Verizon treads into the realm of The Prince

A reader, la'ikoa, was kind enough to point out a change in Verizon's customer service agreement that may have serious consequences for groups of customers with a complaint against the company.

Here's the background: A group of Verizon Last I heard, 10 Gigabytes does not exceed the definition of "unlimited," therefore it cannot in and of itself be conclusive evidence of a violation of terms of service.customers sued the company for failing to disclose its billing practices and service restrictions in a case called Cambell v. AirTouch Cellular. They won. Up to 40 million people may have been affected and may be eligible for credit from the company. According to Verizon it "must also, for at least two years, use a new Customer Agreement that contains specific disclosures." I guess they plan to drop the disclosures after two years—wow, way to show you learned your lesson about fair business practices, Verizon guys.

Following the loss in court, Verizon has circulated a new customer agreement (click to read the PDF from Verizon) that has a Machiavellian twist: If you choose the use the service, you agree never to sue them for anything other than direct damages. This could prevent classes from organizing, as they did in Campbell, to sue Verizon, according to an attorney consulted by la'ikoa.

Further, Verizon requires customers to agree in advance to arbitration of disputes, including by mediators who are employees of Verizon. Any information disclosed in that process is excluded from future actions. The agreement also says you can apply to federal or state courts for relief, but if you cannot organize a class there is little incentive to do anything other than accept arbitration.

If you are a Verizon customer, the company is opting you into this new agreement unless you explicitly tell Verizon that you don't accept these terms, in which case your old customer agreement will remain in effect. You can mail (include your name and wireless number) CSAOptOut@CampbellVZWSettlement.com to opt out of the new agreement or call 1-800-572-7857. You should do so, because other language in the agreement lets the company change your pricing and terms of service at any time.

The Net Neutrality angle 

Doc Searls on Monday pointed to this letter terminating Verizon Broadband service, which informs the recipient that their "BroadbandAccess account" limits use only to "Internet browsing, email and intranet access." It goes on:

All other activities, such as streaming and/or downloading movies and video, are expressly prohibited by the terms and conditions... We recently reviewed your Verizon Wireless National Access and/or Broadband Access (sic) account and found that your usage over the past 30 days exceeded 10 Gigabytes. Your usage was more than 40 times that of a typical user. This level of usage is so extraordinarily high that it could only have been attained by activities, such as streaming and/or downloading movies and video, prohibited by the terms and conditions. Based on these facts, your extraordinarily high levels of usage conclusively demonstrate a violation of the terms and conditions, and your account will be terminated on 6/27/2006.

Wow. Broadband is only browsing (which apparently doesn't include viewing video displayed on a Web page), email and "intranet access?" That's not what the Verizon BroadbandAccess page says, which describes the service as "Fast. Mobile. Secure. Simple. Flexible." Look further and you will find there is no mention of the types of services you may access on the Internet or a data limit in the marketing language. The service is described as "Unlimited." Last I heard, 10 Gigabytes does not exceed the definition of "unlimited," therefore it cannot in and of itself be conclusive evidence of a violation of terms of service.

Then, at the bottom of the page—two full screens down in fine print—is this:

NationalAccess and BroadbandAccess data sessions may be used with wireless devices for the following purposes: (i) Internet browsing; (ii) email; and (iii) intranet access (including access to corporate intranets, email and individual productivity applications like customer relationship management, sales force and field service automation). Unlimited NationalAccess/BroadbandAccess services cannot be used (1) for uploading, downloading or streaming of movies, music or games, (2) with server devices or with host computer applications, including, but not limited to, Web camera posts or broadcasts, automatic data feeds, Voice over IP (VoIP), automated machine-to-machine connections, or peer-to-peer (P2P) file sharing, or (3) as a substitute or backup for private lines or dedicated data connections.

This definition of "broadband service" is awful, and when juxtaposed with the prominent use of the word "unlimited" to describe a service defined by network throughput, probably a form of false advertising. Of course, there are "free marketers" who think any intrusion by government in the market is bad, so we've stopped actively enforcing Truth In Advertising laws.

The capper, however, is that Verizon has streaming (VCast, which includes music, video and games) and  and downloading services (songs, which can be stored on certain phones). You can stream and download whatever you want if it comes through the Verizon VCast service, but nowhere else.

Check it out—the VCast content is the very definition of the content Verizon cited as a reason in the letter quoted above to cancel a customer account.

That's exactly the problem Net neutrality is designed to address. Under Net neutrality, a carrier could not define its competition on the content and Web services side as an extraordinary abuse of network capacity while simultaneously locking customers into its own services.

Machiavelli gets a bum rap, because The Prince, a ruthless primer on getting and keeping power, became his most famous book. He was also a great theorist of democracy in The Discourses. Verizon's taking a page from The Prince in its customer agreements and the services it excludes from its network. Machiavelli wrote of tyrants who abuse religion to lord over other men, as today people lord the term "free market" without understanding the delicate balance of freedom and control that makes a market viable: This mode of living appears to me, therefore, to have rendered the world weak and a prey to wicked men, who can manage it securely, seeing that the great body of men, in order to go to Paradise, think more of enduring their beatings than in avenging them.

It is time for customers to stop taking these beatings lying down.

UPDATE: Scott Loftesness sends this pointer to the mandatory arbitration practices of the credit card industry, whose lead the carriers are following. Customers may want to accept arbitration—it's not an unreasonable choice. It should be a choice and should certainly not be a mediator employed by the company that is a party to the dispute.