Verizon Loses Phone Win-Back Challenge

Appeals court denies Verizon's attempt to overturn an FCC order that prevents the telco from using some controversial retention tactics

Jeff Baumgartner, Senior Editor

February 10, 2009

2 Min Read
Verizon Loses Phone Win-Back Challenge

In a victory for cable, an appeals court has denied the latest attempt by Verizon Communications Inc. (NYSE: VZ) to overturn an Federal Communications Commission (FCC) order that prevents the telco from engaging in some controversial phone service retention tactics.

Verizon filed its petition with the U.S. Court of Appeals for the District of Columbia, seeking to stay an FCC decision finding that the telco was using illegal methods to keep phone subs who were trying to switch to a competing cable service provider. The FCC handed down its ruling (former chairman Kevin Martin was the lone dissenter) only after the Commission's Enforcement Bureau had made an earlier recommendation that the agency deny the original complaint by cable operators about Verizon's win-back tactics. (See Verizon Claims First Amendment Foul, FCC Orders Verizon to Dial Back Win Back Tactics, and FCC Sides With Verizon .)

The original complaint, filed last February by Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and Bright House Networks , argued that Verizon was using proprietary info unfairly to lure phone customers back with new service packages and pricing, and plying them with other "incentives," including gift cards, while number ports were still pending. (See MSOs Sue Verizon.)

Verizon argued in part that the FCC order violated the telco's First Amendment rights, pointing out that cable operators were allowed to use "equivalent" retention marketing when a customer cancels video service. The cable operators said Verizon's argument didn't hold up because the telco doesn’t depend on a porting handshake with the incumbent MSO when customers defect to FiOS TV. (See Apples & Oranges and Verizon Asks FCC for FiOS Help.)

Predictably, Verizon and the cable guys had completely opposite responses about how today's ruling today would (or wouldn't ) protect consumers.

National Cable & Telecommunications Association (NCTA) president and CEO Kyle McSlarrow said the ruling would protect consumer rights when they switch to a new phone provider, claiming it "permits even greater numbers of consumers to seamlessly join the millions of other Americans who now enjoy the significant savings and benefits provided by our industry's competitive digital voice services."

"This looks like a loss for consumers, who now have less information available when choosing between different competitors," countered David Fish of Verizon. "By denying consumers information, the FCC's order denies them choice." Verizon, he added, is reviewing the order.

— Jeff Baumgartner, Site Editor, Cable Digital News

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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