FCC Nails Verizon

In one of the poorest kept secrets at the FCC in recent years, the agency officially sanctioned Verizon June 23 for attempting to keep customers from porting their telephone numbers to another carrier.

According to the FCC order, Verizon used proprietary information such as customers' telephone numbers and porting requests to blitz potentially departing customers with offers to stay at AT&T, including deep discounts and American Express reward cards. The cable companies complained the tactics were hurting their business of luring customers to their own voice offerings.

Under the June 23 FCC order, Verizon is now prohibited from contacting customers during the four-day period allowed for porting numbers from one carrier to another.

For FCC watchers, the decision was an important one, not for ruling against an incumbent landline carrier (although that is rare indeed), but for handing FCC Chairman Kevin Martin his first defeat as head of the agency. In the end, even Martin's two fellow Republican members voted against Martin's idea to let AT&T continue its "retention marketing" program.

"Carriers are free to initiate customer retention marketing campaigns before the consumer gives the order to switch from his or her current phone provider to a new provider," said Republican Commissioner Robert McDowell. "Under law, carriers are also permitted to launch 'win-back' campaigns after consumers have switched."

The ruling was a good one for consumers or businesses seeking to change carriers. However, more significantly, the ruling may also reflect the first changing winds at the FCC with a new president (Republican or Democrat) taking office next year. Martin's last days may see a few more defeats.