Slammed and scammed

On Tuesday, WorldCom settled charges that it illegally switched customers’ telephone carriers through the practice known as slamming. The $3.5-million fine for a year’s worth of wrongdoing was the largest ever levied by the Federal Communications Commission; it represented about a day’s worth of profit for the nation’s second-largest long distance company.

AT&T had a busy week as well. A few days before the WorldCom settlement, the nation’s largest long-distance provider went before the FCC and promised — scout’s honor — that it would cut customer rates if the feds would cut by $3.2 billion the access fees local phone companies charge long-distance carriers to connect calls. The FCC agreed to the deal; AT&T promptly reneged.

AT&T’s follow-up announcement that it actually intended to raise rates for most customers was greeted with howls of protest. FCC commissioners complained that they’d been hoodwinked. Consumer groups said they’d seen it coming. The public, which should be used to getting gouged by now, objected mightily. Even some members of Congress squawked, though not so loud as to disturb the flow of campaign dollars pouring in from the telecommunications industry. AT&T followed up its follow-up by saying it will “defer” any rate changes — a polite way of saying it will wait until the furor subsides and nobody’s paying attention.

The WorldCom scam was a doozy. According to the 2,900 customers who filed complaints, it often went something like this: A WorldCom telemarketer would call to convince the customer to switch carriers; an audio tape of the conversation was recorded to verify the customer’s consent; the voice giving consent, purportedly that of a spouse agreeing to higher rates and a switching fee, turned out to be that of another WorldCom telemarketer, added to tape later.

WorldCom executives say they are shocked — shocked, they say — to learn of such goings on. Anyone caught engaging in such practices will be fired promptly (if, presumably, they haven’t already been promoted). What’s needed, WorldCom says, are tougher anti-slamming rules, much like the tougher anti-slamming rules the FCC enacted two ago and that WorldCom went to court to block.

AT&T’s was much more mundane, the old bait-and-switch. It told the FCC it would pass the local access savings on to customers. It knew that the FCC no longer has authority over long-distance rates. It knew that authority can only come from Congress, which is unlikely to antagonize generous contributors in an election year. Most of all, it knew that, for Congress at least, it’s always an election year. Ho hum.

Welcome, once again, to the wonderful of telecommunications deregulation. This was the promise: Set the industry free from government meddling and the companies will compete furiously to the public’s benefit. And if there’s a public benefit to scaling new heights of chicanery and shenanigans, it’s a promise kept.