CWA to State Regulators: Probe Verizon’s Copper Networks

Josh LongA union that represents Verizon workers has called on state regulators in the Northeast to investigate allegations that the telecommunications giant is failing to adequately maintain its copper phone network.

The letters, filed by the Communications Workers of America (CWA) with public utility commissions in Delaware, Maryland, New York, Pennsylvania, Virginia and the District of Columbia, claimed that just 0.39 percent of the $50.7 billion that Verizon has spent on its landline network from 2008 through 2014 has been allocated to its copper infrastructure. Verizon’s landline investment has been largely focused on its FiOS network, which passes more than 19.8 million premises.

Responding to the letter, New York State Public Service Commission spokesman James Denn pointed out that his agency “is conducting a fact-based assessment of the current telecommunications and broadband services across the state to strengthen our communications infrastructure.”

The union pressed the state regulators to probe Verizon’s copper network expenditures and revenues over the past decade and other issues related to customer service, repair and preventative maintenance.

The CWA estimated that Verizon serves as many as 8 million retail customers over its copper landline network.

“We support Verizon’s expansion of FiOS, but the company also has a legal obligation to provide safe, reliable service over its traditional landline network,” said Dennis Trainor, Vice President of CWA District One, in a statement this week.

The union’s calls for regulatory probes come amid negotiations with Verizon over collective-bargaining agreements governing 39,000 workers in the District of Columbia and nine eastern states. CWA and the International Brotherhood of Electrical Workers represent the workers in the talks.

“CWA leadership’s claims are absurd and nothing more than a tired tactic from the union playbook to avoid serious negotiations on a fair contract for their members,” Verizon spokesman Richard Young said in an emailed statement. “Verizon’s commitment to invest heavily in its wireline network is well documented and unquestioned. No company has invested more in broadband; last year alone we invested almost $6 billion in our wireline networks.”

In the letters to state regulators, CWA quoted a Verizon filing with the FCC in which it disclosed spending around $200 million on its copper network since 2008. The union characterized such an investment over a seven-year period as a “paltry” one compared to its overall landline spending.

But in an FCC filing, Verizon noted that it costs more than $200 million annually to maintain its copper network in areas where it has deployed FiOS, “even if no or few customers are using the legacy facilities.”

Chris Lewis, vice president of government affairs with Public Knowledge, the Washington, D.C.-based public interest group, referenced consumer complaints …

… over a period of years alleging that incumbent phone companies such as Verizon have been forcing consumers to migrate from copper to substandard services.

CWA’s letter to the Pennsylvania Public Utility Commission said more than 6,000 customers since 2012 have lodged complaints with the commission regarding Verizon’s service and its reliability.

Verizon’s “neglect” of its copper infrastructure, CWA’s Edward Mooney wrote to the Commission, “results in frequent and repeated service outages, trouble reports, long delays in service restoration, and other service-impacting problems for customers.”

Nils Hagen-Frederiksen, a spokesperson with the Pennsylvania PUC, said the agency was reviewing CWA’s letter.

Betty Ann Kane, chairman of the District of Columbia Public Service Commission, noted in an emailed statement that her agency has been investigating since 2011 “Verizon’s performance in reducing the number of repeat troubles on copper lines and the speed with which troubles are corrected.”

She said Verizon was required to file a remedial plan and establish targets to reduce repeat troubles and the time required to make repairs. In the first year of the remedial plan, Verizon achieved a 10 percent reduction in repeat troubles, meeting the PSC’s target, Kane noted.

Matthew Hartigan, a spokesman for the Delaware Public Service Commission, confirmed the agency received the letter.

As indicated by the CWA’s letter, “recent legislation in Delaware has removed much of the jurisdiction the PSC had over Verizon,” he said in an emailed statement.

State regulators in Maryland and Virginia had no immediate comment on the CWA’s letters. Candice Johnson, a spokeswoman with CWA, said the union also plans to file a letter with the New Jersey Board of Public Utilities.

In a blog this summer, Verizon’s David Young noted Verizon’s trouble ticket for copper customers has fallen since 2011 to just over two problems per 100 lines. “This is well below the benchmark generally set by states that engage in service-quality regulation,” he wrote.

“When lines are not properly maintained, sometimes you can’t get a line out,” Public Knowledge’s Lewis told Channel Partners. “When you can’t get a line out in an emergency situation, someone’s life could be at risk.”

Lewis hailed the FCC’s recent decision to require that incumbents provide direct notice of at least three months …

… to retail customers if they plan to retire copper facilities.

“We are not asking companies to maintain copper for forever,” he said. “There should be a basic expectation it will work until they choose to make the transition.”

Copper lines are becoming increasingly irrelevant in America. Tens of millions of Americans have ditched their local phone service in favor of wireless and other technologies.

In the State of New York, where Verizon is headquartered, the number of incumbent phone-access line counts has plummeted from more than 13 million in 2000 to around 4 million, according to a June 23 report from the staff of the New York State Public Service Commission (PSC).

Wireless providers including Verizon Wireless have largely benefited from the trend; in 2013, the company served 7.59 million customers in New York and controlled 26.2 percent of the voice market, according to the PSC’ staff report. By comparison, incumbent local phone companies – there are 40 incumbents in New York including Verizon – controlled just 11.5 percent of the voice market and served 3.34 million customers.

The PSC in 2006 largely deregulated the residential market for non-basic telecom services after concluding that it was competitive, although it still required Verizon and other incumbents to offer “basic service” subject to a rate cap of $23.00 excluding taxes and fees.

In June, the state regulator issued for public comment an assessment on the state of telecommunications in New York. The PSC has held numerous hearings across the state which have drawn more than 1,200 people.

“In terms of the specific telecommunication technologies, the Commission, as a policy matter, generally supports migrations to fiber, especially in areas where chronic copper repairs have existed, as it is more reliable and offers platform for advanced services (data and video),” Denn, the PCS spokesman, said. “Under PSC-approved tariffs, when the company chooses to provide service over fiber it must offer a voice-service option with the same terms, rates and consumer protections as is provided over the copper network.”

The FCC also has moved to protect consumers as the nation’s local phone companies retire their copper networks. Such protections include, among other obligations, the required 90-day notice to retail customers. In its recent technology transition order in which it laid out the notice requirements, the FCC referenced numerous cases in which consumers were not notified about copper retirements as well as customer complaints, “including allegations that such migrations have resulted in a move from regulated to unregulated services, without adequate customer notice and consent.”

In a statement coinciding with the order’s release, Mignon Clyburn, an FCC commissioner, referenced FCC data that said about half of residential phone connections, or 37 million lines, still rely on legacy wireline technology.

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