Verizon’s Rural Roaming Challenge
In September 2017, Verizon wrote to around 8,500 customers in rural areas to advise them that they were cancelling their service because of “substantial” roaming use. Verizon have since had to backtrack from their original letter. One of Verizon’s claims is that it has the best American network, with coast to coast coverage. Despite this, the carrier still has a number of roaming partnership arrangements in place for those areas where it does not have coverage. Here, the idea is that customers with a Verizon plan are always connected, to the point that Verizon’s devices do not show the customer that they are roaming onto another carrier. Presumably this is because Verizon are carefully massaging their ‘best network’ image and would not want customers to recognise that they are using a third party network. Understandably, many customers were surprised to receive the letter from Verizon: if the device gives no visible clue that it is roaming onto a partnership network, how are they to know?
As the largest American carrier, Verizon runs it’s own “LTE in Rural America” scheme, whereby the carrier has formed a number of exclusive network sharing partnerships with small, regional carriers. The idea here is that a customer living or working in an area serviced by the regional carrier signs one of their plans, and for most of the time he or she uses their service. However, where the customer leaves the area, their device is able to transparently roam onto the Verizon network and their service is not interrupted.
Let me say a few words about inter-carrier roaming arrangements: these are the source of considerable revenue for carriers. One carrier will charge another handsomely for the privilege of letting customers roam onto its network. This is exactly what’s happened to Verizon: its customers have been roaming on partner networks, and Verizon has been paying more to these roaming partnership businesses than it has been getting from customer bills!
Back in September, the original story was picked up by the media for a few reasons. One is that Verizon did not state what exactly “substantial” meant, and for some customers at least, their monthly usage was only a few gigabytes a month. The answer is almost certainly a proportion of their monthly allowance but Verizon consider this to be commercially sensitive information. They’re not telling. Another is how Verizon took a draconian approach to dealing with customers: if they aren’t making the company any money, it didn’t want to know. These sorts of decisions make it difficult to be sympathetic towards Verizon.
Verizon – and the smaller carriers – should have safeguards in place that prevent a customer from signing up to the “wrong” carrier. A customer living in an area not serviced by a given carrier should be prevented from signing up, so that the carriers do not lose money on these connections. it’s probably also explained in the plan small print paperwork that if customers abuse roaming they can be binned by their carrier: few people read this. Isn’t it a shame that we can’t so easily bin our carriers when they charge us too much for going over our allowances?
Verizon’s original letter gave these 8,500 customers about a month to move their service to another carrier, and to sweeten the deal agreed to hand off customer devices with an outstanding balance and waive all early termination fees. The original letter did not offer any leeway to negotiate with Verizon. This is very much a cut and shut approach to dealing with customers, and not something Verizon had to do. There are various ways carriers can encourage customers to moderate their use, through restricting roaming use, reducing data speeds, rather than simply cancelling customer accounts.
Since the original customer letter, Verizon received considerable backlash. Verizon management explained some public safety workers would not be disconnected, but this wasn’t the experience when at least one firefighter spoke with customer services. The carrier has later clarified: “We have become aware of a very small number of affected customers who may be using their personal phones in their roles as first responders and another small group who may not have another option for wireless service.” Perhaps Verizon knew that there would be a number of public safety officers in these 8,500 customers but figured they would go quietly rather than kick up a fuss?
Following pressure, the original deadline for customers to move service has been extended from October 17 to December 1. For those customers without an alternative carrier, Verizon is offering a select range of alternative plans in S, M and L sizes for 2 GB, 4 GB and 8 GB of data respectively, plus a 5 GB single-line plan. Verizon’s “unlimited” plans are unavailable for these customers.
Going forwards, it’ll be interesting to see how things develop: Verizon is a business, and exists to make a profit for shareholders. We may see some of the “LTE in Rural America” schemes start to unbundle. If the smaller local carriers lose too much revenue through having fewer customers roaming on their networks (and so being unable to charge Verizon roaming costs), the cost of their infrastructure becomes too great and the business may fail. Being cynical, this gives Verizon the opportunity to step in and buy up the infrastructure so as to “rescue” those customers signed up to the regional carrier. Let’s hope this isn’t Verizon’s plan all along.