Verizon (NYSE: VZ) may have made it known that it does not want to bring its Fiber to the Premises (FTTP)-based FiOS outside of towns and cities where it has an existing service agreement in place, but a group of mayors in upstate New York charge the telco is deliberately ignoring their communities.
Instead, the nine mayors maintain that the service provider has focused its attention on bringing FiOS to affluent suburban areas outside of its flagship New York City market.
"Verizon has not built its all-fiber FiOS network in any of our densely-populated cities. Not in Albany, Buffalo, Syracuse, Binghamton, Kingston, Elmira or Troy," the mayors say. "Yet, Verizon has expanded its FiOS network to the suburbs ringing Buffalo, Albany, Troy, and Syracuse, as well as many places in the Hudson Valley, and most of downstate New York. As a result, the residents and businesses in our cities are disadvantaged relative to their more affluent suburban neighbors who have access to Verizon's FiOS, providing competitive choice in high-speed broadband and video services."
Echoing a similar outcry made by five community groups from Boston, Baltimore, and three cities in New York--Albany, Syracuse and Buffalo--this group has also petitioned the Federal Communications Commission and Department of Justice to review the wireless spectrum deal Verizon Wireless made with a group of cable operators.
With this agreement in place, Verizon Wireless' users would be able to purchase a discounted voice, video, data, and wireless bundle at a discounted price from cable MSOs including Comcast (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC), Cox, or Bright House Networks.
The group argues that if the spectrum deal is allowed to go forward, Verizon will have even less motivation to ever consider bringing FiOS to other areas in New York State.
"These commercial agreements appear to eliminate any incentive that Verizon might have had to expand its all-fiber network to our high-density urban centers," the mayors say. "After all, Verizon Wireless, a subsidiary of Verizon Communications, will now be able to sell Time Warner's video and broadband service as part of their bundled package in our communities."
Although Verizon's CFO Fran Shammo said during the recent 40th Annual J.P. Morgan Global Technology, Media and Telecom Conference that they would consider other roll outs if a business case could be proven, it's unlikely that any of these communities will get the service. And while DSL is another option for these consumers, the telco has made getting that service even more complicated by announcing that it would no longer offer standalone DSL service.
Another possible scenario for these communities is that Verizon could sell off these lines to another ILEC like Frontier (NYSE: FTR), which itself has no plans to deliver fiber-based broadband outside of the rural FiOS markets it acquired in its previous multi-billion dollar deal from Verizon.
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