August 19, 2015

Hon. Kathleen H. Burgess
Secretary, Public Service Commission
Three Empire State Plaza
Albany, NY 12223-1350

Case Number: 14-C-0370

Dear Ms. Burgess,

After years of allowing the telecommunications industry in New York to operate with little or no oversight, the need for an extensive and comprehensive review of the impact of New York’s regulatory policies has never been greater.

Let us remind the Commission of the status quo:

• As Verizon winds down its FiOS initiative, other states are getting cutting-edge services like Google Fiber, AT&T U-verse with GigaPower, CenturyLink Prism, and other gigabit-speed broadband service competition. In contrast, the largest telecommunications companies in New York have stalled offering better service to New Yorkers.
• Time Warner Cable has left all of upstate New York with no better than 50/5Mbps broadband – a top speed that has not risen in at least five years.
• Frontier Communications has announced fiber upgrades in service areas it is acquiring while its largest New York service area – Rochester, languishes with copper-based ADSL service that often delivers no better than 3-6Mbps, well below the FCC’s minimum 25Mbps definition of broadband.
• Verizon Communications, the state’s largest telephone company, is accused of reneging on its FiOS commitments in New York City and has left upstate New York cities with nothing better than DSL service, giving Time Warner Cable a monopoly on 25+Mbps broadband in most areas. It has also talked openly of selling off its rural landline network or scrapping it altogether, potentially forcing customers to an inferior wireless landline replacement it calls Voice Link.

As the Commission is also well aware, there are a number of recent high-profile issues relating to telecommunications matters that have a direct impact on consumers and businesses in this state – some that are currently before the Commission for review. Largest among them is another acquisition involving Time Warner Cable, this time from Charter Communications. That single issue alone will impact the majority of broadband consumers in New York because Time Warner Cable is the state’s dominant Internet Service Provider for high speed Internet services, especially upstate.

These issues are of monumental importance to the comprehensive examination and study of the telecommunications industry in New York promised by Chairwoman Audrey Zibelman. The Charter-Time Warner Cable merger alone has the potential of affecting millions of New York residents for years to come.

Although this study was first announced to Speaker Sheldon Silver, the Honorable Jeffrey Klein, and the Honorable Dean Skelos in a letter on March 28, 2014, followed up by a notification that Chairwoman Zibelman intended to commence the study within 45 days of her letter of May 13, 2014, the first public notice seeking comments from stakeholders and consumers was issued more than a year later on June 23, 2015 (less than two months ago), with comments due by August 24, 2015.

With respect, providing a 60-day comment window in the middle of summer along with a handful of public hearings scattered across the state with as little as three weeks’ advance notice is wholly inadequate for a broad study of this importance. The Commission’s ambitious schedule to contemplate the state of telecommunications across all of New York State will likely be shorter than the review of the 2014-2015 Comcast-Time Warner Cable merger transaction which started May 15, 2014 and ended April 30, 2015.

We have heard from New York residents upset about how the Commission is handling its review. One complained to us the Commission had more than a year to prepare for its study while giving New York residents short notice to attend poorly advertised public hearings in a distant city, and two months at most to share their feelings with the Commission in writing. One woman described having to find a hearing that was, at best, 60 miles away and located at a city hall unfamiliar to those not local to the area, where suitable parking was inconvenient and difficult as she attempted a lengthy walk to the hearing location at the age of 69.

Several of our members also complained there are more suitable public-friendly venues beyond paid parking downtown city administration buildings or deserted campuses in the middle of summer break. Many asked why the Commission does not seem to have a social media presence or sponsor live video streaming of hearings where residents can participate by phone or online and avoid inconvenient travel to a distant city. Perhaps the Commission could be enlightened to see how New York’s telecommunications companies actually perform during such a hearing.

While we think it is very useful for the Commission to have direct input from the public, we are uncertain about how the Commission intends to manage those comments. We were disappointed to find no public outline of what the Commission intended to include in its evaluation of a topic as broad as “the state of telecommunications in New York.”

Too often, providers downplay service complaints from consumers as “anecdotal evidence” or “isolated incidents.” But if the Commission sought specific input on a topic such as the availability of FiOS in Manhattan, consumers can provide useful input on the exact location(s) where service was requested but not provided.

If the Commission received information from an incumbent provider claiming it was providing broadband service to low income residents, consumers could share on-point experiences as to whether those claims were true, true with conditions the Commission might not be aware of (paperwork requirements, onerous terms, etc.) or false.

If the Commission sought input on rural broadband, providers might point to a broadband availability map that suggests there is robust competition and customer choice. But the Commission could learn from residents asked to share their direct experiences that the map was inaccurate or outdated, including providers that only service commercial customers, or those that cannot provide service that qualifies as “broadband” by the Federal Communications Commission.

A full and open investigation is essential to finding the truth about telecommunications in New York. The Commission needs to understand whether problems are unique to one customer in one part of the state or common among a million people statewide. We urge the Commission to rethink its current approach.

New Yorkers deserve public fact-finding hearings inviting input on the specific issues the Commission is exploring. New Yorkers need longer comment windows, more notice of public hearings, and a generous extension of the current deadline(s) to allow comments to be received for at least 60 additional days.

Most critically, we need hearings bringing the public and stakeholders together to offer sometimes-adversarial testimony to build a factual, evidence-based record on which the Commission can credibly defend its oversight of the telecommunications services that are a critical part of every New Yorker’s life.

The Commission’s policies going forward may have a profound effect on making sure an elderly couple in the Adirondacks can keep a functioning landline, if affordable Internet will be available to an economically-distressed single working mother in the Bronx, or if upstate New York can compete in the new digital economy with gigabit fiber broadband to support small businesses like those run by former employees of downsized companies like Eastman Kodak and Xerox in Rochester.

Yours very truly,

Phillip M. Dampier
Director

A Frontier Communications service outage in New York left more than 6,000 customers without Internet service for more than 24 hours, leaving businesses with no way to process credit card payments and idling home-based telecommuters.

The outage began early Sunday morning leaving customers near Buffalo, Rochester, and the Southern Tier with no broadband and no answers.

Daniel Virella of Irondequoit called Frontier about the outage and a representative spent 30 minutes troubleshooting his connection with no results.

“I [then] asked him if there was an outage and he says, ‘you know what you’re right,” Virella wrote. “I’m like ‘are you serious?'”

As calls poured into Frontier’s customer service center, nobody had any answers about what the problem was or when it would be fixed.

“There was a recording that said if you’re calling from Rochester, you’ve got a problem,” Stephen Lambert told WROC-TV. “I wish someone would tell me what the problem is.”

By late Sunday, customers took to social media to blast Frontier for its lack of response.

“[Frontier’s] Internet goes down constantly,” complained Rochester resident Mary Ellen Frye. “They are aware of the problem but have no idea when it will be fixed. [Their] service level [is] erratic and totally unacceptable!”

Sharon McCauley Barger was without Frontier Internet for two days in Wheatfield (near Niagara Falls).

“We had to add 2GB to our mobile plan because of this,” she complained.

For businesses affected by the outage, the costs were even higher.

A gas station on Winton Road in Rochester lost business as customers discovered their credit cards wouldn’t work because Frontier’s Internet was offline.

Manager Angel Perez told WROC there is every chance the damage done will last longer than the outage itself.

“The impact is definitely lost sales, customers. You don’t know, they just might not come back,” Perez said.

Eva McDaniel can commiserate. Her service has been out for weeks. She let Frontier know she was fed up with them for the last time.

“Very poor customer service and no resolution on an Internet outage for over a month,” she told the company on their Facebook page. “Good riddance Frontier! I am done!”

Frontier eventually issued a statement that a circuit board was responsible for the failure but it would take several more hours before service was restored. Although Frontier claimed they first received reports of the outage “late Sunday,” Stop the Cap! confirmed customers started calling Frontier about service problems early Sunday morning. Multiple customers were able to confirm the outage began around 7:30am Sunday and ended just before 10:30am Monday morning — more than 24 hours later.

Internet Service Providers are deregulated and are not required to report service outages except when they impact telephone service. The New York Public Service Commission does collect statistics about service outages, mostly as a result of customer complaints.

Customers have some recourse when an outage occurs:

1. Request a service credit for the outage. Providers typically do not give credit unless it is requested. For each day you experience a service outage, Frontier should credit you for one day of service. Multiple outages or extended service problems often call for even larger service credits, especially in response to a complaint filed with a state regulator;
2. File a complaint with a state regulator and/or the FCC. Providers with a poor service record could attract the attention of state or federal officials and provide useful ammunition when a company seeks to expand by buying up other providers and service areas.
3. If service problems are frequent, change providers if you can.

[flv]http://www.phillipdampier.com/video/WROC Rochester Frontier outage frustrates customers 8-10-15.mp4[/flv]

Stop the Cap! talks with WROC-TV about the major Internet outage affecting Frontier Communications DSL service in western New York. (2:36)

Sandra Hartman has been a Verizon DSL customer for more than 10 years. She doesn’t have much of a choice.

In her small town outside of Binghamton, N.Y., Verizon is her only option. Time Warner Cable doesn’t come close to providing service in this part of upstate New York and cell service is abominable, even with Verizon and AT&T.

“I live in an area just large enough to have given Verizon the justification to offer DSL, but 3Mbps service is about all we have ever been able to get, but it has been better than nothing,” Hartman tells Stop the Cap!

Hartman signed up for a package that included $19.99 DSL with her landline a decade ago, a price that went up $10 after the sign-up promotion ended but has remained stable for years.

“Then Verizon decided to raise the price without improving the service,” Hartman says.

In fact, the price hikes have been fast and furious lately, beginning last fall when Hartman received this notice Verizon was raising the price to $34.99 a month:

Dear Valued Verizon Customer,

We realize you have choices when it comes to choosing your Broadband provider, and would like to take this opportunity to say thank you for being a loyal customer and for choosing Verizon.

In order to continue to bring you quality service and product innovation, at times we need to raise our rates. Your monthly rate will increase by $5.00 and will be reflected on your bill within the next two months. This rate will remain in effect for one year. If you currently have any credits or discounts on your account, these will remain in effect until their original expiration date.

If you would like to review your account to see if you may qualify for additional savings or if you have any questions, please log on to verizon.com/myverizon or give us a call at 1.888.213.9932.

We value you as a customer and look forward to continuing to serve you.

Sincerely,
Your Verizon Team

“What choices?,” Hartman wondered. “We have no choice and after the rate increase, we’ve seen no improvement in the quality of the service or any evidence of Verizon’s ‘product innovation.’ It’s the same DSL service we’ve had for a decade — we’re just paying $60 more a year for the same thing.”

In the unusual case of Pennsylvania, Verizon is required by law to offer access to broadband to any customer that wants the service by the end of 2015. This map shows Verizon’s service areas in green, 96% of which now have access to at least DSL service. That same requirement is absent in most states.

To save money, Hartman downgraded her Verizon landline to the cheapest possible plan and switched to Voice over IP provider Ooma, which works over her DSL line. But Verizon is now back for more with another rate increase notice — this time looking for another $7 a month starting this fall, putting the price of 3Mbps DSL up to $41.99 before fees, surcharges, and taxes.

“I called Verizon and they told me rates are reviewed ‘for competitive reasons’ and reflect the cost of providing the service, which is apparently now up another $84 a year,” she said. “Verizon’s equipment, sitting in the elements on a phone pole or humming away in their phone office actually appreciates in value it seems. I wish my 10-year-old laptop was worth more today than the day I bought it, but my laptop wasn’t made by Verizon.”

Hartman complained to customer service the successive rate increases do not seem to be spent on any improvements. In fact, it seems Verizon is no longer accepting new DSL customers in her area.

“A real estate agent friend of mine told me selling homes in this town has gotten difficult because Verizon will simply not sell DSL to new customers here, claiming they have no capacity,” Hartman said. “If you can’t get DSL from Verizon, you don’t have broadband service, it’s as simple as that.”

DSL availability from Verizon is not just a problem for Hartman. Several central offices in upstate New York no longer accept new Verizon DSL customers, claiming the service is at capacity. Some customers in the Finger Lakes region keep DSL service year-round at their seasonal cottages, fearing if they suspend service for the winter they will not get it back next spring. Time Warner Cable offers service to many lakefront properties, but those who own cabins and homes away from the lakeshore usually cannot get cable service and depend on Verizon for service.

The Verizon DSL forum on DSL Reports has more examples of customers that discover their entire exchange is no longer qualified to get Verizon DSL. One such example is in Purcellville, Va., west of Washington, D.C., a quick drive to the Maryland and West Virginia borders.

“DSL suddenly has disappeared from my wire center entirely – regardless if your 10 feet from the CO or out of a remote terminal with a DSLAM,” wrote Zenit. “Even the industrial section of town which has its own fiber fed DSL equipped RT shows negative for service, and there are plenty of vacant units there.”

Similar stories were reported in communities like Pittsfield, Mass. and Netcong, N.J.

Customers have been able to push back against Verizon’s price increases, especially in competitive areas. Some customers are switched to lower cost bundled packages while others are given straight service credits that lower a customer’s bill. Customers need only ask Verizon for a better price and let them know you are shopping around for a better deal.

”After considering all of our options, your leadership has decided not to go on strike at midnight tonight, even though we have not yet reached a contract agreement,” came word Sunday from Dennis Trainor, vice president for CWA District One, which represents Verizon workers in New Jersey, New York and Massachusetts.

Verizon’s workers will stay on the job for now, launching a new strategy that will include sharing information with customers about Verizon’s unwillingness to invest in FiOS fiber expansion and improved broadband and phone service. The PR war will extend not just to customers but also to the media, politicians, and regulators. The union’s message: “Verizon’s greed knows no bounds.”

“Despite $18 billion in profits over the last 18 months, and a quarter of a billion in compensation to its top executives over the last five years, this greedy corporation is still insisting on destroying our job security, forcing us to pay thousands of dollars more for our health care, and slashing our retirement security,” Trainor said in a bargaining update. “It’s a disgrace.”

“But we are not going to let our anger allow us to walk into a trap,” Trainor added. “It’s quite possible that Verizon is trying to provoke us into a long strike in order to try to break us. They have spent tens of millions of dollars preparing for a strike, training managers, hiring scabs and contractors, advertising against us on TV and radio. So your leadership has decided that if and when we strike, it will be on our terms, on our timing.”

Verizon’s FiOS expansion is still dead.

The union wants Verizon to expand FiOS throughout the company’s entire service area, not just a select few communities and wealthy suburbs. That’s a win for customers and for workers running fiber optic cables, installing and maintaining the service, according to the union. A series of radio ads from the CWA are running in New York and Pennsylvania telling customers “you just can’t trust Verizon” after the company failed to bring FiOS service across both states.

The CWA says the New York mayors of Albany, Syracuse, Kingston, Rome and Utica, as well as the town supervisor of Brookhaven, have joined the CWA in sharing their concerns Verizon has refused to build out its FiOS broadband and TV services across upstate New York, leaving customers with a neglected legacy copper network Verizon barely maintains.

Verizon spokesperson Rich Young attacked the CWA’s efforts to bring politicians looking for better broadband from Verizon into the negotiating process.

“The CWA owes these mayors an apology,” Young said. “These elected officials should be outraged that union leaders wasted their time attending a negotiating session today that had nothing to do with FiOS. Unfortunately, the mayors were seemingly misled to think FiOS deployment is an issue that’s being negotiated. It’s not. Sadly, it seems the mayors were just a ploy as part of this bargaining publicity gimmick.”

Sheil

“I can assure you, none of these mayors were misled,” said Kevin Sheil, president of CWA Local 1103. “Does the company really believe that the mayor’s constituents need for reliable High Speed Internet so underprivileged children could have additional educational opportunities is a union gimmick, or do they just not give a shit about the consumers in their footprint.”

Union officials expressed concern about Verizon’s latest contract offer, which would allow the company to transfer employees to any Verizon service area, in or out-of-state, on short notice. The union also noticed Verizon is limiting job opportunities in rural service areas, which could be another clue Verizon is planning to eventually sell off much of its rural landline network to another company. Some utilities that have experience fighting over infrastructure issues like telephone poles believe all signs point to Verizon’s exit of the landline business to focus on more profitable wireless service instead.

Union officials admit they could be in for a long fight with Verizon before another contract is signed. The hostility is coming from both sides. Verizon took heat for creating what the CWA is calling a “spy app” it has distributed to non-union employees to document and report bad behavior by union workers if a strike occurs. The app records a photo and the time and exact place of any vandalism or intimidation non-union workers encounter, and asks the user to write a short incident report that will be sent to corporate security.

The Communications Workers of America is running this radio ad slamming Verizon’s lack of FiOS deployment in Pennsylvania. (0:30)

You must remain on this page to hear the clip, or you can download the clip and listen later.

“Verizon should stop focusing on clever new ways to fire people and start focusing on bargaining in good faith towards a contract that protects workers’  job security and standard of living, and ensures that every customer is getting the highest quality service,” said Bob Master, legislative and political director for CWA District One. “The company’s petty attempts to intimidate workers do not bring us any closer to a fair collective bargaining agreement.”

Amy Seifer, Verizon associate general counsel for labor and employment, told RCR Wireless News, “The app serves three primary purposes: the first is a means for our management employees to report or document an unsafe situation, unlawful act, or violation of our code of conduct, and it will also be used by managers who have been assigned into these union positions for the duration of the strike to ask questions about installations or repairs they are handling. It also provides a means for our employees to submit suggestions on process improvements.”

“The answers [they receive in response] will be wrong anyway,” countered Ed Mooney, vice president of CWA District 2-13 on a town hall conference call.

Seifer did admit the app’s primary purpose was to assist non-union workers taking over during a work stoppage.

“If we get reports of misconduct, our corporate security office will do a thorough investigation then determine a course of action whether that’s suspension, termination or no action at all will be based on the outcome of the investigation,” Seifer said.

“We will rally, engage in informational picketing, build political and regulatory pressure on the company, follow all the company rules to the letter, never take shortcuts, pressure company executives and members of the board of directors,” said Trainor. “We will be disciplined, militant and united. This was not an easy decision. But it is the smart decision. And if and when the time comes, we will strike the company on our terms.”

The Communications Workers of America is airing this radio ad across upstate New York, telling consumers they were bypassed for Verizon FiOS because of the company’s broken promises. (0:30)

You must remain on this page to hear the clip, or you can download the clip and listen later.

Zibelman

After the N.Y. Public Service Commission heard an earful about Verizon’s broken promise to deliver FiOS service to every resident in New York City, the head of the PSC has sent a letter to Verizon reminding them of their obligation and requesting an explanation:

At a recently conducted July 15, 2015 Public Statement Hearing held in the City of New York in the matter of the Study on the State of Telecommunications in New York State […] citizens of the City expressed concern over the pace of Verizon New York Inc.’s (Verizon) Fiber-to-the Premises (FTTP) build-out. Some of the commenters stated that they called Verizon to find out when FiOS would be available in their building and the Company could not provide a specific date or time. Others asked why some buildings had been wired for FiOS while others were still being served over the copper network.

Among the Commission’s minimum requirements and terms included in the approval of Verizon’s cable franchise agreement with the City, is the requirement to complete upgrading its wire centers to video serving offices (VSO) and have its FTTP network “pass all households served by [Verizon’s] wire centers within the Franchise Area” 1 by no later than June 30, 2014.

Audrey Zibelman, chair of the PSC, acknowledged Verizon’s repeated explanation that building owners have often been reluctant to let Verizon engineers into their buildings to initiate the FiOS upgrade, noting Verizon has filed more than 45 petitions for Order of Entry with the PSC over the past two years, identifying over 3,000 buildings with “access” issues of one type or another. Approximately 50% of the building access problems have been identified in Manhattan; about 20% each in Bronx and Queens; 13% in Brooklyn, and the rest in Staten Island and Long Island.

But Zibelman assumes at least some of those disputes have since been settled and now wants details about where Verizon is still unable to offer FiOS in New York City and why. She also wanted to make sure Verizon was not favoring certain areas over others for fiber service:

The agreement also provides that Verizon will conduct the build-out in a way that will prevent redlining, or discrimination based on income, by requiring Verizon to build-out simultaneously to all boroughs and in a manner relatively proportionate to household income. Specifically, the median household income of all homes passed shall not be greater than the average household income of all the households in the City.

“Indicate whether Verizon has achieved its six-year build-out in the cable franchise agreement,” Zibelman asked. “If Verizon has not achieved that build-out, please provide all documentation that Verizon provided to the City to justify the basis for any delay. In addition, please provide a current status of the FTTP build-out, by Borough, indicating the percentage and number of buildings served, and the remainder of buildings yet to be served. Provide a status update of the buildings identified in previous Verizon petitions for Orders of Entry.”

Zibelman reminded Verizon it has an absolute obligation under 16 NYCRR §895.5 to “provide service to any customer upon request.” To verify that, Zibelman wants Verizon to accept and record all requests for service and respond to all of her concerns within 14 days.

[flv]http://www.phillipdampier.com/video/WNBC NY Verizon FiOS Not Installing High-Speed Internet for 25 Percent of NYers Who Want It Audit 7-15-15.flv[/flv]

WNBC in New York reports a quarter of New Yorkers still cannot sign up for Verizon FiOS, despite a commitment from the company to wire the entire city. (2:01)