Verizon is defending its practice of forcing customers to switch plans to get a government-funded $50-per-month discount, telling the Federal Communications Commission that this is not the same thing as “upselling.” Verizon has partially backtracked from this restrictive policy but told the FCC it will take “about a month” to deploy a billing-software update that will let more home-Internet customers get the discounts without changing plans.
As we wrote on May 18, Verizon is preventing some customers from getting the new government subsidies unless they switch to different plans that are sometimes more expensive. AT&T, Charter, and T-Mobile also limit the plans eligible for the subsidies, while Comcast says it will honor the discounts even on grandfathered plans that are no longer offered to new customers.
Verizon is mad that its policy was criticized.
“Despite Verizon’s decision to offer the EBB [Emergency Broadband Benefit] discount on nearly all of our current fixed and mobile broadband service offerings, there have been isolated claims that Verizon viewed the EBB program as an opportunity to ‘upsell’ customers to higher-priced plans. Those claims are unfounded,” Verizon told the Federal Communications Commission in a filing on Friday.
Despite this contention, Verizon decided to loosen its rules after facing a public backlash over its subsidy restrictions. “[W]e heard from some customers that they prefer to stay on the legacy plans they have. Moving forward, we will offer customers on legacy FiOS plans (no longer in market today) the ability to enroll in EBB,” Verizon said in a May 19 update, a week after the discount program began.
That means FiOS home Internet customers won’t have to switch to Verizon’s new “Mix & Match” plans to get the discount. However, Verizon told the FCC that it will take a month to make the “complex billing system changes” necessary to give the discounts to FiOS customers on grandfathered plans. FiOS adopted the Mix & Match pricing system in January 2020, so what Verizon is calling “legacy plans” includes any FiOS plan that’s at least 18 months old.
Verizon lets users switch back—if they act fast
Verizon also told the FCC that “EBB customers that contact us within 14 days of moving to a Mix & Match plan may switch back to their legacy plan.” But Verizon didn’t say whether it has notified those customers about that option. For customers who already switched, the 14 days will have passed by the time Verizon changes its billing system to allow the discount on old plans.
On the mobile side, Verizon apparently still won’t let wireless users on old plans get the discounts unless they buy “a Mix & Match Unlimited phone plan or a Mobile Hotspot as the main or only line on an account.” Verizon doesn’t make the subsidy available at all on legacy DSL plans, which it offers in areas where it hasn’t upgraded copper lines to fiber.
Verizon said the purpose of its letter to the FCC is to “address incorrect characterizations of Verizon’s practices in implementing the EBB program and notify the Commission of additional steps that Verizon has taken to encourage participation by eligible consumers.”
“[R]ather than paying more, most existing customers who switch from a legacy FiOS plan to an EBB-eligible Mix & Match plan save money—an average of about $25 per month (before the EBB discount)—by having the flexibility to choose just the services and content that they want. These savings would continue after the EBB program ends,” Verizon said.
Verizon also said that its “experience during the early days of the program confirms that our original list of EBB-eligible services provides the vast majority of EBB-eligible customers with both choice and a cost-effective broadband service option.” But Verizon did not dispute the fact that, to get the discount, some customers had to get more expensive plans with prices that would remain at the higher level after the government subsidy expires.
AT&T limits also frustrate customers
The EBB is temporary, lasting until the $3.2 billion in program funding runs out or six months after the Department of Health and Human Services declares an end to the pandemic.
Verizon is not the only Internet provider frustrating customers with its subsidy policies. For example, AT&T is not letting home-Internet customers get the discount on plans with speeds higher than 300Mbps. One AT&T customer who pays $70 a month for 1Gbps speeds emailed Ars last week, writing, “I was told that in order to take advantage of the subsidy, I must change to a 300Mbps plan for $75 a month, and I’d pay $25 per month after the subsidy, and lose two thirds of my speed!”
ISPs only have to offer one plan to comply
The $50-per-month subsidies are available to people who have low incomes or who lost income during the pandemic. But ISPs aren’t required to participate in the EBB program, and the FCC lets ISPs participate even if they only make one plan available to customers seeking subsidies. The FCC said it made that decision because “dictating the required offerings in a temporary program will discourage participation and result in less consumer choice than would otherwise be available if we provided participating providers with more flexibility.”
While Verizon apparently isn’t breaking any rules, consumer-advocacy group Public Knowledge told the FCC that Verizon’s “behavior runs contrary to the intent of the program and undermines Verizon’s own reasons for requesting a recent waiver of the FCC’s EBB reimbursement rules.” The FCC on April 20 granted Verizon’s request for a waiver, which allowed additional time to file reimbursement claims.
“Contrary to Verizon’s arguments, receiving the waiver did nothing to prevent Verizon from later using the EBB to force customers onto more expensive plans well above the subsidy amount,” Public Knowledge wrote, adding that the FCC “should take note of the fact that Verizon’s internal decision-making process led it to treat the EBB as an opportunity to take advantage of the low-income consumers they were supposed to serve.”