New York City Claims Verizon Defaulted on Broadband Service Promise

September 23, 2016

verizonThe New York City (NYC) government officially notified Verizon this month that the company has breached its commitment to provide citywide broadband fiber service.  Some observers anticipate that NYC will soon initiate formal legal action against Verizon based on this claim.

NYC contends that Verizon promised, in 2008, that it would make its broadband fiber service accessible to all NYC households by June 2014.  Relying on that promise, NYC granted Verizon an exclusive service authorization.  In June 2015, NYC commissioned an audit of Verizon’s broadband service offerings.  Reportedly, that audit indicated that Verizon had failed to meet its citywide service commitment.

Verizon reportedly takes the position that it has met the service commitments it made to NYC.  Verizon apparently contends that residents in all regions of NYC can obtain Verizon broadband service promptly Matsuura Blakeley Bannerand that this service capability satisfies its obligations.  NYC reportedly disagrees, noting that tens of thousands of residents were forced to wait for more than one year for service connection after signing up for Verizon service.

NYC also expresses concern that hundreds of thousands of residents do not have effective access to the broadband service and that Verizon’s interaction with NYC landlords has, in some cases, been unreasonable.  NYC alleges that hundreds of thousands of residents in NYC public housing do not have effective access.  NYC also claims that Verizon at times requires exclusive service commitments from building landlords prior to service connection.  Not surprisingly, many landlords object to the exclusive service requirement, and this frequently results in delayed broadband access for tenants.

Media reports suggest that this NYC experience is not unusual.  Broadband expansion in communities throughout the country is often apparently subject to the whims of the exclusive service provider.  As a result, extension of broadband service, even in some very large communities, is slow and inefficient.  In this environment, we are likely to see a growing number of local governments pursue legal remedies in an effort to provide broadband access for their citizens.

Alternative services, such as Google Fiber, may help to provide some relief for communities not yet effectively served by their current broadband providers, although experience suggests that development of such competitive service offerings is frequently opposed aggressively by incumbent service providers.  Governments at all levels should also play an active role facilitating expanded broadband access.  They should exercise all available legal and regulatory means to ensure that service providers meet their service commitments.  They should also strive to create and enforce a regulatory framework which actively promotes competitive broadband service offerings.