On June 20, the Federal Communications Commission, in a split decision, ruled that Verizon was unfairly marketing to customers who had decided to drop Verizon phone service in favor of service from competitors, such as Comcast, Time-Warner and VoIP services.
Although telecommunications vendors, Verizon included, often use questionable tactics to gain new customers, the FCC decison strikes me as incomplete -- depending on how this plays out in the marketplace.
First, let's look at the track record. Verizon (and its brethren) make strong come-on statements with teaser rates with little or no indication of what the follow-on rates will be. They create situations in which it is difficult to compare competitive offerings, and they sometimes require customers to sign long-term contracts to get the advertised rates.
In general, they cloud the information in their marketing to confuse the customer and make it difficult or impossible to find key information on their Web sites. If you have ever tried to use Verizon.com to find out what your FIOS cost will be after the introductory period, you'll know what I mean.
In case you think I'm unfairly battering Verizon, I feel the same way about its competitors. Comcast and the others use similar tactics.
The FCC ruling says Verizon cannot offer "please come back deals" to customers who ask to switch away. Yet it doesn't restrict Comcast from doing the same thing. When I recently switched from Comcast to Verizon FIOS (a decision I might reconsider), Comcast offered $300 in incentives if I came back within 30 days.
The big problem with the Verizon offer is that it apparently has been stonewalling the switchover process. According to the Wired Blog, when the company receives a request to switch a phone number to a competitor, it puts the changeover in "conflict" mode, which requires the other vendor to fix the conflict before changing the account -- thereby gaining time for Verizon to market to the customer to woo him back. This delay hurts the competitor and the customer -- and would make it appear that the problem is with the new vendor.
While most people would agree that creating a bogus conflict to stall the change is unfair practice, I don't think the company should be asked to not try to woo back the customer. The FCC simply should require it to do it in an ethical way. Let it send aggressive pricing offers to customers. But make it disclose the hidden costs.
If a vendor is alerted by the changeover process that it is losing a customer, it should be allowed to defend itself from the attrition. Too many times, vendors give better deals to the customers they don't yet have instead of to their current customers.
Using the recent vote as a starting point, the FCC should turn its attention to the full gamut of practices that are being used by telecommunications companies and other services that make it difficult to know what you're going to pay before you start the service, and that make it difficult to compare without great hassle.
It's probably a good thing that the stall tactics were addressed by the FCC, but it's also good that it was a split decision. Because that gives me hope that the FCC will decide to take on the bigger issues.