Verizon Responds To "Retention-Marketing" Inquiry
Bipartisan Majority Prepared to Overturn Staff Decision
By John Eggerton -- Broadcasting & Cable, 6/20/2008 7:40:00 AM
Verizon weighed in Friday following reports that a bipartisan FCC majority of Robert McDowell, Deborah Taylor Tate, and Jonathan Adelstein was ready to overturn a staff decision on Verizon’s marketing practices that had gone against cable and in favor of the phone company.
If so, it would come as the FCC’s chairman was out of pocket on an Asian trip. Spokesfolk for that trio had not returned a call for comment at press time.
The FCC's Enforcement Bureau said in April that it would not step in to prevent Verizon Communications from using proprietary information to try to keep customers from switching to cable-phone service -- so-called retention-marketing efforts. The bureau concluded that the rules were unclear, but it favored Verizon’s reading of them, which would allow methods it used to try to retain those customers.
Tom Tauke, Verizon's top D.C. executive, said in a blog posting Friday. Calling the potential overturn "puzzling," Tauke said: "Today, cable is fully engaged in “win-back” marketing directed toward any customer who decides to switch to Verizon’s FIOS video. Yet, this complaint is designed to prohibit Verizon from marketing – or even providing information -- to a customer who decides to switch from Verizon to cable-provided voice service."
Cable operators, by contrast, had called the Enforcement Bureau's decision to deny the complaint "astonishing."
In his own blog posting responding to Tauke, National Cable & Telecommunications Association said: "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."
A group of cable operators including the two largest, Comcast and Time Warner Cable, had asked the FCC to stop Verizon from using information gained from them -- such as who was switching and when -- to try to keep those customers from defecting to cable.
When a customer decides to switch from Verizon to, say, Comcast's phone service, Comcast sends a request to Verizon for the phone number to be moved to Comcast's service (the government requires that phone numbers be "portable" among services). That request includes whose number is being moved and when. Verizon then uses that information to contact the customer and offer them incentives not to move, such as price breaks or gift cards.
The cable companies said that violates a law that says, “[a] telecommunications carrier that receives or obtains proprietary information from another carrier for purposes of providing any telecommunications service shall use such information only for such purpose and shall not use such information for its own marketing efforts."
