FCC Majority Favors Cable On Verizon Marketing
FCC Commissioners Reverses Course On Marketing Call
By John Eggerton -- Broadcasting & Cable, 6/23/2008 3:21:00 AM
As expected, an FCC majority has reversed an earlier staff decision upholding's Verizon's marketing practices, according to one commissioner who released a statement explaining the decision. The decision was four to one, with only Chairman Kevin Martin strongly dissenting.
Martin wasn't even in the country when the other four commissioners voted to reverse his staff's decision. He is in Singapore on FCC business.
The FCC staff had rejected a complaint by cable companies against the telephone company's retention-marketing efforts, which are attempts to retain customers being wooed to cable's competing phone service.
The FCC's Enforcement Bureau back in April said 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. That included using a cable company's notification to Verizon that a customer was switching to try to retain that customer via various incentives.
A majority of commissioners disagreed. "Carriers are free to initiate customer retention-marketing campaigns before a consumer gives the order to switch from his or her current phone service provider to a new provider," said Commissioner Robert McDowell. "Under the law, carriers are also permitted to launch 'win-back' campaigns after consumers have switched. Today's action underscores long-held Commission policy that using proprietary customer information for marketing efforts cannot take place during the window of time when a customer's phone number is being switched to a new provider."
Saying the FCC would be hurting, not helping, consumers, Verizon countered that the decision prevents customers from getting important information on potentially better service and price. “FCC Commissioners regularly champion consumer choice, transparency of information, and competition on a level playing field. But this decision creates less of each," said Verizon in a statement. "This disappointing outcome takes a step back from the march toward full competition. It enables cable companies to lock in TV customers by forbidding Verizon from providing information about better voice services or prices. It is bad policy that will harm consumers.”
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