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Frequently Asked Questions









Our business received a Notice of Class Action Settlement. What is it?

YOU ARE NOT BEING SUED. The “Notice” you received refers to a settlement of a class action lawsuit against MCI, Inc. (now known as Verizon Business Network Services Inc.) and referred to herein as “MCI/Verizon.” Your business received the Notice because according to MCI/Verizon’s records, the business is a business customer who subscribed to private line or frame relay service from MCI or Verizon between June 22, 2005 and March 16, 2007, inclusive, and were assessed both federal and state Universal Service Fund surcharges for such service for the same period.

The Court ordered that the settlement Notice be sent to you, because you are a potential member of the settlement class, and have a right to know about a class action settlement concerning the matter. This notice explains the lawsuit, the settlement, who is covered by the settlement, your rights and options, the benefits available under the settlement, and how to obtain a payment. The Notice was provided to you so that you could decide if you wanted to be included as part of the settlement and receive benefits under the settlement by submitting a claim, if you wanted to opt-out (exclude yourself) from the settlement class or if you wanted to comment in favor of or in opposition to the settlement.

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Why are you suing the business?

YOUR BUSINESS IS NOT BEING SUED. If MCI/Verizon’s records show that you are a business customer who subscribed to private line or frame relay service from MCI or Verizon between June 22, 2005 and March 16, 2007, inclusive, and were assessed both federal and state Universal Service Fund surcharges for such service for the same period, then under the terms of the Settlement you are included in the Settlement Class and you should have been mailed a Notice.

Your information was provided from MCI/Verizon’s billing records pursuant to the Federal Court's order. The mailing will not result in disclosure of your financial or other identifying information. All reasonable efforts were undertaken to mail the Notice only to potential class members.

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What is a class action?

In a class action, one or more people called class representatives (in this case, Plaintiff Telstar Resource Group, Inc.) sue on behalf of people who have similar claims. All these people together constitute a plaintiff class. This is a class action because one court resolves all class-wide issues for all people who meet the class definition, except for those who excluded themselves from the class.

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What is this lawsuit all about?

The lawsuit is entitled Telstar Resource Group, Inc. v. MCI, Inc., Case No. 05 Civ. 10671 (JGK), and was filed in the United States District Court for the Southern District of New York in December 2005. It involves Universal Service Fund, or “USF,” surcharges.

Under federal law, providers of interstate telecommunications services contribute to a federal Universal Service Fund, which subsidizes telecommunications services for low-income and rural customers, among other things. Federal law also permits states to establish their own Universal Service Funds and require fund contributions from intrastate-service providers, and many states have created these funds. Service providers are allowed to pass their USF contributions on to their customers by billing them for USF surcharges.

The lawsuit alleges that by federal regulation, private line or frame relay services offered by MCI/Verizon must be classified as either interstate or intrastate lines, based on the percentage of interstate traffic carried. It further alleges MCI/Verizon is prohibited from assessing both federal and state USF surcharges for such services, and is allowed to assess only one or the other. The case was brought on behalf of all MCI/Verizon customers who were assessed both federal and state USF surcharges for their private line or frame relay services for the same billing period. The lawsuit asserts claims under the United States Communications Act, 47 U.S.C. §§ 201-202.

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How do I know if the business is a member of the Settlement Class?

The class covered by the settlement is defined as follows: All customers of MCI, Inc. or its successor in interest, Verizon Business, who subscribed to private line service or frame relay service and who were assessed the Federal USF surcharge and a state USF surcharge for the same service or services during the same billing period between June 22, 2005 and March 16, 2007, inclusive.

Excluded from the class are Verizon Business; any entity in which Verizon Business Network Services Inc. has a controlling interest; any of the officers, directors, or employees of Verizon Business; the legal representatives, heirs, successors, and assigns of Verizon Business; anyone employed with the law firm Girard Gibbs LLP or the law firm Seeger Weiss LLP; any Judge to whom the lawsuit is or was assigned, and his or her immediate family; any entity of the United States government, or any state, territory, or municipality of the United States, or any entity thereof; and any person or entity who submitted a timely and valid request to be excluded from the class.

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Why did the business get a Notice of Settlement?

According to MCI/Verizon’s records, you are a business customer who subscribed to private line or frame relay service from MCI or Verizon between June 22, 2005 and March 16, 2007, inclusive, and were assessed both federal and state Universal Service Fund surcharges for such service for the same period. The Court ordered that this Notice be sent to you, because you are a potential member of the settlement class, and have a right to know about a class action settlement concerning the matter. This notice explains the lawsuit, the settlement, who is covered by the settlement, your rights and options, the benefits available under the settlement, and how to obtain a payment.

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Who is representing the business in this litigation?

To represent the class for purposes of the settlement, the Court has appointed the named Plaintiff in the lawsuit, Telstar Resource Group, Inc., to serve as the class representative. The Court has also appointed the following attorney and law firm to serve as Class Counsel: A. J. De Bartolomeo, Girard Gibbs LLP, 601 California Street, 14th Floor, San Francisco, California 94108.

Class Counsel will request an award of attorneys’ fees of up to 25 percent of the settlement fund described below, plus reimbursement of expenses incurred in the case. Class Counsel will also request a $5,000 incentive award for the one class representative, Telstar, for its initiative and effort in pursuing the case and settlement on behalf of the class. The business will not have to pay any amount out-of-pocket for Class Counsel’s services. The business does not need to hire a lawyer to participate in the settlement. If you wish, however, the business may hire a lawyer to represent it in this case, at its own expense.

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What relief is available for the business under the Settlement?

Under the settlement, MCI/Verizon will place $2,811,500 into an interest-bearing account. This amount, plus accrued interest, is the settlement fund. The settlement fund will be applied first to pay costs of giving notice to the class and settlement administration; any Court-approved award of attorneys’ fees and expenses to Class Counsel; and any Court-approved incentive award to the class representative. Assuming the requested awards are approved, Class Counsel estimate the remaining balance will be approximately $1.9 million plus accrued interest. This net settlement fund will be used to make payments to class members, as described below.

All class members who received a Notice had a choice on whether or not to file a claim to receive a benefit. If the business chose to file a claim, you may receive a benefit. If you choose to be excluded from the settlement, you will not receive a benefit. If you failed to file a Claim Form by June 20, 2008, you will not receive a benefit.

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If the business wants to participate in the Settlement, what do we do?

The deadline to submit a Claim Form was June 20, 2008.

The amount of the payment will be based on the amount of state USF surcharges paid by the business. Using data provided by MCI/Verizon, the Settlement Administrator will determine the dollar amount of state USF surcharges paid by each claimant and not subsequently refunded. The net settlement fund will be distributed among claimants in the same proportion that their state USF surcharges bear to the total of all state USF surcharges paid by all claimants. Mathematically, it can be expressed like this:

Payment = (Net settlement fund) x           (State USF surcharges you paid)    

(Total state USF surcharges paid by all claimants)

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How does the business make a claim and receive its Settlement benefits?

The deadline to submit a Claim Form was June 20, 2008.

The amount of the payment will be based on the amount of state USF surcharges paid by the business. Using data provided by MCI/Verizon, the Settlement Administrator will determine the dollar amount of state USF surcharges paid by each claimant and not subsequently refunded. The net settlement fund will be distributed among claimants in the same proportion that their state USF surcharges bear to the total of all state USF surcharges paid by all claimants. Mathematically, it can be expressed like this:

Payment = (Net settlement fund) x           (State USF surcharges you paid)    

(Total state USF surcharges paid by all claimants)

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How much will the business receive under the Settlement?

Plaintiff proposed a Plan of Allocation for distributing settlement money among class members. At the fairness hearing, the Court approved this plan as well as the settlement. Under the settlement, the amount available for distribution will be the balance of the settlement fund remaining after deduction of Court-awarded attorneys’ fees and litigation expenses (“Net Settlement Fund”). The Net Settlement Fund will be distributed among those class members who timely submitted valid claims.

Payment = (Net settlement fund) x           (State USF surcharges you paid)    

(Total state USF surcharges paid by all claimants)

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When will the business receive its benefits under the Settlement?

Please be advised that the Court granted final approval of the Settlement and the Plan of Allocation. The deadline to file a claim was June 20, 2008. Please periodically check this website for updates on the status of the distribution of the settlement fund. Under the terms of the settlement, the money will not be distributed until there is no possibility of appeal. If there are no appeals, the parties will seek to distribute your share of the settlement fund within three months of receipt by the Settlement Administrator of claims data to be provided by Defendants. An appeal by a class member would likely delay your payment.

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If the business does nothing, what happens?

Unless the business excluded itself, it will continue to be a member of the class, and that means that if the settlement is approved, by staying in the class, the business will give up any right it may have to sue, continue to sue, or be part of any other lawsuit against MCI, Verizon, or their affiliates concerning the assessment, billing, or collection of USF surcharges between June 22, 2005 and March 16, 2007, inclusive. Furthermore, the business will be bound by all of the Court’s orders in this case, including the judgment dismissing all claims asserted on behalf of the class.

To keep any right the business may have to sue or continue to sue over MCI’s or Verizon’s USF surcharges, as described above, you must have excluded your business from the class.

EXCLUDING YOURSELF FROM THE SETTLEMENT

If you do not want a payment from this settlement, but you want to retain any right to sue or continue to assert any of the Released Claims on your own against any Defendant or other Released Person, then you must have taken steps to get out of the class. The deadline to exclude yourself from the class was March 31, 2008. This is called excluding yourself from the class, and is sometimes referred to as “opting out” of the class.

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What if the business did not receive a Claim Form, does it need one?

Yes. To request a payment, you must have completed and sent in a Claim Form. You may obtain “pdf” copies of the Notice from this website, or you may obtain copies by mail.

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What are the deadlines for submitting a Claim?

The deadline to submit a Claim Form was June 20, 2008.

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What if the business name or address has changed?

If your business address changes after you have submitted your Claim Form you must notify the Settlement Administrator of the new address in writing. If the business name has changed, you will need to provide the appropriate documentation to substantiate the name change with the Claim Form to ensure that the appropriate surviving entity is submitting a claim and will receive the settlement benefits.

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What if the business does not want to participate in the Settlement? How does the business opt-out of (exclude itself from) the Settlement?

The deadline to exclude a business from the Settlement Class was March 31, 2008.

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What happens if the business excludes itself (opt-out) from the Settlement?

The business will not be able to receive any recovery under the Settlement. The business will, however, retain its right to bring a lawsuit, continue to pursue an existing lawsuit, or be part of a different lawsuit asserting a Released Class Claim against the Released Verizon Parties.

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What happens if the business does not exclude itself (opt-out) from the Settlement?

Unless the business excluded itself, it will continue to be a member of the class, and that means that if the Settlement is approved, it will release all “Class Claims” against the “Released Verizon Parties,” and it will be prohibited from bringing or participating in any other cases concerning the “Class Claims” against the “Released Verizon Parties.”

The Stipulation of Settlement provides:

  • Release of the Class Claims. In consideration hereof, upon the Effective Date, Telstar and each Class Member—including their predecessors, successors, parents, direct subsidiaries, indirect subsidiaries, affiliates, assigns, heirs, agents, and attorneys—hereby remise, release and forever discharge Verizon Business—including all of its predecessors (including but not limited to MCI, Inc.), successors, parents, direct subsidiaries, indirect subsidiaries, affiliates, and their assigns, agents, directors, officers, employees, heirs, personal representatives, and shareholders (collectively, the “Released Verizon Parties”)—from and against all causes of action, claims, suits, debts, damages, judgments, liabilities, demands and controversies whatsoever, whether matured or unmatured, now known or unknown, liquidated or unliquidated, at law or in equity—whether before a local, state or federal court or state or federal administrative agency, commission, arbitrator(s) or otherwise—that Telstar and any member of the Settlement Class now has or may have arising out of or directly or indirectly related to the Litigation, and for all times up to and including the Effective Date of this Settlement Agreement (the “Class Claims”). This release and discharge applies both to all matters now known and to all matters that may hereafter be discovered, if any, with respect to the Class Claims. After execution of this Settlement Agreement, Telstar shall thereafter be barred from bringing any charge, complaint or other action against Verizon Business relating to the Class Claims. Notwithstanding the foregoing, nothing herein shall serve to release any rights of Telstar or any Class Member against Verizon Business other than the Class Claims.


  • Release of the Verizon Business Claims. In consideration hereof, upon the Effective Date, Verizon Business—including its predecessors, successors, direct subsidiaries, indirect subsidiaries, assigns, heirs, agents, and attorneys hereby release and forever discharge Telstar—including all of its predecessors, successors, parents, direct subsidiaries, indirect subsidiaries, affiliates, and their assigns, agents, directors, officers, employees, heirs, personal representatives, and shareholders—from and against all actions, causes of action, claims, suits, debts, damages, judgments, liabilities, and demands whatsoever—whether matured or unmatured, known or unknown, liquidated or unliquidated, at law or in equity, whether before a local, state or federal court or state or federal administrative agency or commission or arbitrator(s) or otherwise—that Verizon Business now has or may have asserted in the Litigation, for all times up to and including the Effective Date of this Settlement Agreement (the “Verizon Business Claims”). This release and discharge applies both to all matters now known and to all matters that may hereafter be discovered, if any, with respect to the Verizon Business Claims. After execution of this Settlement Agreement, Verizon Business shall thereafter be barred from bringing any charge, complaint or other action against Telstar relating to the Verizon Business Claims. Notwithstanding the foregoing, nothing herein shall serve to release any rights of Verizon Business against Telstar or any Class Member other than the Verizon Business Claims.

The Class Claims and Verizon Business Claims, including any Unknown Claims, as these terms are defined above, shall be referred to collectively as the “Released Claims.”

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Will there be a hearing? Can a representative of the business attend and/or tell the Court what the business thinks about the Settlement?

Please be advised that the Court granted final approval of the Settlement and the Plan of Allocation. The deadline to file a claim was June 20, 2008. Please periodically check this website for updates on the status of the distribution of the settlement fund.

Judge Koeltl held a fairness hearing on April 17, 2008, at 4:30 pm, at the United States District Court for the Southern District of New York, Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, New York 10007-1312.

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Does a representative of the class member business have to go to Court? The business representatives do not want to or cannot go to Court.

No. Judge Koeltl held a fairness hearing on April 17, 2008, at 4:30 pm, at the United States District Court for the Southern District of New York, Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, New York 10007-1312.

The deadline to comment or object to the Class Settlement was March 31, 2008.

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Does the business have to pay an attorney for any of this?

Not directly. Class Counsel will ask the Court to award attorneys’ fees from the settlement fund in an amount not to exceed 25% of the settlement fund, and for reimbursement of expenses incurred in connection with the prosecution of this litigation, plus interest on such fees and expenses at the same rate as earned by the settlement fund.

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What is the $5,000 “Incentive Payment” to the Class Representatives?

Class Counsel asked the Court to award $5,000 incentive payments to the Class Representative in this action. This is the individual named in the lawsuit against MCI/Verizon. The incentive award is sought in recognition of the time and effort the Class Representative expended in pursuing the lawsuit, in supporting Class Counsel with information and documentation, and in fulfilling its obligations and responsibilities as the Class Representative, and of the benefits conferred on the Class by the settlement. The incentive award will be deducted from the settlement fund.

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How did you get the business address and its MCI/Verizon billing information?

Your information was provided from the Defendant’s billing records pursuant to the Federal Court's order. The mailing will not result in disclosure of your identifying information. All reasonable efforts were undertaken to mail the Notice only to potential class members.

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The business that you sent the Notice to has been sold/no longer exists. What should I do with this Notice?

Whomever is authorized to act on behalf of the sold or defunct business would have needed to complete and sign the Claim Form. Before we can allow someone to act on behalf of a former or defunct business entity in exercising its rights under the Settlement, we will need to receive a copy of any documentation of the sale or wrap up of the business that shows that the signatory is authorized to act as the representative of the business entity which is the class member. The materials you will need to submit depend on the particular circumstances of the business entity’s status.

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Why was the Claim Form mailed to the sold or defunct business client’s address?

We were required to mail the packet to the address of record for the qualifying accounts.

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What if the business’s representatives still have questions?

If you still have questions, please feel free to contact us at Telstarsettlement@girardgibbs.com.

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