Maryland regulators are hammering Verizon for complaints about telephone outages and missed service appointments. The Public Service Commission opened an investigation last month, demanded documents, held hearings and threatened fines.
"Reliable telephone service is a necessity, not a luxury," chided the commissioners.
But thanks to the Federal Communications Commission and the administration of Gov. Martin O'Malley, what is almost certainly Maryland's fastest-growing kind of telephone service is immune from much scrutiny by the PSC or anybody else.
Comcast, Vonage, Skype and others -- among them Verizon -- are selling voice-over-Internet protocol phone service, known as VoIP. Between them they're probably adding thousands of Maryland customers a month, although nobody will disclose state-by-state numbers.
But the FCC has decreed that VoIP is interstate commerce that states cannot regulate, thus setting up a double standard and preventing the kind of accountability the Public Service Commission is demanding from Verizon's traditional phone service. Courts recently upheld the decision. To make matters ironclad, the General Assembly passed and O'Malley signed a law this year banning the PSC from overseeing Internet-telephone service.
It's a shame the feds removed states' regulatory billy club. It's a double shame Maryland has walked entirely off the beat -- especially after last month's two-day Skype outage and a growing number of complaints to Maryland's attorney general about cable companies that carry VoIP.
Government has essentially decided to regulate VoIP the way it regulates cable TV and Internet -- which is to say, very little.
Unhappy VoIP and cable customers in Maryland have been calling the PSC in recent weeks and saying, essentially, why don't you hold hearings on the cable companies as you did with Verizon?
"We don't regulate them," says agency spokeswoman LaWanda Edwards. The agency refers Comcast customers getting less-than-Comcastic service to Attorney General Douglas F. Gansler.
Can't do much
"When we get these complaints, there's not much we can do unless [the companies] have in some way violated the Consumer Protection Act, which is usually not the case," says Gansler spokeswoman Raquel Guillory. "We take those calls and then forward them to the local jurisdiction, the local cable commissions."
So cities and counties can make sure cable Internet and phone service are reliable, right? Should you call them if you have a problem?
Nope. The cable boards have no authority over VoIP services. And even over cable TV and Internet they have little power except to revoke the franchise, which never happens.
"There isn't much the local jurisdictions can do" except field complaints and try to intercede for customers one by one, says Thomas Peddicord, counsel for the Baltimore County Council.
That may solve individual cases but it doesn't prompt the kind of systemwide improvement the PSC is seeking for Verizon. Because VoIP is unregulated, it is impossible to measure customers or service problems in Maryland.
Comcast, which is aggressively selling its "triple play" of phone, Internet and TV service in Maryland, had 3.5 million phone customers across the country at the end of June, most of them using VoIP. Vonage has 2.5 million subscribers in the United States and Canada.
That's a substantial number of Americans subject to the same risk (lacking phone service in an emergency) that concerned the PSC about the problems with Verizon's traditional phone service.
Verizon got into trouble after regulators received more than 450 complaints this year regarding poor service, outages and missed appointments. For the same period, the attorney general's office has received 112 similar complaints about Comcast, a substantial increase from last year, Guillory said.
(Although complaints about Comcast were lower than those for Verizon, Comcast has fewer Maryland customers. At the same time, the Comcast problems related to a mix of cable TV, Internet and VoiP, so the tallies aren't directly comparable.)
Comcast customer Kathy Wolff's VoIP service failed in early July, two days after it was installed, according to notes she kept. She had no landline phone in her Timonium home for a week. When she took the afternoon off from work to wait for a repairman, he never showed up.
"Thank God for cell phones," she says, although, as the PSC points out, many people don't have them.
After I called Comcast's attention to Wolff's ordeal, the company gave her four months of free service. "I'm very pleased now," she says.
"We believe even one customer issue is too many," says Comcast spokeswoman Aimee Metrick, adding that Comcast is hiring extra technicians and call-center reps, upgrading its Web site, offering more weekend and evening appointments and otherwise trying to improve.
OK, but there might be fewer customer issues -- or more avenues for satisfaction -- if Maryland and the FCC hadn't punted on VoIP oversight. Even Verizon promoted the law prohibiting the Public Service Commission from regulating VoIP.
"Verizon sees no need for more regulation," says spokeswoman Sandra Arnette. (I'll bet they don't, after last month!)
O'Malley spokesman Rick Abbruzzese says that, thanks to the federal ruling, the Public Service Commission couldn't regulate VoIP even if policymakers wanted it to.
Meanwhile, he said, the Maryland law "promotes competition in the marketplace" by making the state's regulatory stance clear. It also requires VoIP vendors to warn customers that the service is beyond the PSC's jurisdiction, and it asks regulators to track customer complaints about VoIP and report back in 2010.
I bet there'll be more than a few. But the way things stand, there will be little government can do. Verizon's traditional phone service may have its problems, but at least it hasn't gotten a free pass from regulators.