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Regulatory News – Strike Two Against Verizon Long Distance

Posted: 12/2000

Regulatory News

Strike Two Against Verizon Long Distance
By Kim Sunderland

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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