Verizon's Pay-Phone Dopiness
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Things haven't been going real well for Verizon since it was launched last June, after Bell Atlantic bought out GTE. And by the same token, I guess, you could say that things haven't been going all that well for Verizon's customers, either.
A 19-day strike last August, consumer complaints jumping an astounding 48 percent for the second quarter of 2000, millions of dollars in penalties levied against them by the state's Public Service Commission, the Communications Workers Union accusing them of falsifying work orders to cover up a terrible service record?and just try to find a Verizon customer along the East Coast who has anything nice to say about them. Connections are awful, rates are through the roof, repairmen don't show up, their DSL and wireless service sucks. There are even entire websites?like VerizonEatsPoop.com?devoted exclusively to badmouthing the company. Verizon, it seems, is fast becoming more hated than even Microsoft or Starbucks. Yet despite competition, they remain the largest telecommunications company in the U.S., expecting yet more record profits from this past year.
The most recent PSC report on Verizon (dated 12/13/00) reveals a company whose service record has gotten progressively worse from the moment they changed their name: in nearly every category?from line trouble to missed appointments?their performance has lapsed. And as a result, total PSC penalties this year came to $43.1 million. They waived half a million in deference to Hurricane Floyd. And Verizon is asking for more than $22 million in waivers on account of the strike. But even if they were granted all the waivers they're asking for, they'd still owe the PSC upwards of $17.6 million in penalties?an amount that's still significantly higher than in previous years.
Verizon's response to this ranges from flat denial (Eric Rabe, a company spokesperson, was quoted in The Washington Post saying, "You can't make a case that [our] service is worse than it used to be")?to blaming the wet spring for their equipment troubles, and the strike for their lousy performance record. And the problems with their DSL service, I was told, were not their fault, either?it's the fault of the customers, who simply don't understand how complicated DSL really is.
They say things will be getting better soon, though.
"They spent just scads of money on infrastructure and systems and stuff," says Verizon's Jim Smith. "The service rep training and support for phone customer service has been invigorated in a big way. It's sort of a culture change thing that came along with the merger?we took the opportunity to get them all on the bus in making sure that the customer's satisfied. In fact, when they finish a contact?it's not scripted, but it's suggested that they say, 'My goal today was to delight you with the service that I have provided?have I done so?' And they're not supposed to get off the call if the customer says, 'No, I'm not satisfied.' Reason being?there are an awful lot of competitors out there. And they are stealing customers left and right. And the only way to win is to give better service."
The latest bit of Verizon news is the rumor that the cost of a local call from a Verizon pay phone will soon jump from 25 to 35 cents here in the city.
At the end of December?again, shortly after the PSC report?Verizon announced that the rates would be making just such a jump in Rhode Island.
"The price of local pay phone calls was deregulated by the FCC in 1997 as a result of the Telecommunications Act of 1996," their press release explained. "Since then, most local telephone companies and major independent pay phone companies across the country have increased the price of a local pay phone call to 35 cents."
According to Verizon's William Freeman, "Letting the market establish fair prices promotes the availability of pay phones, enabling Verizon and our competitors to recover the cost of providing pay phone service... Customers we've talked to in other markets have told us a local call is still a great value at 35 cents."
Well, not everyone seems to think so. Shortly after the announcement was made, the mysterious folks behind VerizonEatsPoop.com posted their response.
The rate increase, they said, will make Verizon's "already non-functional pay phones even more inconvenient to customers... Of course, Verizon wants its customers to use their calling cards and are trying to make coin calls as inconvenient as possible. Calling card calls have a connection fee and are normally more per minute than coin calls; moreover, no one has to go and collect the coins from calling card calls, hence Verizon can eliminate some of its labor force."
They also went on to suggest that New York will be next. The proof? As you've probably noticed, thousands of new officially designated Verizon pay phones are being installed throughout the city. The plastic instruction plates near the coin slot currently announce that a call costs 25 cents. Tricky thing is, though, the plates are two-sided. Flip it over, and it says a call is 35 cents.
I asked Jim Smith about the potential rate hike.
"Actually," he explained, "it was November of '98, in the old Bell Atlantic territory, we did just about everybody except Rhode Island and New York. West Virginia, Virginia, all the way up to Maine."
So can we assume that New York will be next?
"Hard to say," he said. "I believe that there are some covenants and restrictions around the current rate plan that's in place. Not that the PSC was smart enough to see this thing coming a few years ago. But I believe that as part of the rate stability plan that they do have in New York, there's an explicit prohibition against messing with the pay phone rate for a local call. And that's why New York is kind of hung up. I suppose we could appeal and say, 'Look, we gotta do it, the business needs the revenue,' but nobody's taken that step yet."
Which is good, I suppose, given last year's profits.
"But what about those plastic instruction plates?" I asked. "They're two-sided."
"That's right!" he admitted. "Well, since there's 400,000 Verizon pay phones, they figured we might as well print both sides?it saves a separate press run. They did that a while back, too?when it was still Bell Atlantic. Production- and installation- and maintenance-wise, you just turn the card around when the state flips. Not so dumb, these telephone guys, I guess."
Fortunately or unfortunately, neither are the rest of us. Here's the question?given that most of the new Verizon pay phones are being installed in states in which it already costs 35 cents to make a local call, why would they need to print up two-sided plates for them? Is Verizon considering a switch back to the 25-cent call at any point? That seems doubtful. And as far as the "two press run" argument is concerned, printing two-sided on plastic is a very expensive procedure. Also, a second, smaller, two-sided press run for New York alone would still be much cheaper than printing them all?pointlessly, it seems?that way.
Nevertheless, Verizon officials are on the record saying it's not going to happen. At least not any time soon. But given their recent history, it might be wise to start saving those dimes.