THE BLOG
07/02/2014 01:05 am ET Updated Aug 31, 2014

How Verizon's Affiliates Took over this Broadband, Internet and Phone Bill.


Part VI,b in the series based on the new report "It's All Interconnected".

Go to questions, Part VI,a

See the Verizon Bill Full Size

Here are the Answers.

1) How many lines does this customer have?

Answer: A) This is a one line account, though there are a host of items on this bill that would suggest otherwise.

2) What is the 'Total Cost" this customer is paying Verizon for this month's charges?

Answer: D) This customer is paying $114.67 this month.

3) How many Verizon affiliate companies are charging this customer?

Answer: C) There are 5 companies offering service of which Verizon New York, the company the customer believed to be the phone company he was dealing with, is not even mentioned.

a) Verizon New York
b) Verizon Online
c) Verizon Business
d) Verizon Enterprise Solutions
e) Verizon's affiliate for web hosting, Intuit.

4) How many services does this customer have?

Answer: This was a trick question. I'll get back to this.

5) What do these charges, with $0.00, mean?

Answer: D) Who knows?

Discussion

This is actually a sad tale of customer overcharging. This small business grocery store ordered a basic, POTS, (plain old telephone service), line for his ATM machine, which should have cost around $30.00 a month.

This Customer is Paying for a Number of Services He Did Not Order.

The charges on the bill are for local and long distance, broadband with Internet and web hosting. However, the customer didn't have a computer at the store so didn't/couldn't use any of these other services and didn't need long distance for the ATM machine.

This customer was overbilled about $85.00 a month on just one line -- $1020.00 a year.

And this customer was 'rammed'-- i.e., the affiliate companies --Verizon Online, Verizon Business, Verizon Enterprise Solutions (which offers long distance) and with Intuit, took over his 1 line account and added charges on the bill he did not order, want need, or could even use. And this is different than "cramming", where 3rd parties that are not related to Verizon place charges on the customers' bill. In fact, the customer was also 'doubled-billed' on the 'Intuit' web hosting.

Charging for Long Distance Is Standard.

On the top left of the bill it says "includes $13.00 for long distance on all lines included in the bundle".

This bill and most, if not all 'double' and 'triple play' bills with phone service are charging a separate fee for long distance -- which most people think has been removed years ago in this Digital Age.

The "$0.00"

If you notice, one of these charges is for 'dial-tone', which should have been the basic "POTS" phone service, but it is clear that this customer's services were transferred and Verizon Business is most likely controlling the account. However, because it also has 'touch-tone' for $0.00, which has not been a separate charge since the 1990's, it is clear that no one has bothered to actually clean up the bills for at least 15 years.

Truth-in-Billing? Nah.

In our last accounting from a survey of Verizon New York and New Jersey bills, we found over 190 different truth-in-billing and truth-in-advertising issues. A simple example -- there is no clear place that explains this is a one line account or that there were 5 companies offering service, with the primary company, Verizon New York, not even mentioned.

But we can go on and on. Does this customer have 'calling features'? There is no listing of the features though the 'bundle' claims that they exist. And with the discounts, promotions and other information, there is no clear way to understand the actual costs. My personal favorite was this -- a description of the promotion where there is no explanation and none could be found on the Verizon web site at the time this bill was issued.

2014-07-02-promotionverizonbill.png

There is no mention of the speed of the service (which is DSL), and don't get me started on the multitude of issues surrounding the taxes, fees and surcharges, which comes to $18.10 extra.

How Does It Relate to Net Neutrality? The Control of the Wire by Verizon's Affiliate Companies Causes Net Neutrality.

So what did we learn from this? While we will be addressing a number of other issues about Verizon's billing practices in the future, there are a few specifics we'd like to highlight.

Hiding in Plain Sight -- First, multiple telecom auditors and experts couldn't actually figure out parts of this bill, but the consensus is that there are multiple Verizon subsidiaries that are working together and have taken control of this customer's bill and account. They control the long distance, local, broadband and Internet services, and in this case worked together to overcharge this customer.

But, how would anyone know? There's no information about these companies interactions and the bills are unreadable-- most think it's just "Verizon".

Transfer of a Basic Service Utility Customer to More Expensive Services Via Other Affiliate Companies

Moreover, this customer appears to have been transferred from being a Verizon New York utility customer to another affiliate, Verizon Business, without their permission or knowledge.

  • This customer's service most likely is no longer counted as an 'access line'. This helped to raise rates as they claim they are losing lines and decreases the lines for policy reasons at both the state and federal government.
  • Verizon's largest competitor is Verizon. These services actually 'compete' with the Verizon New York services, even though they are controlled by the parent company. The phone service is not the utility service but part of the Verizon Business account, it would appear, and the 'bundle' competes with the price of stand alone local service.
  • Also, Verizon's FiOS phone service competes with regular utility basic service, while FiOS broadband and Internet, which is based on fiber, competes with DSL, which uses copper.

In short, different Verizon subsidiaries compete with the utility products and the utility always loses.

No Competition -- This bill reveals that there are no serious local service competitors. If there was competition, a competitor would probably have pointed out just how Verizon had taken advantage of this customer and the customer would have had lower rates.

Control Over Multiple Communications Services and the Wire Causes Net Neutrality. -- It is this control of the wire and all of the services by the affiliate companies that causes Net Neutrality issues. Think about it. The speed of your service as well as your connection to the Internet and the actual wire are all being controlled by one company, who has given their own affiliate companies special advantages and perks that no other competitor would have.

For example, there is no competition for just 'local service'; the 'bundle' of services are all and only Verizon's products (or their 'partners'), and your ability to get online is based on this wire -- or the cable wire and the companies' bundles.

And, as you can see, they also manipulate the data, which directly impacts the policy implications of everything from Net Neutrality to the IP Transition.

I can hear someone in the back going "But I'm wireless. Why should I care?" Wireless, too, is controlled by the incumbent phone companies' wire, known as 'special access'. In the next few articles we will discuss these 'hidden' networks. Verizon' special access wired services not only give perks to their own wireless affiliate, Verizon Wireless, but it also controls the competitors' services. It controls the costs to offer service, the price they can charge and even speeds they can offer as special access services are monopoly products controlled by the incumbent phone companies, Verizon, AT&T and Centurylink.

But this is only one part of the 'affiliate' issues and the 'control of the wires' story.

Part VII asks: What happens if we attempt to track the monies this customer is paying with revenues, expenses and profits of Verizon New York and the Verizon affiliates?

Coda:

Who should we blame for these issues related to the communications bills and charges? -- Verizon senior management and the regulators for a lack of oversight.

The majority of the employees, including the union members, such as those who work the front lines for installations, etc. have nothing to do with this, and the customer service representatives mostly read off of prepared scripts and don't have much of a say about billing practices, and yet they are on the front lines when angry customers call up or there are problems with the lines.

I bring this up because it is getting continually worse as employees are considered an 'expense' and customers are considered targets with the goal being more 'profits' squeezed out of the same subscribers. And with the plan to move to 'contracts' where the customers' rights to take the companies to court has already been eliminated in wireless services, all services are moving to this forced arbitration-only solution (with the customer always at a disadvantage and forced through a timely process). Net Neutrality is only one of the areas which are experiencing a degradation and erasure of customers' rights.