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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