Sorting Out Truth From Fiction In The Cable/Telco Customer Retention Mess

Overhype

from the smoke-and-mirrors dept

Back in March, we wrote about a complaint to the FCC by cable companies about how Verizon was abusing the number portability system to try to retain customers. In April, Kevin Martin took his expected position in siding with Verizon, the telco. However, it appears that only Martin was convinced. All the other FCC commissioners went in the other direction and sided with the cable companies, smacking down Verizon and telling it to stop.

What’s impressive, though, is the response and the amount of misinformation flying around. Even before the official vote, Verizon’s policy guys put up a blog post claiming that this decision would hurt customers. That resulted in a spirited discussion in the comments on that post between Verizon’s public policy guy and a cable lobbyist. There have also been some interesting discussions among public policy followers, with some, like James Gattuso, buying Verizon’s take that this is bad for consumers, and others, like Karl Bode, noting that Verizon’s spin on this appears to be pure “nonsense.”

The reality appears to be somewhere in-between. Verizon is clearly overplaying the situation in claiming that the FCC is saying that it cannot market to customers who have chosen to leave Verizon for cable. That’s not what this argument is about, and James Gattuso is incorrect in suggesting that the “question at hand” is really about whether or not Verizon can contact customers who have agreed to switch and ask them not to switch. That’s certainly the way Verizon wants you to think about it, but that wasn’t really the question. No one is saying that telcos (or cable companies) for that matter, can’t try to convince customers not to switch. What the FCC has said is that Verizon cannot abuse its position to block the switch while it tries to convince customers not to switch. That’s what Verizon is doing. When it gets the request from the cable companies to switch, it basically goes into procrastinate mode, even though it’s required to process the switch. It codes the switch request as a “conflict” which gives it extra time to resolve the “conflict” before obeying the switch request.

That’s not the same as simply asking the customer not to switch. It’s abusing the technical process for marketing purposes. The FCC has not said that Verizon (as Verizon claims) cannot try to entice customers to stay, or to win back those customers who have decided to leave. All it has said is that Verizon cannot stall and block the change request, once it’s been placed, in order to try to win back the customer before the change is made. Once the customer has committed to the change, Verizon should be required to process it, rather than block it. So, don’t buy the story about Verizon no longer being able to win back customers or entice them with reasons to stay. That’s got nothing at all to do with this decision.

Update: Gattuso responds. I still think he’s buying Verizon’s spin on this ruling. Verizon is falsely claiming that it cannot market to customers who have decided to leave. That’s false. They simply cannot abuse the fact that they have access to certain information from the group that has to make the change to market to them. They can still market to them through other means. In other words, Verizon’s complaint here does not fly.

Filed Under: cable companies, customer retention, fcc, number portability, telcos
Companies: verizon