FCC scolds Verizon on landline retention practices

In a 4-1 vote on Friday, the US Federal Communications Commission said it has banned Verizon from using cable companies' customer data in efforts to persuade their customers not to switch.

Retention practices are nothing new for the communications industry. Most commonly, a wireless company will offer its customer special deals in return for remaining with it, after the customers informs the company of his intentions to switch.

However, Verizon was doing this a bit differently. When it was receiving notice as part of the local number portability process to transfer numbers over to another carrier (in this case the cable companies) Verizon was apparently attempting to persuade customers to cancel the switch.

Cable operators took issue with the practice, and asked the FCC to intervene. The original complaint was filed by Comcast, Time Warner, and others back in February of this year.

The FCC had until midnight Friday to make a ruling on the subject, and Friday afternoon a majority of the commissioners had voted for it, with Robert McDowell taking the lead. He argued that the porting data contained private information, which Verizon was not permitted to use as part of its marketing efforts.

"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," he argued.

Verizon had argued that the information was not proprietary since the customer was previously its own. It should also be noted that companies are permitted under FCC regulations to launch "win-back" campaigns after he or she has switched.

What's apparent from this ruling is that the FCC does not see the interregnum between the notification of the switch, and its subsequent completion, as a period where any retention campaign can be launched.

But in a dissenting opinion, FCC Chairman Kevin Martin challenged that notion. "I am concerned that today's decision promotes regulatory arbitrage and is outcome driven; it could thwart competition, harm rural America, and frustrate regulatory parity. Therefore, I must dissent from today's decision," he wrote.

Martin alluded to the practices of the cable and satellite providers, where no such "hands-off" periods seem to exist.

While Verizon had not responded to the decision directly, in March it told the FCC that video services should have a similar policy for switching television providers as phone services do now. Essentially, the new provider should initiate the disconnect request and not the customer his or herself. A lack of such regulations puts it at a competitive disadvantage, it argued.

The FCC has not made any kind of public response on that request.