Verizon lost one at the FCC. Cable competitors brought a complaint against Verizon regarding some customer win back tactics being used by the phone giant. The complaint alleged that upon receiving a telephone number porting request to a cable competitor, Verizon would contact the customer in question and try to “win them back.” Cable companies claim such tactics were not only unfair, but illegal. The FCC issued a Memorandum Opinion and Order against Verizon and in support of the cable companies complaint. It's somewhat of a surprising development, considering the FCC's own enforcement bureau came out with an opinion siding with Verizon. Apparently several FCC commissioners were not impressed with that opinion.

Verizon did fire back against the original complaint, and issued a complaint of their own regarding the process to switch video service providers. Verizon claims that the process for video switching requires the customer to initiate action with the existing provider, whereas a telephone switch does not. Both points seem to be valid. Whatever the process, it should be comparable and equal. Both telcos and cablecos should have an equal chance to “eat each others lunch.”

The FCC offered its opinion in the recent spat between cable MSOs and Verizon. Several cable companies lodged a formal complaint with the FCC claiming Verizon was illegally trying to stop customers from defecting to cable triple play offers. The complaint alleged that once Verizon got notice of a telephone number porting request, they aggressively pursued that customer with offers to keep them from switching phone service providers. The cable industry argued the practice is against the spirit of FCC competition guidelines, and may even be illegal. Verizon argues that they are doing nothing illegal, and are simply aggressively competing in the marketplace.

Apparently, the FCC agrees. In the Enforcement Bureau’s recommendation, the FCC, while suggesting Verizon’s retention marketing practice may need more study (and even recommends a Notice of Proposed Rulemaking on the subject), sees this type of debate as healthy for consumers and the competitive marketplace. “In fact, one could argue that, when the customer’s existing provider offers to lower prices or expand services to prevent the customer from switching providers, the customer benefits. This type of aggressive competition to win and to keep customers can result in lower prices for consumers, the introduction of new services and technologies, and improved quality of service as carriers compete in the open marketplace,” says the FCC Enforcement Bureau. They go on to say, “In fact, today’s competitive marketplace for bundled services, and intermodal competition of providers of services within the bundle, may reduce the need for regulation. It is reasonable even to ask whether further deregulation would allow for even more vigorous competition for customers and bring with it the associated benefits of such competition.” In the end, the recommendation rules for Verizon and says the cable company’s complaint and argument “don’t hold any water” in the context of the current guidelines and regulations. Checkmark Verizon.

The FCC has banned exclusive agreements with apartment building property owners and telecom carriers. These agreements have been common and basically allow a carrier to become the exclusive provider for telecom services in places like apartment buildings, providing a huge barrier to entry for competitors. The order also claims to rescind any existing exclusivity agreements. The FCC issued a similar order for cable television agreements back in 2007.

It’s too early to get a reaction from the industry, but consensus is they won’t be happy. This new order affects both telecom and cable companies, since they both now provide telecom services. In fact the cable industry will probably be more upset because they have been more active with apartment building exclusivity deals, especially with triple play bundles. The next few days and weeks will surely see less than favorable reaction.