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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) ) File No. ENF-99-04 MCI WORLDCOM, INC ) Acct No. X3217-002 ) ) ORDER Adopted: February 29, 2000 Released: March 1, 2000 By the Chief, Enforcement Bureau: 1. In this Order, we adopt a Consent Decree in which MCI WORLDCOM, Inc. (MCI WorldCom) agrees to be bound by certain principles regarding its advertising for Dial-Around services and to modify its billing practices for casual calling, as well as to make a voluntary contribution to the U.S. Treasury of $100,000. 2. On February 19, 1999, the Federal Communications Commission (Commission) staff sent a letter of inquiry to MCI WORLDCOM, Inc, (MCI WorldCom) requesting information and documents regarding the promotion, marketing and advertising of MCI WorldCom's dial-around services. The purpose of the inquiry was to determine whether MCI WorldCom had engaged in unjust or unreasonable practices under Section 201(b) of the Communications Act of 1934, as amended (Communications Act), 47 U.S.C.  201(b). On August 31, 1999, Commission staff issued a letter to MCI WorldCom requesting responses to questions regarding MCI WorldCom's billing practices for casual calling. The purpose of this inquiry was to address concerns raised in customer complaints regarding MCI WorldCom's casual billing practices. 3. The staff and MCI have negotiated the terms of a Consent Decree that would terminate the staff's investigations. A copy of the Consent Decree is attached hereto and is incorporated by reference. 4. We have reviewed the terms of the Consent Decree and evaluated the facts before us. In light of MCI WorldCom's commitment to be bound by various principles regarding its advertising and marketing practices for Dial-Around services and to modify its Casual Billing practices, as well as certain other pro-consumer commitments, we believe that the public interest would be served by approving the Consent Decree and terminating these matters. 5. Based on the record before us, and in the absence of material new evidence relating to this matter, we conclude that there are no substantial and material questions of fact as to whether MCI WorldCom possesses the basic qualifications, including its character qualifications, to hold or obtain any FCC licenses or authorizations. 6. Accordingly, IT IS ORDERED, pursuant to sections 4(i) and 4(j) of the Communications Act, 47 U.S.C.  154(i), 154(j), and the authority delegated in sections 0.111 and 0.311 of the Commission's rules, 47 C.F.R.  0.111 and 0.311, that the attached Consent Decree is hereby ADOPTED. 7. IT IS FURTHER ORDERED that the above captioned investigation as well as the Commission staff inquiry into MCI WorldCom's casual billing practices ARE TERMINATED. FEDERAL COMMUNICATIONS COMMISSION David H. Solomon Chief, Enforcement Bureau Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) File No. ENF-99-04 MCI WORLDCOM, INC. ) Acct No. X3217-002 ) CONSENT DECREE I. Introduction 1. The Enforcement Bureau (the "Bureau") of the Federal Communications Commission (the "FCC" or the "Commission") and MCI WORLDCOM, Inc. ("MCI WorldCom" or the "Company") hereby enter this Consent Decree for the purpose of terminating inquiries by the Bureau into the Company's advertising and marketing practices for so-called "Dial-Around" services and casual billing practices. II. Background 2. On February 19, 1999, staff of the FCC issued a letter of inquiry to MCI WorldCom requesting information and documents regarding the promotion, marketing and advertising of MCI WorldCom's Dial-Around services. The purpose of the inquiry was to determine whether MCI WorldCom had engaged in unjust or unreasonable practices under Section 201(b) of the Communications Act of 1934, as amended (the "Communications Act"), 47 U.S.C.  201(b). The inquiry was undertaken pursuant to the provisions of Section 4(i) and 403 of the Communications Act, 47 U.S.C.  154(i) and 403. 3. On August 31, 1999, Commission staff issued a letter to MCI WorldCom requesting responses to questions regarding MCI WorldCom's billing practices for casual callers pursuant to Section 4(i), 403, 218, and 220(c) of the Communications Act, 47 U.S.C. 154(i), 403, 218, 220(c) (the "Casual Billing Inquiry"). The purpose of the Casual Billing Inquiry was to address concerns raised in customer complaints regarding MCI WorldCom's casual billing practices. 4. As a matter of corporate policy, MCI WorldCom is committed to lawful advertising, and the Company opposes deceptive and misleading advertising practices by any telecommunications carrier. MCI WorldCom remains committed to advertising and educating consumers about new and innovative products in the competitive marketplace. III. Definitions 5. For purposes of this Consent Decree, the following definitions shall apply: (a) The "FCC" or the "Commission" means all divisions of the Commission, including the Enforcement Bureau. (b) "MCI WorldCom" or "the Company" means MCI WORLDCOM, Inc. and its subsidiaries, affiliates and successors, including without limitation Telecom USA. (c) "Parties" means MCI WorldCom and the Enforcement Bureau. (d) "Order" or "Adopting Order" means an order of the Enforcement Bureau adopting this Consent Decree. (e) "Final Order" means an order that is no longer subject to administrative or judicial reconsideration, review, appeal, or stay. (f) "Clear and conspicuous" means made in a manner that is both readable and understandable (or, in the case of oral disclosures, audible and understandable) to a reasonable consumer. (g) "Substantiate" means to support and verify with proof or evidence. (h) "Deceptive" means a misrepresentation, omission, or other practice that is likely to mislead the consumer acting reasonably in the circumstances to the consumer's detriment. (i) "Omission" means failure to disclose qualifying and material information that, in light of the representation made, would be necessary to prevent reasonable consumers from being misled. (j) "Material" means important to a consumer's decision to buy or use a product. (k) "Advertising claim" means the overall or net impression that the entire advertisement, including the disclosure, conveys to a reasonable consumer. (l) "Dial-Around" means a product or service by which a consumer may use a Carrier Identification Code to bypass his or her preferred interexchange carrier to gain access to the telecommunications service of another carrier. (m) "Dial-Around Inquiry" means the enforcement action initiated by the Commission staff's February 19, 1999 letter of inquiry regarding MCI WorldCom's Dial-Around services. (n) "Casual Billing Inquiry" means the enforcement action initiated by the Commission staff's August 31, 1999 letter of inquiry regarding MCI WorldCom's casual billing practices. (Collectively the Dial-Around Inquiry and the Casual Billing Inquiry shall be referred to as the "Inquiries".) (o) "LEC" means a local exchange carrier. (p) "IXC" means an interexchange carrier. (q) "Effective Date" means the date on which the Bureau adopts the Adopting Order. IV. Agreement 6. MCI WorldCom and the Bureau agree that this Consent Decree does not constitute either an adjudication of the merits or a factual or legal finding or determination, regarding any violations that may have been committed by MCI WorldCom arising out of the marketing and promotion of MCI WorldCom's Dial-Around services or its Casual Billing practices. The Parties agree that this Consent Decree is for settlement purposes only and that by agreeing to this Consent Decree, the Company does not admit any violation or liability described in the February 19, 1999 letter, in the August 31, 1999 letter, in any follow up meetings between MCI WorldCom and the FCC concerning Dial-Around services and/or Casual Billing practices, or in any informal complaints received by the Commission on or before the effective date of this Consent Decree. Indeed, MCI WorldCom expressly denies any such violation or liability. 7. In express reliance on the covenants and representations contained herein, the Bureau agrees to terminate the Inquiries at such time as the Bureau adopts this Consent Decree. 8. The Parties agree and acknowledge that this Consent Decree shall constitute a final settlement between MCI WorldCom and the Bureau of the Dial-Around Inquiry and Casual Billing Inquiry. In consideration for the termination of these Inquiries in accordance with the terms of this Consent Decree, MCI WorldCom agrees to the terms, conditions and procedures contained herein. 9. This Consent Decree applies only to advertising for the MCI WorldCom Dial-Around services. 10. MCI WorldCom admits that the Commission has jurisdiction over the subject matter of this action. 11. MCI WorldCom is committed to lawful advertising and to complying with the rules and regulations of the Commission and the provisions of the Communications Act. To ensure that the Company's promotional and marketing activities for its Dial-Around services and Casual Billing practices are just and reasonable, MCI WorldCom agrees to implement the following within sixty days from the date this Consent Decree becomes final. A. Every explicit and implied statement in any Dial-Around advertisement will be substantiated prior to its release. B. All advertisements for MCI WorldCom's domestic Dial-Around services will disclose a rate prominently in a clear and conspicuous manner. If a flat fee will be charged for the Dial-Around call, the advertisement will state its total cost, excluding taxes which MCI WorldCom is required by law to collect. If the call is billed based on duration, the advertisement will state the per-minute cost. If the call is billed on a variable rate basis, the advertisement will state both the cost of the initial portion of the call and the rate(s) that will be charged for the remainder of the call. C. All material terms relating to the advertised Dial-Around service, including but not limited to additional fees, minimum charges, geographic restrictions, time of day restrictions, billing requirements, promotional offers, or other conditions, will be disclosed in a clear and conspicuous manner. Without limitation, this will include the following: (i) All print or visual disclosures modifying a claim will be made in close proximity to the claim being modified. (ii) All print or visual disclosures modifying a claim will be made in a color or shade that readily contrasts with the background of the advertisement. (iii) All verbal disclosures modifying a claim will be made in a manner and at a volume that is reasonably understandable. D. All advertisements for Dial-Around services will include the name of the carrier providing the service (e.g., Telecom USA), a toll free number and a web site where consumers can obtain additional information regarding the service. E. If MCI WorldCom makes comparative claims in its Dial-Around advertising, they will clearly and conspicuously disclose by name the comparison product, and the rate or value of each savings claim, whichever is more practicable. F. If the Company uses the term "Basic Rate" or a similar term to make a price comparison in its Dial-Around advertising, it will disclose clearly and conspicuously that the Basic Rate is a non-discounted rate, if such is the case. G. In limited areas where a Dial-Around service is not available, customers who attempt to access the service will continue to receive a fast busy or LEC recording indicating that the call cannot be completed. Any customer who accesses the MCI WorldCom network using an advertised MCI WorldCom Dial-Around code will be charged the advertised rate and not MCI WorldCom's casual calling rates. In addition, MCI WorldCom will clearly and conspicuously disclose that the Dial-Around service may not be available in all locations or, alternatively, is available in most areas. H. Within 120 days from the Effective Date of this Consent Decree, MCI WorldCom will ensure that for all customers that request disconnection from the Company as their preferred interexchange carrier, the Company will not remove the customer's billing records until the Company receives notice from the customer's LEC that the customer has cancelled his or her account with MCI WorldCom. This provision does not preclude the Company from conducting regular account maintenance of customer billing records to address escalations regarding a) accounts for which the customer can verify that they have already been switched to another primary interexchange carrier, and b) accounts where multiple ANIs are consolidated onto a single billing account provided that MCI WorldCom verifies that a customer's billing information is properly migrated. I. With regard to MCI WorldCom's 10-10-9000 directory assistance service, or any comparable future service, MCI WorldCom operators will clearly disclose to non- presubscribed customers the rate per-minute, or range of rates per-minute, if applicable, the customer will be charged if he or she accepts the MCI WorldCom operator's offer to connect the call. The MCI WorldCom operators will clearly disclose to MCI WorldCom presubscribed customers that the customer will be charged his or her plan rates if he or she accepts the MCI WorldCom operator's offer to connect the call, unless MCI WorldCom adopts a flat rate for all customers for this service, in which case the MCI WorldCom operators shall disclose the flat rate. J. MCI WorldCom will have a sufficient number of trained customer service representatives available to respond within a reasonable time to all customer inquiries related to its Dial-Around services. K. Within thirty (30) days of the Effective Date, MCI WorldCom agrees to review all of its Dial-Around advertisements presently in use and retract from all media outlets all Dial-Around advertisements that do not conform with the terms of this Consent Decree. Within ten days thereafter, MCI WorldCom will present to the Enforcement Bureau a report detailing which advertisements, if any, were retracted and for what reasons. In addition, within six months after MCI WorldCom files this report, and every six months thereafter, the Company shall present to the Bureau a report on all of its Dial-Around ads that have run during the preceding six months, in order to permit the Bureau to monitor MCI WorldCom's compliance with this Consent Decree and to evaluate the need for any enforcement action. The Company also agrees to conduct a year-end review of all of its Dial-Around advertisements released during the years 2000, 2001 and 2002. On or before March 1 of the years 2001, 2002 and 2003, MCI WorldCom will submit to the FCC Enforcement Bureau a report describing its record of compliance with the principles of this Consent Decree during the preceding calendar year and any instances of non-compliance. L. Based on its review of its customer service procedures and support materials for Dial-Around services, the Company will continue to incorporate into its training program for its customer service representatives accurate and complete information regarding the terms of these services as well as the terms of any competitive service to which MCI WorldCom's service is compared in an MCI WorldCom advertisement. 12. MCI WorldCom will make a voluntary contribution to the United States Treasury in the amount of One Hundred Thousand Dollars ($100,000). Payment should be paid by check or money order drawn to the order of the Federal Communications Commission. Reference should be made on the check or money order to "Acct No. X3217-002." Such remittances must be mailed to: Forfeiture Collection Section, Finance Branch, Federal Communications Commission, P.O. Box 73482, Chicago, Ill. 60673-7482. 13. The Bureau agrees that, based on the facts developed in its Inquiries and in the absence of material new evidence related to this matter, it will not use the facts developed in the Inquiries or the existence of this Consent Decree to institute any new proceedings, formal or informal, or take any action against the Company concerning possible violations of the Communications Act or the rules and regulations implementing the Act. The Bureau also agrees that, based on the facts developed in the Inquiries, and in the absence of material new evidence related to this matter, it will not use the facts developed in this Inquiries to institute any proceeding, formal or informal, or take any action against MCI WorldCom with respect to its basic qualifications, including its character qualifications, to be a Commission licensee or with respect to compliance with the Commission's rules and policies. 14. The Company waives any and all rights it may have to seek administrative or judicial reconsideration, review, appeal or stay, or to otherwise challenge or contest the validity of this Consent Decree and the Order adopting this Consent Decree, provided the Order adopts the Consent Decree without change, addition, or modification. 15. The Company's decision to enter into this Consent Decree is expressly contingent upon issuance of an Order that is consistent with this Consent Decree, and which adopts the Consent Decree without change, addition, or modification. 16. In the event that this Consent Decree is rendered invalid by any court of competent jurisdiction, it shall become null and void and may not be used in any manner in any legal proceeding. 17. If the Commission, or the United States on behalf of the Commission, brings a judicial action to enforce the terms of the Order adopting this Consent Decree, neither MCI WorldCom nor the Commission will contest the validity of the Consent Decree or Order, and the Company will waive any statutory right to a trial de novo. 18. MCI WorldCom waives any claims it may otherwise have under the Equal Access to Justice Act, Title 5 U.S.C.  504 and 47 C.F.R.  1.1501, et seq. 19. Any violation of the Consent Decree or the Order adopting this Consent Decree will constitute a separate violation of a Commission order, entitling the Commission to exercise any rights and remedies attendant to the enforcement of a Commission order. 20. The Parties agree that the terms and conditions of this Consent Decree will remain in effect for thirty-six (36) months from the Effective Date. The Parties also agree that any provision of the Consent Decree affected by or inconsistent with any subsequent rule or order adopted by the Commission will be superseded by such Commission rule or order. 21. This Consent Decree may be signed in counterparts. FEDERAL COMMUNICATIONS COMMISSION ENFORCEMENT BUREAU By:________________________________ David H. Solomon Chief, Enforcement Bureau MCI WORLDCOM, Inc. By:________________________________ Thomas F. O'Neil III Chief Legal Counsel