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Verizon To Pay $5 Million To Settle Charges It Failed To Investigate Complaints By Rural Phone Customers

Verizon logo Last week, the Federal Communications Commission (FCC) announced a settlement agreement with Verizon where the telecommunications company will pay $5 million to resolve charges that it ignored the complaints of rural land-line phone customers who were unable to receive both long-distance and wireless phone calls.

Terms of the agreement require Verizon to pay immediately $2 million to the U.S. Treasury, $3 million over the next three years to fix the rural phone call completion problems, appoint a Rural Call Completion Ombudsman within the company to analyze rural call completion problems, file a report with the FCC at the end of the three years, host workshops and fund academic studies about ways to solve rural phone call completion problems, and develop a system to identify customers' complaints about rural call completion problems.

Verizon filed notices during 2014 that it planned to cease copper phone network services in at least six wireline centers: Belle Harbor (NY), Orchard Park (NY), Farmingdale (NJ), Hummelstown (PA), Lynnfield (MA), and Ocean View (VA). For example, the Farmingdale, New Jersey notice by Verizon (Adobe PDF) stated:

"Verizon intends to retire all copper facilities (feeder, distribution and drop) in the Farmingdale, New Jersey wire center and to serve all customers over a fiber infrastructure... After the retirement of the copper facilities, Verizon will: (1) no longer offer services over copper facilities; and (2) cease maintaining the copper facilities. However, to the extent required by applicable agreements and federal law, Verizon will offer to requesting carriers a 64 Kbps voice-grade channel over fiber loops that have been deployed where copper was retired..."

Read the January 26, 2015 FCC announcement (Adobe PDF) and the Consent Order against Verizon (Adobe PDF).

Sadly, this is not the first time the FCC has had to take action to get a telecommunications company to support rural phone customers. The FCC announcement stated:

"This is the fourth major resolution of a rural call completion investigation and is part of a coordinated effort to address rural call completion problems. The Bureau entered into consent decrees related to rural call completion performance with Matrix Telecom, Inc. and Windstream Corporation in 2014 and with Level 3 Communications, LLC in 2013."

Some experts are concerned about the coming retirement of copper phone land lines. The Ars Technica blog reported in August 2014:

"The National Association of State Utility Consumer Advocates (NASUCA) asked the FCC to delay copper retirements in Belle Harbor and Ocean View until the FCC performs the investigation requested by Public Knowledge. NASUCA also wants the retirements to wait until after the completion of trial runs of all-IP phone networks. The FCC is expected to oversee the first such trials as early as next year in the AT&T wire centers of Kings Point, Florida, and Carbon Hill, Alabama. Verizon says it doesn't want to wait, because that process could take years."

What does this mean? All consumers should realize that phone companies want to get out of the traditional copper land-line phone business and support only wireless phone customers. They view maintenance of the copper infrastructure as costly. You may believe that everyone has already switched to mobile phones, but there are plenty of copper land-lines still in use. The Local Telephone Competition Report by the FCC stated that in June 2013:

"... there were 90 million end-user switched access lines in service, 45 million interconnected VoIP subscriptions, and 306 million mobile subscriptions in the United States, or 441 million retail local telephone service connections in total... Of the 135 million wireline retail local telephone service connections (including both switched access lines and interconnected VoIP subscriptions) in June 2013, 77 million (or 57%) were residential connections and 58 million (or 43%) were business connections..."

It is important for consumers to realize that traditional copper land-lines in homes (and businesses) are going away, probably sooner than you might expect. That means that Internet services that rely on those land lines (e.g., DSL Internet service) will also disappear. DSL customers will have to migrate to other service providers (e.g., cable or fiber) for high-speed connections.

USA today reported in April 2012:

"First it was street-corner phone booths and home delivery of telephone books. Now, land lines are on their way to becoming part of American telecommunications history. As consumers continue to move to wireless, states are passing or considering laws to end the requirement that phone companies provide everyone land-line service. Indiana and Wisconsin are the two most recent states to end the requirement, and many others — including Alabama, Kentucky and Ohio — are considering it..."

There are concerns that rural consumers lack sufficient access to affordable high-speed Internet services, and that high-speed Internet services in the United States don't offer the best value. A major worldwide study found that consumers in the United States pay more for high-speed Internet services than consumers in other countries and get slower speeds.

Rural residents often face multiple obstacles. Prior studies have found that many poor people in rural areas live in "banking deserts," places not served by any banks. According to a recent FCC report, 64 percent of rural Virginia residents don't have access to high-speed Internet services (as defined by the new benchmarks). In West Virginia the number of residents is 74 percent. More than half of rural residents nationwide lack access to high-speed Internet services. Now, add poor phone service to the list of obstacles.

What should rural consumers do about poor phone services? What should any consumer do if you can't contact rural consumers or businesses? Fight for your rights and the services you are paying for. The FCC advises consumers to first learn to recognize the problem:

  • Long distance or wireless callers may hear nothing or "dead air" for 10 seconds or more after they dial a rural number. Then, the call may drop or get a busy signal.
  • Or the phone may just ring for a long time.
  • Or, you may hear a recording such as "The number you have dialed is not in service" or "Your call cannot be completed as dialed" even though you know you dialed it correctly and it is in service.

Next, write down the date, time, and phone number(s) dialed, plus the name of the long-distance or wireless phone carrier. Then, report the problem to your wireless phone provider or to your long-distance service provider. If the problem remains unaddressed, file a Phone Complaint with the FCC.

What are your opinions of the FCC and Verizon settlement? Of land-lines going away? Of the problems rural residents face?

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