Verizon treads into the realm of The Prince

Verizon treads into the realm of The Prince

Summary: Verizon's changed its customer agreement with wording that could limit or ban class action law suits by customers. You have to act to opt out.

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TOPICS: Verizon
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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.

Topic: Verizon

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10 comments
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  • So don't use Verizon

    Why am I supposed to get up in arms about a company enforcing it's service agreement?

    Don't people read contracts before the sign them?

    [b]If you had used this story for factual reporting rather than political grandstanding, it would be useful. Verizon obviously has deceptive service agreement - meaning the agreement contradicts the advertising. If people care, they'll switch providers. If enough people switch providers, Verizon will change it's practices. But no, we want to involve congress to solve a very simple disagreement over what is and is not included in a service.[/b]

    Why should my tax dollars subsidize people who are too lazy to read their service agreements and then whine about it?
    Erik Engbrecht
    • What tax dollars?

      Erik, all I am saying is "don't use Verizon." If someone thinking
      about using Verizon, which I don't and won't based on this contract
      language, happens to Google it, maybe they'll find this. There is no
      call for using tax dollars for anything here.
      Mitch Ratcliffe
      • Tax Dollars

        Legislation requires enforcement.

        Enforcement requires people.

        People cost money.

        Money comes from taxes.

        I'm also a firm believer that regulations always increase costs, albeit occasionally in very subtle ways and frequently they redistribrute costs enough to fool voters into thinking costs have been reduced. So even if no tax revenue was required to enforce regulations, the regulations would increase the aggregate economic cost of the service.

        Keep the government out of it and I'll agree with you.
        Erik Engbrecht
        • I don't think we're going to agree

          I think a limited set of regulations are necessary to increase
          market choice and, if we're not going to sanction a monopoly as
          we did with AT&T through most of the 20th century, *increase*
          access, which has its benefits that you're not counting.

          If we did not have a system that ensured that anyone who pays
          for a connection gets the maximum choice available, the total
          value of the network would be much lower. Without taking this
          added value, created by regulation, into the equation, you don't
          have a full accounting of the market.

          Openness wins when it comes to connectivity. If nothing else,
          the Net has shown this definitively and, largely as the result of
          massive injections of direct investment in the form of
          government-sponsored R&D in an environment of regulations
          that increase customer choice.

          So, if there is no role for government at all, we'll have to agree to
          disagree. Then, I would ask, how else would you guarantee
          choice in an environment where companies block upstart
          competitors such as municipal wireless networks?

          A tangent, but related: In Tacoma, Wash., near where I live,
          AT&T and (at the time) TCI refused to build a broadband
          network until after they'd built them elsewhere, so the city had
          to build its own, despite efforts to block that project by the
          carriers. Again, tax dollars had to be used to drive the market.

          The question, I suppose, is where would you prefer to see your
          tax dollars spent, on infrastructure or regulation?
          Mitch Ratcliffe
    • You are missing the point

      The point is that Verizon is misleading consumers about its "unlimited" service when it is clearly limited in what you can do and how much bandwidth can be consumed.

      It's like buying an apple (not the computer), then being told by the grocer that you may only bite it with your teeth. You cannot use a knife to cut it up or peel off the skin, and by the way, you may not eat it all at once.
      timhodgson@...
      • It's also like buying a Mac

        and being told that you may only play songs on the system if they
        were purchased through iTunes (which Apple doesn't do).
        Mitch Ratcliffe
  • VCAST

    VCAST is on top of EV-DO.

    In EV-DO areas Verizon wants you to VCAST onto the small tiny cellphone screen, but, they don't want you to pass EV-DO connectivity thru to your computer?

    It's ok though if you buy from them a EV-DO card and shuck out the extra $60/month for the BroadBand Wireless service.

    They'll utlimately regret such restrictive changes.

    Arbitration has been in the agreement for a good while but the other usage restrictions are bad.

    Water seeks its own level.

    Bad for Verizon.
    D T Schmitz
  • Cute.

    I like the way inference is described as fact in this quote:

    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.

    [Facts. By the way, telephone records are not well protected from anybody legally, are they?!]

    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,

    [This is an inference drawn from the facts. The existence of any alternate way to reach 10 gigabytes in a month would be a refutation.]

    prohibited by the terms and conditions.

    [So the violation results from the inference.]

    Based on these facts, your extraordinarily high levels of usage conclusively demonstrate...

    [The facts demonstrate nothing. The inference is now being taken as a conclusive demonstration.]

    a violation of the terms and conditions, and your account will be terminated on 6/27/2006.


    Instead of this nonsense, Verizon could have included a statement:

    Exceeding 10 gigabytes downloaded in a single month shall cause account termination.

    This is an attempt to intimidate... well, get rid of a customer on flimsy grounds.

    Probably intimidate is more correct, because the customer will probably be able to redeem himself by buying something.

    I suppose damages in a case like this must be limited to money. But the inclusion of corporal punishment with a large boot, administered consecutively to the entire legal staff would probably have a good effect. Particularly if a photo were taken and the offender required to have it framed and hung next to his diploma.
    Anton Philidor
  • Thanks for confirming my worst suspicions.

    This has to be the "smoking gun" showing that Verizon, at least, is looking to sieze the Internet, to asimilate it into itself, and to control it for its own profiteering and propaganda machine for their supporters.

    The "fine print" practacly screams "NO HIGH-BANDWITH USE!", especially the forbidden use of VoIP like those from Vonage (and people wonder why they're going under). And that terror... "termination notice" only proves they don't want anyone other than their co-conspirators absorbing bandwith. Plus the "do not sue us" clause only makes certain the masses keep their place.

    Yep, it's a hostile takeover alright. Verizon is using its ISP position to hold the net hostage.
    Mr. Roboto
  • Yeah, "It is time for customers to stop taking these beatings lying down."!

    We should at least stand up for the first punch or two, that way they can get the pleasure of knocking us down too.
    yogeee