New York is extremely lucky that it has not joined the Chump Parade and totally deregulated its telecom sector, although apparently it has such a proposal on the table. I say this because New York now faces one of those quintessential local problems that is much, much better handled at the state level than on the federal level.
It involves Verizon’s Voice Link product. As regular readers know, That Darn Voice Link is the summer replacement series for Game of Sprint — the Sprint/Softbank/DISH/CLWR drama which is now winding down.The plot for That Darn Voice Link is fairly straightforward. Scrappy little Voice Link, the daughter of the highly successful Verizon Wireless family, must get along with curmudgeonly old Uncle Copper while learning the family business and replacing Uncle Copper as the landline substitute. Will Voice Link provide a valuable alternative service? Or is Voice Link not yet ready for her big debut? Hijinks ensue!
In this week’s episode, Voice Link may have been selling herself a little too aggressively to some problem customers up in the Catskills. The State Attorney General thinks Voice Link crossed the line, but Voice Link insists she was just being helpful.
So is Voice Link going to get in trouble? Will the Federal Communications Commission get involved? Will this hurt Voice Link’s big debut on Fire Island?
Probably not. But it does underscore the very real question of what does it mean for Verizon to offer Voice Link as an alternative service while still genuinely offering copper, and stresses the importance of state jurisdiction — because there is no way the FCC can handle this sort of one-off local practice thing effectively.
More below . . .
All kidding aside, the question presented here is a fairly important one. To summarize for those new to the issue. Voice Link is a product Verizon is now selling as an alternative to traditional copper landlines. Voice Link is a box that transforms your house into a giant cell phone on the Verizon Wireless network. Verizon thinks Voice Link is a totally cool product that can meet the needs of subscribers where the copper is crappy. (Mind you, if the Verizon Wireless is also crappy, this will not be a step up from a customer perspective.)
Switching to Voice Link also saves Verizon heapin’ piles of money, because copper can be a totally expensive pain in the neck to service and maintain. This is especially true for “seasonal” customers — folks with summer homes in the middle of nowhere who shut off the service for most of the year. Verizon has to maintain the line, but they only get a few months of revenue for it. Such is the sad life of the incumbent local exchange provider (ILEC) and its carrier of last resort obligations. *sigh*
On the flip side, there are plenty of reasons people may not want to replace copper with Voice Link. As noted by my Public Knowledge colleagues over here, Voice Link does not do many things that a traditional landline does (because Voice Link is part of the cell phone network, it works like a cell phone). Bruce Kushnick has a straight up comparison list here. So, like Cymbalta or Cialis, Voice Link may not be right for you.
From my perspective, Voice Link is a product like any other product. There is nothing intrinsically bad or good about it. If it meets a customer’s needs, great! If it doesn’t, the customer should still have the option to get copper (or, better, fiber). Hence my considerable annoyance with Verizon for refusing to rebuild the copper networks on Fire Island and N.J. Barrier Island. But again, my concern there is that the people in the area devastated by Sandy are not being given a choice. It is one thing for a customer to decide to go with a service that does not allow things like calling cards or work with Life Alert systems because the customer doesn’t use those things and is tired of the copper line going down. It is another thing to tell customers “Sorry, you know that whole ‘public utility’ thing where you had rights and stuff? Turns out, not so much. Sorry you no longer have DSL. Enjoy our faster but more expensive LTE with the ferocious data cap instead (requires separate data contract with Verizon Wireless, not sold with Voice Link).”
What’s Going On In the Catskills?
The summer homes of the Catskills (or, as it was known in my Grandfather’s day, the Borscht Belt) are exactly the kind of place where Verizon would love to get rid of copper and use Voice Link. They are a pain in the neck to service, requiring sending a technician on a multi-hour truck ride from local HQ. The lines cover lots of forested territory where copper perpetually gets corroded from the damp or knocked down by storms when tree limbs fall on it. Voice Link would mean just servicing the towers. Big money savings!
Furthermore, this is what stinks (from Verizon’s perspective) about being the “carrier of last resort.” Do cable guys have to service out-of-the-way low rate-of-return places like the Catskills? Nooooooo!!!!! They get to cherry pick the urban regions and the big hotels while poor little Verizon, the public utility and carrier of last resort, has to provide a copper line to any single home in the service territory that asks for it. Then they have to shut off the line at the customer’s request during the off season, losing months of revenue. grumble grumble grumble. Sooooo not fair. Sure, this was a good deal for Verizon back in the regulated monopoly days. But now it just sucks out the revenue when they could be making 100% profit margins on their wireless service. Stupid consumer protection laws. Stupid carrier of last resort (COLR).
OTOH, the Catskills is also exactly the kind of place where customers are much more likely to want to stick with copper. Cell reception in the mountains if highly variable as a function of weather and terrain — even where the provider has deployed an adequate number of towers. And where population density is low and the population is seasonal, it is a strong temptation to carriers to skimp on tower coverage. So cell service in the region can be spotty and unreliable. In addition, folks up there may want to keep their fax machines or whatever.
So this naturally raises the question “how hard can Verizon push customers to switch?” Under the terms of its NY State Tariff, Verizon can offer Voice Link as an alternative to copper as long as it still offers copper as well. On one end of the scale, it seems pretty clear that it should be totally OK for VZ to say: “we’re happy to send a service tech out, but based on your line history, the line is likely to go down again. Have you heard about our replacement product, Voice Link?” OTOH, it is pretty clear that it would violate the terms of the tariff to say: “No, we don’t really do copper anymore. I can give you Voice Link and have someone out there today. But if you insist on copper, I gotta wait until Ed gets back from vacation next month, and when he gets back he’s gonna be backed up for awhile. So do you want Voice Link today? Or do you want me to schedule you for a service appointment for Labor Day?”
Of course, there is a whole range of possibility in between. Which brings us to this week’s episode of That Darn Voice Link. As reported at Stop the Cap, the New York Attorney General — based on info provided by Verizon customers in the Catskills and Verizon employees represented by Communications Workers of America (CWA) — accuses Verizon of crossing the line between merely “offering” customers Voice Link as an alternative to actively discouraging customers from taking copper. The AG has filed an emergency complaint with the New York Public Service Commission (NYPSC) to get Verizon to stop. Verizon, for its part, says it has done nothing wrong and that it has always honored a customer request to service the copper of the customer decides not to go with Voice Link.
The Real Lesson: Thank God For State Jurisdiction.
This is exactly the kind of very important but nit-picky and highly localized question you want handled at the state level. Happily for New York, the NY PSC has not become one of the many states that have joined the Chump Parade and totally deregulated their phone system. If New York eliminated its COLR regulations, as a bunch of other states have done, then Verizon would not need to provide service at all. You would take Voice Link and be grateful for it — peasant. As it stands, New York has a Public Service Commission that can investigate and decide based on local evidence and local factors whether anything needs to be done. For example, even if the NY PSC decides Verizon did not violate the terms of its tariff, it might want to provide some guidelines to make sure that these disputes about what kind of sales tactics are permissible do not come up again.
While there is no question that the FCC would have jurisdiction over this pursuant to its general authority under Section 201 and Section 202 authority, can you imagine trying to resolve stuff like this at the FCC? For all 50 states? The only way the FCC could handle it would be to come up with one of those stupid standardized scripts that everyone hates — like the kind you get when you want to change your phone service. “I’m going to read this to you and record it, so please answer yes in the appropriate places if you want to switch service, blah blah blah Ginger.” While those can certainly be useful sometimes, they are not an ideal solution.
Worse, can you imagine the FCC trying to resolve individual complaints? The backlog would be ridiculous. You would need to hire a hundred new staffers to handle the volume, which is so not gonna happen.
Mind you, given the live controversy around Voice Link and the whole shutting-down-the-phone-system/PSTN Transition Thing, this is the kind of thing the FCC needs to be aware of — especially as it considers how to set up pilot programs to test copper-to-wireless transition. But the real action for something like this is in the states.
Which is why states really need to avoid passing laws that take them out of the game. I made this point back awhile ago about how California, the largest state by population had pretty much abdicated it’s ability to decide this sort of stuff for itself by passing that dumb ass law last summer. 24 other states have passed the same law and joined the Chump Parade.
As noted above, New York is actively considering passing a similar law to deregulate VOIP and take itself out of the game. Hopefully, this week’s episode of That Darn Voice Link will persuade folks in Albany (and elsewhere) that local oversight of the phone system remains a good idea — regardless of the technology used.
Stay tuned . . . .