Verizon Walks Away From $550M+ In Federal Broadband Money

WASHINGTON - Verizon today became the only major U.S. telecommunications company to turn down federal funding to build broadband in unserved, primarily rural, communities, leaving many residents in eight states and the District of Columbia without access to vital communications options. The company was offered $568 million over six years by the Federal government to bring broadband to 270,000 locations in Washington, DC, Delaware, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, Rhode Island, and Virginia.

“Verizon’s track record is clear,” said Bob Master, Assistant to the Vice President of District One of the Communications Workers of America. “Even while raking in a billion dollars per month in profits, Verizon is turning its back on underserved communities by refusing federal subsidies to expand high-speed internet access. Instead, its top priority is slashing job and retirement security for its employees and eliminating benefits for workers  injured on the job.”

In April, the Federal Communications Commission launched Phase II of the Connect America Fund. The FCC offered major telecommunications companies nearly $1.7 billion a year over six years to provide high-speed internet and voice to unserved, primarily rural, communities. The carriers had until August 27 to decide whether to participate.  The program was based on the successful universal service program, which ensured telephone service was available in rural communities.

Verizon accepted funding for two states where it is selling its network to Frontier Communications and rejected funding in the other states it operates.  

Verizon’s attitude toward the federal subsidies is sadly consistent with its approach in New York State, where the company refuses to avail itself of Governor Cuomo’s $500 million New New York Broadband Fund, which offers up to 50% subsidies to companies willing to build high-speed service in underserved areas. For years, Verizon has steadfastly refused to bring its high-speed internet service (or FiOS) to areas like Buffalo, Syracuse, Albany, Rome, Utica and numerous other upstate New York cities, as well as much of Eastern Suffolk.  At a series of hearings held by New York State, elected officials from Buffalo, Syracuse, Albany, the North Country, the Southern Tier and the Hudson Valley decried the lack of FiOS in their communities.

Campaigns in Pennsylvania and Massachusetts have also called for FiOS to be built in their communities.

A damning audit of Verizon’s FiOS rollout in New York City found that Verizon has failed to meet its promise to deliver high-speed fiber optic internet and television to everyone in the city who wanted it. During its negotiations for a city franchise, Verizon promised that the entire city would be wired with fiber optic cables by June 2014 and that after that date, everyone who wanted FiOS would get it within six months to a year.  The audit found that despite claiming that it had wired the whole city by November 2014, Verizon systematically continues to refuse orders for service. The audit also found that Verizon stonewalled the audit process.

At the same time, Verizon has been letting its traditional phone network deteriorate. In 2005, New York’s Public Service Commission (PSC) eliminated automatic fines for Verizon’s telephone service quality failures, reasoning that “competition” would improve services. Instead, service quality plunged. In the 3rd quarter of 2010, Verizon cleared only 1.2% of out of service complaints within 24 hours, almost 79 percentage points lower than the PSC’s 80% requirement.  Rather than reverse course, the PSC changed its measurements, cutting out 92% of customers from service quality measurements and consolidating 28 repair service bureaus into 5 regions. On paper, terrible service quality was almost miraculously transformed. In reality, service quality continued to decline.