Verizon, it's over.
No more letters. No more presents. No more anything.
The federal government, speaking on behalf of former Verizon phone
service customers, yesterday sent the communications company a stern
message: Stop trying to woo back those consumers who have opted for a
new provider. They've moved on.
Verizon had been using its proprietary data to contact former
customers and try to persuade them to give the company another try. But
a majority of members of the Federal Communications Commission yesterday said such practices are illegal and infringe a consumer's privacy.
"Today we carry out Congress's unambiguous mandate to protect consumer
privacy," said Robert M. McDowell, a Republican commissioner. Two
Democratic and two Republican commissioners voted against Chairman Kevin J. Martin,
a Republican. The chairman had pushed for the agency to rule that
Verizon's use of phone numbers to contact its departing customers was
legal, despite complaints from cable service operators.
Verizon yesterday evening requested a stay on the FCC decision.
"FCC commissioners regularly champion consumer choice, transparency
of information, and competition on a level playing field. But this
decision creates less of each," said Tom Tauke, Verizon's executive
vice president of public affairs.
The issue highlights the increasingly competitive environment of
telecommunications services as cable companies race to gain more of the
share of phone services. Some 16.5 million subscribers get phone
services from cable companies. And cable firms have pushed to increase
wireless services with recent investments in next-generation high-speed
WiMax networks run by Sprint Nextel and Clearwire.
Land-line-phone and DSL providers, such as Verizon and AT&T, are
fighting back against cable companies with their own paid video
Commissioner Michael J. Copps,
a Democrat, criticized Verizon, saying the company offers its best
deals to customers only when desperate to retain them. They should be
offering customers lower prices and deals throughout their contracts,
"After today's ruling, Verizon will have additional incentive to
focus on making sure that all its customers are happy with their
service, rather than reserving the red-carpet treatment for those who
have already decided to leave but whose transfer has not yet been
technically implemented," Copps said in a statement.
The decision yesterday was Martin's first defeat on a vote since he
became chairman of the FCC in 2005. He said customers can benefit from
Verizon's marketing tactics, through which they often are offered steep
discounts to stay with the provider. Verizon had offered American Express
gift cards of up to $200 to keep customers and sent overnight letters
with promises of steep discounts, according to the complaint filed by
If Verizon is stopped from those practices, cable companies should
also be prevented from offering consumers discounts and deals to stay
with them for video services, Martin said.
"I am therefore disappointed that the Commission would prohibit
these practices, which promote and benefit consumers and particularly
disappointed that they would do so and prohibit practices from only one
class of companies," Martin said in a statement.
"Moreover, the cable companies engage in such practices to keep
their video customers from switching to other providers," he said.
Cable companies disputed Martin's reasoning, saying they do not use
confidential information, such as a user's phone number, in their
marketing practices. They have pushed for the FCC to further reduce the
four-day period telecommunications companies have to switch phone
numbers of former customers to competitors.
"Customers want and deserve the ability to change providers if they
so choose quickly and seamlessly. Shortening the porting interval would
promote competition and choice for all consumers," said Kyle McSlarrow,
president of the National Cable & Telecommunications Association, a
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