FCC's fine given to Verizon Wireless a $25 million joke

For large corporations, government penalties for wrongdoing a trivial cost of doing business

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Wow. Talk about being brought to its knees! Verizon Wireless executives today must be literally floored by the "largest fine in history" assessed the company Thursday for the "mystery fees" it charged 15 million customers over the past three years.

As in rolling on the floor laughing.

It's hard to believe anyone seriously thinks this multibillion-dollar mobile communications company will be hurt in the slightest by the fine, never mind dissuaded from further sleazy behavior. Yet I keep reading how the Federal Communications Commission, which concluded a 10-month investigation into the carrier's billing practices, showed it has consumers' backs, how other carriers should take heed, how the FCC's actions "send a message," etc.

It sends a message, alright. And the message is that corporations can rip off consumers at will, knowing that the worst consequence will be a wrist slap and a forced (not to mention insincere) statement of contrition.

To recap, going back to November 2007 Verizon Wireless charged customers without monthly data plans $1.99 per minute for a number of activities, such as data transfers via built-in apps, accessing Web links that were advertised as free (such as Verizon Wireless's own mobile web site) and attempts to access data that failed due to inadequate network bandwidth.

I know, add in the $52.8 million that Verizon Wireless previously said it would repay customers and now the company is coughing up $78 million for its misdeed. How much is this really going to hurt a company that has generated more than $107 billion in revenue and operating income of more than $30 billion over the past seven quarters? I think we all know the answer.

Furthermore, the $25 million "fine" isn't even a fine. It's a voluntary payment to the U.S. Treasury and requires no admission of guilt from Verizon Wireless. Not only that, even though the FCC has been investigating the case since the beginning of the year, Verizon Wireless continued the practice right up until now.

But there's Michele Ellison, Chief of the FCC’s Enforcement Bureau, saying, "I am gratified by the cooperation of the Verizon Wireless team in the face of these issues, and pleased they are taking the high road."

Honestly, the whole thing is a joke. Too bad the joke's on consumers.

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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