
were still billing with NOS/ANI.9 The consumers also state that
they were threatened with service disruption if they did not sign
new LOAs, which they were told were temporary, but necessary to
keep their service running. Some of the consumers were induced
into signing the LOAs with the assurance that it was only
temporary, while others refused to sign.10
5. The Companies' Winback Campaign apparently began in
December 2001.11 As alleged by the consumers, and reflected in
the audiotapes, the conversations between consumers and NOS/ANI
representatives followed a similar script, during which NOS/ANI
apparently made numerous false representations to the consumers
to induce them to switch their services back to NOS/ANI.12 As an
initial matter, consumers were told that they were being
contacted by the Companies' Cancel or Operations Cancel
Department because the Companies had received an alert in their
system from the local carrier to switch the consumers' services.
In fact, NOS/ANI representatives were apparently calling from the
Winback Department.13 Moreover, the consumers were apparently
targeted for these calls because they appeared on a lost account
report received from MCI, and not because of any ``alert'' from
the consumers' local service provider.14
6. NOS/ANI representatives also represented to these
consumers that their lines were still billing with the Companies
because their new carrier had not yet switched over the
services.15 Indeed, consumers were sometimes told that their new
preferred carriers had not yet even requested their lines.16 It
appears that NOS/ANI representatives informed the consumers that
they were calling ``out of courtesy'' to see if the consumers
wanted NOS/ANI to carry their lines ``in the interim period''
until their lines were switched to the consumers' new preferred
carriers.17 According to Companies' representations, NOS/ANI
would normally have cancelled the services of these accounts
unless they were ``red flagged'' for having call traffic.18
7. The new carriers were apparently already servicing the
consumers, and the consumers were not incurring further charges
from NOS/ANI at the time of the calls. IXCs such as NOS/ANI
receive reports from local service providers that reflect only
completed switches either to or from the IXC.19 Thus, NOS/ANI
would only have knowledge of which customers requested preferred
carrier changes after the switches had been completed.20 Indeed,
Mr. Faulkner confirmed that consumers were targeted for these
calls because they appeared on a lost account report received
from MCI.21
8. During the calls made in this marketing campaign,
NOS/ANI representatives also advised the consumers that they
needed to execute new LOAs until the consumers' new carriers
picked up their lines, to ensure continuity of service.22
Consumers were incorrectly informed that once they signed an LOA
with another company to switch their services from NOS/ANI, even
though their lines were still being billed by NOS/ANI, NOS/ANI
did not ``have authorization to carry the traffic anymore.''23
According to the Companies' representatives, a new LOA was
mandated by the FCC ``because of all the slamming that's going
on.''24 NOS/ANI representatives apparently told consumers that
once they signed the allegedly standard, FCC-approved LOA, with a
notation to ``See attached addendum,'' the consumers' service
would continue,25 and all ties with NOS/ANI would be severed as
soon as the new carriers picked up their lines.26 Consumers were
also told that they had to sign the new LOA for all of their
lines, and not just the ones allegedly still billing because
NOS/ANI could not service partial line accounts.27
9. Apparently consumers were threatened that their lines
would be taken down if NOS/ANI did not receive immediate
resolution of the matter.28 NOS/ANI representatives apparently
applied increasing and escalating pressure on their former
customers to switch back to NOS/ANI. They apparently contacted
their former customers repeatedly, refusing to take no for an
answer and each time increasing the pressure and urgency to sign
a new LOA designating NOS/ANI as the supposed ``interim''
carrier. In the case of Tideland Electric, for example, when Ms.
Baynor on behalf of Tideland Electric, stated that she could not
sign the new LOA without permission from the company CEO, who was
unavailable, the NOS/ANI representative insisted that she sign
because NOS/ANI showed her as an authorized signer on the
account.29 Ms. Gibbs, the NOS/ANI representative, persisted30
and followed up in a subsequent call with a lengthy and
impassioned argument upon learning that the CEO had not yet been
contacted.31
10. During the campaign, NOS/ANI also apparently threatened
disruption to former customers' local telephone service, even
though those customers did not have local service with NOS/ANI at
the time, to induce them to sign LOAs designating NOS/ANI as
their carrier. For example, Ms. Gibbs, on behalf of NOS/ANI,
threatened disruption to Nelson Engineering's local telephone
service in a conversation that took place on April 23, 2002,
representing to Nelson Engineering that its new preferred carrier
had not yet completed the switch.32 As she stated, ``What is
going to happen is it is going to cause a disruption to
everything that you have, as well as the local phone, too,
because they haven't completed it.''33 Yet, as of April 1, 2002,
Nelson Engineering's local service was with Qwest.34 Therefore,
NOS/ANI could not have disrupted Nelson Engineering's local
service at the time of this call.
11. The apparent pattern of these conversations NOS/ANI had
with former customers bears a remarkable similarity to a
``Winback Script''35 provided by Mr. Faulkner, who attested that
the Companies originated the script in December 2001, with top
management handing down the script to branch managers and sales
representatives in the Winback/Quality Assurance Department.36
For example, the Winback Script instructs sales representatives
to identify themselves to the consumers as the consumers' current
long distance carrier, while acknowledging that the consumers had
requested a change to another carrier.37 The script then directs
the sales representatives to tell the former customers that their
lines are still being billed with NOS/ANI, and to ask them if
they would like to avoid disruption in their service because now
that ``you've signed letter of agency with another company ...
and they didn't pick up all your lines at once...this could cause
a disruption to your service...''38 Next, the representatives
are instructed to explain that NOS/ANI is allegedly prohibited
from providing service to ``partial line accounts.''39 The
script then instructs the sales representatives to solve this
``problem'' by offering to keep ``all your lines up and running''
by having the customer sign an LOA.40 Under the script, the LOA
is described as providing temporary authority for NOS/ANI to keep
their former customers' service running ``til the new carrier
picks them up.''41
12. The Winback Script also instructs the sales
representatives to implement a practice of ``calling as
customer,'' or ``CAC,'' where necessary.42 Specifically, the
Winback Script directs sales representatives to ask for the
consumer's consent to call his or her local phone company, using
the consumer's name.43 According to the script, the sales
representative should explain that a conference call with the
consumer's local phone company is necessary to make sure that
everything is done correctly, but that the sales representative
does not want to ``bug'' the consumer anymore.44 According to
Mr. Faulkner, CAC is necessary when an LOA does not suffice to
change a consumer's preferred carrier with the local phone
company, such as when there is a preferred carrier freeze or
another restriction.45
13. The case of Arizconsin Group, Inc., d/b/a Crandon
Nursing Home (``Crandon Nursing'') of Crandon, Wisconsin appears
to illustrate the Companies' practice of ``calling as customer''
to effect a change to a consumer's preferred carrier selection.
On April 11, 2002, Crandon Nursing switched its main line and
associated telephone numbers from NOS/ANI to Verizon.46 Ms.
Christina Rose Spencer of Crandon Nursing was apparently
contacted thereafter by NOS/ANI and, under threat of service
disruption, signed a new LOA and faxed it back to NOS/ANI.47
Apparently, NOS/ANI submitted the LOA to the consumer's local
carrier to switch Crandon Nursing back to NOS/ANI.48 The
consumer's local carrier, Frontier, apparently rejected the LOA
because the consumer's service had just been changed from
NOS/ANI.49 Frontier alleges that, thereafter, it received two
different telephone calls from people claiming to be Ms. Spencer
and requesting that the consumer be switched back to NOS/ANI.50
The first caller was a male, but knowing that Chris Spencer was a
woman, Frontier's Customer Care representative refused to make
the requested change without first contacting the consumer, who
later confirmed that she did not authorize the change.51 The
second caller was a female, who hung up when its representative
told her the consumer would be called to verify the requested
change.52 Ms. Spencer confirmed that she did not authorize the
change after this second call as well.53 In fact, on April 15,
2002, Ms. Spencer went to Frontier's office and signed a
preferred carrier freeze to prevent further unauthorized changes
from being executed.54
14. Consumers who were apparently deceived into signing
were usually returned to the Companies' services just days after
they switched to their new carriers.55 Once they learned that
they had been switched back to NOS/ANI, however, they immediately
switched away again, evidencing their clear intent to leave the
Companies.56
III. DISCUSSION
A. Whether NOS/ANI Violated Section 201(b) of the
Communications Act
15. The consumer complaints and information from a former
company executive before us all suggest a continuous
telemarketing campaign, apparently intended for the sole purpose
of tricking and threatening former customers into signing new
LOAs to switch their services back to NOS/ANI. This practice
depicts a callous disregard for the requirements of the
Communications Act and section 201(b) in particular. Section
201(b) of the Act, states, in pertinent part, that ``[a]ll
charges, practices, classifications, and regulations for and in
connection with such communication service, shall be just and
reasonable, and any such charge, practice, classification, or
regulation that is unjust or unreasonable is hereby declared to
be unlawful.''57 Based upon our review of the evidence before
us, we find that NOS/ANI's apparent telemarketing campaign
evidences apparently willful or repeated violations of section
201(b) of the Act. The Companies' apparent Winback Campaign
involving misleading representations to consumers regarding the
switch status of their services and threats of service disruption
to scare consumers into signing LOAs appears to constitute an
``unjust and unreasonable practice'' within the meaning of
section 201(b).
16. The evidence of NOS/ANI's apparent misrepresentations
to consumers includes: 1) that the representatives were calling
from NOS/ANI's Cancel Department or Operations Cancel; 2) that
the consumer's lines were still billing with NOS/ANI because the
consumer's new preferred carrier had not picked up all of their
lines; 3) that NOS/ANI had received an alert in their system from
the consumer's local service provider to disconnect the
consumer's service, and that the alert probably just came too
soon before the consumer's new preferred carrier could pick up
all the lines; 4) that the consumer's account had been ``red
flagged'' because it was still billing, and that the
representative was calling out of courtesy to find out whether
the consumer wanted to keep his or her lines up; 5) that when the
consumer signed an LOA to switch from NOS/ANI to a new carrier,
NOS/ANI lost authorization to carry the lines, and that, due to
FCC mandates, NOS/ANI could not carry the lines without a new
signed LOA; 6) that the consumer's lines would be taken down
without a new signed LOA; 7) that the consumer had to sign the
new LOA for all of his or her lines, not just the ones still
billing because NOS/ANI could not service partial line accounts;
8) that the new LOA was temporary until the consumer's new
carrier could ``pick up'' his or her lines, and that the consumer
should attach an addendum to the LOA indicating that the LOA was
temporary because the FCC had only approved a standard LOA; and
9) that the consumer needed to respond immediately or the
consumer's lines would be taken down. The evidence also reveals
that NOS/ANI's representatives apparently misrepresented to
consumers that NOS/ANI could view the consumer's call traffic
live or within the hour and that they could disconnect the
consumer's local lines even when the consumer did not have local
service with NOS/ANI.
17. As outlined herein, each of these representations is
apparently false. Contrary to what was told to consumers, the
NOS/ANI representatives were apparently calling from the
Companies' Winback or Quality Assurance Department, and not the
Cancel or Operations Cancel Department. This fact is supported
by Mr. Faulkner's allegations and also by the audiotaped
conversations and consumer allegations, which follow the
telemarketing script from NOS/ANI's Winback Department.
Therefore, it appears that the nature of the calls was to
``winback'' the consumers' service, and not courtesy calls to
help the consumers keep their lines up while they transitioned to
their new carriers as purported. It also appears that, contrary
to assertions made by NOS/ANI representatives, the consumers'
lines were already switched to new preferred carriers and were
not incurring further charges from NOS/ANI at the time of the
calls to consumers. If the consumers' lines had already been
switched, it follows that NOS/ANI could not ``take down'' their
lines for any services not remaining with NOS/ANI.
18. We have already established that NOS/ANI was apparently
misrepresenting to consumers who had switched from their service
that some of the consumers' lines had not been picked up by their
new carriers and that the companies could not carry the lines
without authorization. There is nothing in the Act or in our
rules which supports NOS/ANI's statements to consumers that
NOS/ANI would lose authority to carry a consumer's lines once the
consumer signs a new LOA with another carrier. In fact, this
interpretation of our rules would provide absurd results, as it
often is the case that a preferred carrier change is not executed
until days after the consumer has requested the change and the
request has been submitted to the local carrier and executed.
Under NOS/ANI's theory, every carrier would be providing service
without authorization if it did not immediately obtain
``transitional'' or ``temporary'' LOAs from consumers switching
from their service to another carrier the moment those consumers
requested the change or signed new LOAs with the other carriers.
Further, administration in such an event would be nearly
impossible, as most consumers do not even contact the old carrier
when requesting a change to a different carrier. They simply
give authorization to the new carrier. Given that carriers are
only notified of lost accounts from the local carriers after the
switches have been complete, the old carriers would have no way
of knowing from whom to request these temporary LOAs.
19. It necessarily follows, therefore, that an old carrier
loses authorization when the carrier change has been completed,
and not when the consumer signs a new LOA or otherwise requests a
carrier change. That said, NOS/ANI's statements to consumers
that new LOAs are needed because consumers' new carriers did not
pick up all of their lines are apparently false and misleading
and not based upon any reasonable interpretation of the Act or
our rules. In the unlikely event that a new carrier does not
pick up all of a consumer's lines, NOS/ANI would continue to be
the authorized carrier until the lines were switched over
notwithstanding the companies' dubious policy against partial
accounts.
20. NOS/ANI's Winback telemarketing campaign also
apparently consisted of calling former customers and threatening
them with service disruption if they did not sign new LOAs,
promising that the LOAs would be temporary until the consumers'
new carriers picked up their lines. Consumers were told to mark,
``see attached addendum'' on the LOAs and told to include with
the LOA a statement on company letterhead that the LOAs were
temporary. Consumers were apparently told that NOS/ANI could not
provide them with temporary or interim LOAs because the FCC had
allegedly only approved one standard LOA for their use.
Consumers were apparently assured, however, that if they followed
these instructions, as soon as their new carrier picked up their
lines, all ties would be severed with NOS/ANI. Consumers were
apparently called repeatedly with escalating threats to sign the
LOAs. Pressured repeatedly and threatened with business losses,
many of these business consumers apparently signed and returned
the LOAs to NOS/ANI believing it was necessary to keep their
lines up while they transitioned to their new carriers.
21. In many instances, NOS/ANI then used the LOAs to switch
the customers back to NOS/ANI's service, oftentimes just days
after they had switched to their new carriers. The consumers
contend, however, that they did not intend to give the Companies
authority to switch their preferred carriers back to NOS/ANI. In
fact, the consumers were attempting to switch from the Companies
to new carriers and were only willing to stay on NOS/ANI's
services until their lines could be switched to their new
preferred carriers. As the evidence establishes, the consumers
were unaware that they had already been switched to their new
preferred carriers and that they did not need ``temporary''
service from NOS/ANI. The complainants make it clear that had
they had this information, they would not have signed the LOAs.
22. In light of the apparent egregious behavior evidenced
by the consumer statements, the audiotapes, the independent
verification of the facts by the consumers' local carriers, and
other evidence, we direct the Administrative Law Judge (``ALJ'')
to determine whether NOS/ANI engaged in a misleading and
continuous telemarketing campaign in apparent willful and
repeated violation of section 201(b) of the Act's prohibition
against unjust and unreasonable practices.
B. Whether NOS/ANI Should Remain Authorized to Act as a Common
Carrier
23. It appears that NOS/ANI engaged in an unjust and
unreasonable marketing practice in apparent violation of the Act.
It thus appears that the continued operation of NOS/ANI as a
common carrier may not serve the public convenience and necessity
within the meaning of section 214 of the Act. We therefore
direct the ALJ to determine whether the NOS/ANI blanket section
214 authorization should be revoked. Further, in light of the
egregious nature of NOS/ANI's apparently unlawful activities, we
direct the ALJ to determine whether specific Commission
authorization should be required for NOS/ANI, or the principal or
principals of NOS/ANI, to provide any interstate common carrier
services in the future.58
IV. CONCLUSION
24. In light of the totality of the information now before
us, an evidentiary hearing is warranted to determine whether the
continued operation of NOS/ANI as a common carrier would serve
the public convenience and necessity within the meaning of
section 214 of the Act. Further, due to the egregious nature of
NOS/ANI's apparently unlawful activities, NOS/ANI 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. In
addition, consistent with our practice in revocation proceedings,
the hearing will also address whether a forfeiture should be
levied against NOS/ANI for willful and repeated violation of
section 201(b) of the Act.
V. ORDERING CLAUSES
25. ACCORDINGLY, IT IS ORDERED that, pursuant to sections
4(i) and 214 of the Communications Act of 1934, as amended, 47
U.S.C. §§ 154(i) and 214, the principal or principals of NOS
Communications, Inc., Affinity Network Incorporated, and NOSVA
Limited Partnership ARE DIRECTED TO SHOW CAUSE why the operating
authority bestowed on NOS Communications, Inc., Affinity Network
Incorporated, and NOSVA Limited Partnership pursuant to Section
214 of the Communications Act of 1934, as amended, should not be
REVOKED.
26. IT IS FURTHER ORDERED that, pursuant to section 312(b)
of the Communications Act of 1934, as amended, 47 U.S.C. §
312(b), the principal or principals of NOS Communications, Inc.,
Affinity Network Incorporated, and NOSVA Limited Partnership 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.
27. 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. The ALJ shall apply the
conclusions of law set forth in this Order to the findings that
he makes in that hearing, upon the following issues:
(a) to determine whether NOS Communications, Inc.,
Affinity Network Incorporated, and NOSVA Limited
Partnership engaged in a misleading and continuous
telemarketing campaign in apparent willful and
repeated violation of section 201(b) of the Act's
prohibition against unjust and unreasonable
practices;
(b) to determine, in light of all the foregoing,
whether NOS Communications, Inc., Affinity Network
Incorporated, and NOSVA Limited Partnership
authorization pursuant to section 214 of the Act
to operate as common carriers should be revoked;
(c) to determine whether, in light of all the
foregoing, NOS Communications, Inc., Affinity
Network Incorporated, and NOSVA Limited
Partnership and/or their principals should be
ordered to cease and desist from the provision of
any interstate common carrier services without the
prior consent of the Commission;
28. IT IS FURTHER ORDERED that the Chief, Enforcement
Bureau, shall be a party to the designated hearing. Both the
burden of proceeding and the burden of proof shall be upon the
Enforcement Bureau as to issues (a) through (c) inclusive.
29. IT IS FURTHER ORDERED that, to avail themselves of the
opportunity to be heard, the principal or principals of NOS
Communications, Inc., Affinity Network Incorporated, and NOSVA
Limited Partnership, pursuant to section 1.91(c) of the
Commission's rules, SHALL FILE with the Commission within 30 days
of the mailing of this Order to Show Cause and Notice of
Opportunity for Hearing a WRITTEN APPEARANCE stating that a
principal or other legal representative from NOS Communications,
Inc., Affinity Network Incorporated, and NOSVA Limited
Partnership will appear at the hearing and present evidence on
the matters specified in the Show Cause Order. If NOS
Communications, Inc., Affinity Network Incorporated, and NOSVA
Limited Partnership fail to file a written appearance within the
time specified, NOS Communications, Inc., Affinity Network
Incorporated, and NOSVA Limited Partnership's right to a hearing
SHALL BE DEEMED TO BE WAIVED. In the event that 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 as to that
entity and CERTIFY this case to the Commission in the regular
course of business, and an appropriate order shall be entered.
30. IT IS FURTHER ORDERED that, if it is determined that
NOS Communications, Inc., Affinity Network Incorporated, and
NOSVA Limited Partnership have willfully or repeatedly violated
any provision of the Act or the Commission's rules cited in this
Order to Show Cause and Notice of Opportunity for Hearing, it
shall be further determined whether an Order for Forfeiture shall
be issued pursuant to Section 503(b) of the Communications Act of
1934, as amended,59 for the maximum forfeiture amount of $120,000
per day for more than ten (10) days up to the statutory maximum
of $1,200,000.
31. IT IS FURTHER ORDERED that NOS Communications, Inc.,
Affinity Network Incorporated, and NOSVA Limited Partnership must
immediately modify their document retention policies, if
necessary, to ensure that no arguably relevant Documents, as
defined herein,60 are destroyed. This obligation includes any
Documents relating to the matters described above. NOS
Communications, Inc., Affinity Network Incorporated, and NOSVA
Limited Partnership must retain all such Documents and continue
the modified document retention policies for twenty-four (24)
months from the date of this Order unless (1) NOS Communications,
Inc., Affinity Network Incorporated, and NOSVA Limited
Partnership are directed by the Enforcement Bureau to retain such
Documents and continue the modified document retention policies
until the matter has been finally concluded through issuance of a
final order in this proceeding and exhaustion of all possible
appeals.
32. 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, 47
U.S.C. § 503(b)(A), for the potential forfeiture liability
outlined above.
33. 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 NOS Communications,
Inc., Affinity Network Incorporated, and NOSVA Limited
Partnership at:
NOS Communications, Inc.
6110 Executive Boulevard, Ste. 508
Rockville, MD 20852
Affinity Network, Inc.
4380 Boulder Highway
Las Vegas, NV 89121
NOSVA Limited Partnership
6701 Democracy Boulevard, Ste. 811
Bethesda, MD 20817
FEDERAL COMMUNICATIONS COMMISSION
Marlene Dortch
Secretary APPENDIX A
AFFIDAVIT OF ROBERT FAULKNER
1. My name is Robert Faulkner, and my address is 170 Emerald
Mountain Avenue, Henderson, Nevada 89015. My telephone
number is (702) 567-9822 and (702) 592-5128. I am over
eighteen (18) years old.
2. From October 1996 to April 2002, I worked for NOS
Communications, Inc. (``NOS'') at 4380 Boulder Highway in
Las Vegas, NV 89121. I was last employed by NOS as the
Executive Director of Accounts Receivables and Collections.
In that position, I oversaw all the collection activities
for NOS and its subsidiaries and affiliates. NOS, its
subsidiaries and affiliates, including Affinity Network
Incorporated and NOSVA Limited Partnership, operated from
shared facilities at the same Las Vegas address. NOS's
customers were primarily business customers.
3. In December 2001, when my department contacted customers
regarding collections, we noticed that many customers were
complaining that their services had been switched back to
NOS without their authorization or that NOS had exerted
undue pressure on them to authorize such a switch. The
complaints were primarily against NOS's Quality Assurance
(``Winback'') Department.
4. I began investigating these customer complaints through use
of NOS's telephone monitoring system called NICE. The NICE
computer system allows access to live or previously recorded
(archived) telephone calls throughout the company. Through
NICE, recorded conversations can be sent electronically via
wav files. At the time of my employment, Bill Fleischman
was in charge of the NICE system and Nate Brown was the Vice
President of Information Systems.
5. As an authorized user of the NICE system, I listened to
calls from the Winback Department and heard sales
representatives and branch managers misrepresent to
customers who had switched from NOS that NOS was still
showing call traffic from the customers' line(s) due to an
incomplete preferred carrier change. Customers were even
told that NOS was showing up to the minute calls, which was
impossible to view.
6. The Winback Department's sales representatives and branch
managers also told customers that they were calling from the
Cancel or Operations Cancel Department, and that they had
received an ``alert'' or disconnect order to disconnect the
customer's line(s) still showing traffic. [The so-called
``alerts'' were lost traffic reports from WorldCom, Inc.,
from whom NOS resells long distance, showing that a customer
had switched 50% or more of its lines. An appearance on
this report would bring the customer to the attention of the
Winback Department].
7. The customers were asked if they wanted their service
``taken down'' or ``left up'' while they were being switched
to their new carriers. Confused, the customers often wanted
to contact their new carriers, but were told that a
resolution was required on that particular call or the
line(s) involved would be disconnected.
8. The customers were told that NOS was carrying the lines at a
risk of being fined $10,000 to $40,000 by the FCC for
slamming. The customers were asked to sign a Letter of
Agency (LOA) to prevent service disruption, under the
misinformation that the LOAs kept NOS from being in
violation of the FCC's slamming rules. Customers, in fear
of losing their lines (especially their toll-free numbers),
reluctantly agreed to sign the LOAs. They signed under the
belief that it was a temporary arrangement until their new
carriers completed the switch.
9. Customers were told that they had to sign the LOAs for all
of their lines, not just the one(s) showing traffic, because
NOS could not service partial line accounts. This was a
ploy to move all of the customer's lines back to NOS.
10. During these calls, sales representatives and branch
managers would oftentimes practice what they refer to as
``calling as customer'' (``CAC''). CAC is calling the
customer's local exchange carrier (``LEC'') and pretending
to be the customer to complete the carrier change.
Customers were told that the sales representative or branch
manager could complete a conference call to the LEC using
the customer's name to save the customer time. They
misrepresented to customers that these calls could take from
20 to 40 minutes, and that they did not want to keep the
customer on the line any longer. Sometimes the sales
representatives or branch managers did what is referred to
as a ``push through'', that is, they would switch the
customer's service without a conference call if the customer
had no ``PIC freeze'' restrictions on his line(s). CAC is
only necessary when an LOA does not suffice to switch a
customer's service, such as when there is a ``PIC freeze.''
11. I have forwarded to the FCC audiotapes of some of the
aforementioned calls to customers. The audiotapes are of
calls made primarily by Tim Slingerland, branch manager, and
Marsha Gibbs, sales representative, during the latter part
of April 2002. The audiotapes were recorded live from the
NICE system, and I have marked certain of the tapes with the
dates they were recorded. The audiotapes corroborate the
misleading practices I have described herein.
12. I have also forwarded to the FCC a copy of the Winback
Department's customer calling script. As with the
audiotapes, the script further corroborates the misleading
practices of NOS's sales representatives and branch managers
as I have described herein. The script was originated at
the start of the ``winback campaign'' in December 2001. It
has been revised several times since, most recently in March
or April 2002. The scripts were handed down from top
managers to branch managers and sales representatives, who
have been allowed to ``think on their feet'' and embellish.
13. Additionally, I have forwarded to the FCC copies of various
NOS emails, memos, customer complaints, customer lists and
telephone numbers, reports (Winback Tracking, Settlement
Tracking, and Logout), and billing records.
I declare under penalty of perjury that the foregoing is true and
correct.
/s/__Robert Faulkner____ for ____ROBERT FAULKNER
Signature Business Name
Executed on (Date): 3/5/03
APPENDIX B
WINBACK SCRIPT
DM PRESENTATION WINBACK 1
Hi (DM NAME) ... this is ______________ with _____________ your
current long distance carrier.... How's yer day doing so
far....Good?....I noticed where someone put in a request to move
your phone lines to another service....and I just want to
apologize because we obviously let you down...and I also want to
say thank you for the business you've given us....
And if things don't work out with yer new carrier....I'd really
appreciate it if you'd give us another chance. Your lines are
still billing on our service And I imagine you want them left up
and running till the new carrier picks them up....right?
IF YES KEEP GOING...
Now what I'm going to do is send you $500 in pre paid calling in
case you do have any problems. Because the last thing we want
you to do is to leave with a bad taste in your mouth.
I'm also gonna send you another Letter of Agency.
[MUST SAY]
This will allow us to keep all your lines up and running,
including yer local service (DM NAME)...Just until they can
properly switch them.
IF ANY REUTTAL GO HERE
IF NO REBUTTAL GO TO CLOSE
Now because you've signed letter of agency with another
company....and they didn't pick up all your lines at
once.....this could cause a disruption to your service....so I'm
calling to confirm that you still want ALL your lines left up and
running for now.
IF ASKED WHY WOULD IT CAUSE A DISRUPTION
Unfortunately (DM NAME) ...our tariff does not allow us to
service partial line accounts....and our system is set up to take
down accounts that have partial lines still billing...so I'm
calling to confirm that you want these lines left up and running
for now.
JUSTIFICATION FOR POLICY
The cost for our company to service...and bill and collect...on a
partial line account...that may only generate $25-$50 in
billing... is almost as high as the cost to service an entire
account...where all the lines are billing on our service...that
may bill $250-$500. So the bottom line is...it's just mot
profitable for us to service partial line accounts.
CLOSE AND CAC
If you could grab my fax I will only take a couple more seconds
of your time ...and we should be able to pick all your lines
without having to bother you anymore. In order to make sure this
is done correctly....we may have to conference you in with the
local phone company....which usually takes about 20 minutes...or
...if it's ok to just use your name...we take care of it
ourselves...this way we don't have to bug ya anymore is that O.k.
(MUST WAIT FOR RESPONSE). Now the fax should be there all I need
you to do is just sign and date it and fax it back at (COMPANY
FAX) ...that way we'll be covered....and you'll still have
service...
HOLD FOR L.O.A
(AFTER LOA IS RECEIVED)
Let me ask you...just out of curiosity....why ya leaving?
{Address The Issue}
IF RATE IS ISSUE THEN------------
Oh...I'm sorry...I'll tell you what.....I'm gonna give ya a nice
reduction on your rate...this way you don't have to worry about
switching again.
***Reduce Rate only to whatever the rate was before the last rate
increase.
Question: Can you just leave my lines up for a couple of days?
Answer: We can leave them until tomorrow, if that will help you.
APPENDIX C
TIDELAND ELECTRIC TRANSCRIPT
Audiotape # 1, Side B
[First conversation with Marsha Gibbs of NOS/ANI].
Janice: Good afternoon, Janice Baynor.
Marsha: Yes, hi, Janice. My name is Marsha Gibbs. I'm
calling from ANI Communications in the Corporate
Office. How are you?
Janice: I am fine.
Marsha: Alright, you know that calls are monitored and recorded
for quality assurance purposes. I and Timothy, or
someone ... You talked to him. He's a manager. He's a
branch manager. He runs our Operations Department.
Janice: Uh-uh.
Marsha: I'm the Director. And so, I wanted to call you on
myself because I wanted to speak to you about some
issues. The lines are still billing here with our
company. And so you're going to Sprint from what I
understand. Is that correct?
Janice: Yeah, that's right.
Marsha: They have not completed the switch. The lines are still
billing here with our company. I did not wanna have to
shut these lines off because your business would be in
a detriment, and basically, anybody that calls into the
office will have that you are temporarily disconnected.
And if you tried to dial out on the lines that are
still PIC'd here, you wouldn't be able to.
Janice: Right.
Marsha: And you have so many lines, you know, that are billing
here, you know, on a large scale. If we can send you a
Letter of Agency, have you attach a detailed addendum
to it. Put on the form itself, ``See attached
addendum.'' Cause I would much rather prefer, as a
previous customer of ours, for you to transition from
our company over to the other one.
Janice: Yeah
Marsha: And what I will do is, basically -- and I don't usually
make these types of calls, but I wanna give you my
backline because, uh, we're gonna work through this
process to make sure that everything transitions over
correctly to them.
Janice: Okay, sure.
Marsha: Okay, and so my line directly ... I'm gonna get two
numbers for you, actually. Hold on for two seconds,
okay?
Janice: Okay.
[PHONE RINGS]
Marsha: Okay, Janice. I'm gonna give you, uh ... This is ...
This is the line that you call, but at least you will
have a way -- two ways -- of getting a hold of me
directly. It's 702 ...
Janice: Where are you located?
Marsha: I'm in Nevada. Nevada, originally from Chicago. Our
... our Corporate Office was in Bethesda, but I -- we -
- transferred here.
Janice: 702.
Marsha: 949-4019, and uh, my secretary's name is Megan. And
so, if I'm on the phone or on the floor, she will find
me, and get me on the phone with you. My direct, uh
... my direct line is (800) 636-6670. And my office
extension is 5556. And Megan is within the office, but
I just wanted you to have two numbers.
Janice: What is your name?
Marsha: Marsha Gibbs. G. I. B. B. S. It's spelled M. A. R.
S. H. A.
Marsha: And so I'm gonna send the form over, and I need to, uh,
have resolution on this call because what I want you to
do is ... I'm gonna tell you what to write out on the
Addendum. You need to state the company that you're
switching to so that it's on this call. And then on
the form itself we're gonna have you put clearly, ``See
attached addendum.'' Because those are the terms of
this Letter of Authorization that you're signing. And
then as soon as it comes in it might erase your
services from us. All your ties will be severed from
our company completely. And we're gonna make sure that
this transitions because, you know, this is the thing.
You don't wanna go shutting people's lines down. Even
though, in this particular instance, it's not our fault
because they didn't pick it up in time. And no fault to
them, it's probably because we got our alert a little
bit too early before they could finish it. But the last
thing you wanna do is do that because this is, uh, very
competitive. You're not with us right now, but maybe
you might consider our company in the future.
Janice: Right.
Marsha: And so, what's the fax number that's closest to you so,
uh, right now? I can get this form over to you.
Janice: 252.
Marsha: 252.
Janice: 943.
Marsha: 943.
Janice: 3510.
Marsha: 3510.
Marsha: Okay, I'm gonna modify it and get it over to you right
now. If you can put me on hold and grab the company
letter head, I'll tell you exactly what to put. This
is going to take two minutes, and we're done.
Janice: Well, I'm gonna have to go ... The CEO is not
here this afternoon, and I'm ... He ...We go over all
changes like this before we finalize them with him. He
... I'm expecting him back later on ... [words
unclear].
Marsha: Has Tim ... Has Tim or any body talked to him? Is this
...
Janice: I don't think so. I don't know.
Marsha: Is this, um ... I'm trying to think. If ... If I ...
Janice: If they did call ... [words unclear].
Marsha: Is it Jeff?
Janice: No.
Marsha: Okay, I have Patrick. Was it him?
Janice: Uh, no, Patrick is an accountant.
Marsha: Okay, cause I know that they talked to several people
here.
Janice: Yea, they talked ... they talked to, uh, Patrick.
He's the accountant that handles the bills.
Marsha: Yea, we do have you listed as the key person here.
Janice: That's right.
Marsha: And ... And it says temporarily. My main concern is we
don't want you to lose service. At this point ...
[words unclear].
Janice: I certainly don't want to either.
Marsha: Yeah, we haven't gotten resolution on it, and that's
why I called you myself because I don't want you to
mistake urgency for pressure. But this system is set
up to cause disruption to everything effective
immediately. And so I wanted to call and explain it to
you, so that we can get this on file. Because, as you
know, in our company, we don't have contracts, term
plans, or agreements. So as soon as they come in and
pick it up, it will be fine. But if the service goes
down, it's gonna take them even longer, Janice, to get
it PIC'd to them because they are gonna have to figure
how to bring it back up. And this is every phone line
that is associated here with us that's still billing,
which is at this point about 95% of the traffic.
Janice: Okay.
Marsha: So, I need to get that back from you.
Janice: If ... If you'll get it to me, then I'll ... I'll ...
Marsha: It's sitting. It's sitting there right now. And I
have to confirm with you on this recorded line that I
received it from you. That's the reason why I gave you
both of my numbers. Because once you talk to him, if
they have any questions for me, that's fine. Our main
point is ... is we're respecting your decision. We
actually want that company to come in as soon as they
can and pick it up. Because it's almost not worth
carrying it if you ... if our company is gonna be at a
liability. And I don't mean to sound facetious when I
say that at all because we appreciated you as customer,
but we want to help them get you over there as soon as
possible without ... with you having a smooth
transition.
Janice: Uh well, as soon as I can talk with him ... And I
don't know what time he will be here. That's the
thing.
Marsha: Is there any way you can go ahead and send that over to
me?
Janice: I cannot.
Marsha: So I can keep this up and running?
Janice: I cannot. I have to have a talk with him.
Marsha: Well, does he have a cell phone where you can put me on
hold and let him know the seriousness of this
situation?
Janice: Well, he's actually ... He's actually on the golf
course ... [word unclear]. He does not carry a phone
with him.
Marsha: Okay.
Janice: But I expect him in later on this afternoon.
Marsha: See, that's the thing, Janice, if ... if it's shut off
right now, then you ... he won't even be able to call
into you to see what's going on because every phone
line [clears throat] is stilling billing here with our
company, you know. And you're still here on
everything. So, and, uh ... [unclear word] all those
lines will be shut off, as well as all the other
locations. Your 800 numbers are still billing here
with us. And you know, basically, if ... if the 800
numbers are shut down -- which is where the
predominantly ... most of your business is at -- it's
gonna have clearly that these lines are disconnected.
My concern is the fact that we don't have them in here
trying to pull them from us. So they're going to be
sitting dormant. That's the perfect opportunity for
the National SMS to reissue them.
Janice: Say that again. I didn't hear you.
Marsha: That is the perfect opportunity for another company to
pick them up on an open market network, and you can
possibly lose the numbers. So I'm just ... I'm not
trying to scare you, I'm just trying to let you know,
you know, as the Director of this department what can
happen. Because if we don't get something to cover
this ... Because your company is gonna be at a serious
detriment.
Janice: Why can't you just continue it until they can get an
opportunity to switch? That's what we can't
understand.
Marsha: Okay let me explain to you why we can't do that.
Because you signed a Letter of Agency with this other
company ... Our company is not tariffed to do partial
line billing. We do not ... we're carrying the traffic
at a liability because we don't have permission to
carry it at this point. For instance, when you signed
that Letter of Agency with them, it voided out any
authorization that we had to carry this traffic.
Janice: Well then, I don't understand how something on our
letterhead could change that.
Marsha: Your letterhead and the Letter of Authorization from
our company. That's what I'm asking you for. It's a
standard Letter of Agency. You have to send over an
addendum on company letter head, and you will have to
send over the Letter of Authorization. We'll have it
on file because we need to be covered in this interim
period. I'm sure you, being in business, you know ...
At this point, this company could be at a liability for
carrying the traffic unauthorized. You know what I
mean? It's just not worth the detriment. So, you
know, we're calling you out of courtesy. We understand
you are leaving our company completely. So you should
look at it with some integrity here because we are at
least trying to help you, so ... so that you will have
a transition smoothly to this company.
Janice: Yeah, and I ... I appreciate it. I really do.
Marsha: But I can't ... I can't do that, ah, and then have our
company at risk because we're carrying the traffic
unauthorized. If ... It's risk free to you. It's
going to keep your service up until its running. We
know you're switching. We know you're leaving without
a doubt. It's been stated on several calls. Why take
the risk? Don't have the service go down, and not be
able to call out, and waiting for them to transition it
when you know that's gonna slow their process down. And
your company will lose in the interim because you have
so many numbers that are billing here. And that's the
reason we need it. Just like when they come in,
Janice, and they physically migrate the lines from us
on to their company, the ... the information that
they're using that you gave them would supercede what
you sign with us today.
Janice: Uh-um, okay. Well, I just need to ...to, uh, get
the signature of the CEO. I need to talk with him, and
like I said, he's not available right now. Uh, can you
just give us a little time and let me see if I can, uh
... see if I can reach him? I'll try.
Marsha: You know what? I'll let you try for a little bit here.
And then, uh, if you can't ... because the thing of it
is ... is that we don't have system over ... we don't
have control over this system engineering. I've held
this for as long as I could because I knew that Tim was
talking to you about this, trying to get you resolution
on it. At this point, it has to be urgent for the
director of the whole department to call you, and let
you know what's going on. And that's my stand-point
right now. I have to get resolution either way,
whether you want us to go ahead and proceed with the
take-down, or whether you want us to keep it up and
running. And this is normally a, uh, simple process
because it's temporary. We know that you're leaving.
We know that it's for the interim period. The only
thing that we are asking you is do us the courtesy of
being covered on this end trying to help you to get
switched over to the other company.
Janice: Okay, well, I still need to talk to him. You
understand that, I'm sure.
Marsha: Yes, I do. I have you authorized as the signer, so
that's fine when you talk to him. Can I hold with you
for a little bit while you actually try and call him?
Janice: What I will have to do is try to get up with him and
have him call you. That's all that I can do. I know
that I can't get him, but I can probably get a message
to him to call you.
Marsha: Okay, and if the lines are down, I would suggest that
you call them and try to find out what they're doing
because they're ... they're still here. They're still
here, and it's just something else. I ... I know that,
and once again, that's fine. If that's what you need
to do, that's fine. But I hope you understand that we
tried to do everything that we could on this end to
pretty much help you. And all these 800 numbers, and
everything that`s associated with all of the accounts
are still here. Last we checked today, 800 numbers are
not even been requested by this company as of today.
As of this moment, everything is actively billing. So
it's gonna cause a disruption to everything that you
have.
Janice: As soon as I can get up with him.
Marsha: Okay and if it happens before then ... You understand
what I'm saying. That's why I'm asking you if ... if
you can get a message to him and possibly maybe hold me
until he gets you.
Janice: What is the problem with you just continuing to
serve us until ...?
Marsha: I explained that, I think, very thoroughly like three
times here. We cannot carry the traffic. It's just
like somebody walking out of the store with something,
you know, and then asking for them -- the store owner -
- asking to wait to pay for it.
Janice: The store haven't received notice for it.
Marsha: Yes. Yes, we have got a disconnect from the local to
disconnect the services. Our company is a non-
contractional company, Janice. We can't carry the
traffic unauthorized. It's no shade of grey.
Basically, we have permission or we don't. When you
signed that letter, and when they sent over that
disconnect, it voided out any authority that we had to
carry the traffic. I can't tell you what to do over
there. I've been with this company now for 6 years,
and this business for 10. And the thing of it is, is
that I'm trying to understand from you what your
apprehension is. And I'm trying to help you keep the
lines up, and I can't, and I wish I could, you know,
basically. But on a professional standpoint, within
our company right now -- and I'm sure you can
understand that -- if it's for 20 minutes, if it's for
an hour, if it's for end of business day today, we have
to get something from you on file that we have
permission to carry it temporarily in the interim
period. And it's logical, I think. If I'm missing
something ... It's a logical explanation, you know -- I
would think -- even for you to understand that we
cannot do it if it's gonna cause us a problem. And you
have to understand something. You're a customer that's
leaving our company.
Janice: But you were serving us yesterday. Why can't you
continue to serve us?
Marsha: Because I can't. That's the reason why I called you
today.
Janice: But, I mean, why? That's what I don't understand.
Marsha: Because you signed that Letter of Agency with that
other company. So, we are carrying the traffic, even
though they haven't completed. We know you're going to
Sprint, but they haven't completed it yet, Janice.
They haven't even requested any of the 800 numbers yet.
So we know that you're leaving, but we are just waiting
for them to come and take it from us. They haven't done
that. And then they send us ... And then they notify
the local. The local sends us a disconnect on this
end. So we're just sitting here. We're carrying the
traffic without authorization. You cannot do that.
And that's the reason why I wanted to take the
opportunity and call you myself and explain to you in
detail what it is, and the detriment that you are gonna
end up with. So if I can get this form from you, so we
can carry it temporarily until they can pick you up.
Janice: Okay, uh now, you tell me, uh, you're Marsha,
right?
Marsha: Yes.
Janice: You tell me I can get you on (702) 949-4019?
Marsha: Yes.
Janice: (800) 636-6670?
Marsha: And you need to call back as soon as possible. That's
why I said I will hold with you for a little bit.
Janice: Well, I can't. That wouldn't do any good. I will have
to get a message to him. That's not going ...
Marsha: Is there anybody else that you can talk ... contact
that can give you permission to do this if you let them
know that the company is gonna be at standstill? I'm
sure as the owner, or your attorney, or somebody
because you're gonna end up losing service. And then
he's gonna come in as the owners of the company and
everything is gonna be down and it was just a matter of
signing.
Audiotape # 1, Side A
[Second conversation with Marsha Gibbs of NOS/ANI].
Janice: Janice Baynor.
Marsha: Hi Janice, this is Marsha. I'm back. Were you able to
get him?
Janice: I have not called him. I expect him to come in come in
here by 5:00 or 5:30.
Marsha: Okay.
Janice: But we haven't been able to get him.
Marsha: Okay, so what do you want to ...
Janice: The golf course is about thirty miles away, so I
don't know. Uh, if I try the house, I don't get anybody
there.
Marsha: You don't get anybody?
Janice: Uh-uh.
Janice: His wife teaches at a Community College.
Marsha: Whoa.
Janice: So I ...
Marsha: I know he's gonna be upset because these you know ...
[word unclear)] I checked the traffic within the last
hour. And when was this company suppose to take him
over? Do you know?
Janice: I ... I thought it was today, but I didn't know for
sure. Cause I hadn't been doing ... I hadn't gotten
involved in it until today.
Marsha: They have not even requested one number and we have
like ...
Janice: I know.
Marsha: We have so many numbers that are still billing here.
Janice: Yeah.
Marsha: So many ... [words unclear].
Janice: But you know that's ... that's good for you if they're
still billing ...[words unclear].
Marsha: But you know what? The thing of it is that our company
standpoint ... Because they're calling you from our
Operation Cancel Department, that's not even the issue.
The issue here is ... Yea. If we continue to bill you
... Yea, that will be a benefit for our company. But
can you imagine having, uh, our company being in that
serious of a liability because we're carrying the
traffic unauthorized? So you know that's worse.
You're carrying traffic, you know, without consent.
Janice: But we authorized you to. I mean you were billing
yesterday with us under the same ... [word unclear].
Marsha: Yea, but since then we have received that disconnect in
the system.
Janice: You just told me you had an alert from them.
Marsha: No. We received an alert in the system from the local
that you were switching vendors. The company ... We
know that you're going with Sprint. Sprint has not
physically picked up the lines yet, but your intent is
to switch with them. The whole issue is the fact that,
uh, until they request for us to disconnect it.
Janice [Words unclear].
Marsha: We're not. We're not.
Janice: Why?
Marsha: Because we got that disconnect from the local in our
system that you're switching vendors.
Janice: Local is?
Marsha: That's Sprint. That automatically ...
Janice: I thought you hadn't heard from Sprint?
Marsha: No. Okay, Janice, the reason you were called in the
first place by Dalphine is because there was an alert
in our system that you were switching vendors, okay. We
know that you're going to Sprint, okay, because through
the conversations and because of the alert in the
system, you're going to Sprint. But, we're looking at
the traffic, and Sprint has not picked up the lines.
So we have a disconnect ... Well, hold on.
Janice: We're under the same arrangement with you right
now.
Marsha: But you are not right because we did not know it.
Janice: But the fact that they notified you that's what I
don't understand because they haven't actually switched
anything. So if they notified you, what does that do
to you? Tell me that. I don't understand that.
Marsha: What that does to us is that totally omitted any
authority that we had to carry any of the traffic
because they sent that alert in through the system.
Janice: Okay.
Marsha: And they weren't ready to pick it up yet.
Janice: But what does it do to you as far as you billing us?
Marsha: We could be at a serious liability because right now we
are billing you without authorization. See what had
happened was is that they put that alert in too early
before they could get it switched.
Janice: But you, you got the same authorization you had a week
ago.
Marsha: But it was voided when we got ... We didn't know that
you were switching a week ago. We didn't have an alert
in the system until Dalphine called you.
Janice: But we didn't void it. So how can it get voided? We
didn't do it ourselves.
Marsha: When you signed ... When you ... Well, hold on Janice.
When you signed the Letter of Authorization with
Sprint, it voided out any authorization we had to carry
the traffic.
Janice: But they haven't done it yet, so until they do it,
you're still authorized by us.
Marsha: But we ... But we ... But we don't have proper
authorization on file because [words unclear]. You're
cutting me off before I can even answer you. I ... I
mean, I'm the Director. I run this Department. I've
been doing this with this company for 6 years.
Janice: Well, I've been doing this for 23.
Marsha: I can't ... I can't ... Right. I can't tell you what
your policies are and what your procedures are within
that business. I wouldn't even attempt to try to do it
because if you told me that this is what you needed to
have and, you know, that's how your system is set up,
and that's how, you know, the FCC guidelines are, I
would just honor that. Because that's you company, and
those are your policies and procedures. With our
company ... They shouldn't have sent us ... It's like
they're sending it as it as a disconnect, but they are
just letting the lines sit here.
Janice: But, what are they sending a disconnect for?
Marsha: For us to disconnect the long distance from our
company.
Janice: For which line?
Marsha: All of these lines. All of your service. Tideland.
They sent an alert. We knew you were switching vendors
when we called you because of the alert that was in the
system.
Janice: I understand that you wouldn't have called if you
didn't know that.
Marsha: Right.
Janice: I understand all that. But I just don't
understand what's the problem with you continuing to
carry it until the switch gets made.
Marsha: Because we can't now. Because they have alerted us
since then that we should disconnect. And they don't
have them picked up yet.
Janice: [words unclear] ... disconnect.
Marsha: Our ... We got a disconnect in our system from the
local -- from your local company -- that you were
switching vendors. It's the same person, Sprint. So,
for instance ... Okay, right then they send it in to
us, but they haven't taken anything from us yet. They
haven't even made the request for the 800 numbers to be
switched. So, you're technically ...
Janice: [Words unclear] ... long distance business until they
switched.
Marsha: It doesn't matter because you know what? The
consequences you would have in carrying the traffic at
a liability and billing you for a couple days is not
worth the liability that would cost our company.
Janice: What kind of liability would you have, Marsha?
Marsha: Because we're carrying it unauthorized, our company
could be fined.
Janice: By whom?
Marsha: By the FCC.
Janice: You're carrying it unauthorized?
Marsha: Yep. That's the reason. And they ... And the thing of
it is, is that they should never have even alerted us
if they weren't prepared to switch it.
Janice: Well, that's true. They shouldn't have.
Marsha: And, you know what I mean? I don't know what caused
you to do this in the first place. But the thing of it
is, is that this is not our fault. We're trying to
help a customer that is leaving us, you know, and, uh
.... If you send in an addendum, then it's only until
the company can come and pick you up.
Janice: Yeah.
Marsha: You're stating that clearly on the addendum. You're
writing, ``See attached addendum.'' This call is
monitored.
Janice: The addendum ... The addendum ... I told you, you
know, I don't mind saying ... I don't mind doing
something on letterhead saying please carry us until
...
Marsha: But we have to have the Letter of Authorization to go
with that because that's giving us authorization to
carry it in the interim period. It can't. We can't
just take that.
Janice: Marsha, May I say something? Will you not interrupt me
if I try to say something?
Marsha: Yea, that's cause you interrupt me when I'm trying to
explain something to you. And I'm just trying to let
you know because you ... You're trying to come back at
the point that we can't, you know ... Why can't you do
this? And I'm trying to tell you why. It's
frustrating because I'm trying to tell you why we
can't. And I don't want your ... [word unclear] to get
cut off.
.
Janice: Okay.
Marsha: I don't want that for your company. I don't want that
for you cause then you're gonna have to answer to them,
you know, and we would much rather that you have a
smooth transition. If you just ...
Janice: What if it may be as late as Monday? What would that
do?
Marsha: We'll keep it up and running until they pick it up.
And just to let you know how simple it is, as soon as
they come in here ...
Janice: What if we don't ... if we don't sign anything and they
don't get it switched until Monday?
Marsha: It would cause ... If you don't sign anything and they
don't get it switched until Monday, it will cause
disruption to everything that you have.
Janice: What ...
Marsha: And I've been waiting to call you back before we did
anything on this end, hoping that everything will be
alright and, you know, we can go ahead and get what we
needed from you in order to get this done, and I can't.
Can't get it from you.
Janice: I can't do it without ... without the CEO because he
gave me a direct order not to, and I can't. I will get
fired if I do it.
Marsha: Yeah, I know. That's why I don't want ... I know that,
and that's fine. I'm gonna respect that. But the
thing of it is, is that I hope to be called soon
because as of this point ... You just said, you know,
you been with that company for a long time. You
probably have a high stature in that company. If you
... if you don't follow his procedures you said you can
lose your job. I'm not gonna go as far as to say that
I could lose my job because that is not the detriment
for me at this point. Our company ... My standpoint is
more of a company standpoint. Because you are leaving,
and we got the request. They shouldn't have sent it in
to us before they were ready to do this because then we
wouldn't be having this conversation right now.
Janice: Then what would you be doing? You will continue to be
billing us, and they would be in the process of making
the switch.
Marsha: If they hadn't alerted us.
Janice: We are right now.
Marsha: If they hadn't alerted us.
Janice: Yea, that's what I mean. So we ... So they'd be in the
process of switching. You wouldn't know the
difference. So you're saying ...?
Marsha: Yeah, usually when we get things the ...
Janice: [words unclear] ... operating without
authorization from us ...
Marsha: No, usually when we get these systems, and usually when
the vendors send it in to us, the ... [word unclear] is
already cancelled. You see what I'm saying? It's a
matter of canceling it out in the system. The only
reason you were called is because your account was red
flagged because you still have traffic with us.
Janice: Well, but if they hadn't ... you hadn't gotten
that disconnect order, then you'd still be billing us
and they'd be in the process of switching and you'd
never known it.
Marsha: Right.
Janice: Then you'd be ...
Marsha: Right, cause normally ...
Janice: Providing service with no authorization.
Marsha: No, that's not what it would have been because they
wouldn't have sent it in yet. They wouldn't have sent
it until they were ready to send it.
Janice: That's not making any sense.
Marsha: They wouldn't have normally ... That company shouldn't
have sent us in a cancel until after they were ready to
pull all the lines.
Janice: But, what difference ...?
Marsha: Normally, they cancel ...
Janice: What difference?
Marsha: I am sorry.
Janice: What difference does it make if they send in the
cancel? If they hadn't sent in the cancel and they
were in the process of switching it then everything
would be fine.
Marsha: But we wouldn't have even known that they were
switching it. But usually, it would have been where
everything ... [words unclear]. Like this morning, I
told you, okay we're gonna get all the lines ported
over today. Okay and they were ready to pick that up.
And we had a request in the system that this company
was gonna pick you up. Cause it would show us in the
system that they're all on ``D'' status, which is
disconnect status. And that, ah, there is a company in
here for the 800 numbers, and we were shown that they
were actually requesting it. Then you would have been
fine. Because if we would have taken it down, then
they were ready to pick it up. In this case, they sent
it over here to us and they haven't even requested any
of the 800 numbers and then on most locations -- all of
them -- still have active calls. Last calls they
introduced yesterday and today.
Janice: But Sprint tells me that they didn't send over an
order.
Marsha: Yea, they did. How else would we know? Logically.
Logically, Janice. If you think about it, Janice, how
else would we know?
Janice: Because one of the lines has been switched, and the
rest of them haven't. Uh, who signed the disconnect
order, cause they tell me at Sprint they didn't send
one?
Marsha: I don't know how they do it. I don't know what their
policy is, but our company was alerted that you were
switching because if it wouldn't have been, we wouldn't
have called and told you. Okay, if you think about it
logically, if ... Why would we call you and tell you?
Janice: Would you like me to ask him to call you at those
numbers you gave me? Is that the easiest thing to do?
Marsha: Yea, you can ask him to call me. Hopefully, he gets to
me beforehand.
Janice: Alright, I'll ... As soon as I can get a hold of him, I
will. Okay?
Marsha: Okay, thank you.
Janice: Thanks APPENDIX D
NELSON ENGINEERING TRANSCRIPT
Audio Tape # 4, Side A
Julie: Good morning, Nelson Engineering.
Marsha: Hi, could I speak to Julie, please?
Julie: This is Julie.
Marsha: Hi, Julie. This is Marsha Gibbs. I'm calling from
QuantumLink Communications. I am Greg Stewart's
directing manager. I have to let you know that calls
are monitored for quality assurance purposes. I wanted
to call you myself -- I know that he spoke to you
several times -- before we go proceeding to shut the
lines down and let you know that the lines are still
billing here with our company. The company that you
have switched to has not switched your services over
yet. No fault to them. It is probably that we got our
alert a little bit to soon before they could actually
complete it. We are still billing you unfortunately on
most of the lines on your local and your long distance.
And so the thing of it is that if I go in there ...
Because the lines are still physically PIC'd here to
us. We're still physically your carrier, even though
you went out the door from us a long time ago.
Basically, we are still carrying the traffic. We can't
take anything back from them because it's still here.
That's the principle why we need the Letter of
Authorization for the interim period only, until this
company can come in and pick you up. This way you have
a full transition from one company to another and you
don't have to worry about a disruption. And I had
asked them if they even had a chance to talk to you
because they should have attached an explicit addendum
with it stating exactly that it is for a short period
of time.
Julie: I didn't do that.
Marsha: I don't think he got a chance to tell you, but I wanted
to talk to you about it myself because I feel more
comfortable about this. Because I wanted to know what
caused you to leave us in the first place, even though
it's like out of my department. The last thing that we
want to do, even though this is not our fault at this
point, is have you lose service and then there is
complete bad light that shines on our company.
Julie: There shouldn't be any reason that we should lose
service.
Marsha: The reason is because you signed a Letter of Agency
with this other company. Our company -- we don't have
authorization to carry the traffic anymore, even though
the lines are still physically billing here with us.
We don't have permission to carry it.
Julie: I have never had a problem like that before when I
switched from someone else to you guys. I never had to
sign anything.
Marsha: You know why? Because here, recently, with all the FCC
mandates and because of all the slamming that's going
on, any company ... Our company has not chosen to do
that. So in essence, we can carry traffic for 15
minutes, Julie, without authorization. I wanted to
have an opportunity to call you this morning. I was in
a meeting when he spoke to you. And so ...
Julie: This does not say anything...
Marsha: Right. Let me tell you why. Because it is a standard
Letter of Agency. Every company that has things
approved by the FCC has one standard Letter of Agency
on file. So in essence, what we wanted you to do --
because it is our standard Letter of Agency ... As you
know, our company ... We do not have contracts, term
plans, or agreements. So you are in control of this
situation. As soon as that company comes in with the
information that we provided for them and they take
your services from us, ties will be severed. This is
what I want you to do. I want you to put on the form,
``See attached addendum letter.'' And on the addendum
letter ... If you can grab it, I'll tell you exactly
what to write because you have to state the company
that you are switching to, that it's only for a short
period of time until they can pick it up. This call is
monitored in its entirety.
Julie: You're recording it. I am not. So I can't just
approve anything.
Marsha: You put, ``See attached addendum,'' and then you put
the addendum letter with it until we get what we need
to keep the services up and running. Until the company
can get you switched. As soon as they come in and
switch your services, all your ties will be severed
from our company.
Julie: I called the Public Utilities Commission, and they
said that I don't have to sign anything like this.
They don't know where you guys are coming up with this.
[Tape repeats].
Marsha: Well, I don't know who you talked to within that
company there, but I hope you understand, being in
business yourself. You're leaving our company, and I
think that your company can show some kind of integrity
here. We're at least trying to call you to let you
know that the company did not pick you up and we can
help you if you want us to. You see what I am saying?
So I don't see what the harm would be in that. You
know we're not trying to ... Because normally, this is
our Cancel Department. Operations Cancel. What we do
is, we'll see an account in the system, and basically
just cancel the shell out in the system, unless it is
red flagged to a manager's office if it has traffic.
So the thing of it is, you're kind of between a rock
and a hard place because you want to leave our company.
Basically, you have a bad taste in your mouth about our
company, yet you're still here. The company that you
have switched to has not picked you up yet. That's not
our fault. What caused you to leave is. We're calling
you out of courtesy just to ask you if you wanted us
carry it in the interim period until they can pick you
up. Whether it's one day, whether it's two days ...
Whatever their timeline is. You've not heard me say
one bad thing about the company because I'm sure it's a
good company that you're switching to. I'm just telling
you what we need to do in order to help you on this
end. Otherwise, it'll cause a disruption to everything
that you have. And with us carrying the local toll
right now ... And I don't know who advised you of that
when you called that facility because if you're still
PIC'd here with us for local, you are still PIC'd here
for long distance. They have not even requested it
yet, but we have a disconnection order.
Julie: You have a disconnect order from who?
Marsha: It comes into our company internally within the local
company within your area. So in essence, we knew that
you were switching vendors when he called you. We just
didn't have a request from the company yet, and then he
found out from you it was Qwest. We look at the
situation and investigate a little further and that was
who you were switching to. And Qwest is a good
company. The thing of it is that we probably got our
alert a little bit to soon before they could actually
complete it. So my issue at hand is that I wanted to
call you myself, tell you the situation of what's going
on and the detriment. I did go to my director, which
is VP of this company, and I did tell him, ``I need to
talk to her first before we proceed in anything because
the lines are still billing here with us.'' And so if
you want, attach the addendum letter, write it out
explicitly that it's for a short term time. I'll tell
you exactly what to write. You date it and sign it.
Put on the Letter of Authorization, ``See attached
addendum.'' I will give you my backline, Julie, and we
will track the traffic. I would say, today is the
23rd. What we will do is, I will check the traffic
early morning on the 25th, because they should have it
by then, and that way we'll work together to get you
transitioned over there. I apologize for any
inconvenience that was caused by my company. The thing
of it is, the only thing that we can do at this point
is make sure that you have the form transitioned over
to Qwest.
Julie: I don't know. I don't like this at all. I don't
understand why I have to do that when I've never had to
do it before. I do have a bad taste in my mouth about
this company.
Marsha: Well I understand that, but you have to understand,
too. Right now you are leaving our company. I don't
know any company out there that calls a customer, lets
them know that they still have traffic, and asks them
if they want them to keep it up and running until the
new company can get them switched.
Julie: Well that's just standard. Everyone does that.
Marsha: No, everyone does not do that. Not anymore.
Julie: All the ones that have integrity do.
Marsha: Well the thing of it is ... You know what? I wouldn't
dare come in ... And I think I've been as very
professional and very courteous with you as possible on
this phone. I wouldn't dare come in and tell you what
your policies and procedures are within your industry
or within your business.
Julie: But I am saying that I have never had to do this
before.
Marsha: I understand that, and I called you to explain to you
why you need it, because technically, we do not have
authorization to carry this traffic. You are switching
from our company. It's still sitting in here with us
on the local end as well as long distance, and so the
only thing that we are trying to do is make sure that
we're covered in that interim period.
Julie: I think that you guys could come up with an
interim one if this ...
Marsha: Well unfortunately, with the FCC, you don't have
different Letters of Authorization for different
reasons. There is a standard Letter of Agency with our
company. It states very clearly at the top of the
Letter of Authorization that our company -- we don't
have any contracts, term plans or agreements, so at any
moment a customer can select a switch at any point and
time. That's your coverage right there. That's the
reason why when they came and you signed that Letter of
Agency, we were out of the picture just that quick.
Julie: A customer does not permit QLC to change customer
service to another telecommunications company.
Marsha: It is a standard Letter of Agency, but the top of it
supercedes anything. With our company, you don't have
contracts, term plans, or agreements. So at any point
in time you are not 100% satisfied, we have to pay your
PIC fee and coordinate your switch anyway. We did
that. We released everything. The company that you
switched to, they have not come in to pick up the local
and long distance from us yet. So what we did was we
called you out of courtesy, okay it might take them a
little longer. We will carry the traffic until they can
pick you up. You have to understand something, anything
that you would sign with any other carrier and they
have your permission to do it, it will supercede
anything that you would sign here with us today because
you are in control of the situation. At any moment you
decide you want to go and you gave another company
permission, it going to supercede anything that you
would sign here with us because that is our company
policy. My main reason is that I really didn't call to
get into a lot of issues...
[Break in conversation].
Julie: I just called Qwest and they have our lines as of
the 17th.
Marsha: They don't. Okay, they're stilling billing here with
us. They haven't completed this yet. So the thing of
it is, is that this was a simple call. If you want us
to go ahead and take it down, we'll do that, but they
haven't. It still had A codes and everything. If
you're talking to your salesperson, he's probably
talking to a call center because he can't see the
actual calls on your account. They submit it for the
order. That is why I said to you it probably won't
take them any more than a day or so to get this done,
but they haven't completed it yet, so you are still
physically PIC'd here to us. There are two codes.
There is your PIC code, which is through your local.
There is a CIC code, which differentiates one carrier
from another. That had not been completed yet. At
this point and time I guess that you don't want us to
keep your lines up and running.
Julie: No I guess not because Qwest told me they have it.
Marsha: Okay they don't have them, so this is the thing. What
is going to happen is it is going to cause a disruption
to everything that you have, as well as the local
phone, too, because they haven't completed it. (402)
241-0340 is still billing here, as well as 1257, 6068,
6927. I am giving you the last four digits. The
calling cards don't matter, and (402) 594-6935 ... Now
let me see what's going on with your 800 numbers at
this point? Okay now MCI is requesting your 800
number. Are they supposed to?
Julie: Yes.
Marsha: Okay. So you are going to MCI for your long distance?
Julie: Yes.
Marsha: Oh okay. See they need to switch ... No, they
requested the 800 numbers. The only thing that we are
concerned about is just working the land lines. They
are also PIC'd here to us. See the local -- which
brings me back to my point, which I explained to you
earlier. The local has to acknowledge who you switched
to because you are in control of the situation. They
have the PIC code set up for MCI to come in and migrate
the services from us to them. Now they did their job.
The local. Now it is up to MCI to make sure that all
the lines are properly migrated from our company to
their company because we had you for local and long
distance. I'm thinking that might be some of the time
barrier that's maybe taking them a day or so. The 800
number is already gone. The only thing that I am
concerned about is the five land lines that you had.
So they're still physically PIC'd here on your local
and long distance toll. So what I want you to do is
send a letter of cancellation because this call is
monitored and recorded. Because very few times ever
have a customer say take it down when it is billing
here because really if you think about it, I have
absolutely nothing to gain either way. I'm in neutral.
My job isn't contingent on anything. It's just to get
you the information that is here at hand and ask you
what you want us to do with it. Because we have
already lost your business, that's my only job right
now. So I take that you want us to just go ahead and
shut off the local and long distance on those land
lines.
Julie: I'm not saying anything. I am done with this call
thing. [Hangs up].
Marsha: Whatever. Fine. I hate this. APPENDIX E
Consumers who have Signed Sworn Statements
Regarding Contact Received from NOS/ANI
after Switching from the Companies
COMPANY BTN DATE OF DATE OF SWITCH BACK
SWITCH FROM TO NOS/ANI
NOS/ANI
Advanced Tex 989/643-5526 4/16/02 N/A61
22040 Gratiot Rd.
Merrill, MI 48637
Al-Tek Transp. 724/872-6709 4/1/02 4/3/0262
Rte. 70 Smithton Rd.
Smithton, PA 15479
Appeal Insurance 770/416-0975 12/3/01 N/A
Company
5548 Naylor Court
Norcross, GA 30092
Arizconsin Group, 715/478-3324 4/1/02 N/A63
Inc., d/b/a Crandon
Nursing Home
105 West Pioneer St.
Crandon, WI 48637
Bank of the Sierra 559/782-4900 5/1/02 5/16/0264
86 North Main Street
Porterville, CA
93257
Becker Wagonmaster, 610/395-3745 4/3/02 N/A
Inc.
4611 Hamilton Rd.
Allentown, PA 18103
Century 21 Assoc. 717/243-5325 3/19/02 3/29/0265
398 East High St.
Carlyle, PA 17013
Chicago Title Insur. 603/472-3226 9/12/02 N/A
Co.
75 Federal St., Ste.
410
Boston, MA 02110
EarthAction Alerts 413/549-8118 6/6/02 6/11/0266
Network
30 Cottage St.
Amherst, MA 01002
Genisys Financial 949/715-1155 4/15/02 4/17/0267
d/b/a Magellan
Mortgage
485 E. 17th St.
Costa Mesa, CA 92627
Nelson Engineering 402/241-0340 4/17/02 N/A
108 E. 23rd
S. Sioux City, NE
68776
The Bank of 870/449-4231 4/3/02 N/A
Yellville
P.O. Box 325
Yellville, AK 72687
Tri-V Services 586/323-9916 5/02 6/0268
607118 Mile Road
Sterling Heights, MI
48314
_________________________
1 NOS Communications, Inc. is a Maryland corporation, whose
principal address is Ste. 508, 6110 Executive Boulevard,
Rockville, MD 20852. Maryland Dept. of Assess. and
Taxation. (Note: The D&B Business Information Report
reports a headquarters location at 4380 Boulder Highway, Las
Vegas, NV 89121). NOS also conducts business under the
following business names: International Plus, O11, INETBA
(or Internet Business Association), and I-Vantage. See
Schedule A, List of Company Affiliate ``Providers'', Letter
from Shawn M. Elicegui of Lionel Sawyer & Collins on behalf
of the Companies to the Nevada Office of Attorney General,
dated April 5, 2002 (``Lionel Sawyer Letter''), File No. EB-
02-TC-119. ANI is a California corporation, whose mailing
address is 4380 Boulder Highway, Las Vegas, NV 89121.
California Secretary of State. (Note: The D&B Business
Information Report reports an address at 9839 Whitwell
Drive, Beverly Hills, CA 90210). ANI also conducts business
under the business names HorizonOne Communications
(``HorizonOne'') and QuantumLink Communications
(``QuantumLink''). See Lionel Sawyer Letter, File No. EB-
02-TC-119. NOSVA is a Maryland corporation with principal
offices at 6701 Democracy Boulevard, Ste 811, Bethesda, MD
20817. Maryland Dept. of Assess. and Taxation. (Note: The
D&B Business Information Report reports an address at Ste.
508, 6110 Executive Boulevard, Rockville, MD 20852). NOSVA
also conducts business under the business name of CierraCom
Systems. See Lionel Sawyer letter, File No. EB-02-TC-119.
All of the entities identified herein have in common either
the same principals or officers. For purposes of this
order, the term ``NOS/ANI'' (collectively ``Companies'')
includes all of NOS's, ANI's, and NOSVA's respective
entities, identified or unidentified, including any of their
respective successors or assigns.
2 47 U.S.C. § 201(b).
3 See Id.
4 See letter from Kecia Boney Lewis of Worldcom, dated January
24, 2003 (``January 24, 2003 Worldcom Letter''), File EB-02-
TC-119. Although NOS, ANI, and NOSVA are set up as
different corporations, they apparently share the same
offices, directors, and major shareholders. They also
appear to share the same employees and conduct telemarketing
activities from shared facilities in Las Vegas, NV.
Although the companies report separate principal places of
business in Las Vegas, NV (NOS and NOSVA) and Los Angeles,
CA (ANI), Marsha Gibbs, a NOS/ANI employee, identified
herself in recorded conversations as calling from various of
the entities named herein from the same telephone numbers in
Las Vegas and the same corporate location in Las Vegas. For
whichever entity she identified, she frequently told the
consumer that she was calling from the corporate office.
For example, although ANI is a California corporation with a
principal address in Los Angeles, CA, in one recorded
conversation, Ms. Gibbs told a consumer that she was calling
from the corporate office in Nevada and gave a Nevada
telephone number where she could be reached.
Yes, hi Janice. My name is Marsha
Gibbs. I'm calling from ANI
Communications in the corporate
office. . .
* * *
I'm in Nevada, originally from
Chicago. Our corporate office was
in Bethesda [Maryland], but we
transferred here... [702] 949-
4019. And my secretary's name is
Megan. And if I'm on the phone or
on the floor, she will find me, and
get me on the phone with you. My
direct line is (800) 636-6670, and
my office extension is 5636.
See Audiotape # 1, File No. EB-02-TC-119. See also the
transcript of this conversation between Ms. Janice Baynor of
Tideland Electric Membership Corporation of Pantego, North
Carolina and Ms. Gibbs of NOS/ANI (``Tideland Electric
Transcript''), attached hereto as Appendix C. Ms. Gibbs
gave the same Nevada telephone number, fax number, and toll-
free number and extension where she could be reached to all
the consumers, regardless of which entity she identified
herself as associated.
Accordingly, in the absence of any evidence to the contrary,
it appears that NOS, ANI, and NOSVA are alter egos of the
same company, and therefore, will each be held jointly and
severally liable for any apparent violations discussed
herein.
5 See CCN, Inc., et al., Order to Show Cause and Notice of
Opportunity for Hearing, 12 FCC Rcd 8547 (1997)(CCN).
6 Id.
7 See Affidavit of Robert Faulkner (``Faulkner Affidavit''),
File No. EB-02-TC-119, attached hereto as Appendix A.
According to Mr. Faulkner, he was employed by NOS from
October 1996 to April 2002. In his last position as
Executive Director of Accounts Receivables and Collections,
he was responsible for overseeing the collections from
NOS/ANI customers. In December 2001, after NOS/ANI
implemented their new "Winback" Campaign, Mr. Faulkner
noticed a marked increase in customer complaints alleging
that their service had been switched back to NOS/ANI without
their authorization or that the Winback or Quality Assurance
Department had exerted undue pressure on them to authorize
such a switch. Id.
8 Mr. Faulkner provided the Bureau with six audiotapes of
conversations between NOS/ANI sales representatives and
consumers, which he states he recorded live from the
Companies' computer telephone monitoring system, the NICE
sytem, during the latter part of April 2002. Mr. Faulkner
also provided the Bureau with a telemarketing script, titled
``DM Presentation Winback 1'', the names and telephone
numbers of customers, and copies of email correspondences
between himself and other members of management regarding
the consumer complaints described herein. See Faulkner
Affidavit, Appendix A.
9 See Appendix E.
10 For the consumers who were induced into signing the LOAs,
based on apparent misrepresentations, NOS/ANI apparently
used or attempted to use the LOAs as authority to switch the
consumers back to the Companies' services.
11 See Faulkner Affidavit, Appendix A.
12 In fact, as explained infra at paragraph 11, NOS/ANI had a
``Winback Script'' that appears to have set the general and
specific parameters for these discussions.
13 Apparently NOS/ANI believed consumers would not be deceived
into believing that their lines were in imminent danger of
disconnection if they realized the caller was from a sales
department. See Faulkner Affidavit, Appendix A.
14 Apparently disconnect orders are not sent by local exchange
carriers to interexchange carriers (``IXCs''), such as
NOS/ANI prior to the completion of a switch. Once a switch
has been completed, IXCs receive reports showing lost or
gained accounts. These reports reflect only completed
switches either to or from the IXC. See letter from Kecia
B. Lewis of Worldcom, dated March 3, 2003 (``March 3, 2003
Worldcom Letter''), File No. EB-02-TC-119.
15 For example, in the case of Nelson Engineering Construction,
Inc. (``Nelson Engineering'') of Sioux City, Nebraska, Ms.
Gibbs of NOS/ANI informed the consumer that before NOS/AN
shut the consumer's lines down, she was calling to inform
the consumer that the lines were still billing because the
new carrier had not switched then over yet:
I wanted to call you myself - I know that he
spoke to you several times - before we go
proceeding to shut the lines down and let you
know that the lines are still billing here
with our company. The company that you have
switched to has not switched your services
over yet.
See Audiotape # 4, File No. EB-02-TC-119. See also the
transcript of this conversation between Ms. Julie Suhr of
Nelson Engineering and Ms. Gibbs of NOS/ANI (``Nelson
Engineering Transcript''), attached hereto as Appendix D.
16 Id.
17 Id.
18 Id. To convince consumers that their lines had not already
been switched to their new carriers, NOS/ANI representatives
apparently represented that they were viewing the consumers'
call traffic live or within the past hour. For example, in
the case of Tideland Electric, Ms. Gibbs stated that she
``checked the [call] traffic within the last hour,'' and
that Tideland Electric's lines were still billing. See
Appendix C. She later told Ms. Baynor of Tideland Electric
that she was actually looking at its call traffic and could
tell that the new carrier had not picked up the lines. Id.
Worldcom has confirmed, however, that NOS/ANI cannot view
live call traffic and does not receive call traffic data
information from MCI for at least a day after its
occurrence. See March 3, 2003 Worldcom Letter, File No. EB-
02-TC-119.
19 See Note 14, supra.
20 Nelson Engineering is a specific example of a consumer that
was contacted by NOS/ANI after its lines had been switched.
In that case Nelson Engineering's local service provider,
Qwest Communications, Inc. (``Qwest''), confirmed in writing
that the consumer's lines were switched from NOS/ANI on
April 17, 2002. See email from Richard Denny of Qwest,
dated March 6, 2003, File No. EB-02-TC-119. Nevertheless,
during a conversation between Ms. Suhr of Nelson Engineering
and Ms. Gibbs of NOS/ANI on April 23, 2002, Ms. Gibbs
insisted that Nelson Engineering's lines were ``still
sitting in here with us on the local end as well as long
distance.'' Ms. Gibbs further stated that ``[w]hat is going
to happen is it is going to cause a disruption to everything
that you have, as well as the local phone, too, because they
haven't completed it. See Nelson Engineering Transcript,
Appendix D.
21 See Faulkner Affidavit, Appendix A.
22 See, for example, Nelson Engineering Transcript, Appendix D,
and Tideland Electric Transcript, Appendix C.
23 See Nelson Engineering Transcript, Appendix D.
24 Id.
25 Id. Consumers were apparently told to include with the LOA
an addendum statement on company letterhead that the LOAs
were temporary. Consumers were told that NOS/ANI could not
send them temporary or interim LOAs because allegedly the
FCC had only approved one standard LOA for their use. Id.
26 See Tideland Electric Transcript, Appendix C.
27 Id. Ms. Gibbs states, specifically:
[Y]ou signed a Letter of Agency with this
other company... Our company is not tariffed
to do partial line billing... [W]e're
carrying the traffic at a liability because
we don't have permission to carry it at this
point. For instance, when you signed that
Letter of Agency with them, it voided out any
authorization that we had to carry this
traffic.
Id.
28 Id. See also Nelson Engineering Transcript, Appendix D.
29 See Tideland Electric Transcript, Appendix C.
30 Id. Ms. Gibbs even went so far as to suggest she could
contact the CEO directly through his cell phone or, failing
that, if there was an ``owner, or your attorney or
somebody'' who could sign. Id.
31 Id. Ms. Gibbs threatened that disconnection of the
business's 800 numbers could mean ``serious detriment'' to
Tideland Electric as well as the permanent loss of its 800
numbers if they were placed back in the open market. She
stated specifically:
See, that's the thing, Janice, if ... if it's
shut off right now, then you ... he [the CEO]
won't even be able to call into you to see
what's going on because every phone line
[clears throat] is still billing here with
our company, you know. And you're still here
on everything. So, and, uh ... [unclear
word] all those lines will be shut off, as
well as all the other locations. Your 800
numbers are still billing here with us. And
you know, basically, if ... if the 800
numbers are shut down -- which is where the
predominantly ... most of your business is at
-- it's gonna have clearly that these lines
are disconnected. My concern is the fact
that we don't have them in here trying to
pull them from us. So they're going to be
sitting dormant. That's the perfect
opportunity for the National SMS to reissue
them. . . That is the perfect opportunity for
another company to pick them up on an open
market network, and you can possibly lose the
numbers. So I'm just ... I'm not trying to
scare you, I'm just trying to let you know,
you know, as the Director of this department
what can happen. Because if we don't get
something to cover this ... Because your
company is gonna be at a serious detriment.
Id.
32 See Nelson Engineering Transcript, Appendix D.
33 Id.
34 See email from Richard Denny of Qwest, dated January 28,
2003.
35 See telemarketing script, titled ``DM Presentation Winback
1'' (``Winback Script''), File No. EB-02-TC-119, a
reproduction of which is attached hereto as Appendix B.
36 See Faulkner Affidavit, Appendix A.
37 See Winback Script, Appendix B.
38 Id. Similar to the case of Nelson Engineering, discussed
previously, and other consumer allegations, the script also
instructs the representative that he must inform the
consumer that his local service was also at risk. The
script appears to make no distinction between consumers who
had local service with NOS/ANI at the time and those who did
not. Specifically, the script states:
[MUST SAY]
This will allow us to keep all your lines up
and running, including your [sic] local
service ... Just until they can properly
switch them.
Id.
39 Id.
40 Id.
41 Id.
42 Id.
43 Id.
44 Id.
45 See Faulkner Affidavit, Appendix A.
46 See letter from Citizens Communications Company, d/b/a
Frontier (``Frontier Letter''), File No. EB-02-TC-119.
47 See Declaration of Christina Rose Spencer, Administrative
Assistant, Arizconsin Group, Inc., d/b/a Crandon Nursing
Hone, File No. EB-02-TC-119.
48 See Frontier Letter, File No. EB-02-TC-119. In the Frontier
letter, as well as with other local exchange carrier
(``LEC'') responses that the Bureau received regarding
preferred carrier changes submitted by NOS/ANI, the
responsible carrier is shown as MCI or Worldcom
(``MCI/Worldcom''). This occurs because switchless
resellers of long distance, such as NOS/ANI, typically
submit preferred carrier changes to the subscriber's LEC
using the carrier identification code assigned to the
underlying carrier. Therefore, the LEC records will show
the change was made by the underlying carrier and not the
switchless reseller. In this case, NOS/ANI is a switchless
reseller of MCI/Worldcom long distance. Accordingly, for
ease and simplicity in this Order, even when LEC responses
refer to MCI/Worldcom, we will only refer to NOS/ANI when it
is the responsible carrier. With regard to Crandon Nursing,
specifically, the Bureau has received written confirmation
from Worldcom that NOS/ANI was its reseller involved in the
requested preferred carrier change described herein. See
January 24, 2003 Worldcom letter, File EB-02-TC-119.
49 See Frontier Letter, File No. EB-02-TC-119.
50 Id.
51 Id.
52 Id.
53 Id.
54 Id.
55 For example, in the case of EarthAction Alerts Network
(``EarthAction'') of Amherst, Massachusetts, the consumer
switched its services from NOS/ANI on June 6, 2002 to Global
Crossing and was switched back to NOS/ANI on June 11, 2002.
See letter from Verizon, dated December 9, 2002 (``Verizon
letter''), File No. EB-02-TC-119. Also, in the case of
Genisys Financial, d/b/a Magellan Mortgage (``Magellan
Mortgage'') of Costa Mesa, California, the consumer switched
it services from NOS/ANI on April 14, 2002 to Unidial and
was switched back to NOS/ANI on April 17, 2002. See letter
from SBC Telecommunications, Inc., dated January 15, 2003
(``SBC letter''), File No. EB-02-TC-119.
56 In the case of EarthAction, the consumer switched its
services away from NOS/ANI again 14 days later on June 25,
2002. See Verizon letter, File No. EB-02-TC-119. In the
case of Magellan Mortgage, the consumer switched its
services away from NOS/ANI again 22 days later on May 9,
2002. See SBC letter, File No. EB-02-TC-119.
57 47 U.S.C. § 201(b).
58 See CCN, 12 FCC Rcd 8547.
59 47 U.S.C. § 503(b).
60 "Document" shall mean the complete original (or in lieu
thereof, exact copies of the original) and any non-identical
copy (whether different from the original because of
notations on the copy or otherwise), regardless of origin or
location, of any written, typed, printed, transcribed,
taped, recorded, filmed, punched, computer-stored, or
graphic matter of every type and description, however and by
whomever prepared, produced, disseminated, or made,
including but not limited to any advertisement, book,
pamphlet, periodical, contract, correspondence, facsimile,
e-mail, file, invoice, memorandum, note, telegram, report,
record, handwritten note, working paper, routing slip,
chart, graph, photograph, paper, index, map, tabulation,
manual, guide, outline, script, abstract, history, calendar,
diary, agenda, minute, marketing plan, research paper,
preliminary drafts, or versions of all of the above, and
computer material (print-outs, cards, magnetic or electronic
tapes, disks and such codes or instructions as will
transform such computer materials into easily understandable
form).
61 ``N/A'' designates that customer was not successfully
switched back to NOS/ANI.
62 Customer switched away from NOS/ANI again on 4/17/02 and
added a freeze to account.
63 On 4/13/02, NOS/ANI apparently submitted an LOA to switch
the consumer back to its services, but the LOA was rejected
because the consumer's services had just been changed from
NOS/ANI. According to Frontier, thereafter, it received two
different telephone calls from people claiming to be Ms.
Spencer and requesting that the consumer be switched back to
NOS/ANI. Ms. Spencer confirmed that she did not authorize
the requested changes, and on April 15, 2002, went to
Frontier's office and signed a freeze on the account.
64 Customer switched away from NOS/ANI again on 7/16/02.
65 Customer switched away from NOS/ANI again on 4/11/02 and
added a freeze to account.
66 Customer switched away from NOS/ANI again on 6/2502.
67 Customer switched away from NOS/ANI again on 5/9/02.
68 Customer switched away from NOS/ANI again in 8/02.