Letter Calls on Governor Cuomo to Endorse “Connect New York” Petition to PSC for Formal Proceeding Investigating Phone Deregulation
Verizon abandoning landline upkeep while City audit shows it is failing to meet its broadband commitments in New York City
Hearing is second in series of eight to be held across NYS
New York, NY – In advance of an evening Public Service Commission hearing in New York City on the status of telecommunications services in the State, customers, advocates and phone workers joined elected officials today in a press conference to slam the impact of 20 years of telecommunications deregulation implemented by the PSC. The coalition of advocates released a letter it has sent to Governor Andrew Cuomo urging him to sign on to a petition filed in July 2014, which requested that the PSC initiate a full-blown proceeding to assess the impact of deregulation on the state’s telecommunications customers. That petition was endorsed by 17 organizations and over 70 elected officials, and urged the PSC to explore deterioration of telephone service quality, a growing digital divide that leaves many New York communities as victims of a cable broadband monopoly, and whether Verizon is illegally misallocating its internal costs in order to exaggerate alleged financial losses on landline services.
“Fast and reliable internet service is the well-spring of New York City’s growing economy, but right now we are stalling out on the information superhighway, and falling behind cities like Tokyo, Hong Kong, and even Chatanooga,” said New York City Comptroller Scott M. Stringer. “It’s time for Verizon FiOS to live up to the agreement it made with New York City and make 21st Century Internet available on every block and to every citizen, by investing in its workforce and its infrastructure, and recognizing that a deal is a deal.”
“The current state of the telecommunications market demonstrates self-regulation is not a successful strategy for the people of our state. It is time for the Public Service Commission to act in the interest of New York’s consumers, not big business,” said Syracuse Mayor Stephanie A. Miner. “In many communities, including the City of Syracuse, there is no competition. Consumers have no choice but to pay sky-high bills for essential services while companies like Verizon, Time Warner, and Cablevision benefit. We must find a new way to deliver telecommunications services to all New Yorkers and the PSC must help lead that conversation for consumers.”
Verizon has been abandoning its landline network in New York City and around the state while failing to fully build out its state-of-the-art broadband network, or FiOS. A recent New York City audit of Verizon’s FiOS rollout found that Verizon had failed to meet its promise to deliver high-speed fiber optic internet and television to everyone in the city who wanted it During its negotiations for the city franchise, Verizon promised that the entire city would be wired with fiber optic cables by June 2014 and that after that date, everyone who wanted FiOS could get it within six months to a year.
“Whether it’s a question of maintaining quality phone service for customers who still rely on copper lines, or meeting its contractual obligations to provide FiOS to every NYC consumer, Verizon acts as though the rules simply don’t apply to them. Shareholders and executives always come first for Verizon, and consumers are left holding the bag,” said Bob Master, Legislative and Political Director for Communications Workers of America District 1. “Now is the time for the PSC to step up and hold Verizon accountable.”
“New York consumers have paid a high price for 20 years of deregulation of telecommunications services, through skyrocketing monthly bills, inferior quality of service, and inadequate competition and choice,” said Chuck Bell, Programs Director for Consumers Union. “We urge the Public Service Commission to conduct a formal proceeding on the status and condition of the New York telecommunications system, to investigate current and projected levels of investment, service quality, and public expectations for basic and essential services. This is a foundational step for the PSC to fulfill its legal mandate to provide high quality, affordable service for all consumers.”
Assemblyman Walter Mosley said, “I applaud the New York State Public Service Commission for convening these series of public hearings on Verizon’s delay at expanding access to high-speed Internet for millions of New Yorkers. The failure of Verizon to meet its obligations of providing access to an alternate internet service provider is troubling, as digital services becomes increasingly an important component of the economic infrastructure of our nation. It is vital that New Yorkers throughout the state have access to high-speed affordable Internet capabilities. We must continue to do everything possible in order to make New York State a competitor in the 21st century global economy.”
“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. “The city’s shocking audit shows Verizon did not deliver on its word to do just that, stalling the city’s modernization for years. Now, I join the Mayor and advocates to strongly call on Verizon to do what is right and make good on its promises so that all New Yorkers can access high-speed Internet.”
The Connect New York coalition, which includes advocacy organizations like Common Cause and Consumers Union, as well as numerous elected officials, is demanding that the PSC take action to reverse declining Verizon service quality and to ensure that hundreds of thousands of New York City customers are not condemned to a cable monopoly for broadband and video services.
Rates for basic telephone service have increased in recent years, even as Verizon has refused to expand broadband services and service quality has greatly deteriorated. Verizon refuses to build FiOS in any major upstate city, including Buffalo, Syracuse, Rome, Utica, Albany, Binghamton, Beacon or Newburgh. Verizon’s declining service quality especially affects customers who cannot afford more advanced cable services, or who live in areas with few options for cable or wireless services.
In 2005, New York’s Public Service Commission (PSC) eliminated automatic fines for Verizon’s telephone service quality failures, reasoning that “market competition” would improve services. Instead, service quality plunged. In the 3rd quarter of 2010, Verizon cleared only 1.2% of out of service complaints within 24 hours, almost 79 percentage points lower than the PSC’s 80% requirement. Rather than reverse course, the PSC changed its measurements, cutting out 92% of customers from service quality measurements and consolidating 28 repair service bureaus into 5 regions. On paper, terrible service quality was almost miraculously transformed. In reality, service quality continued to decline.
The PSC recently issued an 81 page “Staff Assessment of Telecommunications Services,” which largely whitewashes the problems that have arisen across the state as a result of two decades of deregulation. Declining service quality in much of the state due to Verizon’s deliberate abandonment of the copper network, and the absence of competitive options for high-speed broadband and video for millions of New Yorkers, are barely noted in the report.
In addition, the PSC has failed to respond to the petition by the Connect New York Coalition in July 2014. The PSC’s one concession in response to pressure from Connect New York has been the scheduling of eight public hearings on telecommunications issues across New York this summer. This after-the-fact public process contradicts promises made by the PSC Chair to the Connect NY coalition. In a letter to CWA official Bob Master on Oct. 28, 2014, PSC Chair Audrey Zibelman pledged “…a robust dialogue conducted in a transparent process as we work with all stakeholders, including the Coalition, to promote the public’s interest in a first-class infrastructure and array of communications services for the citizens of New York.” As this letter was written to the coalition nearly 9 months ago, and five months before the original due date for the study set by the State Legislative leadership, public input was clearly anticipated prior to the issuance of a study.