IV. RESPONDENTS' BUSINESS MODEL
A. Respondents Market Their DA Service Through Approximately One Million Defunct Toll-Free Numbers.
Respondents market their DA service through intercept messages (which Respondents refer to as "network messages") played on defunct 800 and other toll-free numbers, i.e., toll-free numbers that have been discarded by the entity previously associated with the number, or where the entity associated with the number has ceased to exist.32 The intercept message informs customers that the number "now has a new national directory assistance service," and directs consumers to call a 101515800 or 1015158000 "dial-around" or "equal access" number to "get information on the number you have dialed."33 Other than this marketing intercept, Respondents do no mass media advertising; nor do they post the dial-around numbers on their websites.34 Thus, it is only through control of a large pool of discarded toll-free numbers that Respondents' business model functions.35 Respondents control approximately one million 800 and other toll-free numbers, access to which they obtain from another entity owned by Patrick Hines, Signal One, as described above. Respondents apparently pay $10 a year to their affiliate Signal One for access to and control of these numbers.36
Customers reach these numbers by mistake, either by a dialing mistake (sometimes referred to as "fat finger" dialing), or by dialing a number abandoned by its previous owner, as described further below.
B. Respondents Provide Their Reputed DA Services from a Server Located in Nevada - the "Nevada Directory Assistance Platform."
If the consumer in fact calls the dial-around number advertised in the marketing intercept, she reaches a server allegedly located in Nevada (sometimes referred to as the "Nevada DA platform"), from which the DA service is provided.37
The mere act of calling the Nevada platform seems to trigger, in most cases, charges in excess of $7 on a consumer's bill.38 CAB complainants and other customers, on the other hand, are nearly unanimous in stating that they had not dialed, reached or heard of Respondents' DA platform, much less authorized the disputed charges.39
Because Respondents own no telecommunications facilities of their own (Calling 10 registered with the Commission as a "reseller" of inter- and intra-LATA telecommunications services), they contract with WCS for the transport of California consumers' calls to the Nevada DA platform, for the use of the dial-around numbers, and for the DA service itself.40 WCS, in turn, contracts with the Williams Telecommunications Group (Wiltel Communications, LLC, aka Wiltel),41 which routes the calls through voice switches owned and operated by a member of the Wiltel Group. In this way, WCS provides domestic origination and routing for Respondents.
C. Respondents Bill Their Services Through "Billing Telephone Companies" - Typically the Incumbent Local Exchange Carriers Like AT&T and Verizon.
Once a caller has proceeded far enough onto the DA service platform to trigger a charge,42 those charges are routed by Respondent to Respondents' billing agents ILD and BSG (aka OAN), which bundle and forward the charges and an accompanying description of the "service" to the billing telephone companies, primarily AT&T and Verizon.
D. How Telseven and Calling 10 Respond to Consumer Complaints.
Telseven and Calling 10 do not, in the first instance, respond to consumer complaints. Instead, they contract with the billing aggregators ILD and BSG for customer service functions.
When cases have escalated to Telseven or Calling 10, they or their agent respond that there are call detail records (CDRs) associated with the consumers' call to the DA platform. Although staff has not yet examined these CDRs, it has obtained other call records from AT&T and WilTel, reflecting calls from California customer numbers to Respondents' DA platform. The Staff Report addresses these latter CDRs, noting in some cases that the call duration shown was insufficient for a consumer to find and hear the rate disclosure or gain any useful information at the DA platform.43
Often, the proffer of a CDR is accompanied by the promise of a credit. It may be that Respondent's liberal credit policy masks the true extent of the problem, and has prevented Respondents services from being challenged in administrative or judicial proceedings. Staff reports that approximately 89,000 customers in California have had Respondents' charges credited back to them, as against approximately 2.7 million Californians who have been charged for Respondents' DA services.44
32 Staff Report at section II(C)(1).
33 Staff Report at section II(C)(1) and (2), and Staff Report Attachments 15 and 17C.
34 Staff Report at section II(C)(1). The websites of Telseven and Calling 10, set forth above, do not advertise or disclose the "10-10" or "10-15" dial-around numbers through which consumers allegedly access Respondents' DA services.
35 Staff Report at II(C)(1).
36 Staff Report Attachment 10C (contracts between Calling 10 and Signal One & Levendo and Signal One - all Hines' entities - for the provisioning of 800 numbers).
37 While Respondents themselves operate the servers on the DA platform, live operators - when requested - are provided by WCS, pursuant to the contracts found at Attachments 13.1C-13.3C.
38 Staff Report at section II(C)(2) and III(B)(2). Aug 3, 2010 data responses from Respondents (Attachment 69C) seem to indicate that about 90% of the calls that arrive at the Nevada DA platform result in charges to consumers.
39 Staff Report at sections IV(C)(1), IV(D) and IV(E).
40 Staff Report section II(B)(2), Attachments 13.1-13.3.
41 Staff Report section II(B)(2) and II(C)(2). See also Staff Report Attachment 13.1C (Service Schedule II), at pg.9 - "Through WilTel Communications...WCS will provide domestic origination and routing, via WilTel's voice switches of 10-15-158 1+700-XXX-XXXX calls." Wiltel is the owner of the 1015158 "CIC" code necessary for routing these numbers. The 5158 portion of the Respondents' equal access number correspond to William Telephone Co.'s carrier identification code as identified by the North American Numbering Plan Administration - http://www.nanpa.com/reports/cic_docs/D-sep-98.doc.
42 It appears that most callers reaching the platform are charged. Staff Report, at sections III(B)(2), (4), and Attachment 69C. Staff has call detail records of customers who were charged notwithstanding call duration of under 10 seconds, and in at least one case under 5 seconds. Id.
43 See Staff Report section III(B)(4) regarding staff conducted "test calls."
44 See Staff Report at sections III(A) (total revenue, charges) and IV(A)(3) (credits).
