Two years after Verizon promised its FiOS fiber to the home service would be available to every resident of New York City, the city sued Verizon Communications on Monday, alleging Verizon failed to meet its commitment.

The 19-page lawsuit, filed in New York’s Supreme Court, contrasts the city’s interpretation of Verizon’s commitments laid out in a 2008 franchise agreement against Verizon’s claim it has met its obligations. Central to the case is the city’s claim tens of thousands of New Yorkers cannot get FiOS service from Verizon, even though Verizon’s fiber network may be running down the street.

“Verizon must face the consequences for breaking the trust of 8.5 million New Yorkers,” Mayor Bill de Blasio said in a statement. He added that, “It’s 2017 and we’re done waiting. No corporation — no matter how large or powerful — can break a promise to New Yorkers and get away with it.”

A 2015 audit conducted by the city and testimony given in public hearings confirmed Verizon had failed to wire every building for service, despite what the city believed was Verizon’s promise to do so.

Verizon defended its actions, claiming it had met its obligations to New York City by providing FiOS fiber-to-the-home infrastructure throughout the five boroughs. The problem, according to Verizon, is intransigent building owners that have obstructed Verizon’s entry to get service to tenants. Verizon’s defense does come with some evidence. The company has filed numerous complaints with New York’s Public Service Commission to gain entry to properties in the city that have either ignored Verizon’s efforts to wire their buildings or actively opposed it.

Some landlords claimed no tenants in their building wanted Verizon FiOS and the telephone company wasn’t welcome. Others accused Verizon installers of damaging buildings or performing shoddy work and sought assurances Verizon will meet the building owner’s installation standards. Some live-in building managers have even demanded kickbacks or free service in return for entry. New York State law gives Verizon a right of entry and the company has followed legal channels to eventually gain admittance.

Difficulties with landlords alone cannot account for many other instances where willing customers were told service was not available. In some cases, even city officials seeking FiOS were themselves told repeatedly it was unavailable.

Verizon’s defense is likely to come down to a single industry phrase — “homes passed.”

The former Bloomberg Administration signed an agreement with Verizon that committed Verizon to wire its fiber network citywide. Verizon interpreted the contract to mean installing fiber infrastructure that passes every major property in New York, but not wiring every property for the service. The current de Blasio administration argues the contract means Verizon should be able to reach every customer that wants FiOS service within 7-14 days of receiving an order.

Verizon’s lawyer indirectly conceded Verizon has not made the service available to every household that might want the service.

In a letter sent last week to Anne M. Roest, the commissioner of the city’s Department of Information Technology and Telecommunications, Craig Silliman, Verizon’s general counsel, wrote:

“[…]We now pass all households in the city and can provide service to over 2.2 million households within seven to 14 days of receiving a service request.”

According to data from Baruch College, New York City had 3,129,147 households as of 2015, leaving at least 900,000 households unaccounted for.

Verizon’s fiber network may run down the street of each of those homes, but the lawsuit contends Verizon has been unwilling or unable to wire them for service.

“Although Verizon claims it ‘passed’ all residential premises, Verizon still does not accept orders from all city residents,” the city audit concluded. “In fact, it still informs residents that service is ‘unavailable’ at an address if their network has not been created on the block.”

The city and several consumer and civic groups have implored Verizon to ‘speed it up’ for the last two years but contend Verizon’s response has been inadequate, which led to the lawsuit.

McConville

Common Cause New York has been pushing for more FiOS service for years and reports consumers are frustrated with Verizon’s inability to deliver service. They now suspect Verizon’s unwillingness to expand FiOS comes from a lack of investment to complete its fiber network.

“People continue to be very frustrated because it appears that Verizon is motivated by what will be most profitable for them — what buildings to wire and what buildings to ignore,” Common Cause New York’s executive director Susan Lerner told the New York Times. “This really is about undertaking an ambitious obligation and then deciding halfway through that it’s not worth it. We are very happy to see the city holding the vendor’s feet to the fire. This is absolutely what should be done.”

Verizon appeared frustrated for another reason, shared by company spokesman Raymond McConville.

“On a day where the city is preparing for the biggest blizzard of the season, it’s sad that the mayor’s focus is on pursuing a frivolous lawsuit,” McConville wrote in an email to the Times. “The de Blasio administration is disingenuously attempting to rewrite the terms of an agreement made with its predecessor and is acting in its own political self-interests that are completely at odds with what’s best for New Yorkers. We plan to vigorously fight the city’s allegations.”

And if that doesn’t work, McConville threatened Verizon may not seek a franchise renewal when the current one ends in three years.

Emery

It’s 2017 and a lot of Missouri residents are still tortured by the lack of access to basic broadband service, and if a community broadband ban bill becomes state law it will remain that way for years to come.

SB 186 is essentially a copy of last year’s community broadband ban that eventually died in the legislature. Just like last year, many of the sponsors and promoters of the latest attempt to impose a municipal broadband ban have close ties to the American Legislative Exchange Council (ALEC) and receive copious amounts of money from Missouri’s largest telecom companies. Some even win awards from the state’s biggest telecom lobbyists.

State Sen. Ed Emery (R-Lamar) loves the headlines he attracts from throwing ideological bombs into the public debate (he called homosexuality a mental illness, compared public education to slavery and a pathway to prison, and questioned whether former president Barack Obama was actually an American citizen). But he is not in touch with the rural residents in his state who have had their pleas for broadband service ignored by AT&T and other telecom companies for years.

Emery is a big fan of ALEC and serves as a Missouri state chairman. In 2015 he told an audience at an ALEC event he found the group’s efforts inspiring and helpful. ALEC acts as a giant clearinghouse for corporate-inspired legislation that ends up in the hands of friendly state legislators. ALEC’s model bills, including one banning municipal broadband, win passage in part because state legislatures do not get the kind of media attention and public scrutiny seen in Washington. SB 186, its predecessor, and other similar bills introduced in other states are frequently ghostwritten by telecom company lawyers and lobbyists and are designed to stop municipal broadband networks before they can get started.

Emery’s current bill is designed to apply a “scorched earth” response to communities trying to find ways to get rural broadband service up and running after a decade of being ignored by private telecom companies. It’s corporate protectionism and welfare at its finest, with a thicket of language that would force public providers into price and speed regulation. Emery’s bill would interfere with the types of loan agreements communities could contemplate to provide the service, and the language required for a mandatory referendum is heavily slanted to suggest such service is redundant and unnecessary. Emery’s bill also offers assurances his business friends could get gigabit speeds from community-owned providers, but not necessarily consumers.

Like the failed broadband hit bill introduced in Virginia, SB 186 is an ironic piece of legislation, heavy-handed with regulation and micromanagement and anchored with bureaucratic requirements designed to guarantee disappointment and costly failure. Emery’s career in public life has been spent railing against costly and unnecessary overregulation, yet his bill exemplifies both in action.

SB 186 also protects the status quo for broadband in Missouri, which is dreadful outside of major cities. It would assure incumbent telecom companies won’t face any service-improving competition and keep municipalities off their turf. For example, Columbia Water and Light has a “dark fiber” institutional fiber network at its disposal that is woefully underutilized. In addition to helping provide some connectivity for local government functions, the city-owned network also leases connections to hospitals and other public buildings, as well as some businesses. But the utility does not sell internet service itself.

The city believes much of the fiber network’s capacity is sitting un-utilized and could prove a valuable asset to the local connectivity economy. With the fiber already in place, expanding the network could be a cost-effective/common sense way to reach city residents that want better internet service than what incumbents are offering, and the city is more than willing to open the network up to those incumbents as well. SB 186 could eliminate that option in Missouri, just to protect the same private companies that have delivered underwhelming service for years.

In cities like Centralia, now exploring enhanced smart grid technology to improve the area’s electricity infrastructure, SB 186 would make the upgrade much more costly. Smart grid technology relies on fiber optic technology, often laid deep into neighborhoods and office parks. Only a tiny portion of that capacity is used to monitor utility infrastructure. The rest of the bandwidth on the fiber optic cable — already in place, could easily offer gigabit broadband service to every resident and business, especially if the city wires fiber to or near individual utility meters. That wouldn’t be allowed under SB 186 either, so communities like Centralia could not recoup some of the cost of the fiber optic technology by selling broadband service. That’s great news for companies like AT&T, CenturyLink, and Charter Communications. It’s also a relief for the phone companies who need not invest in their networks to offer something better than 20th century DSL.

Rural America: not a broadband-a-plenty

Emery offers two contradictory defenses for his bill:

1. It is necessary to protect taxpayers from municipal broadband which Emery calls “unsuccessful, leaving ratepayers to cover debt costs.” But when asked by local media for any examples of a Missouri public broadband project that has failed, he could not.
2. “We need more private-sector opportunities and not drive them out or hinder offerings coming into a community.”

In other words, Emery believes all public broadband networks are failures -and- they represent a major threat to private telecom companies that will be discouraged from investing in broadband expansion because a publicly owned competitor could be ready to “drive them out.”

Of course, neither is true. In rural Missouri there is no line of eager telecom companies seeking to expand broadband service into unprofitable rural communities and where only one broadband provider exists, there is no pressure to improve service quality or speed. In the first instance, there is no investment by private companies to discourage and in the second, the presence of a new provider encourages upgrades and investment. It’s a concept called “competition.” Sen. Emery would have a difficult time providing the name(s) of telecom companies that exited a community because of the presence of a municipal broadband alternative.

Rural farms are among the least likely places to get adequate internet service.

Sen. Emery’s family has a feed and grain business background, and those businesses (as well as Missouri’s farmers) are among the hardest hit economically by the lack of suitable broadband. But Emery is now far away from the business his father and grandfather ran. These days, he harvests big dollar contributions from some of the country’s largest corporations and much of his last campaign was financed by just two families — one with a vendetta against unions and the other — Rex Sinquefield — bucking to be Missouri’s own version of the Koch Brothers, who has his own private agenda he’d like enacted into law. Sinquefield has close ties to the Grow Missouri PAC, that also has close ties to the Club for Growth, ALEC, and the Koch Brothers’ backed Americans for Prosperity. Birds of a feather flock together.

Missouri’s biggest telecom companies are also generous contributors to Sen. Emery, which isn’t a surprise considering his bill and voting record directly benefits their businesses in the state. That may explain why the Missouri Cable Telecommunications Association — the state’s top cable lobbying group — gave Emery its Legislator of the Year award. Not to be outdone, the phone companies’ Missouri Telecommunications Industry Association gave Emery its own Leadership Award. Anyone who can introduce a bill that eliminates the best prospect of competition in suburban and rural Missouri for years is probably worthy of both.

In return for favors like that, some familiar names appear at the top of Emery’s list of campaign contributors:

• AT&T ($6,000)
• Comcast ($4,000)
• Verizon Communications ($4,000)
• CenturyLink ($3,500)
• Charter ($2,000)
• Time Warner Cable ($1,500)
• Charter Communications ($1,325)
• Sprint ($1,000)

Emery clearly listens to their interests more than average Missouri consumers still searching for broadband service.

The St. Louis Post-Dispatch reported last summer that there are significant gaps in broadband coverage even in St. Louis County, where one million residents live. “Fringe suburban spots” too costly to meet Return On Investment requirements guarantee no service, indefinitely. In St. Clair County, 5,000 homes are without broadband for the same reason. In large parts of the state, what constitutes broadband no longer meets that definition — 25Mbps, as established by the FCC. Every telephone ratepayer pays a “universal service fee” on their phone bill, in part to extend broadband into rural areas. But that extension has been spotty because not every phone company accepts the money and the conditions that come with it to broaden their reach. That leaves many rural Missourians with <1Mbps DSL service. That’s the case in Wildwood, where streaming media is out of the question because internet speeds are too low.

The Broadband Berlin Wall: Wildwood, Mo. — Broadband service is easily available to the east of Highway 109. But to the west, service is spotty to non-existent.

Wildwood — in western St. Louis County, is living in “Third World conditions,” even though “we’re not in rural Timbuktu,” according to resident Marilyn Gilbert. It’s also comparable to Cold War-era Berlin, except in reverse. Eastern Wildwood offers residents broadband options from both Charter and AT&T. But the Broadband Berlin Wall dividing the community — Highway 109, separates the broadband haves’ from the have-nots’. The larger part of Wildwood to the west, now growing with new housing and businesses, is a broadband swamp with few, if any choices for local residents.

Gilbert “enjoys” AT&T DSL and speeds that never come close to 1Mbps. It is her only option.

“I tried to download my Windows update and it timed out,” she said. “The amount of time you waste waiting for things to open up or download!”

Remember, this is in St. Louis County, the old home for the headquarters of Charter Communications, which dominates the city of St. Louis.

Despite earning billions every year from the broadband business, Charter has refused to extend its lines of service into the western half of Wildwood, despite efforts to attract the company that date back six years. Residents report broadband availability is among their top concerns taken to local officials, who have in turn sought help from Charter, AT&T, and the state legislature.

The city of Wildwood’s efforts were met with a demand by Charter to pay the cable company $3 million in taxpayer funds to extend service. The city said no.

“The comment we hear constantly is that kids need high-speed (internet) in order to access their school work,” said Wildwood councilman Larry McGowen. “These days, internet is just like another utility. It has become every bit as important in people’s lives as electricity.”

But it apparently is not important enough to allow Wildwood and other communities the option of constructing their own local broadband solutions for residents if Emery’s bill becomes law.

Ironically, the same companies that refuse to extend their service into rural Missouri are also vehemently opposed to letting local governments do it in their absence.

The stalemate has caused some residents to sell their homes and move, just to get internet access. David Norell left town because he couldn’t survive with satellite internet service, which costs $80 a month and offers spotty service with a low data allowance.

That makes Emery’s bill, and others like it, a travesty. Banning local communities from doing the job large for-profit companies won’t seems nothing short of corporate protectionism. After all, as critics of Emery’s bill charge, how can a local government unfairly compete with a company that doesn’t compete at all? Also of concern is the fact those residents that do get token DSL service from AT&T may be trapped using it forever if Emery’s bill keeps better and faster service from co-ops and other public broadband options off the table.

If it seems like Sen. Emery is putting the interests of big telecom companies – many dues-paying members of ALEC – above those of his constituents, perhaps he is. Consider the fact Emery is a state chairman at ALEC, an organization that included this loyalty pledge in its draft state chair agreement:

I will act with care and loyalty and put the interests of the organization (ALEC) first.

Emery has taken heat for his ongoing love affair with ALEC before, including an ethics complaint about a $3,000 meal at the Dallas Chop House where Emery ate. ALEC’s corporate members picked up the tab. That kind of unethical conflict of interest, along with the aforementioned loyalty pledge, infuriated the St. Louis Post-Dispatch:

Mr. Emery and his ilk can believe what they want, but they should play no part in allowing corporations to hide their agendas, and their lobbying expenses, by pretending to be something they are not. The proof is in ALEC’s actions, which as Washington Post columnist Dana Milbank outlined, hid itself behind closed doors in a meeting last week in the nation’s capital, pushing reporters away while claiming they had nothing to hide.

No, ALEC exists solely to hide. To hide money. To hide agendas. To hide its hijacking of democracy.

Lawmakers who care about the constitution and their commitment to voters should be fleeing faster than the corporations who realize ALEC is simply a bad investment.

Emery at a 2015 ALEC event.

It was not an isolated incident. Ed and his wife Rebecca Emery also enjoyed a $141.10 meal paid for by the Missouri Telecommunications Association. It’s safe to assume nobody had just a small salad. Other meals and drinks were courtesy of AT&T and CenturyLink. (Peabody Energy footed the bill for the Emerys’ taxi rides back and forth.)

When the wining and dining ended, the lobbyists were back with campaign contribution checks in hand.

These kinds of municipal broadband bans are toxic to economic development for rural communities that already face built-in economic and infrastructure disadvantages. The 21st century digital knowledge economy has the potential to make rural America equally competitive, assuming there is adequate infrastructure in place to participate.

Relying on private investment alone can work in urban areas where broadband profits are easy because the essential infrastructure to provide the service was constructed and paid for decades ago, originally to deliver telephone and television service. Rural areas suffer from deteriorated wireline infrastructure some phone companies want to abandon altogether and no cable broadband service at all.

Charter and AT&T first answer to shareholders. Local governments answer to their residents. Legislators are supposed to do the same. For Mr. Emery, loyalty to the interests of ALEC and the state’s telecommunications companies seems clear. It’s too bad his bill suggests a lot less loyalty to the voters in his district that need internet access or better broadband are will assuredly not get it if this bill ever becomes state law.

Verizon Wireless’ new unlimited data plan threatens to destroy everything, fear Wall Street analysts in an open panic attack over the prospects of value destruction and network reliability damage.

“An unlimited offer is dangerous,” Roger Entner, an analyst at Recon Analytics LLC, told Bloomberg News. “If they sign up a lot of people, it will congest the network, and they run the risk of people saying ‘the network sucks’.”

The return of unlimited data at Verizon (with a protective right to throttle customer speeds after they consume 22GB of data during the month) seems to have triggered anxiety on Wall Street because Verizon was the most adamant about never offering unlimited plans again after dropping them in July, 2011. Part of that fear may have come from Verizon’s own former chief financial officer Fran Shammo who warned investors last fall:

“The majority of people don’t need unlimited plans. But the people who use unlimited plans can be abusive, they can really wreak havoc to your network. And at the end of the day, I continue to say you cannot make money in an unlimited video world. You just can’t do it because you need to generate the cash flow to keep up with your demand.”

What also concerns Wall Street is the increasing evidence an all-out price war provoked by T-Mobile and Sprint will threaten to close some doors on network monetization. Charging customers for data consumption has a growth prospect that would have guaranteed increasing average revenue per customer indefinitely. But unlimited plans mean consumers pay one flat price for data no matter how much they consume. Consumers love it. Wall Street analysts generally don’t.

Other analysts are concerned that Verizon, deemed the Cadillac Network because of its premium price and reputation, also happens to have the least amount of deployed wireless spectrum of all the four national carriers. As the nation’s largest carrier with 114 million users, a big spike in data consumption could affect Verizon’s network performance, some speculate.

Unlimited data plans promote usage and total wireless traffic is expected to grow between 70-80% annually, up from 50-60% under today’s tiered data plans, according to wireless analyst Chetan Sharma.

In response Verizon has rushed out executives to reassure Wall Street and investors Verizon’s network was built to take it.

“Our goal is to always offer a better performance, and I see a path to that,” Mike Haberman, Verizon’s vice president of network support, said in an interview with Bloomberg:

“Spectrum is only one element of a network,” he added. “How you put the network together is far more important.” In advance of its decision to start selling an unlimited data package, Verizon was busy with upgrades. The company just boosted network capacity by 50 percent with new systems that take separate radio frequencies and combine them into one large pathway, Haberman said. The company has also been adding more cell sites and transmitters in cities and connecting those sites with high-capacity fiber-optic lines.

CNBC reported Verizon’s new unlimited data plan is a “sign of weakness” for Verizon, which is facing challenges to its core wireless business. (4:30)

Google’s forthcoming online TV streaming service will cost too much for too little and includes a cloud-based DVR that will replace many of your recordings with unskippable-ad-laced alternatives.

YouTube TV was previewed for reporters Tuesday, despite the fact it won’t debut until late spring or early summer, with a lineup of 40 channels for $35 a month. The “skinny bundle” from Google has managed to put together a very incomplete lineup of major cable networks and for most of the country, on-demand-only access of network shows about a day after they air.

YouTube TV Tentative Lineup

• Disney: ABC, ESPN, ESPN2, ESPN31, ESPNU, ESPNews, SEC Network, Disney Channel, Disney Junior, Disney XD, Freeform
• NBCUniversal: NBC, Telemundo, Bravo, Chiller, CNBC, E!, Golf Channel, MSNBC, NBC Universo2, NBCSN, Oxygen, Sprout, SyFy, Universal HD, USA. In some regions: Comcast Regional Sports Networks, NECN (New England Cable News)
• CBS: CBS, The CW, CBS Sports Network
• Fox: FOX, FS1 (Fox Sports 1), FS2 (Fox Sports 2), BTN (Big Ten Network), FX, FXX, FXM, Nat Geo, Nat Geo Wild, Fox News, Fox Business. In some regions: Fox Regional Sports Networks
• The Weather Channel: Local Now (rolling weather forecasts)
• YouTube TV members can also add Showtime for $11 a month and Fox Soccer Plus for $15 a month.
• Availability of local TV/live network streaming limited to residents of New York, Los Angeles, Chicago and Philadelphia.

Prospective customers will have to tough it out with no access to AMC, HBO, MTV, Comedy Central, Nickelodeon, MTV/VH1, CNN, Cartoon Network, Discovery, TBS, TNT, PBS, Food Network, and HGTV among many other missing networks.

One potentially interesting feature – an unlimited cloud-based DVR service, is rendered almost unusable with the imposition of prioritized video-on-demand. In short, this means that once a video-on-demand version of the show you recorded on your DVR becomes available, you can no longer access your recording. Your only option is to watch the ad-heavy, on-demand version with advertising you cannot skip. In most cases, that will give customers about 12-24 hours to watch their DVR recordings before they become inaccessible, at least until the on-demand version is removed.

Wojcicki

That’s a challenging proposition when consumers have other choices including AT&T’s DirecTV Now, Sling TV, and PlayStation Vue. The premise of YouTube TV, like many others, is to appeal to cord cutters and cable-nevers — especially millennials.

“There’s no question millennials love great TV content,” said YouTube chief executive Susan Wojcicki. “But what we’ve seen is they don’t want to watch it in the traditional setting.”

What Wojcicki ignores is the fact millennials prefer to watch their shows on-demand. Relying on live television as the primary source of scripted television shows is already inconvenient and unnecessary. The viewing experience is increasingly an individual one, catering to the whims of a single viewer watching on a tablet, smartphone, or connected TV. Of all the websites on the internet, YouTube should already understand the trend towards individualized viewing better than most.

Just as important, YouTube TV is a lousy deal. Hulu subscribers can binge watch all the series they want with no ads for $11.99 a month. YouTube TV will charge nearly three times the price and force customers to sit through up to 18 minutes of ads an hour. Hulu doesn’t require customers to use Google’s Chromecast as the only stream-to-TV option either. A premium YouTube Red subscription also won’t get you a better deal or fewer ads. You may already pay to watch YouTube commercial free but now you will pay more to watch YouTube TV filled with ads.

Analyst Michael Nathanson said Google’s real goal here is to get into the television advertising market. Because customers will be held captive by a disabled fast-forward button, they will see Google-targeted ads playing in ad slots normally reserved for use by local cable operators. Getting a lot of people to watch those ads means YouTube TV will at least be generous about something. A subscription will include access for six accounts with separate login information, but only three users can watch simultaneously, if they bother.