Case Example 1.1 Verizon: How (Not) to Communicate with Stakeholders

In 2017, reports began surfacing on how Verizon, one of the largest internet service providers in the USA, began throttling internet speeds for video streaming in a revamp of its unlimited data payment plans for its customers. The throttling of internet speeds involves the intentional slowing down of user downloads by an internet service provider to regulate traffic and reduce a users usage of bandwidth that is supplied to the local network. In this instance, it soon became clear that Verizon was throttling speeds to incentivize users to upgrade to a more expensively priced scheme, where bandwidth is not throttled. Initially, Verizons throttling affected downloads on Netflix and YouTube. However, in 2018 Verizons throttling also affected downloads and communications for essential public and emergency services. Most dramatically, firefighters combatting the raging wildfires in Northern California (specifically around Santa Clara, Mendocino and Paradise) found that they were unable to communicate amongst each other because they had reached the threshold for Verizon to begin throttling and Verizon then cut off most of their service.

Even after the firefighters petitioned the company and met a customer representative soon after the incident, Verizon advised them to purchase a more robust plan or upgrade their current one. Once this response from the company made the news, Verizons stance caused outrage amongst the government and general public alike. The firefighters petitioned a second time and still Verizon decided to continue throttling the service, affecting the firefighters operations and their ability to effectively fight fires. In one e-mail, an exasperated firefighter said to his Verizon account manager, Please work with us; all we need is a plan that does not offer throttling or caps of any kind. The account manager staunchly replied what the going rate was: Its $99.99 for the first 20GB and $8/GB thereafter. To get the plan changed immediately, I would suggest calling in the plan change to our customer service team.

It was only after the news about Verizons unresponsiveness came out and public backlash grew more intense that Verizon stopped its throttling tactics. The companys corporate communication team then immediately released a statement claiming that this was primarily a customer service issue, citing the companys policy to immediately grant access to its service when first responders and emergency services petition. This statement, however, raised questions in the publics mind about why the firefighters reasonable demands were not met, in line with its corporate policy. Furthermore, framing the issue in this manner and by portraying its hard-nosed commercial edge, Verizons individual customers were actively reflecting on the service they themselves were getting from Verizon. With this initial crisis still lingering in the publics mind, Verizon encountered further controversy in September 2018 when unconfirmed news reports broke that victims of Hurricane Florence in North Carolina were also experiencing throttling issues.

In an attempt to address the negative impact of these events on the companys reputation, the communication and marketing teams of Verizon released an advert expressing the companys dedication to supporting first responders and emergency aid. The advert was, however, poorly received due to Verizons perceived mistreatment of the Santa Clara firefighters and the resulting court case that was going on at the time and that was receiving a lot of public attention. Overall, these public controversies highlight a major issue in Verizons corporate communication, with the company being taken off guard and with its reputation being damaged because of its words and actions not being consistent with one another.

Questions for reflection

What are the main reasons for why Verizon ended up in a reputational crisis and what could the company have done to avoid the crisis? In your view, what broader lessons does the case imply for corporate communication?