Schneiderman

The New York Attorney General has some strong words for Verizon Communications:

“Verizon [must] divest those portions of its New York franchise where it is no longer willing to continue providing wireline service and replace Verizon with another carrier that will provide wireline service.”

Attorney General Eric Schneiderman is more than a little concerned with Verizon’s plans to abandon offering landline service on the western half of Fire Island and potentially other areas further upstate to satisfy the company’s wireless business strategy.

In a hostile 13-page filing directed to the New York Public Service Commission, Schneiderman’s office accused Verizon of abdicating its responsibility to provide universal access to high quality landline service in favor of moving customers to inferior Verizon Wireless service.

“Verizon is asking the Commission to depart from a century of telephone service regulation, which had as one of its fundamental principles, universal wireline telephone service for all customers,” Schneiderman wrote.

In return for a guaranteed monopoly, profits, and a secure franchise area across portions of New York, telephone companies like Verizon historically agreed to offer phone service to any customer who wanted it. State and federal universal service rules provided subsidies to phone companies to reach their most rural or expensive-to-reach customers.

The goal, Schneiderman argued, was for every resident in New York to have home phone service, enabling them to communicate with their doctors, families, schools, friends and businesses, as well as to send for police, fire and ambulance assistance in an emergency.

Verizon’s intended replacement, Voice Link, represents a downgrade in service even worse than hundred-year old copper wire “plain old telephone service,” according to the attorney general. Schneiderman called Verizon’s Voice Link inferior and its thick 10-page terms, conditions, and disclaimers “legalistic,” leaving consumers without services they previously received or imposing significant new burdens and obligations.

The issues cited by Schneiderman:

Voice Link Service “is not compatible with fax machines, DVR services, credit card machines, medical alert or other monitoring services or some High Speed or DSL Internet services.” Customers in western Fire Island and other rural parts of New York have no FiOS or cable modem Internet providers to switch to, so those who rely on these services have no alternatives if switched to Voice Link.

Because Voice Link “may not be compatible with certain monitored home security systems,” customers’ homes and businesses will be at greater risk from flooding by burst plumbing, fire or burglars. In the case of plumbing emergencies, visit Carlson Plumbing Company website for reliable solutions and prompt support.

Although wireline customers whose service is suspended for nonpayment can still reach a 911 operator in emergencies, suspension of Voice Link “will prevent ALL Service, including any 911 dialing and associated emergency response services. Customers may also lose the ability to receive or place calls, even to 911, if they fail to “promptly notify Verizon” of a change in their address, email, or credit card expiration date.

Customers must “defend, indemnify and hold harmless Verizon from and against all claims … for infringement of any intellectual property rights arising from use of Voice Link or its software.”

Voice Link Service “does not allow the Customer to make 500, 700, 900, 950, 976, 0, 00, 01, 0+, calling card or dial-around calls (e.g., 10-10-XXXX),” so customers will be unable to use such pay-per-call information services. Voice Link Service “does not allow the Customer to accept collect calls or third number billed calls. The Company will not bill any charges on behalf of other carriers. [Customers] must have an International Calling Plan in order to make international calls. Wireline customers are able to subscribe to toll and international calling plans provided by other carriers, and have these and other third-party service charges included on their Verizon bills.

Verizon Voice Link

Voice Link Service “is subject to the availability of adequate wireless coverage throughout your home, and is not available in all locations.”

Unlike wireline service, which supplies its own power over the copper wiring, Voice Link uses customers’ house current to operate. Verizon has not disclosed how much customers’ electric utility bills will increase to power the Voice Link device. Also, if electric power is interrupted, Customers may have to “reset or reconfigure equipment prior to using” Voice Link. This may be difficult for some physically limited or technologically unsophisticated customers to perform.

During power interruptions, the wireless Devices used in Voice Link are battery operated. Although the Devices include a rechargeable battery back-up that provides only 36 hours of standby power and up to 2.5 hours of talk time in the event of a commercial power outage, “[a ]fter the battery is exhausted, the Service (including 911 dialing) will not function until power is restored.”

After the expiration of a one year replacement warranty for the battery back-up included with customers’ wireless Device, customers “are responsible for replacing the back-up battery as needed,” but Verizon has not disclosed the cost of such replacement batteries.

Wireline customers purchase their own telephones from competitive manufacturers, but the Voice Link device is only supplied by Verizon, which continues to own it. Thus, customers will have to pay Verizon to repair the device if “such repair or maintenance is made necessary due to misuse, abuse or intentional damage to the Device.” Verizon has not disclosed what [the] repair or replacement might cost customers in such event.

When wireline customers end their service with Verizon, they have no equipment to return to the company. However, Voice Link customers who cancel their service “are responsible for returning their Wireless Device to [Verizon] in an undamaged condition. Failure to return the Device within 30 days … may result in [Verizon] charging [customers] an unreturned equipment fee.” Verizon has not disclosed the amount of this fee.

Schneiderman accused Verizon of dragging its feet on repairs on Fire Island and forcing Voice Link on customers as the only available alternative.

“It is clear that Verizon is leveraging the storm damage from Sandy as part of its long-term strategy to abandon its copper networks by substituting Voice Link for [landline] service on western Fire Island and forcing customers to accept wireless Voice Link wherever it does not build FiOS,” Schneiderman argued. “Verizon’s failure to make prompt repairs to its Fire Island facilities during the seven months following Sandy left the Commission little choice but to provide temporary approval of Voice Link so that customers would have some form of telephone service during the 2013 summer beach season. However, this ‘temporary approval’ should not be expanded to allow Verizon to avoid its obligations permanently, on Fire Island or anywhere else in New York.”

Schneiderman wants the PSC to force the issue with Verizon, and not on the preferred terms of its senior executives.

“Rather than allow Verizon to provide inadequate Voice Link service to Fire Island and other New York customers, the Commission should compel the company to either maintain its wireline network throughout its franchise territory or sell
those parts where it is unwilling to do so to another provider that will provide adequate service,” Schneiderman wrote.

New York State residents have until July 2 to share their views about a proposal by Verizon Communications that would allow the company to drop landline service in rural upstate New York and other locations and replace it with a wireless substitute — Voice Link, as its sole service offering.

Stop the Cap! has covered the issue of rural landline service extensively since 2008. In the past few years, while CenturyLink, Windstream, FairPoint, and Frontier have developed business plans to sell lucrative landline telephone and broadband service in rural areas, AT&T and Verizon have proposed abandoning their landline networks in certain areas in favor of wireless.

Verizon has sought to stop offering rural landline service in areas where it feels no longer economically justified providing it. It ultimately means dismantling communications infrastructure that has provided reliable voice telephone service for more than 100 years.

Voice Link is first being introduced as Verizon’s “sole service” for beleaguered residents living on the western half of Fire Island, which was devastated by last fall’s Hurricane Sandy. Verizon does not want to foot the bill to rebuild and repair the damaged copper wire infrastructure and does not believe installing its fiber optic network FiOS is economically justified either. That leaves residents with one option for basic phone service: Voice Link.

Unfortunately, many of the residents now encountering Voice Link have told the Public Service Commission it has proven unreliable or unsatisfactory and represents a downgrade from the landline service they used to have. (Stop the Cap! has repeatedly offered to test Voice Link’s workability and sound quality ourselves, but Verizon has not taken us up on that offer.)

The company does admit Voice Link is incompatible with basic data services, which means Verizon customers using Voice Link will lose DSL and dial-up Internet access. It also does not work with fax machines, home alarms, and medical monitoring services. Verizon has promised to address these issues in the future, but has offered no timeline or guarantees. Instead, it suggests customers consider purchasing added-cost services from Verizon Wireless, which could cost some residents hundreds of dollars a month for phone and broadband service.

Stop the Cap! believes Voice Link should be offered only as an optional service for customers who wish to use it. In its current form, it is unsuitable, unproven, and insufficient to serve as Verizon’s sole offering, particularly when the company is the carrier of last resort for many rural residents, as well as those on Fire Island.

At the very least, Verizon must be compelled to offer an equal or better level of service, not diminish it. That means better voice quality, rock solid cell coverage, an equivalently priced, unlimited wireless broadband service option for DSL customers, and compatibility with the data services that are now supported over the plain old telephone network.

The Commission should also explore the true costs of repairing and/or replacing wired infrastructure before allowing the company to dismantle it. Once the wired infrastructure is removed, the costs to provision rural New York with fast, reliable, wired broadband service in the future will become prohibitive. Wireless service is no panacea for rural New York, where coverage issues abound, especially in the mountainous areas upstate and across the rolling hills of the Southern Tier. Verizon’s lawyers admitted as much when they wrote the terms and conditions governing Voice Link and other wireless services, walking away from significant liability if calls to 911 go unconnected:

“In the absence of gross negligence or willful misconduct by Verizon, our liability to you, to anyone dialing 911 using the Service, or to any other person or party, for any loss or damage arising from any acts, errors, interruptions, omissions, delays, defects, or failures of 911 services or emergency personnel, whether caused by our negligence or otherwise, shall not exceed the amount of our charges for such Services during the affected period of time. This limitation of liability is in addition to any other limitations contained in this Agreement.”

In other words, Verizon’s only responsibility is to credit your account for the time you could not reach 911 or your call summoning help was dropped. You will see that credit reflected on a future bill, assuming you are still among the living when the emergency is over.

We strongly urge our fellow New Yorkers to share their personal views about Voice Link as a landline substitute with the PSC. This issue is important not only to Fire Island but to the rest of rural upstate New York as well, particularly pertaining to whether customers will have broadband service or not. Verizon management has clearly stated their agenda is to retire copper landline service and replace it with wireless in non-FiOS areas deemed too costly or unprofitable to keep up or upgrade.

Sharing your views is fast and easy and can be done in several ways. Be sure to reference “Matter/Case: 13-00986/13-C-0197” in your comments and include your contact information. All submissions will become publicly viewable on the Commission’s website under the “Public Comments” tab. You can find submissions from Stop the Cap! there as well.

Write (U.S. Mail):

Hon. Jeffrey C. Cohen, Acting Secretary
New York State Public Service Commission
Three Empire State Plaza
Albany, New York 12223-1350

E-Mail:

[email protected]

Online Comments:

You can post comments directly to the Commission’s Document and Matter Management System (DMM). Choose the “Post Comments” link on the upper-right of your screen. An online submission form will appear asking for your contact information. You can include your comments in the provided text box on that form or attach a .PDF, .DOC, or .TXT file.

Stop the Cap! has received information from customers and anonymous employees that Verizon Communications is allegedly attempting to pressure seasonal residents in the rural Catskill Mountain region of upstate New York to give up their landline phone service in favor of the company’s wireless alternative, Voice Link, in potential violation of an order from the New York Public Service Commission limiting its deployment to sections of Fire Island.

Two Verizon customers who own vacation property in the mountainous region of upstate New York in and around Monticello separately contacted Stop the Cap! after doing online research on the wireless product Verizon representatives attempted to sell them.

Both reported they were pressured by Verizon’s service/repair department to accept the landline alternative after attempting to reconnect their seasonal telephone service. In one case, a customer had to call Verizon three times to attempt to reconnect her disconnected phone line after a missed appointment.

“They wanted nothing to do with coming out here to put my old phone line back in service,” says the customer, one of two we have been asked to leave unidentified in light of certain forthcoming legal proceedings. “I got transferred twice and finally ended up talking to someone pushing something called Voice Link.”

Verizon Voice Link

The customer tells us she never heard of Voice Link and Googled information about it, ending up on Stop the Cap!’s website which has maintained ongoing coverage of the product’s introduction on Fire Island.

“I called them back and told them they must be mistaken because I don’t own property on Fire Island and they told me it was no mistake and that they were preparing to distribute Voice Link all across the area and I was lucky to be among the first before they ran out,” the customer tells us.

The second customer, who has since taken his complaint to the Attorney General of New York, claims he was offered the same service from Verizon a week later.

“When I called to get my dial tone back, Verizon transferred me to a special repair representative who wanted to install Voice Link instead,” he tells us. “It was explained I would be better off with Voice Link and would get more calling features for less money and get national calling, free voicemail, and all of these other extras.”

The customer tried to turn the offer down, but Verizon made it difficult to refuse.

“You really had to argue with them and say no at least a dozen times,” our reader tells us. “The reason I said no is that I tried that same type of service from Verizon Wireless and it sucked. I raised my voice and they finally agreed to reconnect my phone.”

We have also received e-mail from individuals claiming to be Verizon employees represented by the Communications Workers of America indicating Verizon delivered a large shipment of Voice Link units for deployment in the Catskills, despite the fact Verizon is apparently not authorized by the PSC to offer the service to customers outside of the western half of Fire Island, and only on an interim basis.

Verizon’s use of Voice Link in upstate New York will almost certainly raise questions with regulators who negotiated the agreement with Verizon over the limited use of Voice Link during its evaluation, especially if customers report they were not offered the service only as an option.

If the allegations are true, Verizon may be signaling its confidence it will succeed adopting Voice Link as a mandatory rural landline replacement in parts of New York State and isn’t waiting for final approval from the PSC.

Verizon’s Jarryd Gonzales denied Verizon is responsible for any wrongdoing, noting nothing in the PSC’s Fire Island proceeding restricts Verizon’s ability to offer Voice Link service as an option, which he confirmed the company was doing in Monticello. (See PSC order here, reference page five: “Finally, the amendment will not apply in areas where Verizon offers the alternative wireless service as an optional service [i.e., traditional wired facilities are still in place].”)

“Verizon’s VoiceLink is an innovative and proven product that already is providing quality and reliable voice telephone service to residents of Fire Island and other areas,” Gonzales tells Stop the Cap! “It is a repair option for our customers who have had continued and lingering difficulties with their copper-based telephone service.  It uses wireless technology which has proven to be resilient, and which millions of people use millions of times each day.”

[Update 4:25pm ET]

The New York Attorney General’s office has announced they have filed an Emergency Petition with the New York Public Service Commission to prohibit Verizon from “illegally installing” Voice Link service in direct violation of its tariff.

Attorney General Eric Schneiderman has asked the Commission to sanction Verizon for its actions detailed in this formal complaint:

The Attorney General’s Office has recently learned that Verizon intends to require customers outside of the Fire Island pilot area seeking to have their wireline service installed accept instead wireless Voice Link service, notwithstanding the Commission’s May 16 Order. According to reports by representatives of the Communications Workers of America, Verizon has delivered a pallet load of Voice Link devices to its Monticello Installation/Maintenance Center, and has instructed its technicians in that region to provide summer seasonal customers returning to Catskill vacation homes, who have long been received Verizon wireline service, only Voice Link service.

The union’s report is corroborated by two complaints of Verizon seasonal customers who have been told Voice Link will be installed instead of repairing their wire line telephone service. Only by firmly refusing Voice Link were both customers able to keep their wireline service.

Unlike Fire Island, wireline network damage from Superstorm Sandy cannot be used as an excuse for substituting Voice Link for wireline service in the Catskills, where the storm had limited impact. Instead, it appears that in the Catskills, Verizon has chosen to pursue the company’s business strategy in blatant disregard for the Commission’s Order.

The Commission’s May 16 Order could not have been clearer in limiting Verizon’s substitution of Voice Link for wire line service to western Fire Island, to enable evaluation of this unproven technology on a pilot basis.

Verizon’s provision of Voice Link outside the confines of western Fire Island is illegal, and its open defiance of the Commission’s May 16 Order must be met with effective sanctions.

[Update 4:33pm ET]

[Article further updated at 5:17pm ET to include statement from Verizon Communications.]

Attention broadband planners: Although broadband deployment strategies differ around the world, a new report decisively concludes there is only one network technology proven to meet the demands of broadband users both today and tomorrow: a national fiber optic network.

BuddeComm’s new report, “Global Broadband – Fibre is the Infrastructure Required for the Future,” looked at every technology from variations of DSL, cable broadband, satellite, and wireless and found only fiber optics capable of handling the capacity of data and applications that will be required to run cities and countries from today onwards.

The report found that fiber optic deployment faced a range of challenges, despite its obvious technological advantages. Political obstacles are among the biggest roadblocks facing fiber networks. A combination of concerns about the cost of wiring service to procrastination has held back many national broadband improvement projects, including those in Australia and New Zealand. Incumbent commercial providers in North America have also actively attempted to block public fiber networks to protect their own commercial interests.

BuddeComm concludes America’s biggest broadband problems come as a result of incumbent providers exercising undue market power and influence over elected officials to protect their commercial interests at the price of the public good.

The report concludes that decisive political leadership is essential to overcome many of the artificial obstacles which slow down or stop fiber broadband deployments.

“One can argue endlessly about what technologies should be applied and at what cost, but we believe that all signs point to Fiber-to-the-Home (FTTH) networks as the best future-proof solution,” the report concludes. “One can debate about whether it is needed in five, ten or fifteen years – and again that depends on some of the differences between countries – but in the end FTTH is the best final solution for all urban and many regional premises.”

The 21st century digital economy is powered by robust broadband, and growing demands for faster speeds are coming from the healthcare, energy, media and retail sectors. Healthcare uses include file transfers of high-definition medical imagery and teleconferencing. Smart Grid technology is being deployed by many power companies to develop more efficient means of distributing and conserving energy. Media and mass entertainment providers are moving to high bandwidth online video, and the retail economy markets products and services over modern broadband networks.

The implications for the global economy are enormous. More than 120 countries have formal broadband policies and many consider high-speed Internet access a national priority. In the last century, North America and western Europe were considered the dominant economic players, in part because they established and maintained infrastructure to support their manufacturing and service economies. But many of these countries are falling far behind in the 21st century digital economy, where countries like Japan and Korea, parts of eastern Europe, the Baltic States, and Scandinavia are taking the lead in infrastructure deployment.

“Broadband infrastructure is perceived by all to be critical for the development of the digital economy, healthcare, education, e-government and so on,” the report notes. “From a financial and investment point of view broadband infrastructure should be treated as utility infrastructure.”

The interests of the private sector are not always aligned with the public interest, particularly when it comes to spending capital on upgrading network infrastructure. The report recommends that governments step in and build a public fiber highway system on which all providers can offer services.

“A National Broadband Network (NBN) should be based upon an open network as this makes it possible to offer the basic infrastructure on a utility basis to content and service providers,” the report concludes.

The governments of Australia, New Zealand, Israel, and others are already moving in that direction, setting up broadband authorities to build fiber infrastructure dismissed as too expensive or unnecessary by commercial providers who answer first to financial markets, shareholders, and private banks.

Under most NBN plans, providers get access to the fiber network at wholesale rates and help recoup its cost.

Australia’s National Broadband Network is on the way.

Where politicians answer to the whims of the private sector before considering the public good, the report finds:

• Private cable companies, particularly in North America, will continue to support and incrementally upgrade their HFC networks, but new cable operators are more likely to deploy fiber at the outset, not coaxial copper cable. Network costs, efficiencies, and reliability are all in fiber’s favor. In Europe, cable broadband is regularly losing market share to faster fiber technology. The share of all broadband subscribers held by HFC networks across Europe fell from 26% in 2002 to about 11% by mid-2013;
• Private telephone companies that do not face robust competition will continue to rely on their existing DSL networks. In cities and larger towns, expect phone companies to eventually upgrade to VDSL fiber-to-the-neighborhood (and its variants) in the largest markets with the most competition. Rural areas will continue to receive less robust DSL service, particularly where no cable competitor provides service;
• Rural areas may receive fixed wireless or satellite broadband service, but this is not a solution for more populated areas.

Although the global economic downturn stalled many fiber network deployments and suppressed demand, the report finds broadband usage and demand for faster speeds are quickly accelerating. Some other highlights:

• Asia continues to be the leader in fiber optic deployment;
• Sufficient customer demand to make the investment in fiber worthwhile is increasingly likely once fiber service becomes widely available in countries like the Netherlands, China, France, Israel, Switzerland, Norway and Sweden;
• International connectivity in Africa remains a challenge, but fiber bandwidth is expected to more than double by 2014;
• The Middle East will see rapid growth in fiber broadband once international capacity constraints are eased.

Obtaining a copy of the full BuddeComm report is prohibitively expensive for consumers, priced at $995.

Two former interns for Bell Mobility have filed complaints with Canada’s labor department alleging the company exploited an internship program to acquire the ultimate in cheap labor.

Jainna Patel, 24, spent five weeks at the wireless phone company’s intern campus in Missassauga, Ont. She was enrolled in Bell’s Professional Management Program (PMP), intended to expose workers to the fast-paced telecommunications industry. Patel expected to work with advanced wireless telecom technology and get an introduction to the industry over the course of the three or four-month program. Instead, she and other workers allege they were exposed to 12 hour days doing unpaid entry-level work including phone surveys and basic market research that directly benefited Bell and likely violated Canadian labor laws.

“It felt like I was sitting in an office as an employee, doing regular work. It didn’t feel like a sort of training program,” Patel told CBC News. “They just squeezed out of you every hour they could get and never showed any intent of paying.”

Bell’s PMP invites nearly 300 post-secondary graduates each year to work in the special facility, segregated from regular Bell employees.

Interns are allegedly pressured to work long hours and late, sometimes until 3am, and some left afraid to ask too many questions or complain.

Patel

One intern interviewed by the CBC said he lasted two months in the program and felt taken advantage of performing tedious market research that helped the company place cell towers and advertising billboards. He added he was chastised if he arrived late or complained about overtime hours.

He noted many interns had few opportunities in the jobs market, including at Bell, and many eventually returned to living at home, unemployed.

“I didn’t learn anything,” he said. “I learned not to trust corporations. I learned how life works. Anything I learned professionally was from the other interns.”

Toronto lawyer Andrew Langille, who specializes in internships and labor law, estimates the majority of the 300,000 unpaid interns working in Canada are performing work that directly benefits their host companies in violation of Canadian labor laws.

“Employers decided to use the poor economic conditions and the poor labor market as a carte blanche to begin replacing paid employees with unpaid ones,” Langille claims, noting he hears more complaints about Bell’s internship program than any other program in Canada.

“If you are out of school and you are just providing free work for an employer, then it is typically illegal,” said Langille.

But provincial laws often differ from federal law, opening up loopholes that some companies use to flout labor laws.

Bell’s Creekbank Campus in Ontario.

In Ontario, provincial regulated employers, which do not include Bell, must provide training that benefits the intern without reaping any benefit from the work the intern does. Bell, which is federally regulated, is covered by Canada’s looser Labour Code, which avoids spelling out specific rules governing internships. Case law and past precedent have provided some general guidance that employers should follow, including the fact almost all work should be compensated, but it remains less clear-cut.

Patel’s complaint asks Bell to compensate her almost $2,500 in unpaid wages for her work.

Patel also explained she felt intense pressure from Bell managers to stay quiet and not file any complaints against the program, which at least one manager suggested could be at risk if the government intervened. Patel was told that could result in hundreds of interns being sent home.

Langille was unmoved.

“Is it permissible that a company that makes billions of dollars each year in profits is not paying the minimum wage? It’s ridiculous. A lot of the companies that are using unpaid labor have the ability to pay but choose not to — to save money,” Langille said.

Patel is now back at home worried she will get blacklisted by the industry for being a troublemaker.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/CBC BC Bell accused of breaking labour law with unpaid interns 6-24-13.flv[/flv]

Jainna Patel talks with the CBC about her experience as an unpaid intern for Bell Mobility, Bell Canada’s wireless division. (3 minutes)