Slashdot Mirror

← Back to Stories (view on slashdot.org)

NYC Threatens To Sue Verizon Over FiOS Shortfalls (arstechnica.com)

Posted by BeauHD on from the handshake-deal dept.

An anonymous reader quotes a report from Ars Technica: New York City officials yesterday notified Verizon that the company is in default of an agreement to bring fiber connections to all households in the city and could file a lawsuit against the company. The road to a potential lawsuit has been a long one. In June 2015, New York released an audit that found Verizon failed to meet a commitment to extend FiOS to every household in the five boroughs by June 2014. City officials and Verizon have been trying to resolve the matter since then with no success, as Verizon says that it hasn't actually broken the agreement. The default letter (full text) sent yesterday by the city Department of Information Technology and Telecommunications (DoITT) says Verizon has failed to pass all residential buildings in the city with fiber. As of October 2015, there were at least 38,551 addresses where Verizon hadn't fulfilled installation service requests that were more than a year old, the letter said. "Moreover, Verizon improperly reduced, from $50 million to $15 million, the performance bond required [by] the Agreement on the basis of Verizon's incorrect representations that Verizon had met the prescribed deployment schedule, when in fact it had not," the letter said. City officials demanded that Verizon restore the bond and wants a response within 30 days. The default letter also accuses Verizon of failing to make records related to its provision of cable service available to the city during its audit. "Officials say they could sue Verizon unless the carrier shows clear plans for stepping up installations," and that the notice is the first step in that process, The Wall Street Journal reported. The citywide fiber agreement lets NYC seek monetary damages from Verizon if it fails to deliver on the fiber promises.

44 comments

  1. They can't even cover Rhode Island by Anonymous Coward · · Score: 0

    But they can claim some 99+% coverage rate, and leave the edges of the map unserviced.

    Hooray government-granted monopolies!

    1. Re:They can't even cover Rhode Island by Archangel+Michael · · Score: 4, Insightful

      End Franchise agreements. Confiscate the existing Fiber plant, and install Municipal funded fiber plant, back to a COLO facility and offer all service proivders a seat at THAT (COLO) table. You'll see lots of creative solutions to problems you didn't even know you had..

      --
      Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
    2. Re: They can't even cover Rhode Island by Anonymous Coward · · Score: 0

      Government-granted monopolies are easy to come by if you have the money.

    3. Re:They can't even cover Rhode Island by Wrath0fb0b · · Score: 1, Troll

      Yeah, confiscating all of their assets is a great way to encourage others to do it! What an example you'll be setting for them about the benefits of doing business in your jurisdiction.

      I bet you could even pull it off in just five years with the right planning.

    4. Re:They can't even cover Rhode Island by Anonymous Coward · · Score: 0

      Wish I could mod you up. We wouldn't allow this bullshit with plumbing, and we shouldn't allow it here.

    5. Re:They can't even cover Rhode Island by Anonymous Coward · · Score: 3, Insightful

      Yeah, confiscating all of their assets is a great way to encourage others to do it!

      Yeah, confiscating their assets is a great way to show what happens to companies that don't fulfill their contractual obligations!

    6. Re:They can't even cover Rhode Island by Anonymous Coward · · Score: 1

      Their assets paid for by our tax dollars and our subscription fees that they were allowed to have by adhering to agreements that they have defaulted on more than once.

      As to the benefits of this, the benefits have been shown multiple times over in other places were this allows multiple companies in an area and actually compete over the same lines which leads to better prices and support.

      I am amazing what you can accomplish when you actually set up a system where they have to compete and the barriers of entry are low enough to get lots of companies and startups trying for a piece of the action.

      The last mile access should be publicly owned and maintained as that is the part the companies can effectively hold a populace by the balls on.

    7. Re:They can't even cover Rhode Island by Anonymous Coward · · Score: 0

      Statists...the answer to the states messes is more state messes. FREE MARKET, COMPETITION. THE CONSUMER CHOOSES WHATS BEST. Is this so hard for SJW and liberals to understand. Or just the "FREE" part is all that registers?

    8. Re: They can't even cover Rhode Island by Anonymous Coward · · Score: 0

      It's worked in other countries for Internet, just don't follow them on deregulating the electricity market, that's never worked to benefit the consumer.

    9. Re:They can't even cover Rhode Island by Jawnn · · Score: 1

      Yeah, confiscating all of their assets is a great way to encourage others to do it! What an example you'll be setting for them about the benefits of doing business in your jurisdiction.

      I bet you could even pull it off in just five years with the right planning.

      That whooshing sound you hear is the patently obvious point sailing right over your head. Seize the cable plant and adopt the public utility model. That will be a great way to encourage others to live up to the terms of the agreements they negotiate, not to mention a clear message to others to not to try similar bullshit in the future. Verizon had their shot, they missed, or more likely never intended to deliver at all. Fuck them and their shareholders. Regulations either have teeth or they don't.

    10. Re:They can't even cover Rhode Island by Anonymous Coward · · Score: 0

      Archangel Michael didn't limit his comment to that circumstance.

  2. evidently by Lead+Butthead · · Score: 2

    somebody in the government bureaucracy didn't get paid (enough.)

    --
    ELOI, ELOI, LAMA SABACHTHANI!?
    1. Re:evidently by msauve · · Score: 1

      More likely Verizon wrote the contract to promise they would install fiber in "up to all" locations, like the promises of "up to xxx Mbps" Internet speeds.

      --
      "National Security is the chief cause of national insecurity." - Celine's First Law
    2. Re:evidently by cheater512 · · Score: 3, Funny

      Nah the mayor moved house and found out he couldn't get fibre.

  3. Back up the threat by bhcompy · · Score: 4, Interesting

    Back up the threat by repossessing and auctioning off their fiber

    1. Re:Back up the threat by Anonymous Coward · · Score: 0

      To Google.

    2. Re:Back up the threat by Anonymous Coward · · Score: 0

      Yes because people who don't do what benefits YOU should be punished, right?

    3. Re:Back up the threat by alvinrod · · Score: 4, Insightful

      Benefit has nothing to do with it. It's a contractual obligation. If someone or some business were contractually obligated to provide you with some service, you would want them sanctioned for breaking that contract. Not doing so only ensures that there's no incentive for anyone to keep to the terms of a contract.

    4. Re:Back up the threat by Anonymous Coward · · Score: 0

      You're not going to get anywhere with them, contracts are for the little people.

      For instance: Your mortgage contract is inviolate and you are a horrible horrible person if you dare attempt to use any of the provisions outlined in the contract (which the bank agreed to when they countersigned, clearly they didn't understand what they were signing and should not be held responsible) to exit the contract (even if you didn't understand what you were signing, you must be held responsible).

      In this case? New York ain't got shit on Verizon. Verizon's contract isn't worth the paper it was scrawled on, or the blood that it was signed with. There ain't anyone in the US that will dare force Verizon to honor their agreement.

  4. Performance bond by mrchaotica · · Score: 1

    Given that NYC claims Verizon failed to perform, shouldn't NYC have already made claim to that $50 million performance bond (before Verizon had a chance to "reduce" it, which I don't understand how they can unilaterally do anyway)?

    --

    "[Regarding the 'cloud,'] ownership was what made America different than Russia." -- Woz

    1. Re:Performance bond by Mycroft-X · · Score: 4, Interesting

      Verizon claimed they'd met standards that would allow the reduction of the $50 million to the $15 million and give them $35 million back. Apparently NYC agreed to it without doing any actual audit that the standard was met.

      In fact, it seems they didn't do an audit to determine whether "every household in the 5 boroughs" was able to get Fios service until a year after that was supposed to be complete, and from there it took another 15 months to call them on it. And this is probably someone's full time job.

    2. Re:Performance bond by CrimsonAvenger · · Score: 3, Insightful

      that $50 million performance bond (before Verizon had a chance to "reduce" it, which I don't understand how they can unilaterally do anyway)?

      Given that I (and noone else discussing this here) has actually read the contract, there's no way to say for certain.

      That said, I infer that the contract reduces that performance bond when certain milestones are met. Verizon thinks it met them, NYC disagrees.

      Who is right? Well, most likely the party with the best lawyers. Because this case is going to be about specific words in specific places in the contract. And without being a lawyer, none of us are even going to understand the arguments....

      --

      "I do not agree with what you say, but I will defend to the death your right to say it"
    3. Re: Performance bond by Anonymous Coward · · Score: 0

      I'd say it should be multiple full time positions. Most likely it is some contracts / fiscal bureaucrat that has no contact with any department that could verify the claims that everything was completed as requested. Gotta keep those budgets nice and thin.

    4. Re:Performance bond by msauve · · Score: 2

      "And this is probably someone's full time job."

      But do you understand how long it took for that person to go to every residence in NYC to check?

      --
      "National Security is the chief cause of national insecurity." - Celine's First Law
    5. Re:Performance bond by SlaveToTheGrind · · Score: 4, Interesting

      Given that I (and noone else discussing this here) has actually read the contract, there's no way to say for certain

      There's a link to the contract in the summary, reposted here. (That copy doesn't include the appendices, which are here.)

      That said, I infer that the contract reduces that performance bond when certain milestones are met.

      Correct. The bond reduction schedule is on page 42 of the contract, and references performance benchmarks in Appendix F.

      Interestingly, it says the bond was to be reduced to $15 million after meeting the 2011 performance numbers. It lists three more step-downs after that ($10 million, $5 million, and $1 million) that Verizon apparently didn't claim.

      So a few things: First, this has been brewing for several years, and probably just boils down to whether Verizon met the 2011 benchmarks, not any of the earlier step-downs. Thus, if they didn't meet the 2011 benchmarks, the bond theoretically would only go back up to the 2010 level, $25 million, not the full $50 million. And the letter only claims 38k addresses in NYC are without service. That's a vanishingly low percentage, and according to Appendix F they only had to provide 66% coverage across NYC in 2011.

      Given all that, this default letter strikes me as more of a media ploy than a reasonable expectation of legal recourse.

    6. Re: Performance bond by Anonymous Coward · · Score: 0

      No, Verizon so thoroughly own the process that it would have been a mere rubber stamp. A real audit only took place when outsiders started taking an interest.

    7. Re:Performance bond by unrtst · · Score: 1

      But do you understand how long it took for that person to go to every residence in NYC to check?

      I know you're joking, but of the 8+million residences, I'm really surprised there are only 30-40k properties with service requests that haven't been fullfilled. Per the doc:
      * 2014-12-31 : 31,313 addresses with initial non-standard installation requests for service exceeding 12 months
      * 2015-10-09 : 38,551 addresses...
      * today - they don't have any more up to date info listed. The last count is from nearly a year ago!

      That count went up, so I'm guessing that has almost nothing to do with "passing all households throughout the City". That's just, of the boatloads of properties they haven't passed, that's the small amount that managed to request service still.

      FWIW, every time I've tried to check for FiOS at my addresses, I get asked to give them an email to let me know when there is service. Somehow, I doubt that counts as a service request, so I'm wondering how one does request it?

  5. GrumpyCat by jtownatpunk.net · · Score: 1

    Good!

  6. File the lawsuit by tomhath · · Score: 1

    The threat the city has made is to sue Verizon unless Verizon caves into the city's demands voluntarily.

    What I don't understand is why this is even a story on slashdot, nothing has happened until a suit has been filed. I suppose any story about a big evil mobile network provider is good clickbait.

    1. Re:File the lawsuit by Anonymous Coward · · Score: 0

      The threat the city has made is to sue Verizon unless Verizon caves into the city's demands voluntarily.

      verizon signed a contract, the city wants to hold them to it.

      so you wish to abandon contract law?

    2. Re:File the lawsuit by unrtst · · Score: 1

      The threat the city has made is to sue Verizon unless Verizon caves into the city's demands voluntarily.

      verizon signed a contract, the city wants to hold them to it.

      Lemme know when "the city" grows some balls and actually does hold them accountable.

      Imagine if a cop pulled aside you as you were doing 90 in a 55 and said, "Hey! We've been watching you speeding for years. We told you about it back then, and again, and again, and you keep doing it! You're doing it right now! We're seeking for you to stop speeding, or give us a response, within 30 days." That's pretty much what the letter asked for. How is the any more newsworthy than the last time they complained?

  7. "Pass" by fafalone · · Score: 1

    Summary of the problem:

    NYC: "Ok, we agree then, you'll pass every house."
    Verizon: "Yup, we'll 'pass' every house. Every address shall be 'passed', you got it." ::snickers in background::
    ...contract term elapses
    NYC: "What's the deal Verizon, not every address can get service!"
    Verizon: "Yeah and? That's not what pass means. We passed everywhere, that doesn't actually mean we have to offer service where we passed."
    NYC: "But that *is* what pass means, that they can get service."
    Verizon: "That's not our definition, and your definition wasn't in the contract, so we met our contract."
    NYC: "Hey, nobody screws our citizens over that bad at the level of bribes you offered, cya in court whenever you stop bribing for more time!"

  8. Fiber to the sidewalk (FTTS) by allquixotic · · Score: 3, Interesting

    Apparently Verizon's strategy for laying fiber and building the next generation of Internet infrastructure for US consumers is to lay fiber buried underneath their street or sidewalk. Because you see, consumers don't actually want to CONNECT to the fiber; they're perfectly content with just the idea of it passing down the street in front of their house.

    And for this, let's collect many billions of dollars in taxpayer money and funnel it to this corporation. I'm sure this will pay huge dividends for our GDP as our consumers become more connected to the global economy... through their $10/GB 4G LTE connection.

    Fuck Verizon.

    1. Re:Fiber to the sidewalk (FTTS) by Anonymous Coward · · Score: 0

      You've seen NYC right? https://images.duckduckgo.com/iu/?u=http%3A%2F%2Fwww.siwallpaperhd.com%2Fwp-content%2Fuploads%2F2015%2F06%2Fnyc_new_york_city_street_wallpaper_hd_6.jpg&f=1

      Yes, they are passing the fibre under the sidewalk because that is the only thing between the building and the street. Obviously, they aren't connecting to buildings that haven't requested a hook up, because that would be... a really dumb idea.

    2. Re:Fiber to the sidewalk (FTTS) by allquixotic · · Score: 1

      You're either trolling, or you have no idea what you're talking about. The problem is that Verizon is not hooking up even those who have requested -- no, *begged* -- for FiOS for *years*, consistently, with their complaints reaching as high as regional executives. If they were just not actively hooking up those who didn't request it, that would be fine. But they are not actually providing service to *many* households that they pass, and there is nothing that a consumer without a lot of money and influence can do to make them provide service.

      If they were doing this with their own private capital, I wouldn't be complaining. But Verizon spends an enormous amount of public money at all levels of Government on their FiOS rollout. They even take money that was earmarked for enhancements and maintenance to FiOS or the PSTN (the old phone system including DSL), and use that towards building out their cellular network. So even when you *give* them money to build out fiber and better landline internet connections, they won't do it. They can't help but be tantalized at the prospect of making $10 for every gigabyte of traffic sent or received by every consumer in the United States, and if the regulators don't stop them, that's exactly how it's going to be for an increasing number of people.

  9. the old google by zlives · · Score: 1

    meh Verizon is a state protected asset, nothing to see here citizen move along

  10. In NYC, Verizon/Time Warner == Trump/Clinton by Voyager529 · · Score: 1

    Nobody likes either, they both play dirty, they're sufficiently well-connected and well-funded to avoid the rules applying to them, and they make promises they never had any intention of really keeping.

  11. Related Links by Areyoukiddingme · · Score: 1

    For once, the Related Links seem relevant.

    10 Confirmed Dead In Shooting at Oregon's Umpqua Community College
    VC, Entrepreneur Says Basic Income Would Work Even If 90% People 'Smoked Pot' and Didn't Work
    Yelp Employee Posts Open Letter About Cost Of Living And Low Wages, Gets Fired
    Universal Basic Income Programs Arrive
    Explosions and Multiple Shootings In Paris, Possible Hostages

    Explosions, multiple shootings, bombs... Channel Verizon customers' angst much? Ok, they're not Comcast. Maybe the bombs are out of line...

    Whipslash, the gerbil that updates Related Links died. You might want to get a new one.

  12. NYC Has No Jurisdiction in Federal Agreements by Anonymous Coward · · Score: 0

    The agreements were between Verizon and the Federal Government, not NYC. NYC has no standing to sue because NYC has no dog in the fight. It was Federal taxpayer money that paid for the optical network, under Federal contract.

    1. Re:NYC Has No Jurisdiction in Federal Agreements by ausekilis · · Score: 1

      Then let the Fed file suit against Verizon for breach of contract while NYC provides the accounting and third-party evidence. While they are at it, the Fed should file suit against all major telecoms that have received federal money and have yet to even bring their FCC-mandated "broadband speeds" up to par, much less expand their networks.

      This is just a small scale, well publicized version of the grander nation-wide problem with the Fed giving money to the likes of Comcast, Verizon, AT&T, TWC/Charter and not getting anything in return.

    2. Re:NYC Has No Jurisdiction in Federal Agreements by oh_my_080980980 · · Score: 1

      Hey fucking moron, the agreement was between The City of New York and Verizon. RTFA. http://www1.nyc.gov/assets/doi...

      Are ass-holes like you totally incapable of reading!

  13. Same thing here by Anonymous Coward · · Score: 0

    Verizon pulled a similar thing in the City of Pittsburgh. They signed the contract and just stopped expanded. Where I live the streets around me have Fios but mine doesn't - I have underground cables so I am guessing they didn't want to be bothered with all that work.

  14. Reply All covered the details by ripvlan · · Score: 1

    Reply All had a good episode on this subject ( https://gimletmedia.com/episod... )

    What was interesting is that Verizon has run the cable through the city - but customers just need to call and ask to have it hooked up. So they met the requirement. And that is where the problem comes - Verizon doesn't necessarily own those last few feet. Plus they strung it in places where people are most likely to afford it. Or not.

    Deep issue. Give the show a listen.

  15. FTTH for everybody is uneconomical by rmullig2 · · Score: 1

    The reason Google would never have agreed to terms like this. It only pays if you can get a significant number of people in an area to sign up.