Verizon faces pressure from unions to expand FiOS into new markets

Verizon (NYSE: VZ) has been adamant that it has no plans to expand FiOS service outside of the areas where it has established agreements with local communities, but that's not stopping the Communications Workers of America (CWA) from launching a campaign called "Where's My FiOS?" to bring the service to more cities.

In a flyer sent to consumers in New York City, the CWA points out how Verizon has 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.

"When it received its franchise from New York City in 2008, Verizon promised FiOS would be available to every NYC resident by 2014," wrote the CWA in the flyer. "Now the company says it's completed its obligations. But customers in many parts of New York City still can't get FiOS. Instead, Verizon has cut 8500 jobs in New York State and slashed its workforce in New York City by 37% over the last decade."

However, in an e-mail to FierceTelecom, Verizon says the CWA's argument, revealing that it continues to invest in its wireline networks in both New York and New Jersey. 

"The union's campaign ignores that year after year we're augmenting and strengthening our networks to meet the needs of today and to enable the usage of customers for decades to come," said Alberto Canal, spokesman for Verizon, in an e-mail to FierceTelecom. "In New Jersey and New York alone, last year we invested $2 billion deploying and strengthening our wireline networks."

Canal added that they have surpassed their 18 million premises build mark for FiOS and "are nearly at 20 million premises and there's still more fiber build to go." 

But the CWA's hopes may be all for naught.

Earlier this month, Verizon's CFO Fran Shammo told investors that it will only honor existing local franchising authority (LFA) agreements in areas like Philadelphia, New York and Washington, D.C., but has not disclosed any plans to expand into new areas.

Canal acknowledged that the initial focus of its FiOS build out is on "fulfilling our agreements first."

The situation is exacerbated by the fact that Verizon is de-emphasizing its wireline capabilities. In February, the service provider reached a deal to sell its wireline properties to Frontier in Florida, California and Texas. 

Selling off these assets will have implications for Verizon. For one, it allows Verizon to consolidate its fiber-to-the-premises (FTTP) FiOS service in the Northeast market, one where it will battle aggressive cable competition from Cablevision (NYSE: CVC) and a potentially soon-to-be-combined Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC) for consumer broadband dollars.

Cable can also now be even more aggressive as it moves forward with its DOCSIS 3.1 plans in the coming year to potentially lure more customers that today can only get slower speed DSL Internet service in the markets where Verizon has not launched FiOS.

For more:
- see the CWA flyer

Related articles:
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
Verizon's Shammo hints that company may offload more non-strategic assets
Frontier enhances wireline footprint with $10.5B Verizon purchase, but integration concerns remain

This article was updated with additional information from Verizon on March 26. 

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