New York City Says Verizon Has Failed to Meet Fios Targets
September 13 2016 - 09:20PM
Dow Jones News
New York City notified Verizon Communications Inc. Tuesday the
company was in default of an agreement to build Fios cable
connections across the city, escalating a fight that began last
year.
The city alleged last summer that Verizon has failed to make
Fios, which includes cable TV and high-speed Fios internet service,
available to every home as required under the 2008 agreement. After
more than a year of talks, city officials say Verizon still hasn't
made meaningful progress.
In places where Fios isn't available, people usually only have
access to one cable provider: either Cablevision Systems Corp.,
which was acquired in June by Altice NV, or Time Warner Cable, now
owned by Charter Communications Inc.
Those companies, which began wiring the city more than three
decades ago, divided their buildouts and don't compete directly
against each other in most parts of New York. When Verizon launched
Fios in 2008, city officials were hopeful it would provide more
competition for internet service.
Officials say they could sue Verizon unless the carrier shows
clear plans for stepping up installations. The notice is the first
step in that process. New York-based Verizon has 30 days to
respond.
Verizon spokesman Ray McConville said the company has lived up
to its agreement, and that the city hasn't helped the carrier
resolve the "impractical processes for getting access to more
buildings."
Last year, the city's Department of Information Technology &
Telecommunications released an audit of the company's Fios
buildout. At the time, the city said there were more than 40,000
outstanding service requests, about three-quarters of which had
been pending a year or more. City officials said Tuesday about 25%
of households in New York are unable to get Fios.
The city recently sampled 52,000 addresses for Fios
availability, and found that outer boroughs were more likely to
have access than Manhattan. For instance, 90% of Staten Island
residents could likely get Fios within seven days, while the same
is true for just 19% of people in central Brooklyn and 11% in upper
Manhattan.
About two-thirds of the more than 300 public-housing
developments, which are home to more than 400,000 people, have no
access to Fios, the city says.
Mr. McConville said Verizon has invested billions of dollars in
high-speed internet in New York.
"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," Mr. McConville said. "The City
should be working with Verizon to make choice available to more
residents, not discouraging competition."
Verizon began rolling out Fios about a decade ago, and has spent
more than $23 billion on construction. In 2010, the company said it
was finished building Fios in new areas.
Citywide "franchise" agreements like the one Verizon has with
New York City have since become less popular.
Instead, telecom firms have tried to convince cities to let them
build first in areas where there is predetermined demand, rather
than build out an entire city. In April, Verizon said it had
reached such an agreement with the city of Boston, which was one of
the handful of places in the Northeast where Verizon hadn't built
at all.
Write to Ryan Knutson at ryan.knutson@wsj.com
(END) Dow Jones Newswires
September 13, 2016 21:05 ET (01:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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