Verizon Asks FCC to Help Ease Switches From Cable
Thursday, March 27, 2008
Verizon Communications asked the Federal Communications Commission yesterday to take steps that would make it easier for cable subscribers to switch to Verizon's competing subscription-television service.
Verizon said in its petition that cable customers trying to switch providers are bogged down by cumbersome cancellation processes and are often required to contact the cable operator to cancel their service when signing up with a new provider. Verizon, which recently expanded into video services through its Fios fiber-optic network, asked the FCC to issue a declaratory ruling that would allow its video service to disconnect service with a cable provider on behalf of a customer.
The move was another skirmish in the battle between telecommunications and cable companies, both of which are trying to become the single source for bundled Internet, phone and paid television services.
Verizon's petition follows reports that Comcast and Time Warner might invest $1.5 billion in a high-speed wireless company that would be operated by Sprint Nextel and Clearwire. This would give the cable giants inroads into the cellphone business, putting them in position to better compete with Verizon and AT&T, the industry leaders.
By making it tougher for consumers to switch their television services, cable companies are giving themselves an advantage over the upstart Fios business, Verizon said in its petition. "The process to switch providers is more cumbersome for consumers. This significantly complicates the process of switching video providers, thereby entrenching the cable incumbents' dominant market position."
The cable industry fired back, calling Verizon's accusation hypocritical. The cable firms said Verizon Wireless makes it difficult for subscribers to switch to a new service provider.
"Verizon's fairy tale complaint is a lame attempt to deflect criticism from its years-long illegal practice of misusing proprietary information to prevent consumers from switching to a new phone provider," said Brian Dietz, a spokesman for the National Cable and Telecommunications Association.
Analysts said yesterday's filing shows how the distinctions between the telephone and cable companies are no more.
"At the heart of all this is . . . the fact that the boundaries [between what] phone companies provide and cable companies provide are getting blurrier and blurrier," said Craig Moffett, an analyst at Sanford C. Bernstein & Co.
Verizon is aggressively rolling out its Fios fiber-optic television service and plans to spend $23 billion on that project through 2010. It also paid $9.5 billion in the FCC's recent 700-megahertz auction for wireless spectrum.