Time Warner Cable’s approval of its request to offer regulated “digital phone” service in New York has been quickly followed by an appeal for deregulation to loosen rules covering disconnection for non-payment and reduced service quality standards.

The cable operator now qualifies — as a designated Eligible Telecommunications Carrier (ETC) — for significant federal and state subsidies in return for providing discounted Lifeline telephone service for the state’s poorest residents.

The cable industry has traditionally escaped regulation and oversight with claims “digital phone” Voice over IP (VoIP) products are “unregulated information services.”

In March, the New York Public Service Commission approved a petition filed by subsidiary Time Warner Cable Information Services (NY) LLP (TWCIS-NY), to begin offering regulated telephone service to the company’s 1,235,710 phone customers in New York.

As a result, Time Warner agreed to a range of oversight and service standard requirements. But on May 1 — less than two months later — Time Warner filed a new petition with the PSC requesting deregulation and exemption from several provisions the company initially agreed to follow.

“Now that it is concededly a regulated telephone service provider, Time Warner is acting like other regulated phone companies, in that it immediately is seeking to relax the rules designed to protect customers,” writes Gerry Norlander from the Public Utility Law Project of New York (PULP), a consumer protection group.

Not so, says the cable company.

“In order to offer the best telecommunications service to its customers and expand this customer base, TWCIS-NY respectfully requests that the Commission grant the waivers discussed in this Petition,” the company writes.

The changes Time Warner requests would make it easier for the cable company to disconnect service for late or non-payment, allow Time Warner to avoid distributing unwanted paper telephone directories, and escape oversight of its phone service for all but the most critical “core” customers with special needs.

Your Partial Payment Will Not Necessarily Prevent Us From Cutting Off Your Phone Line

The Telephone Fair Practices Act (TFPA), prohibits regulated phone companies from shutting off phone service for late/non-payment outside of normal business hours, Fridays after 1pm, weekends, and holidays:

(d) Suspension or termination of service–time. A telephone corporation complying with the conditions set forth in this section may suspend or terminate service to a residential customer for nonpayment of bills only between the hours of 8 a.m. and 7:30 p.m., Monday through Thursday, and between 8:00 a.m. and 3:00 p.m. on Friday, provided such day or the following day is not:
(1) a public holiday, as defined in the General Construction Law;
(2) a day on which the main business office of the telephone corporation is closed for business; or
(3) during the periods of December 23rd through December 26th and December 30th through January 2nd.

Time Warner Cable claims those limitations are too much, and “for its customers’ convenience, TWCIS-NY respectfully requests […] to extend these hours.”

If approved, Time Warner claims it will make your life easier if they can cut you off at their convenience — between the hours of 8:00am and 9:00pm, Monday through Friday, and between 8:00am and 5:00pm on Saturday.

Those times coincidentally match the hours technicians are now dispatched to collect equipment and shut off service for deadbeat customers.

Time Warner says people are often busy or not at home during the day and it would make more sense to coordinate the surrender of service when people are available to hand over equipment. Unfortunately, Time Warner’s preferred hours often fall outside of the calling hours at the Public Service Commission, which maintains a ‘last resort hotline’ for customers about to have their service disconnected.

‘Time Warner Cable Punishes Late Payers With Telephone Service Suspensions and Terminations on a “Massive” Scale’

Unlike cable television and broadband, New York designates telephone service as an essential utility, and regulators take every step to maintain service wherever possible.

Under rules originally adopted when consumers chose both a local and long distance phone company that put all of your charges on a single monthly invoice, regulators sought to protect landline service when customers did not pay the full amount due. Under those rules, partial payments are allocated first to past due charges from the local phone company, then past due charges for regional long distance or local calling, then charges billed by your long distance carrier, and then everything else.

Since your local phone company has the power to cut off your dial tone for late payment, making sure they were first in line to get paid usually kept your phone line working.

“It Appears that Time Warner Has Increased its Reliance Upon Telephone Service Suspensions and Terminations as a Tool to Enforce Customer Payment Obligations.”

According to data provided by Time Warner Cable in response to PULP information requests, during the month of March, 2012 Time Warner Cable sent 68,134 shutoff notices to Time Warner phone customers in New York. The threats worked for the majority of those customers. Only 17,218 were eventually disconnected after the shutoff deadline passed.

Since then, shutoffs and suspensions have soared. By July 2013, Time Warner mailed 146,026 shutoff notices and followed through with 42,777 disconnects, increases of 114% and 148%, respectively.

“As a consequence, interruption of phone service for bill collection purposes has reached massive proportion,” says PULP. “It appears that Time Warner has increased its reliance upon telephone service suspensions and terminations as a tool to enforce customer payment obligations. In the 12 months ending July 2013, Time Warner terminated or suspended telephone service on 592,250 occasions for bill collection purposes. Of that number, telephone service was reinstated after an interruption for collection purposes on 461,268 occasions. Thus, 130,982 or 22% of the customers terminated were not promptly reinstated.”

Those figures concern PULP because it suggests many disconnected customers are now without phone service, swelling the “unacceptably large number of New York households lacking telephone service.”

New York now ranks fourth from the bottom of all states in the most recent FCC Universal Services Monitoring Report of telephone subscribers.

Verizon’s Request to “Streamline” the Payment Process Gives Time Warner Cable the Same Idea

In 2010, Verizon New York successfully petitioned the PSC to streamline that payment allocation system. Few people bother with choosing a long distance carrier these days because most phone companies now offer unlimited long distance as part of a bundled service package. Verizon asked to simplify things so that Verizon New York got paid first and everything else came second.

Time Warner is seeking a variation on that same theme, requesting the PSC allow it to allocate partial payments first to telephone service, with the rest distributed to cover charges for broadband and cable television service.

While that is good news for your Time Warner phone line, it is bad news for your broadband and television service which can still be interrupted for non-payment because your partial payment was applied to phone service above all else.

Customers are unlikely to be aware of this, however. Time Warner Cable bills include a regular notice that if a customer is in arrears for any Time Warner Cable service, telephone service may be shut off.

PULP argues the cable company should let customers decide which services are most important to keep up and running during an emergency.

“For example, a customer might want to jettison cable TV and keep the Internet on to hunt for jobs during a spell of unemployment or other household financial crisis,” writes Norlander. “While the bills include separate items for cable TV, broadband, and telephone services, there is no information given in the bills on how customers can, if they are in arrears, keep the service they pay for with a partial payment.”

Indeed, there is no provision on Time Warner’s website or on its paper bill payment coupon to allocate which services a customer wishes their partial payment to be applied to first.

Time Warner Cable argues it gives late paying customers every opportunity to either make up past due payments or negotiate a payment plan before any service is interrupted.

“Customers have the opportunity to walk into the local [cable] office and make a payment during these extended hours,” Time Warner argues. “They also have the opportunity to pay online and over the phone 24 hours a day, as well as paying cable representatives directly when they arrive at the customer’s premises to disconnect service. TWCIS-NY believes that streamlining of the rules for disconnection of phone and cable services will make the Commission’s rules more consistent across the board and less confusing for customers.”

We Shouldn’t Have to Provide Printed Residential Phone Books We Didn’t Offer Anyway

Time Warner Cable wants to opt out from distributing printed copies of residential telephone directories it doesn’t publish.

When the company provided unregulated telephone service, it never had to offer customers a phone book. But in its new life as a regulated provider, New York requires phone companies to offer, upon request, a printed telephone directory:

Each service provider shall distribute at no charge to its customers within a local exchange area, a copy of the local exchange directory for that area, and one additional copy shall be provided for each working telephone number upon request. A copy shall be filed with the Commission.

Nobody has formally opposed Time Warner Cable’s proposed alternative: distributing residential listings only to customers who specifically request them in print or on CD-ROM.

Most customers don’t realize Time Warner Cable used to outsource most of its telephone service operation to Sprint. In addition to providing VoIP service, Sprint relied on dominant local telephone companies to provide phone books to Time Warner phone customers. In return, Sprint passed along customers’ names, addresses and phone numbers to phone companies like AT&T, Verizon, Frontier, CenturyLink and Windstream to be incorporated into those directories.

In 2010, Time Warner announced a four-year transition project to take its telephone service “in-house.”

Will All of This Competition, Oversight Rules Should Be Relaxed; If Customers Don’t Like Us, They Can Go Somewhere Else

Virtually every telephone company in New York agrees with the assessment Verizon has made for years — if a phone company does not provide excellent service, subscribers will simply switch to a competitor, negating the need for oversight of service quality standards.

The PSC agreed, reducing requirements for service outage reporting and other documented service issues. Today, Verizon only reports incidents involving “core” customers — low-income Lifeline subscribers, “special needs” customers including the elderly, those with serious medical conditions, the disabled and the visually impaired. Core customers also include those with no competitive service providers available to them.

Time Warner Cable wants a modified version of the Verizon “core customer” standard applied to its cable phone service — one that defines core customers as those with Lifeline service or special needs.

Time Warner does not want to include those without competitive alternatives and seeks an exemption from any reporting requirements until it signs up at least 5,000 accounts designated as “core customers.” That could take a while. PULP obtained records from Time Warner Cable showing as of Aug. 7 the company has only signed up 149 telephone customers it defines as “core customers.”

The cable company may be thinking of the future. Verizon Communications has made its intentions clear it wants to abandon rural landline service in favor of questionably regulated wireless Voice Link service. The idea that a cable company provides landline service in an area the local phone company no longer does is unprecedented in New York, but perhaps for not much longer.

If Time Warner Cable successfully argues “core customers” need not include those without competing alternatives, the PSC may unintentionally hand the cable operator a rural telephone monopoly without quality of service oversight in some communities.

Verizon executives in Florida are telling workers that speaking Spanish on the job is unfair to the company’s English-only workers who feel excluded.

The Tampa Tribune reports the telecom company took the unusual step of asking employees to stick to English while on the job after an employee at a Verizon dispatch center felt left out while co-workers chatted away in Spanish.

“Generally, we tell employees they can speak Spanish (or any other language) on break, lunch or any time away from the work area,” a Verizon spokesperson said in a statement.

But the spokesman added that when employees are on the dispatch center floor or other work setting, they should speak English, promoting “positive employee relations.”

The implication is that speaking Spanish in front of other workers who speak only English is discourteous and uncomfortable because, as Verizon says, it can create feelings of separation versus inclusion.

A cultural affairs liaison for Hillsborough County says the controversy is common in Florida where a large Spanish-speaking population resides and works. Tony Morejon told the newspaper it comes as a result of friction between cultures.

It’s a touchy subject for companies that value their multilingual employees, often used to communicate with customers and to market products and services to a wider audience. Telling them to speak Spanish at certain times but not others can create resentment, said Morejon.

It can also place a company squarely in the center of the language-culture wars, with one side promoting language diversity and others demanding English as the one official language of the United States.

Asking about the cost of DirecTV could turn out more expensive than you think.

The Los Angeles Times found DirecTV a little more nosy than it should be, opening the door to identity theft and some minor credit damage from unwanted credit inquiries from the satellite provider.

As customers in southern California grow weary over Time Warner Cable’s dispute with CBS, some are shopping around for a better deal with another provider.

57-year old Los Angeles resident Michael Bell got more than he bargained for when he called DirecTV looking for some price quotes. Before the representative would answer, Bell found himself grilled for a lot of personal details that seemed irrelevant in response to a question about the price of HBO.

In addition to name, address, and type of residence, DirecTV wanted to know if Bell owned or rented his home.

“That stopped me,” Bell told the LA Times. “Why should he care? I told him I just wanted a price quote. He said we’d get to that. And then he asked for my Social Security number.”

That was T.M.I. for Bell’s tastes and he quickly hung up.

Requesting a Social Security number these days is a red flag, often giving warning the person asking is about to run a credit check on you.

Sure enough, Robert Mercer, a DirecTV spokesman, explained the satellite provider pulls a credit report on every potential customer to determine their financial viability. DirecTV doesn’t want deadbeat customers, not after spending close to $900 to install satellite television in the average home.

If you don’t like it, you can pay DirecTV a $300 deposit and keep the number to yourself. The money is gradually refunded in the form of $5 monthly service credits each month you maintain service.

Cable companies are also notorious for running credit checks on customers, which can appear to other creditors as a request to extend credit. Too many credit inquiries can temporarily cut your credit score or worse, deny you credit.

AT&T and Verizon are also sticklers for good credit so expect them to run credit checks as well.

Time Warner Cable stands out among others for at least taking an interest in protecting customer privacy and preventing possible identity theft.

Dennis Johnson, a company spokesman, told the newspaper it can run a preliminary credit check with only the last four digits of a Social Security number and your date of birth.

Consumer privacy advocates argue that in the age of identity theft, nobody should be providing a Social Security number to anyone without a clear understanding it is being used to establish credit, open an account, or get earned retirement benefits. Consumers asked for a Social Security number for any other purpose should ask if they can avoid providing it or at least carefully scrutinize the request. If uncomfortable, simply end the conversation.

21 August 2013

Prime Minister Stephen Harper
Office of the Prime Minister
80 Wellington Street
Ottawa, ON K1A 0A2

Dear Prime Minister:

I read with interest that you are considering allowing Verizon Communications to operate in Canada with unique acquisition rights.

Bad idea.

Before you proceed any further, I suggest that you read a report by the highly regarded Center for Tax Justice and Good Jobs First titled, “Unpaid Bills: How Verizon Shortchanges Government Through Tax Dodging and Subsidies.”

Bottom line: Verizon is one of the country’s most aggressive corporate tax dodgers.

The report found that Verizon enjoyed some $14 billion in federal and state corporate income tax subsidies in the 2008-2010 period, even though it earned $33.4 billion in pre-tax U.S. income during that time. At the federal level, Verizon should have paid about $11.4 billion at the statutory rate of 35 per cent during the three-year period. Instead, it actually got $951 million in rebates, putting its federal tax subsidies at $12.3 billion. Its effective federal tax rate was 2.9 per cent.

The report found that at the state level, Verizon should have paid about $2.3 billion in corporate income taxes during the period but it paid only $866 million. Its aggregate state rate was only 2.6 per cent, far below the weighted state average rate of 6.8 per cent. This gave it state tax subsidies of about $1.4 billion.

Verizon also used a special tax loophole called the Reverse Morris Trust to avoid paying about $1.5 billion in federal, state and local taxes on the sale of its landline assets in various states.

The report found that Verizon also aggressively seeks state and local tax subsidies through credits, abatements and exemptions.

There is no centralized reporting on these subsidies, but the report documents $180 million in special tax breaks and grants Verizon and Verizon Wireless received in 13 states.

In addition to aggressively dodging taxes, Verizon also overtly rips off our federal government.

In April 2011, for example, Verizon paid $93.5 million to settle whistleblower charges that it had billed the government for “tax-like” surcharges it wasn’t entitled to impose on the government. Hidden surcharges on communication services have long been an unwelcome cost to business and consumers, and the General Services Administration had negotiated a firm, fixed-price contract with limited surcharges precisely to avoid being hit with hidden surcharges, the whistleblower alleged.

“Verizon was not only charging the government for the costs associated with communication services, but it also was pumping up its revenues by charging the government for Verizon’s own property taxes and other costs of doing business,” said Colette Matzzie, a Washington, D.C., attorney with Phillips & Cohen LLP, who represented the whistleblower. “Under federal law, Verizon was responsible for paying those costs, not the government.”

The settlement agreement covers the period from 2004 to 2010, when Verizon allegedly billed the government for a variety of surcharges including property tax surcharges, carrier cost recovery charges, state telecommunications relay service surcharges and public utility commission fee surcharges.

Question: why would you allow one of our country’s most aggressive tax dodgers, a company with a track record of overtly ripping off our government, into your country?

What’s bad for the United States will be bad for Canada.

Sincerely,