There are limits in trying to win back customers, as Verizon (News - Alert) has learned. The Federal Communications Commission (FCC) ruled that the carrier broke the law by using the proprietary information of other carriers that it receives while porting local numbers to them in a customer retention campaign. The FCC (News - Alert) said that Verizon’s actions had violated consumer privacy protections in the regulations.

 

The decision also marks another battle between time-division multiplex circuit-switched voice carriers and voice over IP suppliers, and another victory for the latter. Verizon had been attempting to keep customers that had signed up with VoIP providers Bright House Networks, Comcast, and Time Warner (News - Alert) cable.

 

The FCC said that beginning around the summer 2007, Verizon started a program of retention marketing directed specifically at retail customers who are in the midst of the carrier-changing/number-porting.

 

Verizon then sometimes within 24 hours of receiving the notifications that customers are about to change -- contacts customers on the lead list, by express mail, e-mail, and/or automated telephone message. Those contacts encourage customers to remain with Verizon, offering price incentives such as discounts and American Express (News - Alert) reward cards. Verizon conducts this marketing while the number-porting request is still pending, i.e., before the new providers has established service to the customers.

 

If Verizon is successful in persuading a customer to cancel their order with the new service provider, Verizon cancels the internal service order relating to the port request, and Verizon’s systems issue a “jeopardy notice” to the provider that submitted the port request. Verizon also puts the new provider’s port request “into conflict”, which cannot be overridden by the new provider. If the new service provider persuades the customer to switch after all, it can either seek resolution of the conflict or submit a new local service request.

 

The FCC made it clear that Verizon (and other carriers), have every right to retain their customers, and to win back those that they lost once these patrons have switched over. What carriers cannot do is market to them while in the process of changing, using proprietary information.

 

“[Our] action underscores long-held Commission policy that using proprietary customer information for marketing efforts cannot take place during the window of time when a customer’s phone number is being switched to a new provider, “wrote FCC commissioner Robert McDowell (News - Alert).

 

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Brendan B. Read is a TMCnet Contributing Editor.