FCC Decision Violates First Amendment

Implications: 1.      Although the federal appellate court did not issue a stay on the FCC’s ruling on retention marketing, at least the case has been put on a fast track to determine its conformity to law. 2.      It is nothing short of idiotic that a telco cannot make a counteroffer when it is about to lose a phone customer. 3.      It is an example of Big Brother clamping down on the US constitutional right of freedom of expression.

Analysis:  It is important that the court chose not to dismiss the case outright.  The similar rule that cable firms apparently cannot use retention marketing with its voice customers is equally insane.  And the fact that these are “established rules” by the FCC does not take into account the more competitive landscape that exists today.   

As the Chairman of the FCC pointed out in his dissent, the customers are the real losers in arbitrarily removing the competitive bidding process.  He also provides the reason why the decision was arbitrary: “[T]he majority has created new law, holding that these complainants are ‘telecommunications carriers’ for purposes of obtaining this competitive advantage, but that they are not ‘telecommunications carriers’ for other purposes, such as complying with the obligations of ‘telecommunications carriers.’”  

The FCC decision is especially damaging as Verizon has been in a league of its own in aggressively offering a choice of a terrestrial video offering – and in effect a comparable bundle of services that the cable TV companies provide.  At least it was decided not to fine the RBOC.  But the president of the USTelecom is correct in calling it exactly what it is – “a gag order.”