New York City Officials Say Verizon Failed to Meet Fios Pledge
New York City officials said Verizon defaulted on a contract to make Fios available to all its residents. The Department of Information Technology and Telecommunications (DoITT) sent Verizon a notice of default for failing to meet franchise obligations. Philadelphia officials also have raised concerns about Verizon meeting franchise obligations for the fiber network.
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The telco-TV ISP must provide cable service to all New York City residents under its franchise agreement with the city. The agreement uses the definition of cable service in 47 U.S.C. 522(6): “(A) the one-way transmission to subscribers of (i) video programming, or (ii) other programming service, and (B) subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service.” The agreement doesn’t specifically cover broadband, but Verizon uses the same fiber infrastructure for Fios TV and broadband.
“Verizon has failed to fulfill its contractual obligation to install a complete, citywide FiOS network available to all city residents and, most concerning, the company lacks a plan for how to complete it,” said Brittny Saunders, counsel to Mayor Bill de Blasio (D), in a statement Wednesday. “That’s unacceptable.” DoITT Commissioner Anne Roest said her department completed an audit more than a year ago on Verizon’s progress in meeting a commitment to provide Fios to all city residents, regardless of ZIP code. “In that year span, there has been little progress made in completing its commitment, and no viable plan for how to complete it. With very little getting accomplished through discussions, we have been given no choice but to send Verizon a notice of default under several provisions of the franchise agreement. We expect Verizon to take this notice seriously in order to fulfill its promise to fully serve all five boroughs.”
The telco said it has invested billions of dollars in its network. “It is unfortunate and disappointing that the City is taking an adversarial approach to the only company that has challenged New York City's cable monopolies,” a company spokesman said. “The City should be working with Verizon to make choice available to more residents, not discouraging competition.” Verizon blamed city restrictions keeping the company from accessing more buildings. “The City has now chosen not to work with us to resolve impractical processes for getting access to more buildings which seems at odds with bringing the benefits of competition to New Yorkers,” the spokesman said. “If the City pursues counterproductive litigation, we will defend the good work done by our company.”
New York City got support from Verizon union workers represented by Communications Workers of America. “The city is absolutely correct,” CWA Legislative and Political Director-District One Bob Master said in an interview Wednesday. CWA members from New York City "say Verizon has no actual plan to ensure that every city resident can get Fios on a timely basis,” he said. Verizon should hire more workers to finish the build, he added.
Earlier this year, a Philadelphia councilman similarly complained about Verizon’s commitment to roll out fiber in the City of Brotherly Love. Councilman Bobby Henon (D) raised the issue at an April hearing on whether the provider lived up to its promise to roll out fiber to all residents, pointing to the New York City audit as a warning that the same could happen in Philadelphia. Afterward, the city announced a survey -- now closed -- asking residents whether they had Fios availability.
Verizon awaits verification by the Philadelphia Office of Innovation and Technology that the pay-TV company has met franchise agreement obligations, another company spokesman said. The process, involving OIT and the Philadelphia Law Department, has been ongoing for several months, he said. The city last summer confirmed that Verizon completed the first 85 percent of its buildout, but now is checking on the remaining 15 percent, he said. "We believe we’ve completed our Fios build-out in Philadelphia as of February of this year and that we have complied with the terms of our franchise agreement with the city."
Philadelphia OIT "is continuing its efforts to determine whether Verizon met the FiOS buildout completion deadline established in the City’s Franchise Agreement with the company," a city spokesman emailed. "Pursuant to the Franchise Agreement, Verizon was required to make FiOS cable video service available to all households in the city before February 26, 2016." But Verizon claimed certain exceptions to the agreement, for example if a landlord or property management company refused it access to an apartment building, he said. "OIT is in the process of assessing the merit of all Verizon’s claimed exceptions." Meanwhile, New York and Pennsylvania are investigating the quality of Verizon copper lines and its willingness to upgrade copper in areas where it hasn’t rolled out fiber (see 1608010047 and 1607180020).