New York City Audit Calls Out Verizon For Failure To Build Out FiOS Network As Promised

Image courtesy of Jeremy Schultz

Verizon is pretty much over this whole “FiOS” thing. They still support their existing networks, of course, but they’re pretty much done building out new ones. That, however, does not sit well with the city of New York, which is still waiting for Verizon to finish the city-wide build they promised to have done by last year.

The city’s Department of Information Technology and Communications (DoITT) this week announced the results of an audit they conducted of Verizon’s FiOS implementation, and the news is not good.

In 2008, the telecom giant agreed to extend FiOS to any household that wanted it, across all five boroughs, by June 30, 2014. But with that deadline nearly a year gone, that goal is far from met — even though Verizon announced it had met its obligation and completed its build in November of last year.

“Through a thorough and comprehensive audit, we have determined that Verizon substantially failed to meet its commitment to the people of New York City,” Mayor Bill de Blasio said in a statement. “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.”

New Yorkers have been complaining for years that Verizon isn’t getting FiOS to them, and the data from the audit bears that out. Among the major issues the city’s auditors found:

  • Verizon has not actually run enough fiber to do what they say they do
  • Callers are being told their address cannot and will not get FiOS service, despite living within the agreed-upon area (i.e. one of the five boroughs)
  • Over 40,000 requests for service were left outstanding and unmet
  • Of those tens of thousands of requests, 75% had been left outstanding for over a year
  • Verizon tracks complaints from subscribers but not from people who want to subscribe, even though the agreement with the city requires them to do so
The approximate FiOS footprint in four of NYC's 5 boroughs, as of June 30, 2014.  (via the Broadband Map).

The approximate FiOS footprint in four of NYC’s 5 boroughs, as of June 30, 2014 (via the Broadband Map). Click to expand.

The report (PDF) explains that Verizon had the original deadline in their contract extended, due to some of the predictable delays (like infrastructure challenges) and the unpredictable ones (like Hurricane Sandy) that slowed down the build. But after that, it got a little hazy.

“As 2014 progressed,” the report says, “and Verizon’s build-out approached 100 percent, DoITT began to receive anecdotal evidence, largely in the form of consumer complaints, suggesting that Verizon was simultaneously taking credit for ‘passing’ households and declining to accept orders for non-standard service installations from those households.”

In November, 2014 Verizon told the city they had “passed” all residential households in the city, meaning they could — and would be obligated to — accept orders for service from all residential buildings in the city. But complaints kept mounting, to the point where the city developed concerns “that these anecdotes did not reflect occasional irregularities, but possibly broader failures by Verizon to fulfill the obligations it undertook in the 2008 franchise agreement.”

And so, the formal audit.

However, even the audit took longer than it needed to, the report says, due to Verizon’s “persistent intransigence and delay — following Verizon’s pattern in previous audits.” Verizon failed repeatedly to supply data that the city’s auditors requested and denied them access to Verizon systems, the report claims.

In their response report to the city, Verizon claims that auditors present a “distorted view” of their performance, ignoring the “truly significant accomplishments” Verizon has achieved so far. The company, as one would expect, pushes back hard on the findings, claiming that they have in fact met their goals and are perfectly cooperative.

“Aside from its erroneous conclusions and procedural flaws,” Verizon writes, “the Report’s lack of balance and its clear agenda is also disturbing.”

Verizon seems to miss the point of an audit intended to delve into the truth of repeated customer complaints, continuing, “One would expect a performance review to include an assessment of both the positives and the (perceived) negatives of Verizon’s performance. In start contrast, however, the Report makes no positive findings, despite the fact that Verizon’s submissions during the review provided DoITT with several opportunities to do so.”

Many New York City officials found Verizon’s response and performance unsatisfactory.

“We would have universal broadband in New York City, if only Verizon had kept its promise to provide universal fiber to every home, as was required by the 2008 franchise agreement. Countless New Yorkers have tried to get fiber in their homes only to be told it was ‘unavailable,’ and I know because I am one of them,” said Council Member Ben Kallos.

Manhattan Borough President Gale A. Brewer echoed the sentiment, saying, “Verizon promised to provide a new option in a market with too little competition, but for too many New Yorkers that promise has proved empty so far. While there is no question that rolling out fiber-optic service in New York City is a massive undertaking, Verizon must be open and honest about the availability of its services and must make good on its commitments.”

Update: In response to the story, representatives for Verizon sent Consumerist a statement saying:

First and foremost, it is important to note that it’s not a mere coincidence that the report is made public yesterday, and labor negotiations with our largest union begin on Monday. 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. We disagree with many parts of the report. The review was based on erroneous factual conclusions and incorrect interpretations of the Agreement, particular its conclusions on Verizon’s passing all of the households in the City with fiber-optic facilities. We indeed have met the requirement to install fiber optics through all five boroughs. Our $3.5 billion 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.

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