Verizon Seeks Stay Of  FCC Order

Verizon Communications asks federal court to stay FCC order that it stop using subscriber information supplied by cable companies.

By John Eggerton -- Broadcasting & Cable, 6/30/2008 11:35:00 AM

Verizon Communications Friday asked a federal court to stay the Federal Communications Commission's order that it stop using subscriber information supplied by cable companies to try to keep those customers from switching to cable phone service.

That came after the FCC commissioners voted to reverse an earlier staff decision, saying that Verizon's retention-marketing efforts passed muster.

In a request to the U.S. Court of Appeals for the D.C. Circuit, Verizon said providing customers with competitive prices and incentives was information that could benefit them. It also offered up analysis that it said showed that the "consumer welfare benefit" the FCC was barring by blocking the practice added up to $75 million over five years.

Verizon also argued that there is a First Amendment cost, as well, "infringing both Verizon's right to speak to its customers and the customers' right to hear speech from which they may benefit.”

When a customer agrees to switch from Verizon to a competing phone service, the cable company makes the request to Verizon. Verizon has been using that information to try to keep its customers.

Cable operators argued that it was unfair use of proprietary information. Verizon argued that it was not proprietary and that it was simply giving its customers more information on which to base the decisions of whether or not to go through with the change of service. FCC staffers agreed with Verizon. But last week -- in a 4-1 vote with only FCC chairman Kevin Martin dissenting -- the commissioners reversed that decision, upheld the cable complaint against Verizon and told it to stop the practice.

Verizon also argued that cable can use retention-marketing efforts to try to keep video subscribers from switching to Verizon or another competitor.