Wants $4.95 a month in some states to keep your number out of their phone directories.

In a case of shooting itself in the proverbial foot, Verizon’s argument its $4.95 monthly fee to keep your landline number out of their directory is justified has revealed a way to avoid paying it at all, saving $60 a year in unnecessary fees.

The company acknowledged that customers who drop their landline in favor of a cell phone will have an unlisted number at no additional charge.

A Network World columnist asked Verizon why it costs so much to do so little.

“Why do you charge me $4.95 per month just so that I can keep my phone number unpublished? Please do not merely tell me that you are allowed to charge me this fee because I already know that. What I want to know is WHY do you do it? What cost are you passing along? … I would appreciate as much specificity in your reply as possible.”

Here’s the reply from a media relations spokesman, who first consulted with “a key member of product management with oversight for (unpublished) numbers”:

“The cost charged to offer unlisted phone numbers is chiefly systems and IT based. Specifically, the costs we incur and factor into the monthly charge involve three things: quality control, data integrity and the interface we have with other carriers and directory publishers. These activities help us protect the feed of customer information we have, and must protect, when customers request that their telephone number remains private when requested.”

Stop the Cap! decided to pose our own follow-up to Verizon’s customer service department:

“If we were to drop our landline and choose a cell phone instead, would our number be listed or unlisted?” we asked.

Verizon’s reply:

“Cell phone numbers are not listed in our directories and are not available from directory assistance unless you pay an additional fee for our listings service. The rates vary by state.”

Customers switching landline providers with the intent of keeping their currently listed phone number may, however, remain in the telephone directory if Verizon forgets to remove the listing after the customer disconnects service. But there should be no charge to remind Verizon you disconnected service and want the listing deleted.

As a consequence of deregulation, many states no longer keep tabs on ancillary fees charged by Verizon for these services, which are largely based on what the market will bear.

Plaintiffs charge that Verizon’s spinoff deals earned millions for top executives and investment bankers, but left nothing but wreckage for employees, retirees, customers, and smaller banks duped into covering the tax-free debts that were left behind.

Verizon Communications is defending itself in a Dallas courtroom against a $9.5 billion lawsuit brought by creditors who allege the phone company fraudulently structured the spinoff of its phone directory business to Idearc in a deal that enriched Verizon while leaving the new publisher crippled with $9 billion in debt and eventual bankruptcy.

Verizon structured the spinoff of its phone book unit much the same way it has sold-off its local phone business operations in several states to Hawaiian Telcom, Frontier Communications, and FairPoint Communications — through controversial, tax free Reverse Morris Trusts. At the end of the deal, the buyers are saddled with enormous debts, eventually forcing HawTel, Idearc, and FairPoint to declare bankruptcy.

Now the creditors that took the hit over Idearc are in court alleging Verizon engineered the deal to unjustly enrich itself while sending the dying phone directory business straight into insolvency.

Werner Powers, an attorney for the creditors, said in opening statements Idearc was purposely loaded down in Verizon debt and “sent into the market to die.”

“They knew in major markets they had been suffering a double-digit decline,” Powers said to the judge in a Dallas courtroom. “They knew that was the canary in the mine shaft.”

The Association of BellTel Retirees is fighting for former Verizon employees who woke up one morning discovering their safe Verizon pension benefits had been transferred to a shaky startup that quickly went bankrupt.

But creditors are not alone suffering from a bankrupt Idearc. During the 11th hour of negotiations, Verizon quietly engineered a transfer of Verizon retirees that formerly worked for the directory unit to Idearc’s startup pension plan — a very risky proposition for the nearly 3,000 retirees who were secure with a fully funded, low risk Verizon pension plan.

Curtis Kennedy, the attorney representing the interests of the retirees, explains how it all happened:

On October 18, 2006, after conducting a very cryptic half hour meeting via telephone and reviewing a packet of Power Point presentations, the Verizon Board of Directors gave full approval for the Spin-Off transaction. A month later, on the last day to do the transaction, the retirees were thrown into the mix. Of course, no retiree had any prior knowledge, no fiduciary advocate, no legal representation, no union representation, and no say in the matter. The designated group of retirees were simply treated like obsolete telephone equipment being disposed of by Verizon.

At the proverbial “11th Hour” before the closing, Verizon EVP John Diercksen, acting as the sole director of Idearc, resigned his director position and he appointed a new set of corporate directors. The new directors hurriedly executed a resolution to ratify and approve the Spin-Off transaction. In reality, the new Idearc board had no choice but to sign off on the Spin-Off.

Wall Street investment banks JPMorgan and now defunct Bears Stearns swooped in to finance the multi-billion dollar transaction that engineered the transfer of $9.5 billion in debt to Idearc while allowing Verizon to keep more than $2 billion in valuable assets for itself, crippling Idearc from day one, as plaintiffs contend. Both investment banks quickly packaged and sold off the now-worthless loans to hundreds of other unsuspecting financial institutions, while keeping deal fees for themselves.

Investors also got blindsided. One Wall Street analyst gave this recommendation on Idearc shares to unwitting investors:

“When a corporate parent casts off a vexing unit with unpromising growth, the natural inclination is to steer clear of this forsaken offspring. But the yellow pages business Verizon Communications is spinning off may merit a second glance.”

Judge Joe Fish

It got one in bankruptcy court, eventually emerging with a new name: Supermedia.

Much of the documentation that surrounds the deal and those responsible for it have been sealed by the court. U.S. District Judge A. Joe Fish has announced he will decide the case himself and turned back efforts for a jury trial.  Judge Fish has also denied repeated attempts by Verizon to have the case dismissed, although he has also ruled against creditors dismissing some of their claims.

Bloomberg News this month filed motions to unseal the record in the public interest, but the judge has yet to rule on the motion.

Verizon retirees are watching the current lawsuit between Verizon and creditors carefully. The group of former employees have brought their own lawsuit against Verizon, with some of their worst fears realized when Supermedia sent word in June they were canceling the retirees’ pension benefits.

Verizon has reportedly hired eight expert witnesses to testify on its behalf, one who will receive more than$4 million in appearance fees. Verizon has leased office space specifically for the trial near the downtown Dallas federal court building.

Many current Supermedia employees report a siege mentality at what is left of the directory publisher, with regular threats of further job cuts.

Phillip “I can see the duopoly from my house — why can’t the FCC?” Dampier

The New York Times is pondering whether Americans are paying too much for wireless broadband based on Long Term Evolution (LTE) technology. A new study now offers proof, noting U.S. customers pay three times as much, on average, for each gigabyte of data in contrast to European consumers.

The UK-based mobile industry group GSM Association offers evidence Americans are not getting the lower wireless broadband prices promised by the more advanced, cost-efficient LTE technology, although customers in other parts of the world are seeing savings.

According to the group’s findings, Verizon Wireless customers effectively pay $7.50 per gigabyte of data over the company’s 4G LTE network. That is three times more expensive than the European average of $2.50/GB, and more than 10 times higher than what Swedes pay: $0.63/GB, cheaper than many wired broadband providers’ overlimit fees.

Verizon Wireless’ Brenda Raney tried to defend the discrepancy, claiming that Verizon offers enhanced value bundles with unlimited voice, text, and mobile hotspot service. Having a data-only plan, Raney told the newspaper, would reduce the cost to $5.50/GB.

That is still more than twice as much as what Europeans pay.

So what is the real reason for the enormous price difference?

The wireless industry regularly claims that the vast expanse of the United States means a much larger investment in wireless technology and infrastructure, notably cell towers, to reach customers in suburban and rural areas. European countries, in contract, are much more compact and urban-focused, making infrastructure less costly.

But that has proven to be nonsense for Sweden’s Tele2, which not only operates a nationwide 4G cellular network in Sweden — a country with its own vast rural regions — but promises to deliver service to 99% of the country by the end of the year and already covers more than 100 Swedish municipalities. They deliver service at a fraction of the cost charged by Verizon. Tele2 remains undeterred by the “rural cost argument,” taking on the world’s largest country — the Russian Federation. It has already acquired 12 regional mobile operators in Russia, expanding service to more than 43 regions with over 22 million customers, and plans additional investments.

The real reason for the inflated price of service, unsurprisingly, is America’s lack of robust wireless competition, according to GSMA.

Europe has the largest number of competing providers — 38 of 88 operators with LTE technology are in Europe. Even the smallest countries have at least three major competitors. The U.S. has two major competitors, two smaller national carriers, and a dozen or more regional or prepaid operators totally dependent on the larger four to deliver national roaming service.

Until recently, Verizon Wireless had a veritable monopoly on LTE service as AT&T tries to catch up — one of the very rare moments Verizon directly challenged AT&T in advertising that distinguished the coverage differences between the two. These days, AT&T and Verizon mimic one another, often offering identically priced service plans. Customers who want to pay less have to reduce their expectations with smaller competitors that offer reduced coverage.

If you don’t want access to premium wireless broadband, American carriers will also gouge you for lesser 3G service.

U.S. consumers on two year contract plans spend an average of $115 a month for 3G service, according to a survey conducted by Ernst & Young. In the Netherlands, the average was $51; in Britain, $59 — about half the price.

The growing mobile phone bill has now reached the point where Ernst & Young’s Jonathan Dharmapalan suggests it is literally interfering with smartphone adoption and causing others to shut off the devices permanently after an experience with bill shock.

“The No. 1 reason for customers’ discontinuing their use of a smartphone service or not taking the option is the fear of overspending,” Dharmapalan said.

A former FCC senior Internet technology adviser attempted to explain away the vast discrepancies in pricing, offering this bit of analysis: Europeans talk and surf  less.

Verizon Wireless is proud of its new “business intelligence” initiative that will collect your browsing habits and online behavior, aggregate it with other customers similar to you, and then package and sell it to anyone willing to pay.

For your convenience, Verizon has automatically opted you in to their Precision initiative, and it is up to you to make the effort to opt out.

“Companies are always seeking opportunities to understand and act on their customers’ preferences, and Verizon is in a unique position to offer information and insight in a format that can help,” said Colson Hillier, vice president, Precision Market Insights, Verizon Wireless.  “At the same time, protecting customer data and safeguarding privacy have always been high priorities at Verizon, and we give our customers choice and control over their privacy preferences.”

The first set of services from Precision will help brands and companies such as outdoor media companies, sport venues, and other marketers, to understand the characteristics of the audiences for their products and services so that they can better reach and serve those customers.  Business and marketing insights use information from Verizon’s mobile network that is gathered and combined with demographic data, then aggregated to provide real insights into consumer behavior.  Data associated with the preparation of business and marketing reports is anonymous and secure and will not allow the identification of an individual.

Precision plans to introduce additional services including one that will help brands tailor the type of advertising customers see on their mobile phones, also known as relevant mobile advertising, and others that will help marketers create opportunities to better address their consumers and their consumers’ needs.

Still, Verizon’s lucrative new program delivers all of the benefits to themselves, while sticking you with an ever-increasing mobile phone bill. If Verizon Wireless wants to collect your browsing data and other “aggregated” information to sell to advertisers, then the company ought to be paying customers to participate. As usual, they keep all of the money for themselves.

Verizon Wireless obfuscates this privacy invasion with technobabble. They call it: Customer Proprietary Network Information (CPNI), ironic for a program that sells “precision” information to Verizon’s clients. In fact, Verizon tracks your location, collects ongoing statistics that can be used to predict where you will be at any given time, and offers that information up to mobile advertisers. They in turn deliver you “relevant advertising,” that eats your limited data allowance. It represents a win-win for the company and advertisers. Sell your data and then collect even more revenue as advertisers pelt you with unwanted ads.

But customers do not have to be the losers. You can deny Verizon their latest Money Party until they share some of the proceeds with you:

1. Login to your account at Verizon Wireless.
2. Scroll to “I want to…” and find “profile.”
3. Choose “Manage privacy settings.”
4. Note the section: “Customer Proprietary Network Information”.
5. Choose “Don’t Share My CPNI” for each relevant cellular number.
6. Make sure to click the “Save Changes” button when finished or your choices will not be saved.

You may want to also block Verizon from cashing in on your data for their Business and Marketing Reports and Relevant Mobile Advertising. Those settings appear just below the CPNI section. Make sure you “Save Changes” for each section.

Not a Verizon Wireless customer? Look out. Your carrier may be packaging and reselling your browsing habits as well.

• Sprint: Collects and markets subscriber data. Login to your Sprint account and select “My Choices” to opt out or call 1-855-596-2397 from each of your mobile devices.
• AT&T: Collects and markets subscriber data. Visit AT&T’s privacy options after logging into your account and opt out as needed.
• T-Mobile: Legalese overload. Would the average customer understand this: “We may obtain your consent in several ways, such as in writing; online, through ‘click-through’ agreements; orally, including through interactive voice response; or when your consent is part of this policy or the terms and conditions pursuant to which we provide you service. Your consent is sometimes implicit.”

AT&T has finally gotten around to following Verizon Wireless’ footsteps to fewer customer returns as it joins Big Red cutting “no hassle” returns to just two weeks.

Starting this month, if you return a phone to AT&T within 14 days, the company will charge you a $35 restocking fee or 10% of the purchase price for accessories over $199. Return it after 14 days and you may not be hassled, but you will be out as much as $325.

Consumers (including Individual Responsibility Users) – Device/Accessory Returns

Cosmetic blemish items are considered closeout items and are not eligible for return or exchange.