$700 Million Charged to Verizon NY Local Service for Non-Existent Utility Upgrades-in 2021?

Bruce Kushnick
3 min readDec 23, 2022

Our work is not a history lesson, but an ongoing concern using the Verizon NY 2021 Annual Report, published June 2022.

Verizon NY is the primary state telecom public utility and it covers 90% of the state. Long story short, this excerpt shows that the copper-based local voice service has been charged $700 million for ‘construction in progress’, for the year 2021 — which is about 73% of the total. while the other lines of business that also use these exact same networks, which include ‘backhaul’ data lines, also called ‘Special Access’, and ‘nonregulated’, revenues from FiOS video and VOIP. -are paying a fraction of this expense.

This is ridiculous on every level. Local Service has more or less been ‘discontinued’ and the copper networks are not being upgraded to fiber optics as part of this state public utility.

Morover, and hidden from view, these budgets have been diverted to fund mobile wireless — a separate subsidiary, for the last decade, instead of that money going to do fiber to the home. Customers paid thousands of dollars in increases for the upgrades since 2005. The accounting was manipulated and every state in the US is still using these rules. There are no payments from Verizon wireless to cover this work — and the copper had only $21 million in maintenance, according other parts of this financial report.

This is one of many issues; over $1 billion annually that should have went to close the Digital Divide in actuality, these actions created it. What happened in your state?

All states were using the exact same corrupted data and formulas. This is a summary from the last available information from the FCC, in 2007. The FCC stopped publishing the information and collecting it at the request of AT&T et al. This shows that over 70% of the ‘plant specific expense’ — also known as construction budgets, was paid via Local Service. while Special Access only paid 30% — but note — the nonregulated part was a small fraction then of the revenues. This is a sample of the state telecommunications public utilities with the historical names.

At the core. This is a transfer of utility budget that should never have been allowed to occur and halting this illegal flows of money to wireless and other divisions could be used to bring over a billion annually to just New York state to close the Digital Divide. — but the looming question is

Should Verizon, the holding company, be separated from the state utility — a divestiture, and forced to pay for the services wireless received, and customers made whole from the overcharging?

--

--

Bruce Kushnick

New Networks Institute,Executive Director, & Founding Member, IRREGULATORS; Telecom analyst for 40 years, and I have been playing the piano for 65 years.