An audit conducted by New York City's Department of Information Technology and Telecommunications has found that Verizon Communications (NYSE: VZ) failed to deliver on its promise to provide fiber-optic service for television and broadband to anyone who wants them by 2014.
However, Verizon said in a statement to FierceTelecom that the audit is based upon erroneous information and incorrect interpretations of the company's franchise deal that was signed with the city in 2008, which allowed it to deploy FiOS throughout the city. In addition, Verizon spokesman John Bonomo said that the company has met its requirement to install fiber optics through all five boroughs in New York City. Bonomo also said that the company has invested $3.5 billion in deploying FiOS in New York City and that it wants to get more residents on its service.
According to the audit, which was obtained by the Wall Street Journal, there are more than 40,000 outstanding requests for service, two-thirds of which have been outstanding for 12 months or longer. The city plans to make the full results of the audit public today.
Verizon, meanwhile, asserts that it complied with the franchise agreement and said that the primary reason for the outstanding requests for service are due to the company's inability to get access from landlords to deploy fiber in many buildings.
Bonomo also accused the audit of being politically motivated and linked to Verizon's pending contract negotiations with its union workers that are expected to start next week. The company has about 39,000 workers covered by the Communications Workers of America and the International Brotherhood of Electrical Workers.
Last March, the CWA launched a campaign called "Where's My FiOS?" to bring the service to more cities. The CWA distributed a flyer to consumers in New York City that said that Verizon had not met its commitment to bring FiOS service to all residents by the end of last year and that many consumers still can't get service today.
This isn't the first time, New York City has called out Verizon on its FiOS deployment. In 2013 Bill de Blasio, then a candidate for mayor, chastised Verizon for its slow progress with FiOS in poorer neighborhoods such as Upper Manhattan and the South Bronx. At that time, de Blasio pledged to audit Verizon's compliance.
Verizon has placed more emphasis on its wireless network recently. In fact, the company recently sold off wireline assets in three states to Frontier Communications for $10.5 billion.
- see this WSJ article (sub. req.)
Frontier acquires Verizon wireline assets in 3 states for $10.5B
Verizon faces pressure from unions to expand FiOS into new markets
Verizon's Frontier sale gives it a contiguous Northeast FiOS footprint, says Shammo
Verizon's FiOS growth continued to cushion the blow of wireline revenue declines in Q4
Update: This article was updated on June 18 to include statements from Verizon regarding the New York City audit.