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Public Service Commission Orders Verizon To Cough Up Cost Data On Its New York Copper Lines

from the not-so-much-about-how-expensive-copper-is,-but-how-cheap-wireless-is dept

Thu, Dec 12th 2013 3:33am — Tim Cushing

At the tail end of October, we brought you the story of Verizon's attempt to subvert New York's Freedom of Information Law by releasing hundreds of fully-redacted pages. Information on costs related to the buildout, repair and support of copper lines versus the inferior (and capped) replacement (Voice Link) Verizon was pushing was being sought by consumers who felt (understandably) that the company was overstating its claims in order to abandon copper line customers.

Verizon delivered page after fully-redacted page of "info" on costs, stating that revealing these "trade secrets" would give its competition an unfair advantage. While there is undoubtedly some truth to that claim, the fact is that the company had plenty of other reasons to keep the numbers hidden -- especially if it had been overstating the amount of money it would have to spend to restore copper service to areas knocked out by Hurricane Sandy.

Somewhat surprisingly, the New York Public Service Commission has sided with those seeking the information.

Last Wednesday, the New York Public Service Commission ordered Verizon to provide the public with un-redacted cost information about providing phone service on Fire Island, New York. The directive denied Verizon’s request to be exempt from disclosing cost documents…

Consumer advocates complained Verizon was simply hiding the fact they were looking to get rid of those users anyway in order to focus on more profitable wireless service, and that Sandy itself was a red herring. Verizon ultimately dropped the request amid protests and said FiOS would be run to Fire Island after all.

The commission addressed Verizon's "trade secret" claims with this statement.

“The information claimed by Verizon to be trade secrets or confidential commercial information does not warrant an exception from disclosure and its request for continued protection from disclosure is denied,” it said in Monday’s ruling.

State officials wrote there “is no present or imminent contract award that could be impaired by the disclosure” and that the state Freedom of Information Law is based on a “premise that the public is vested with an inherent right to know and official secrecy is anathematic to our form of government.”

Verizon plans to appeal the decision, which means the cost data will still be locked up while that process is underway. This decision, while a win for those seeking to verify Verizon's "it costs too much" claims, could possibly be exploited by companies who may being seeking competitors' proprietary data via proxy FOI requests. The Commission will need to be wary of the unintended consequences it just set in motion.

As for Verizon's New York customers, they're still not entirely happy with Verizon's earlier capitulation, which saw the provider decide to run FIOS to Fire Island rather than force customers into a shoddy wireless service with voice and data caps. Even with FIOS, Verizon is still failing to provide reliable phone service, something they say the law requires it to provide. Unlike copper lines, FIOS may not work during power outages.

Verizon (along with AT&T) has made little secret of its desire to ditch copper lines and move its customers towards higher margin wireless services. If Verizon is ultimately forced to turn over cost data to the public, it could make for some very interesting reading.

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Filed Under: copper, costs, fiber, new york, public services, telephony
Companies: verizon

15 Comments

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That Anonymous Coward (profile), 12 Dec 2013 @ 4:31am

It is sad that all of them don't need to give these numbers openly.
They are getting piles of cash to provide that access, have been to the tune of hundreds of billions IIRC. I'd like to know how little we are getting for the taxpayers money.
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Ninja (profile), 12 Dec 2013 @ 4:46am

I'm not entirely sure how things work in the US but here in Brazil to exploit some communications venue the telcos have to do mandatory investing in areas that are either not interesting or that generate losses to operate. Meaning that copper is mandatory. End of the story. Offering low priced landlines is also in the mandatory package and there are plans in motion to make ultra cheap internet connection (not dial up) available for very little cost (in fact most providers already offer such thing but the Government is kicking in by making the offerings better by letting the telcos use Telebras infra-structure along with their own (it's a state company with pretty decent wiring around the contry). Because communications is being regarded as a basic need. I'm not sure if copper is seen that way in the US. In any case the telcos are not to blame for pushing for the cheapest alternative. The question is: can they ditch the wires or is there anything that explicitly prevents them from doing so (ie: the Govt)? If so, the Govt should be punishing them hard for offering crappy services for wired customers just to drive them to the other offer.
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Anonymous Coward, 12 Dec 2013 @ 4:56am

Copper is obviously cheaper than wireless if it were not you would see a push for it instead.
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That Anonymous Coward (profile), 12 Dec 2013 @ 5:07am

Re:
but they need to have linemen to work on the lines all over the place, rather than just send 1 guy to a tower to dink with something.

So its awesome cost savings, that they won't pass on to consumers who will face overloaded wireless networks, spotty service, and data caps designed to increase profits.
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KoD (profile), 12 Dec 2013 @ 6:01am

Personally, I couldn't give a fuck less about Verizon having to disclose some trade secrets. American Telcos are the bane of our existence. I mean, I am just jealous that I can't convince a bunch of people to pay for the infrastructure needed to conduct my business, only to be able to turn around and fuck them with it...
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Anonymous Coward, 12 Dec 2013 @ 6:03am

Re:
Giving handouts to corporations only makes them dependent, we would be doing them a favor by putting an end to it.

What ever happened to free market capitalism? Does it only apply when it benefits the ones in control?

Honest answers to these, and many more, questions will not be provided by the welfare queen corporations.
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Anonymous Coward, 12 Dec 2013 @ 6:06am

Re:
It's time to take it away.
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Anonymous Coward, 12 Dec 2013 @ 6:44am

Verizon sucks!
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ltlw0lf (profile), 12 Dec 2013 @ 7:48am

Re: Re:
Giving handouts to corporations only makes them dependent, we would be doing them a favor by putting an end to it.

Funny to see that turned around...

What ever happened to free market capitalism?

It went out the window when the Government decided to offer monopoly rents to Verizon in order to exclusively provide land-line services in the area (which they aren't providing.) If anyone could play, Verizon would be packing up their gear and a better, more flexible company (or companies) would be earning the big bucks Verizon gave up.

The problem, however, would mean that everyone would have to run their own cables. As much as I love free-market capitalism, I think the best possible way is for the government to own the infrastructure, and open it to all competitors, instead of locking in on one and living off of its franchise taxes. The government should do what the citizens demand and the corporations are incapable of doing, and infrastructure is one thing that corporations are incapable of doing correctly. Think of all the money we could have saved if government didn't just hand the phone industry a blank check, and instead put that money into the infrastructure.
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Casey, 12 Dec 2013 @ 8:19am

Verizon
Copper lines are very expensive to maintain. Running new copper is simply not worth it considering the expense of future maintenance and the technology limitations. But that doesn't mean they should be allowed to abandon it. They should be required to provide copper or fiber, but at least one of the technologies needs to be available. Fiber is a very suitable replacement for copper, has much lower maintenance costs, and is more or less future-proof.
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Bruce Kushnick, 12 Dec 2013 @ 11:30am

Read the report behind the FOIL and investigation
The FOIA (FOIL for state filings) was part of comments filed by Common cause, Consumer Union, Common Cause CWA-union and fire island association --

And in it relied in part on data and analysis from the New Networks report.

http://www.huffingtonpost.com/bruce-kushnick/is-verizon-wireless-profit-pumping_b_4133497.html

Essent ially, Verizon has been cross-subsidizing the development of other business, including wireless by raising rates, avoiding taxes-- and giving advantages to their 'affiliates' like Verizon wireless.

"We assert that there is evidence that the reported losses are substantially the result of misallocation of revenues and expenses as between the landline and wireless systems. The evidence is strong enough to require the Commission to consider it, and seek such additional information as will prove or disprove the existence of systematic and intentional misallocation by the Company, with consequences for customers/ratepayers of both systems, the tax payments due to federal, state and local jurisdictions, and policy decisions made by the Commission."

They ask the state to start an investigation and turnover the info from various data requests... the state has so far backed the requests and Verizon lost the last round.

The real issue - customers in NY got hit with a rate increase to pay for fiber optics -- and it didn't go into the ground but to fund their other businesses like 'fiber-to-the-cell tower -- or not maintaining the copper networks until they replaced them -- which was always the plan in almost every Verizon state.

In fact, New Jersey IS supposed to have 100% of Verizon New Jersey with a fiber optic service capable of 45 Mbps -- it's in law and was to be completed by 2010 --

http://www.huffingtonpost.com/bruce-kushnick/100-of-verizon-new-jersey_b_4270035.html
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John Fenderson (profile), 12 Dec 2013 @ 1:40pm

Re: Re: Re:
I think the best possible way is for the government to own the infrastructure, and open it to all competitors, instead of locking in on one and living off of its franchise taxes.

Yes.

Free market capitalism is not appropriate for everything, and one of the things it's not appropriate for is when there's a "natural monopoly". Wired infrastructure, water, sewer, etc., are all good examples of that sort of thing.

In those cases, the people should collectively install and own the infrastructure and it should be shared at a reasonable cost amongst everyone who wants to use it.
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Crashoverride (profile), 12 Dec 2013 @ 3:26pm

Wait the Telco monopoly for this area doesn't want to disclose costs. What competition would there be to this legacy monopoly system of copper wires?? They aren't being asked to disclose costs on fiber and other such that may garner some competition.
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ltlw0lf (profile), 12 Dec 2013 @ 4:15pm

Re: Verizon
They should be required to provide copper or fiber, but at least one of the technologies needs to be available. Fiber is a very suitable replacement for copper, has much lower maintenance costs, and is more or less future-proof.

They should be allowed to provide copper or fiber, and then be required to allow CLECs access to whatever they provide for a reasonable rate (subsidized cost plus a little profit.) Right now, they want to kill off their competition by using fiber (which isn't available to CLECs,) instead of copper (which is.)

Thanks to BentFranklin for this link (I was not aware of it before.)
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Anonymous Coward, 12 Dec 2013 @ 5:56pm

Re: Re: Re: Re:
I think this originated at 4chan, but here it is elsewhere sort of at the top of google returns
http://www.plunderbund.com/2010/03/24/say-no-to-socialism/
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