Verizon’s Unconscionable Attack on New York City Utility Customers Needs to be Investigated Immediately.
Tales of Horror from the Front
We’ve been getting emails from people in New York City (and elsewhere) who have been threatened with the shutting off of their working Verizon copper-based, (state utility), residential home phone service with the replacement of the FiOS fiber-optic service.
We have been pro fiber-optic-services-to-the-home since the 1990’s when the original plans to replace the existing copper utility wires were announced. However, decades later, this has become an unconscionable nightmare for many long time Verizon customers — customers who had the same state utility basic service phone line for 20, 30, or 40 years.
This transition to fiber was not supposed to be a ‘last stand at the Alamo’. Unfortunately, the FCC has agreed with the companies that they should be able to just shut off the customer (retire the existing copper wire).
Worse, this is just the start — a precursor to the new wireless bait-and-switch transition. We’ve been writing since 2010 about this other transition coming — to shut off the existing copper-based residential and business customers with working service and force-march them onto wireless services. In fact, Verizon and AT&T have claimed for years that they are now wireless-only companies and they told investors multiple times that they want to make more profits and get rid of regulations by ‘shutting off the copper’.
But let’s go to the details of what’s going on now.
Tales of Horror from the Front
Here are some of the emails we received. Unfortunately, we don’t have a solution, but this slash-and-burn approach being used by Verizon is questionable at best.
Most important, however: These are customers of Verizon New York, the state-based telecommunications, regulated utility offering basic phone service. Verizon corporate has done everything possible to obfuscate this basic fact; it’s not mentioned in the eviction letter, above, for example.
- EMAIL 1: February 21, 2018: I am writing you, because I am trying to keep my Verizon landline, which I need for medical reasons. However, they are vociferously trying to bump me off the landline, in spite of my situation. And they have nearly doubled my rates with no warning. Who can I complain to in order to be able to keep my VZ landline (and, hopefully, lower my rates)?? The Public Service Commission? The NY State Attorney General’s office? They are threatening to suspend my service in a few days, if I don’t pay the huge increases. Plus, they are threatening to cut me off, even if I do pay the huge increases.
BK: This person contacted us. They didn’t just threaten to shut off their landline, which they had for 42 years. They also, suddenly removed the discount on the line that had been put on and renewed for over a decade, which literally doubled the cost. They had disputed the bill increases, and even after they paid the company — on time, they were shut off.
- EMAIL 2: March 13th, 2018 I assume you’re aware of the outage in the West Village caused by a contractor’s having cut an exchange cable at 17th Street and 7th Avenue? Those of us without fiber optics have been left without telephone service since January 29 of this year. Verizon is insisting we accept fiber optics, migrate to another company, or be disconnected. This is no choice at all for me for several reasons.
- EMAIL 3: April 4th, 2018: The woodworking shop I’m assisting in had been without a dial tone for 2 months with Verizon though strangely enough the internet works. They are constantly calling with a recording to offer a “temporary wireless solution”. It was as I’m sure you know, something that plugs into the power outlet. It was through this that I found your postings and writings. I cannot believe that it is still going on, and am ashamed to admit that it didn’t get desperate enough until it happened to our shop. I have a lot to read through, but there are two questions I have at the moment…
- EMAIL 4: April 18th, 2018 “Verizon has just cut off my landline service of 23 years after trying to force me to open a new FIOS account instead of installing the fiber optic telephone service product that is regulated. They are using the forced migration transition from copper to fiber to increase customers for their FIOS brand product.”
Comments about All of This
There are some points that need mentioning about this situation. While we are for upgrades to fiber optics in general:
- Did Verizon have to shut off the majority of customers in these areas who still have working copper-wired-based, utility services?
- One motivation by Verizon: The City of New York is suing Verizon over its failure to have 100% coverage of FiOS cable TV/Internet to residential customers, which was supposed to be accomplished by 2014. Verizon has complained that it had completed these upgrades, but the City data showed that almost 1 million residences in NYC couldn’t get the service.
- These plans for FiOS are for broadband, internet and cable TV service. There was never any need to upgrade to fiber for phone service, which are the people being impacted. And, as far as we can tell, there are multiple Verizon legal entities involved, such as Verizon Online, and the Cable TV company, as opposed to the state utility, Verizon New York.
- No where in the NYC franchise does it call for an eviction notice for the customer’s utility-based, copper-based phone service.
- The actual number of customers with copper-based services being impacted by this transition has been manipulated.
- As we discussed elsewhere, Verizon and the FCC have created a shell game with the accounting of access lines. Their data leaves out whole classes of copper-based services in use, which are the majority of lines. “Special Access”, which are also called “business data services”, include the wires to the ATM machines and alarm services, and the majority was still mostly copper according to the FCC. This means that there are 2–4 times more lines that are being reported.
- This brings up a very serious question — Is this transfer happening, making the fiber optic wires part of the state utility, (which they are), or is this a move to remove customers from the state utility and regulated environment to become non-regulated?
- Technical Issues: Fiber services require a battery back up and in the case of a blackout, the copper-wired phone networks could be more reliable, as they have their own power. There have also been technical issues with the capability of the FiOS Voice service which uses IP Technology, and alarm services, for example. (However, while there have been complaints, filings, etc. about these issues, no government agency or research group has quantified the harms, that we are aware of.)
- Harms to Competitors and Other Twists: In another ‘screw competition’ move, most people don’t know that competitors have been restricted from using these fiber optic ‘new builds’. Thus ‘shutting off the copper’, shuts off their ability to sell services. Worse, the FCC is in the process of turning these fiber optic wires into ‘private property’ — which will then be used by the wireless company at a fraction of the cost. FiOS build outs have been more or less stopped, except for areas like NYC.
Ironic Twists Compounded. In What Can Only be Called a Circle of Irony: (Tying to the Verizon NY investigation of the cross-subsidies being ignored.)
- In 2005, Verizon New York was granted a series of rate increases on basic residential service — 84% by 2009, (and 50%-250% for add on services), for a “massive deployment of fiber optics” and losses, i.e., every customer who is being shut off paid extra for these upgrades and the losses.
- By 2010, most of the utility construction budgets, “the massive deployment of fiber optics”, were shifted to build the wireless networks, which also helped to cause the losses;
- So, these customers also were illegally charged for nonregulated services and manipulated losses.
- Insult to injury — The price of basic phone service should have been in steep decline because there have been massive cuts to all construction, marketing, etc. for the copper-based wired services.
- And, had the state utility actually provided “just and reasonable” rates, the price for basic phone service should be $10–20 bucks a month, not averaging $60.
- (Note: While the State and Verizon claim that local service is ‘competitive’, how did local service continually have rate increases? Doesn’t competition lower rates?)
- At $10-$20 bucks a month, the company’s wireline networks would have not ‘lost lines’ due to rate increases.
- More importantly, had the wireless company been charged for the cross-subsidies, there would be billions extra to upgrade the entire state to fiber optics — but with a plan to make sure that those who didn’t want it, didn’t have to pay extra for it.
- There would also be billions in tax payments as the company would be profitable. (Verizon NY has lost over $1 billion annually since 2010.)
- One can argue that these state utility customers should be refunded thousands of dollars for the overcharging as their own extra payments not only helped in their being kicked off of a working service, but funded these other lines of business, making them ‘defacto’ investors.
Conclusion: There are no good choices for these people if they just want their old phone service. But, questions remain:
- Did the company need to shut off the copper-based state utility phone customers?
- Should there be investigations into how much these customers have been overcharged, and for what?
- Is there a transference going on — dismantling the state utility to be handed over to these other subsidiaries, like Verizon Online or Verizon Wireless?
Some Will Say: “But, it’s more expensive to run 2 networks; FiOS is an overbuild, not a replacement; Fiber is more reliable…” Every part of these responses can be shredded by examining the Verizon NY financials and basic facts.
One Last Thing: While there are those who may think that these people should just ‘get over it’, some see the future all too well. This push by Verizon is just another Trojan Horse and as soon as some regulator drops the requirement that this service is replacing the copper wired service of the state utility, the reality will be — the company moved a massive client base out of the state utility, which still has some protections, onto a ‘free market’ service that will then have every aspect of — more rate increases, removal of legal actions vs an ‘arbitration clause’, removal of privacy issues about sharing your calling information — everything that one expects from a deregulated monopolist. And they will use the fiber for wireless, claiming it is for fiber to the home, but…
I bring up all of these twists and turns because they will all be in play with what this transition is really about:
Part II: Wireless Replacement of the Copper Wires Is a Bait-and-Switch.