Verizon Claims First Amendment Foul

[cablewithaview]

Verizon Communications Inc. (NYSE: VZ - message board) isn't about to let a little overturned ruling at the Federal Communications Commission (FCC) spoil its ability to win back home phone subscribers who have defected to cable.

In a petition filed Friday (June 27) with the U.S. Court of Appeals for the District of Columbia, Verizon is seeking to stay a decision handed down late last month by the FCC, which found that the telco was using illegal methods to retain phone customers. (See FCC Orders Verizon to Dial Back Win Back Tactics.)

That majority vote (FCC Chairman Kevin Martin was the lone dissenter) overturned an earlier agency Enforcement Bureau staff decision. (See FCC Sides With Verizon .) Verizon noted in the document that it was forced to seek court action after the telco attempted to seek a stay directly with the agency, but the FCC failed to act by June 26.

Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC - message board), and Bright House Networks filed the original complaint with the FCC in mid-February, holding that Verizon was trying to lure phone customers back while number ports were still pending. (See MSOs Sue Verizon.)

In its court brief, Verizon argues that it does not delay the pending cancellation process, but contacts the customer "typically by overnight letter, to encourage the customer to call Verizon." If that call comes, the telco then proceeds to relay info about service packages, pricing, and "incentives," such as gift cards. [Ed. note: You know you're doing a great job when you have to pay customers to stay.]

The telco also argues that the FCC order violates Verizon's First Amendment rights and runs afoul of section 222(b) of the Communications Act of 1996, which prevents telecom carriers from using proprietary information obtained from another carrier for its own marketing efforts. Verizon argues that its role in the local number porting (LNP) process is not a "telecommunications service" as defined by the Act.

"The resulting cease-and-desist order, which bars Verizon from engaging in – and customers from receiving – truthful speech, is contrary to the statue and violates the First Amendment," the telco claims, adding that cable operators are allowed to use "equivalent" retention marketing when a customer cancels video service.

Cable operators have countered that it's an apples and oranges argument because Verizon doesn't depend on a porting handshake with the incumbent cable operator when customers defect to FiOS TV. (See Apples & Oranges and Verizon Asks FCC for FiOS Help.)


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