Tom, I have great respect for you but your blog this morning was a little over the top.

“Thwart consumer choice?” C’mon, Tom. This is really about Verizon trying to thwart competition . . . again.

Here is what is really going on. For the first time in history, Verizon’s entrenched incumbent position in the phone marketplace is being challenged successfully by cable competitors providing digital phone service, a relatively new marketplace development that gives consumers more choice, better value, and -- according to J.D. Power and Associates -- provides consumers greater satisfaction in every region of the United States. Not to put too fine a point on it: Verizon is losing customers.

Naturally, you’ll do everything you can to retain them. I get that. But, the law is very clear: Verizon can market to its heart’s content 362 days of the year to its customers. However, when customers make a decision to leave you, you are obligated to honor their decision to request that their phone number be transferred to their new provider, and respect their privacy by porting their current number within 4 days without harassing them with marketing retention calls. Congress, on a bipartisan basis, and the FCC have previously recognized that integrity in the number porting process is essential for true competition to flourish.

You are right that this is about consumer choice . . . but when consumers have made a choice, they deserve to have their choice implemented. That’s why there are rules preventing you from undermining that choice by invading their privacy.

You also call this an “intriguing” development. You refer of course to a decision that has not yet been announced (although there have been press reports). I agree that it is “intriguing.” First, this is a rare “restricted” proceeding. That means no one is supposed to speak to anyone at the FCC about this proceeding unless all parties to the complaint are present. It’s “intriguing” that someone in the FCC apparently leaked a decision that apparently goes against Verizon. And it is “intriguing” that the leak was apparently choreographed in a way that gives Verizon a shot at debating this in the press and the blogs.

One solution we should all agree on is to reduce the “porting interval” – the period of time it takes to shift a phone number from the losing provider to the winning provider, regardless of whether it is a shift from a phone provider to a cable provider or the other way around. That’s what consumers really want and deserve. And, the temptation for mischief is reduced. I invite you to work with us to ensure the FCC actually makes a decision soon to shorten the ridiculously long 4 days that consumers are forced to tolerate for simply making a choice in favor of the competition.

One other thing: you make the usual “apples to oranges” argument that because cable is engaged in win-back marketing when a cable video customer decides to switch to FIOS service, Verizon should be able to market during the porting interval for phone service. Oh, and you also throw in the same old tired refrain of “rising cable prices.” Are you really unaware that Verizon’s video service is priced about the same as cable providers? Did you miss the press release where Verizon announced perhaps the greatest video price hikes in the country last year? And, of course, what you also leave out is that a FIOS customer won’t cancel service until Verizon has already wired up the house and is ready to turn on (or has turned on) the service. So, it’s a done deal at that point. Of course the cable company may try to win back the customer. But it’s not doing it with inside information.

Intriguing? You bet.

Kyle, I respect you, too; you are one of the “good guys” in the policy arena. I won’t suggest your comments are “a little over the top,” but I will assert that they do not reflect the real world of voice and video competition.

The companies you represent and Verizon are battling to be the communications provider for a household. In most cases, your companies are trying to sign up video customers for voice service before Verizon can sign up our voice customers for video service. This is real competition. It’s good for consumers.

Of course, it’s easier to convert cable networks into facilities that can provide voice services than it is to take a voice network and equip it for video. And, in Verizon’s case, we’re replacing our network with fiber to the home. As a result, our cable competitors have had a head start in being the “full service” provider to a customer. That’s all part of the development of competitive markets. Again, it’s good for consumers.

What isn’t fair or right or good for consumers is to apply rules designed a decade ago for Verizon’s wholesale customers - companies who were providing retail voice service using our network - to cable companies who use their own networks to serve customers. What’s not fair or right is for the FCC to:
1) tell Verizon that if we win a customer from cable that we must tell that customer we cannot notify the cable company on their behalf, they must do so; and then allow the cable companies to do retention marketing to those customers when they call to disconnect their service, and at the same time
2) permit cable companies to have the right to notify Verizon that a customer is terminating service and then prohibit Verizon from contacting its own customer to make a competing offer.

Bottom line: cable is happy forcing customers to call to disconnect their cable service and taking advantage of that opportunity to market. Meanwhile, you are trying to get the FCC to prohibit Verizon from reaching out to its customers with overnight mailings after your companies notify us that our customer wishes to change service.

I understand why your companies want to preserve the advantage they have. I suppose most industries would just keep quiet and enjoy the regulatory edge. So I do have a certain admiration for the chutzpah demonstrated by cable’s effort to expand this advantage through the closed complaint process at the FCC.

But when the process is going to deny customers the information they need to make an informed choice and it’s going to further tilt the playing field in favor of incumbent cable providers, it’s not fair or right.

BTW: Kyle – The assertion about number porting is a dog that won’t hunt. The cable companies have stipulated in the proceeding that “Verizon does not have a practice of delaying the porting of numbers in order to engage in” retention marketing. But we’re always happy to work with you to improve the process.

Tom, I hear you. We both agree that the competition that is occurring in the marketplace today is bringing real innovation and value to consumers. But we all need to play by the same rules, and Verizon’s decision to resort to self-help in ignoring long-settled laws that exist to protect consumer privacy and ensure fair competition is simply the wrong approach, and ultimately, chooses to ignore important differences between voice and video services.

It’s hard to deny the fact that consumers generally want to keep their phone number when they change their wireline voice service, so as a competitor, until I get that number ported, consumers aren’t able to try the competitive voice service. As for dogs that will hunt, it seems to me that you’re continuing to bark up the wrong tree. We have no problem with companies marketing to win customers back after the porting process is complete. That’s why a shorter porting interval is not only in the best interest of consumers, but will also help is get us at least a good bit closer to the “parity” that you and I both seek.

Parity doesn’t (or, shouldn’t) work the other way, and it is easy to explain why with a little thought experiment: imagine my suggesting that we achieve parity by insisting that when a customer wants to change video providers, that they have to wait 4 days while we engaged in “marketing retention.” I suspect you would object because you prefer the current regime, where Verizon can install a customer’s video service immediately after they order it. Not so for phone. Customers need that phone number from their current provider. And, absent a rule, phone companies would not port that number. So, I’m all for moving in a direction where different services have less regulation across the board. But we can’t ignore the obvious, and limited unique difference when it comes to allowing a customer to keep their phone numbers.

Have a great weekend. Kyle

Kyle –

I’m impressed that you’re on the job late on Friday afternoon in the summer. Perhaps we should get away from the computers and find an appropriate establishment where we could share our views in person.

First, cable’s assertion in this complaint is not based on long-standing rules. Your companies want to change the long-standing rules and be treated like telecommunications carriers in this specific instance, but they don’t want to be telecommunications carriers when it comes to all the other obligations and rules imposed on telecom carriers. That really gets to the heart of the issue. Under the statute, you can’t get the benefits without the obligations. That seems fair to me.

Second, I concur that there are differences between voice and video. That doesn’t mean that customers should be denied the opportunity to make an informed choice.

Cable is trying to change current practice. Our current practice -- and that of other telecom carriers -- of communicating with our customers when we receive notice that they are terminating voice services allows customers to get information from both us and the cable company before making a final decision to switch carriers. Your companies’ current practice of requiring consumers to call their cable company in order to terminate service (rather than permitting their newly chosen carrier to do it, as occurs when a cable company wins a voice customer) gives your companies the opportunity to market to that customer and ensure that the customer has information from both carriers before making a final decision to switch. If the cable companies win this complaint, this balance that gives both cable and telcos the chance to provide information to customers will change. Consumers will be the losers.

The FCC already has extensive rules relating to number porting. And your own companies indicate that we are playing by the rules and are not using the porting process to do retention marketing. As noted before, we’ll work with you on improving the process if you see that as a problem.

The question policymakers and consumers should be asking you is: Are you willing to give consumers the opportunity to weigh the best offers from both sides before they switch carriers? This complaint says you’re not.

It seems to me that neither company (whether cable or telecom) should get a chance to do "retention marketing" during the porting process and instead both companies should be advertising their best possible rates. That is real competition. If both companies are overcharging their customers until they decide to cancel and then finally offer them a better rate, then there is obviously not enough competition in the market...

Pete,
Over time rates for telecommunications services have been coming down steadily, and, indeed, when Verizon entered the cable TV business, rates from our competitors began to fall too. This issue is not about hiding some secret rate until a customer decides to leave. It’s about talking with a customer who may be considering a switch to be sure she has complete information about various offers and has the chance to buy the package of services that best fits her needs. Today cable can do this, but under the FCC ruling, Verizon could not. With the explosion of new services and new packages of communications services, most consumers are not familiar with all the options available. Giving no information to customers from any competitor, as you seem to suggest, doesn’t seem like a better solution since the customers in these cases are clearly interested in getting the best deal. To do that, they need to know what the options are.

Eric Rabe

Eric,

I completely understand Verizon's argument about the unlevel playing field, and I also feel cable shouldn't be able to have it both ways. However, I don't really understand your argument about it not being some "secret rate." "Rentention Marketing" almost always includes a discounted price over advertised prices. Your argument about the customer not getting all the information just doesn't fly. Customers see ads every day for Verizon Fios as well as ads for the cable companies. Customers can look on both companies' websites and all the pricing information is there. The advertised information is easy enough to access. Retention marketing is a different story, and if one company is allowed to do retention marketing, they all should. If one company is not allowed to do retention marketing, then none should. Its that simple.

Talk about thwarting consumer choice, then take away 90% of usenet in order to "protect" us from bad evil old me.

I think Verizon speaks with forked tongue, and maybe it's Verizon we need protecting from!

Talk about thwarting consumer choice, then take away 90% of usenet in order to "protect" us from bad evil old me.

I think Verizon speaks with forked tongue, and maybe it's Verizon we need protecting from!