Verizon Loses Customer Switching Suit

A U.S. appeals court has upheld a ruling that Verizon can't use competitors' proprietary information to try to prevent customers from changing to other services.

The U.S. Court of Appeals for the District of Columbia has upheld a ruling that prevents Verizon Communications from using competitors’ proprietary information in marketing efforts designed to prevent customers from leaving Verizon services to switch to services offered by the likes of Comcast, Bright House, or Time Warner Inc. Verizon had appealed the initial injunction, arguing it should be allowed to offer its existing customers better deals on phone and other services if they contacted Verizon about “porting,” or switching their services and phone number to another carrier.

Cable operators argued that Verizon’s actions violated federal law by using their proprietary information for marketing purposes. The appeals court agreed, noting the law had been enacted to ensure the carrier losing a customer handle the transition to a new carrier in a neutral and unbiased manner.

Verizon lamented the ruling, saying consumers will now have less information available to them when choosing between carriers. Cable companies and the Consumers’ Union praised the decision, saying that Verizon’s efforts at retention marketing meant consumers generally got fewer competitive offers.

About a year ago, Verizon had petitioned the Federal Communications Commission to make it easier for phone operators like Verizon to woo video customers from cable companies; it argued the cable companies dragged their feet when transitioning subscribers off their services. The FCC eventually sided with the cable operators.