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

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.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    somedude, Jun 23rd, 2008 @ 10:07pm


    i switched from Verizon to Vonage almost four years ago, and to this day i get offers every two weeks in the mail to come back. the way they made it sound, that would stop, which would be ridiculous. however, the issue of them actually holding up the transfer? that's pretty underhanded and should be stopped.

    reply to this | link to this | view in thread ]

  2. identicon
    Jiminy, Jun 23rd, 2008 @ 11:40pm

    Re: Verizon

    I've seen some of Verizon's tricks first hand, they play dirty. My favorite is when they call to ask you not to leave, and you say no, so they cancel your internet when your number ports out knowing full well that Vonage requires it.

    Then, when you call back (somehow) because you have no internet (which means no telephone as well), they tell you it would be four days to get just the internet turned back on, but if you want internet and phone, they can have a tech out tomorrow. How is that fair, or even legal?

    reply to this | link to this | view in thread ]

  3. identicon
    Brad Eleven, Jun 24th, 2008 @ 3:35am

    Jiminy writes about Verizon tactics, which seem slimy at best. I think they're right down there with crooked politicians, or to paraphrase Led Zeppelin's profound wording: "Their time is gonna come."

    reply to this | link to this | view in thread ]

  4. identicon
    erinol0, Jun 24th, 2008 @ 5:30am

    Verizon wants to keep customers...

    The real question is why is Verizon waiting until customers switch to try to keep them? Why not just offer better service and pricing so that their customers do not want to leave in the first place?

    reply to this | link to this | view in thread ]

  5. identicon
    PRMan, Jun 24th, 2008 @ 7:42am

    Bah! Amateurs!!!

    That's nothing compared to the way AT&T treats their former customers! I had to write the FCC and the California Public Utilities Commission before they would switch my number to Vonage.

    reply to this | link to this | view in thread ]

  6. identicon
    Kraw, Jun 24th, 2008 @ 10:16am

    when I left ATT for Vonage, my number was ported in about a week. I had no issues. That was about 18 months ago

    reply to this | link to this | view in thread ]

  7. identicon
    Jo Behlmann, Jun 26th, 2008 @ 8:07am

    Alltels' Bad Business Practices

    I was in a contract with Alltel & paying my bills on time, in full, every month, even though they NEVER sent me a single statement. I went into the store & stood in line on crippled legs, in great pain for 30 minutes each month & waited in line to pay my bill. Then an agent told me I was over my minutes one month , but if I upgraded to "my circle" plan the overage would be covered for only $10.00 more. I tried to enter my numbers online & was denied access to that plan even with tech assistance. A supervisor said maybe because of unpaid bills, but I said "Impossible" and he said "I know I see you've paid all your bills on my computer screen...we're having trouble with our" my circle" program right now". I tried another time and invested a total of three hours trying to get into this great plan & was DENIED, yet the multi-million advertising campaign continued and goes on even today. I know there have been class action lawsuits against Alltel about this issue. They are trying to burn me for an early termination fee even after charging me more than double the agreed amount of the monthly amount. I am a 20 yr. stroke survivor on a strict fixed income. If I had really gone over my allowed minutes they should provide proof of tht in a itemized statement. They had not even offered proof that I made one call ,let alone too many. If they had given me the 5 numbers with unlimited calling, there would have been no problem! SO I REALLY THINK THEY SHOULD DROP THESE CHARGES BECAUSE THEY COULD NOT DELIVER THE PRODUCT THEY SO PROUDLY ADVERTISE AND THEIR AGENTS ARE LIARS!!!

    Jo Behlmann

    reply to this | link to this | view in thread ]

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