Office of the Ohio Consumers' Counsel

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Consumers’ Counsel: Verizon customers deserve more benefits due to company’s poor service

COLUMBUS, Ohio – May 1, 2007 – The Office of the Ohio Consumers’ Counsel (OCC), the residential utility consumer advocate, today told state regulators that a proposed settlement involving Verizon’s local telephone service is inadequate and not in the public’s interest. Verizon has approximately 562,000 traditional residential lines in Ohio. The company’s wireless service is not at issue. Additionally, the OCC asked for local public hearings to provide customers with an opportunity to voice their opinions about Verizon’s service quality.

The OCC believes that the settlement, which has been agreed to by Verizon and the staff of the Public Utilities Commission of Ohio (PUCO), fails to provide adequate remedies given the extent and duration of Verizon’s service quality problems. The settlement is pending approval by the PUCO Commissioners.

“From delayed repairs to missed customer appointments, the problems experienced by Verizon customers appear to violate state consumer protection standards. The proposed settlement does not provide strong enough remedies or ensure that residents will begin receiving better local telephone service from Verizon,” said Janine Migden-Ostrander, Consumers’ Counsel. “We urge the PUCO to put customers’ needs first by rejecting the settlement.”

In April, the OCC asked the PUCO to order the company to show cause why it should not be found to be providing inadequate service. The OCC urged the PUCO to require Verizon to provide an action plan to bring its local service into compliance within three months and submit monthly data to show its repair and installation performance for the next two years.

The OCC also asked the PUCO to consider ordering Verizon to provide customer benefits to make up for what appeared to be systemic service quality problems, and to look at imposing penalties based on certain service quality findings.

The OCC believes the settlement between Verizon and the PUCO staff fails to be in customers’ interest for the following reasons:

The settlement contains inadequate penalties given the severity of the service problems and the size of Verizon. Under the settlement, $250,000 would need to be paid to the state, while other penalties would be suspended unless a violation of the agreement occurs.
Insufficient commitments are made by Verizon to improve its system’s infrastructure.
There is a lack of accountability because only minimal improvements must be made in service performance.
Inadequate credits would be provided to individual customers if the company’s service problems continue.

Among the apparent violations of the state's telephone consumer protections, the OCC found Verizon had failed to repair telephone outages within 24 hours or other service-related problems within 48 hours; missed commitments and appointments related to installations and repairs; and failed to install new service within five business days.

The OCC found that consumer complaints to the PUCO about Verizon service quality reached a four-year high in 2006. In addition, data from the Federal Communications Commission showed that the number of Verizon customer complaints in Ohio increased 400 percent from 1998 (220 per million telephone lines) through 2006 (933 per million telephone lines). For 2005 and 2006, Verizon’s complaint rate filed with the FCC was higher than the total of all other Ohio telephone companies reporting data, including AT&T, Cincinnati Bell and Embarq, which was formerly Sprint.

Verizon service quality has been of concern in other states as well. State regulators in Maine, New Hampshire, New York, Vermont and West Virginia formally investigated Verizon’s performance. In some cases, significant fines or commitments to improve service have resulted.

About the Office of the Ohio Consumers' Counsel

The Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals. To receive utility information, brochures, schedule a presentation or file a utility complaint, residential consumers may call 1-877-PICKOCC (1-877-742-5622) toll free in Ohio or visit the OCC website at www.pickocc.org.