NYC Says Verizon Failed to Deliver FiOS across the Five Boroughs

NEW YORK — A NYC audit report shows that Verizon has failed in its commitment to extend its Verizon FiOS network across the five boroughs. Mayor Bill de Blasio, Counsel to the Mayor Maya Wiley and Department of Information Technology and Telecommunications (DoITT) Commissioner Anne Roest announced the city’s audit findings of Verizon’s citywide Fiber Optic Service (FiOS) implementation. In a 2008 agreement with New York City, Verizon committed to extend its FiOS network to every household across the five boroughs by June 30, 2014.

Consistent with complaints from New Yorkers, the audit – initiated by the Department of Information Technology and Telecommunications last September – documents far-reaching failures and reveals that more than six years after its agreement with the city, Verizon has yet to deliver on the commitments spelled out in the franchise agreement.

“Through a thorough and comprehensive audit, we have determined that Verizon substantially failed to meet its commitment to the people of New York City,” said Mayor Bill de Blasio. “Broadband is a key component of this Administration’s fight to create opportunity and sustainable economic development in every corner of the five boroughs. As I’ve said time and again, Verizon must deliver on its obligation to the City of New York and we will hold them accountable.”

The audit results reveal an egregious failure on the part of Verizon to deliver on the FiOS agreement, including:

• Verizon has not run fiber throughout enough of the City’s residential neighborhoods to deliver on its commitments. DoITT field inspections confirm that blocks claimed by Verizon as completed in fact have not had installed the necessary equipment to deliver service.


• Verizon’s own records indicate that service is “unavailable” at certain residential addresses, despite company claims that it can deliver service to all New Yorkers who want FiOS. In fact, there is evidence of callers being told by Verizon that the company has no plans to bring FiOS to their address. And for prospective customers, details about current and future FiOS availability are unavailable from either Verizon’s customer service representatives or the company’s website.


• Verizon has failed to consistently document service requests. Verizon staff admitted to DoITT that they did not record or track inquiries from prospective customers who requested service before fall 2014. This is in direct violation of the franchise agreement, which requires Verizon to track requests for cable service.


• Where Verizon has accepted requests for service, it has consistently failed to respond to service requests within the required six- and 12-month timeframes. DoITT’s audit reveals that 75 percent of the more than 40,000 non-standard requests – i.e. requests from buildings that had not previously been wired for FiOS service  – that were labeled outstanding as of December 31, 2014, had been outstanding for over a year.


• Despite clear requirements in the franchise agreement, Verizon has only tracked complaints from actual subscribers and has not tracked complaints and inquiries from prospective customers. The franchise agreement requires Verizon to keep records of all complaints—with no distinction between current and prospective customers – for six years. However, Verizon’s own complaint procedures, glossary, and interviews reveal that the company only records and tracks complaints of actual paying subscribers, rather than potential subscribers who request service in their neighborhoods.


• Verizon failed to cooperate with the City’s audit of FiOS rollout, in violation of its franchise agreement. Verizon initially failed to provide access to the systems used in calculating the status of network build, with access granted five months after the initial request. Throughout the course of the audit, and in violation of its franchise agreement, the company significantly delayed or failed to provide access to various other records, reports, and contracts requested by the City to conduct a full assessment of FiOS implementation.Currently, some 22 percent of New York City households have no Internet connection; that number jumps to 36 percent for families living in poverty. But even for those who have it, most pay too much for what they get, with the best $40 per month package available to New Yorkers, for example, featuring download and upload speeds that are a fraction of those available in other major cities like San Francisco and Seoul. The lack of competition in the City’s broadband market is one of many issues at the root of this problem.
  
  Mayor de Blasio recognizes that broadband, like phone service, is a necessity that must be available to and affordable for all New Yorkers. As such, he has demanded greater accountability from the cable television and broadband service providers that use the City’s streets and public rights of way, first as Public Advocate and now as the City’s chief executive. Holding City franchisees accountable to the commitments they have made is a crucial element of the de Blasio Administration’s strategy for delivering universal, affordable broadband citywide.

Verizon Responds, Calling Report a "Union Tactic"

As reported in Network World Verizon spokesman John Bonomo refuted the report and suggested that it is part of an attack from a labor union, with which Verizon is set to begin negotiations next week. "First and foremost, it is important to note that it's not a mere coincidence that the report is made public today, and labor negotiations with our largest union begin on Monday," Bonomo said in a statement emailed to Network World. "It's well known the union has ties to the city administration, and things like this are a familiar union tactic we have seen before."

Specifically, Bonomo refuted the report's claims that the company has not laid enough fiber to provide FiOS services to all of the city's residents, and says these accusations are "based on erroneous factual conclusions and incorrect interpretations of the Agreement."

"We indeed have met the requirement to install fiber optics through all five boroughs," Bonomo said. "Our 3.5 billion [sic] investment and the 15,000 miles of fiber we have built have given New Yorkers added choices and a robust set of advanced, reliable and resilient services. The challenge we have is gaining access to properties which of course would expand availability. We look forward to working with the City to seek solutions to this issue."

Regarding the issues with "gaining access to properties," the statement echoes Verizon's claims of difficulty with city landlords restricting access to buildings. The company has long attributed any perceived delays in project to this issue, and in the Wall Street Journal article this week Verizon said it was the primary reason FiOS has yet to reach every household.