D. C. communications lawyers Smithwick & Belendiuk ask FCC Inspector General to take another look at 2010 consent decree that may not have been all it was cracked up to be.
In recent years the Commission has repeatedly characterized its mission as one of “consumer protection”. One prominent example: back in 2010, the Enforcement Bureau claimed to have “ma[de] things right and put customers back in the driver’s seat” with respect to “mystery fees” that Verizon Wireless had apparently been improperly imposing on its customers for years. Then-Chairman Genachowski said that the Bureau’s successful negotiation of a consent decree with Verizon demonstrated to American consumers that “the FCC has got your back”. Then-Commissioner (now Acting Chairwoman) Clyburn said that the “voluntary contribution” Verizon agreed to pay the government – $25 million, over and above the $50+ million in unlawful charges to be refunded – “sends a clear message as to how important this is to us”.
You’d think that the 2010 Verizon consent decree was a massive triumph of Good over Evil, with all innocent victims made whole and the wrong-doer brought totally to its knees.
Um, not exactly, according to the folks at Smithwick & Belendiuk (S&B), a D.C. communications law firm.
Art Belendiuk, one of S&B’s namesakes, has filed a Petition for Investigation with the FCC’s Inspector General that casts the Verizon consent decree in an entirely different light. According to the S&B Petition, the $50 million or so that Verizon agreed to refund was about $250 million short of the amount that Verizon had actually collected in wrongful charges. S&B also alleges that Verizon knew that it was overcharging its customers but, in its submissions to the Bureau, denied doing so. And S&B claims that the Bureau itself undertook no independent audit of Verizon’s claims, and instead simply took Verizon’s word that the $52 million would cover refunds to all overcharged customers.
If S&B is correct in its charges, somebody’s got some ’splainin’ to do.
S&B’s claims are based on a raft of documents S&B managed to wrangle out of the Commission through Freedom of Information Act requests – and some litigation in U.S. District Court when the FCC’s initial responses to those requests were less than satisfactory, in S&B’s eyes. Whether the Petition will get any traction remains to be seen. Invoking the office of the FCC’s Inspector General is somewhat unorthodox (although, under the circumstances, completely understandable), and it’s far from clear whether the IG will be eager to grab for this particularly hot potato.
But if nothing else, the Petition reminds us all of a couple of things.
First, despite any claims the FCC might make to “transparency”, there remain aspects of the agency’s regulatory activities which are anything but transparent. Indeed, the difficulties (described in the Petition) that S&B ran into in trying to get hold of the underlying documents supposedly considered by the Bureau in its investigation of Verizon scream “stonewall”. An inclination to withhold such materials from the public seems curiously inconsistent with the fanciful notion that the Commission is a “consumer protection” agency.
Second, it’s usually a good idea to take self-congratulatory governmental press releases with more than a grain of salt. Yes, the Commission doubtless felt good about shaking $75 million out of Verizon – but if the Bureau knew or should have known that Verizon’s real refund exposure may have been six or more times greater than what Verizon was claiming, who really got the better of whom here? If S&B is correct (and we emphasize that at this point we have no idea whether or not it is), what does that say about the thoroughness of the Bureau’s processes and/or the honesty and candor of Verizon?
In any event, the S&B Petition makes for interesting reading, and it could lead to even more interesting developments. Check back here for updates.