Helena, Montana – On Friday, September 29, Mike Kilgore, incoming President and CEO of the Rural Wireless Association, provided clarifying details to the Montana Legislature’s Energy and Telecommunications Interim Committee demonstrating that Verizon, and Verizon alone, is responsible for the planned loss of mobile service to thousands of Verizon customers in rural portions of Montana if they do not switch to the underlying carrier used by Verizon for roaming support or agree to switch to a VZW metered plan by December 1. Some Verizon customers had initially been given the impression that the break up was due to rural carriers raising their roaming rates, an “alternative fact” that Mr. Kilgore quickly dispelled.
The Verizon break up letters were sent September 11 to nearly 1,000 Verizon subscribers living in rural Montana and affecting nearly 2,000 people who currently receive Verizon service in Montana. Mr. Kilgore, a Montanan who is the CEO of both Nemont Telephone Cooperative and Sagebrush Cellular (one of Verizon’s rural LTE roaming partners in Montana) gave a compelling case for supporting small rural wireless carriers that, in turn, support larger nationwide carriers in rural markets. By building out in rural areas where none of the nationwide carriers serve and then allowing nationwide carriers to use their networks, rural carriers enable nationwide carriers to extend their footprints. According to Kilgore, under negotiated roaming agreements, Verizon and its rural roaming partners established commercially reasonable roaming rates and other commercially acceptable terms.
Verizon implemented a competitive unlimited data plan in February of this year. Now that data usage is on the rise, Verizon has felt the impact on its bottom line and is pulling the plug on its rural customers.
According to Milt Doumit, Verizon’s Vice President of Government Affairs for the Pacific Northwest, Verizon’s decision to break up with certain customers is due to the customer costing Verizon more than the amount Verizon receives from the customer. When quizzed by Montana Representative Derek Skees, Verizon’s representative elaborated that it is Verizon’s strategy to edge out to rural areas over time and that there were plans to build out 25 new sites in Montana in the coming year. This perplexed Montana Representative Daniel Zolnikov who asked why Verizon is ending its contractual relationship with customers rather than building out to serve them. Mr. Doumit didn’t have a satisfactory explanation.
Verizon was also asked by Representative Daniel Zolnikov and Vice Chair Derek Skees if it is fair for Verizon to break a contract when it isn’t working financially for Verizon and yet hold a customer to a two year contract when the contract isn’t working for the customer. Mr. Doumit did not address the disparity in treatment.
The video of the Montana Legislature Energy and Telecommunications Interim Committee meeting provides full details. Meanwhile, rural consumers in other states have been dumped by Verizon and are up in arms about their treatment.
“Many of our rural carrier members participate in the Verizon LTE in Rural America program and have long supported Verizon in its endeavor to extend its coverage through sharing spectrum with rural carriers who then build out to cover remote and underserved areas from Alaska to North Carolina,” stated Carri Bennet, RWA’s General Counsel. “The roaming agreements were negotiated and deemed commercially reasonable by both parties when they were entered into two years ago. As far as RWA can tell, the only change to the equation is Verizon began offering unlimited data plans to their customers without realizing that their rural customers use a lot of data because there may not be other means of connecting to broadband in many parts of rural America. We are surprised that Verizon has taken this approach. Our members were not given a heads up by Verizon that Verizon was breaking up with its own customers. In fact, we had reports through social media that some of our members were initially blamed for the break up by Verizon customer representatives who erroneously told the customers that the break up was due to the rural carrier raising the roaming rate on Verizon. This simply wasn’t the case,” added Bennet.