FCC Fines SBC $3.6 Million

SBC Communications agreed Tuesday evening to pay a $3.6
million fine to the Federal Communications Commission (FCC) for errors found in its long distance applications in several
states last year.

The FCC found that SBC failed to provide electronic access on its operations
support system (OSS) to competitors looking for information on the advanced
services available on particular phone lines in the region. Advanced
services include digital subscriber line (DSL) availability and
business-class phone services.

The fine, which SBC has 10 days to pay, covers two separate investigations on the FCC docket, both for
apparent violations in providing services to its competitors. Moreover, it is similar to copping a “no contest” plea in court, freeing SBC from admitting to violating any
regulations or incurring any liability for the alleged infractions. The
decree also means the issue can’t be re-visited at a later time.

That’s good news, for if regulators found the carrier culpable in the
matter, the agency could potentially rescind SBC’s long-distance service in
the states it filed the erroneous information; in this case, Missouri,
Oklahoma and Kansas — and conceivably the whole 13-state region SBC serves.

The fine stems from a FCC investigation begun last March and culminating in
an October 2001 Notice
of Apparent Liability
, where investigators found SBC violated certain
conditions for Section 271 (long-distance) approval.

FCC officials declined to comment on the consent decree, saying everything
that needed to be said was included in the October NAL.

SBC, which did not respond for comment as of press time, maintains the system that gives competitors information on specific
phone lines was unintentionally giving bogus information, and promised to
fix the mistake. The second investigation involves competitors trying to get access
loop qualification information from SBC, in which the information was
either unavailable or took too long to process.

The original NAL released by the FCC said that although the phone company
was negligent in collecting the appropriate information about its OSS
practices for the Section 271 application, officials weren’t “supporting a
finding that SBC intentionally misrepresented information to the commission.

Independent auditor Ernst & Young will inspect SBC’s OSS later this year to
ensure compliance and file its findings with the FCC no later than August 2003.

The FCC has been giving the carrier plenty of scrutiny the past year for
numerous “inaccuracies” found in long-distance and Telecom Act of 1996
compliance applications. Regulators say nearly 20 percent of SBC’s monthly
reports are “flawed.”

In total, SBC is waiting for word on nearly $8.5 million in
the FCC has proposed to levy. The largest is for $6
million. The FCC is still reviewing documents from SBC’s response to that
particular NAL, which finds the carrier failed to institute universal rates
for unbundled network elements (UNEs).

The four incumbent telephone companies — Verizon Communications , SBC, Qwest Communications and BellSouth — must prove they are providing non-discriminatory access for
competitive phone carriers before it can provide long-distance phone
service. An application is filed for every state the incumbent phone
company wishes to enter.

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