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New York Accuses Verizon of Abandoning Quality Landline Service; “It’s a Duopoly”

Phillip Dampier May 2, 2012 Competition, Consumer News, Public Policy & Gov't, Verizon, Wireless Broadband 6 Comments

New York State Attorney General Eric Schneiderman is convinced Verizon Communications is abandoning quality landline service for millions of New Yorkers while diverting money and resources to its more profitable cell service Verizon Wireless.

Last week, Schneiderman blasted the state’s largest landline provider for mounting complaints about poor service that now impact 92 percent of its customers, calling deregulation a failure for consumers and businesses in New York.

“Verizon customers deserve the high-quality service they’ve been promised,” Schneiderman told The Associated Press.

The attorney general reports that the number of customers enduring service outages for more than 24 hours has increased, while landline infrastructure — particularly wiring — is allowed to deteriorate.

Schneiderman suspects Verizon is shortchanging landline service as an increasing number of wired phone customers disconnect service, often in favor of Verizon’s more lucrative cell phone service.  The state Public Service Commission (PSC) fined Verizon $400,000 in March for similar concerns, pointing to the company’s intentional workforce reductions lengthening repair windows and creating repair backlogs in some regions.

Schneiderman’s office filed comments with the PSC requesting changes to Verizon’s Service Quality Improvement Plan, which was originally launched in 2010:

At best, New York’s telephone service market is a duopoly, and contrary to theoretical expectations of market controls, the presence of a single competitor has not in fact prevented Verizon from allowing customer service to continue to degrade. Rather than meet its obligations to provide wireline telephone customers with minimally adequate telephone service, Verizon is continuing to drastically reduce its workforce with the result that the company cannot meet its customers’ repair needs in a timely manner.

Verizon’s management has demonstrated that it is unwilling to compete to retain its wireline customer base, and instead is entirely focused on expanding its wireless business affiliate. It is incumbent on the Commission to take appropriate regulatory action to ensure that customers receive reliable telephone service with adequate repair performance. Therefore, the Commission should modify Verizon’s service plan to ensure customers receive adequate service quality in the future.

Verizon defended its service in New York pointing out the company has invested $1.5 billion in the state for infrastructure, including its FiOS fiber to the home network.  Verizon spokesman John Bonomo questioned Schneiderman’s claim that 92 percent of Verizon New York customers had poor service, noting 98 percent of its landline customers don’t have service problems.

Schneiderman’s highlighting of a $400,000 service fine imposed by the PSC did not account for unprecedented damage from both Hurricane Irene and Tropical Storm Lee late last summer, Bonomo added.

But the state’s attorney general notes Verizon’s service problems in New York have been ongoing well before last summer.

Service complaints, charted here from 2008-2011, show a major spike last summer and fall and remain higher than normal.

Schneiderman

“Since at least 2008, Verizon has frequently failed to meet these PSC telephone service standards essential to safe and reliable telephone service,” Schneiderman says. “Even as the number of telephone lines needing to be maintained has dwindled to half those of a decade ago (as customers choose to rely instead on wireless and/or cable telephony), Verizon’s continues to fail to meet the PSC’s service standard.”

Customers on the upper west side of New York City don’t need to be reminded of Verizon’s service failures.  Hundreds of Verizon landline customers in New York’s largest city were left without basic phone service for more than a week, only made worse by the fact Verizon told many of them they’d be without service for at least one additional week while the company worked on repairs.

Phone and Internet service went dead in multiple buildings along Central Park West April 10, but customers wanted to kill when they learned the phone company wanted more than two weeks to get service restored.

“I was like, excuse me, are you serious? Two weeks?” Iram Rivera, a concierge at 262 Central Park West, told DNAinfo.  His building was hard hit by the service outage — 80 percent of the building’s 80 apartments were affected.

“I just don’t get the feeling that there’s much of an appreciation on Verizon’s part that this is a hardship for people,” said Ken Coughlin, who lives on West 87th Street and Central Park West. “There’s no communication, there’s no updates, it’s infuriating.”

The outage only affected traditional landline service and DSL broadband over copper phone wiring. The more modern fiber-optic FiOS network that provides TV, Internet and voice service wasn’t affected, Bonomo said.

Schneiderman notes landline outages have an especially hard impact on small businesses:

In the current recession, the fragile economic condition of many small businesses puts them at risk of financial disaster if they suddenly lose telephone service, and their provider is unable to restore service promptly. Each day that these businesses are without service they lose significant revenues that many simply cannot survive without.

Small businesses depend on functional telephone service to meet the needs of their customers in numerous ways. When customers are unable to reach a business by telephone, they may assume the business is closed and purchase the goods or services they want elsewhere. Restaurants are prevented from giving reservations to prospective customers who call. Many types of businesses depend on working telephone lines for processing credit card charges, and may lose substantial sales by limiting transactions to cash or checks. Professional offices can be prevented from providing medical, legal or accounting services to their clients without working telephone service.

In Schneiderman’s view, the deregulation policies now in place in New York have failed consumers, leaving them with a duopoly of phone providers with insufficient oversight.

For competition to benefit customers with improved service, lower prices, and more innovation, there has to first be a willingness to compete, which is significantly absent from Verizon-New York’s policies and practices.

Rather than robust competition, New York’s telephone market is at best a duopoly, with as many indicators of cooperation between the two providers as robust contest for customers. Furthermore, the actual behavior of consumers in the real world is markedly different from the PSC’s theoretical assumptions about the telephone market.

When a Verizon customer experiences a prolonged service outage or installation delay, the option to switch carriers to a cable provider is of no immediate use. Finally, even if consumers wanted to compare Verizon’s service performance with cable provider alternatives, the lack of available information prevents consumers from making educated choices.

In New York, most customers are served by Verizon Communications, Time Warner Cable, or Cablevision.  Time Warner Cable and Verizon recently agreed to cross-market the other’s products and services as part of a wireless spectrum transfer.

Currently there are 6 comments on this Article:

  1. Smith6612 says:

    I suppose I can attest to this, as well as Verizon’s forums. Their repair times/wait times for anyone can get pretty ridiculous at times, and getting them to repair a static issue can be a few weeks of fun as well if you push it. I haven’t encountered a line outage to complain about, but the Verizon forums are filled with many complaints on DSL and Phone being out for days or weeks, or issues with DSL or Phone taking forever to be resolved. It’s a process of finger pointing too.

  2. milo says:

    When a copper landline customer has a problem with their line, and this customer is in a Fios area, they are being told that it will take a month to fix the copper landline……or they can convert to Fios in a few days for their basic dialtone service. What they wont tell you is, Fios is deregulated which means they can charge you, and change the price whenever they want with ZERO regulation.
    The article above states ‘Verizon has invested $1.5 billion in the state for infrastructure, including its FiOS fiber to the home network’ but what they wont tell you is they used to spend WAY more than that in infrastructure upgrades in the past. Funneling infrastructure money from the traditional copper landline budget to build Fios does not help ANY customer in a non Fios area.
    Not long ago, Verizon persuaded the PSC to raise rates to help upgrade its network so EVERYBODY would have great service and high speed Broadband. Instead, these rate increases have been used to upgrade the Wireless Network. Any money spent on Fios was money that was not spent on traditional copper lines. The copper plant is in disrepair.
    Thanks Verizon!

    • Lisa says:

      I am one of verizon’s unfortunate business customers that is getting the run around. I run a small business in downtown Brooklyn . July 30th I arrived at my office to find my fax line didn’t have a dial tone and my Internet was not working. I have had numerous service technicians arrive after having to wait 7-10 for an appointment. At first their excuse was that my inside wiring was faulty. I spent a bunch of money to have all my inside wires redone as this is not a service Verizon provides. I still did not have a dial ten or Internet. I had to schedule another service appointment for technicians to come which was another 7 day wait. Did I mention none of my customers could phone in orders fax orders or email orders to me for 2 weeks now. I tried to find another phone company to service me and was told by each one that verizon is the only company that provides service to my area. So I have in a sense been completely crippled by Verizon and their complete lack of care for their business customers. I have lost so much revenue that I am unsure I will be able to gain the trust back of each customer who has been trying to place orders with us and has not been able to communicate in any way with our company. When the technician arrived he mentioned that I was on the copper wiring system and said Verizon is abandoning us. They do not want the copper line customers anymore. I hoped that I could switch to fios however they don’t provide that in my area. So where does that leave me and my business? The technician advised that he would be sending a construction crew to work on my pole and I probably won’t have service for some time. I called the technical support again and have scheduled another technician to come and take a look however the next appointment is not for 7 days. Does anyone have any advice for me? I am at my wits end I can’t find another provider and each day that passes I lose more revenue. Someone has to do something about Verizon’s complete lack of care as the public service commission is obviously not doing a thing about timely appointments, or any form of regulation on customers down time. Verizon has our neighborhood locked up and now we are about to get discarded with no options for another supplier.
      Someone please help us or we will have to close our business.
      Thank you Verizon you have taken my money for the last 10 years and now you are ruining my business and my life.

  3. Jerrie Walsh says:

    Here it is a year later, and when it rains in Northern NY, the lines “crackle”. Due to power outages that affect cell service and my husband’s line of business, we have opted to keep our landline. It rained over the weekend, and the line is “cracking.” It’s Verizon problem.
    My mother has had a problem of the local radio station feed playing in the background when she uses her phone. Someone from Verizon has identified the problems’s source, but do you think that Verizon will fix it’s problem? Absolutely not after at least 5 years of dealing with this.
    By the way, Verizon’s supposed “better Package deals” aren’t any cheaper either!

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