FCC May Regulate Uses of Customer Data

The FCC is expected to begin a review of how cable operators and phone companies use customer data in their efforts to woo subscribers away from competitors.

The enforcement bureau at the Federal Communications Commission is expected to recommend the regulatory agency review rules and policies governing how phone companies and cable operators use customer data in their efforts to lure subscribers away from their competitors. At the same time, the enforcement bureau is recommending the regulatory body to reject a complaint from Verizon that cable operators make it too difficult for customers to switch away from cable services.

At issue is the tactics phone companies and cable operators use to lure customers from one service to another—and the techniques the same companies employ to "retain" customers seeking to switch to a competing service. Phone companies, for instance, will accept a disconnect notice from a rival operator on a customer’s behalf, facilitating the transition to a new service. Cable operators, conversely, require customers contact them directly to cancel service, which not only makes more trouble for the customer, but also enabled the cable operators to make special offers and promotions to encourage the customer to stick with them. Verizon also says cable operators have been dragging their feet on switching customers who insist on going through the process.

The FCC’s enforcement arm does not believe that cable companies’ tactics violate existing regulations, but is recommending the FCC review all rules regarding service switching and use of customer data to create a consistent playing field—especially since cable and phone operators are now routinely offering multiple services (voice, data, and video) as a single bundled service. "Given the prevalence of intermodal and bundled service competition, we recommend that such an NPRM [Notice of Proposed Rulemaking] conclude that customer retention marketing practices be made consistent across all platforms," the FCC wrote in its recommended decision.