Verizon could be sued by NYC over reportedly broken FiOS promises

A number of New York City officials said they are considering suing Verizon (NYSE: VZ) for not meeting their proposed FiOS buildout obligations set in their 2008 franchise agreement.

"We want them to make it available to everyone in every ZIP code and on every block so that everyone can get online, to do research, to do their homework," said Maya Wiley, the chief lawyer for Mayor de Blasio, in a New York Times article. "We need our residents to get online."

Wiley said that her staff was working with Verizon and would like avoid a lawsuit, adding that "if that's what we have to do, then that's what we'll do."

John Bonomo, a Verizon spokesman told FierceTelecom in an e-mail that it wants to resolve the issues it has with the city in order to extend FiOS to more users.

"We want to work with the city administration on a workable solution to this and other impediments so that all New Yorkers can benefit from FIOS," Bonomo said. "In completing this massive infrastructure achievement, the company has both provided New Yorkers hundreds of thousands of New Yorkers with a choice for better TV, and a better value over the incumbent cable TV monopoly companies, and it has provided the City with a resilient, reliable telecommunications infrastructure that is the envy of cities the world over."

Verizon and the city have not been on the greatest of terms lately.

In June, an audit conducted by the New York City's Department of Information Technology and Telecommunications found that Verizon failed to deliver on its promise to provide fiber-optic service for television and broadband to anyone who wants it by 2014.

Perhaps not surprisingly, Verizon was quick to dismiss the audit, saying it was 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.

Following the audit, NYC Mayor Bill de Blasio began requiring city hall to approve any business local agencies do with the service provider, a measure focused on getting it to fulfill its goal to wire the city with FiOS fiber-to-the-premises (FTTP) service.

Under the terms of the agreement, Verizon agreed to pass all 3 million homes in New York City by the end of 2014, an obligation that the telco said it has met.

"By installing fiber-optic cables throughout the five boroughs -- an initiative no other communications company has done -- Verizon has met its commitment to New York City under the cable television franchise it was awarded in 2008," Bonomo said. 

According to city officials, FiOS is not available in large parts of the city, including the Co-op City complex in the Bronx, which comprises more than 15,000 apartments and whose residents say they want FiOS. 

Bonomo said that "Co-Op City has an exclusive agreement with Cablevision, which could make it unprofitable for us to market FiOS there."

Verizon has long argued that one of the issues it has run into in building out FTTH service to more areas of the city are landlords that restrict access to their facilities.

Kevin Service, senior vice president for network operations for Verizon, told the New York Times as a way to illustrate the point of the challenges it faces with properties owners if it wants to wire 118th Street in East Harlem it will have to work with multiple property owners.

"To get to the 10th floor in the middle of the block," he said, "we've got to talk to not only that building, but the three buildings on one side and the four buildings on the other side."

For more:
- New York Times has this article

Related articles:
New York City audit says Verizon failed to deliver on FiOS promise
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 NYC government contracts face scrutiny over claims of not meeting FiOS goals

This article was updated on Aug. 28 with additional information from Verizon. 

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