Verizon has agreed to bring FiOS fiber-to-the-home service to another 500,000 households in New York City by July 2023, settling a lawsuit over Verizon’s failure to wire up the entire city as required in a franchise agreement.
“Today’s settlement will ensure that 500,000 households that previously lacked Verizon broadband access because of a corporate failure to invest in the necessary infrastructure will have the option of fiber broadband and create critical cost competition in areas where today only one provider exists,” NYC Mayor Bill de Blasio’s office said in an announcement last week. The settlement’s full text is available here.
New York City sued Verizon in March 2017, saying the company failed to complete a citywide fiber rollout by 2014 as required in its cable-TV franchise agreement. At the time the lawsuit was filed, Verizon said it had brought its fiber network to 2.2 million of NYC’s 3.1 million households.
The settlement will cover many but not all of the remaining residential housing units where FiOS is currently not available. As of July 2019, Verizon had brought FiOS to 2.7 million households, a number that will rise to 3.2 million households once Verizon complies with the settlement, de Blasio’s office told Ars today. The city estimates there are now 3.45 million households, so about 250,000 will be left without FiOS. With the settlement providing coverage of over 90 percent of households, “this is part of our overall strategy to increase competition in the market,” a de Blasio spokesperson told Ars.
Low-income areas to get FiOS
The settlement requires Verizon to target low-income areas for fiber upgrades. At least 125,000 of the new residences must be in designated “Community Districts” in parts of the Bronx, Brooklyn, Manhattan, and Queens. “Under the settlement, Verizon is compelled to prioritize the least-connected Community Districts and ensure connectivity for every NYCHA (New York City Housing Authority) residential building,” the NYC announcement said.
That will ensure access for areas “with low median household incomes” and few, if any, options for affordable broadband, the city said. De Blasio issued a statement saying the settlement proves that New York City is holding corporations accountable:
Internet access is an economic right in New York City, no matter your ZIP code. Tech giants will not stand in our way to deliver high-quality broadband to New Yorkers—they must be a part of the solution. COVID-19 has further exposed the inequalities in Internet access while changing the way New Yorkers work, learn, and live. We will continue to hold any corporation that fails to deliver on its promise to New Yorkers accountable.
New York State officials last year reached a similar agreement with Charter, which was accused of failing to comply with broadband-expansion requirements stemming from merger conditions imposed on the company’s purchase of Time Warner Cable. (Disclosure: The Advance/Newhouse Partnership, which owns 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.)
Verizon’s next deadline is June 2021
Verizon did not admit any wrongdoing in the settlement, which modifies Verizon’s cable franchise agreement with the city. If Verizon fails to meet its new deadline of July 2023, it could have to pay damages of up to $7.5 million. The settlement is still pending final approval by NYC’s Franchise Concession Review Committee and the Public Service Commission.
Verizon can count installations made so far in 2020 toward its 500,000-residence requirement. Specifically, Verizon has to make FiOS available to at least 225,000 residential housing units between January 1, 2020, and June 30, 2021. The remaining required deployments include 150,000 new units from July 1, 2021 to June 30, 2022; another 75,000 units by December 31, 2022; and the final 50,000 by July 16, 2023. In apartment buildings, each housing unit would count toward the 500,000 required.
Verizon doesn’t have to bring fiber all the way to the premises of all 500,000 residences. But Verizon will have to expand the network far enough such that “if a resident requests paid FiOS service, Verizon will be required to make it available generally within seven days,” NYC said in its announcement.
The original franchise agreement required Verizon to “pass all households” with fiber by June 30, 2014. When NYC officials accused the company of failing to meet that requirement in 2015, Verizon argued that its fiber doesn’t actually have to pass in front of buildings in order for the buildings to be “passed.” Verizon also blamed landlords for not providing access to buildings, but a city audit found evidence that Verizon demanded exclusive agreements from landlords despite a Federal Communications Commission rule banning exclusive video service deals in multiple-dwelling units.
“Brings a finality”
A Verizon spokesperson said the settlement “brings a finality to this longstanding litigation” and that Verizon’s “work on this agreement has already gotten underway,” according to a Bloomberg article. We contacted Verizon today and will update this article if we get a response.
Verizon reports having 6.1 million FiOS Internet customers in its Northeast US service area and 6.6 million home-Internet customers overall including DSL. Verizon mostly stopped expanding FiOS years ago and sold some of its former FiOS territory to Frontier.