Add Pittsburgh To The List Of Cities That Say Verizon Ripped Them Off

from the maybe-you-should-read-your-contracts dept

Tue, Oct 13th 2015 8:27am — Karl Bode

You can add Pittsburgh to the growing list of towns, cities and states that claim Verizon is ripping them off. Verizon, of course, froze its FiOS fiber expansion years ago, instead focusing its attention on more profitable (read: capped) wireless service. The company did continue to expand FiOS in a number of east coast cities (Washington, Philadelphia, New York), agreeing to full city fiber expansion in exchange for sweetheart franchise deals, tax cuts, and/or subsidies. But as cities like New York have found out, Verizon's definition of full city fiber upgrades probably doesn't match yours.

Pittsburgh Mayor Bill Peduto has started noticing that huge swaths of Pittsburgh haven't been upgraded, despite the city signing a franchise agreement with Verizon that called for uniform FiOS coverage. Peduto was one of fourteen mayors who recently wrote Verizon's CEO in a futile attempt to get the telco to give a damn about its rotting, taxpayer-subsidized DSL networks. Peduto's now considering legal action after Verizon failed to meet its obligations:

"We have an agreement with Verizon that, over the course of several years, the entire city would be provided with FiOS, and it was the agreement that allowed them to start putting their lines in the public right of way. They have now broken that agreement," Peduto said. "They do not have the city finished, so now we need to seek the damages that were agreed to through the contract. At this point, I'd have to talk with our law department."

As with New York's belated realization that they'd been swindled, the problem is that these cities signed these deals without reading them. Most of these contracts include oodles of fine print that let Verizon claim that homes "passed" with fiber (several blocks away) are the same as being "served" by fiber, or let Verizon pay a modest fine for missing deployment goals. As such, Verizon was quick to highlight that it met the terms of the deal, because technically -- it probably had:

"Verizon sent a letter to the City confirming it is in compliance with the terms of the franchise agreement and that with certain exceptions allowed under the franchise, there are no residential areas of the city where Verizon does not offer cable service. In addition, Verizon is scheduling a meeting with the City in the near future to explain its accomplishments."

While hindsight certainly helps, cities that don't want to be ripped off should either learn to read their contracts, or avoid doing business with companies with a generation of documented, sleazy behavior. Pittsburgh leaders in particular should have paid close attention to Verizon's multi-billion dollar swindle of Pennsylvania years earlier, in which Verizon promised ultra-fast fiber broadband in exchange for billions in subsidies, then just threw money at the state legislature and regulators to convince them to forget the obligation ever existed (Verizon did the same thing in New Jersey).

Of course that's just it; most politicians are so cash compromised they saw the warning signs but just didn't care, leaving the mess for somebody else to clean up (or ignore). And in Verizon's case, billions in undeserved subsidies across thousands of miles have left a fairly massive mess.

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Filed Under: broadband, fiber, fiox, pittsburgh, promises, subsidies
Companies: verizon

23 Comments

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That One Guy (profile), 13 Oct 2015 @ 6:38am

Let's highlight those 'exceptions' shall we?
"Verizon sent a letter to the City confirming it is in compliance with the terms of the franchise agreement and that with certain exceptions allowed under the franchise, there are no residential areas of the city where Verizon does not offer cable service.

If the mayor wants to really return the favor and twist the knife, he should prepare a report, to be made public, showing just how large those 'exceptions' are in practice. Maybe via a pair of maps, what Verizon wants people to think it's coverage is, right next to what it's coverage actually is.

Make it abundantly clear how Verizon acts, and you make it more difficult, if only slightly, for them to pull similar scams in the future.
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- Anonymous Anonymous Coward, 13 Oct 2015 @ 9:17am
  
  Re: Let's highlight those 'exceptions' shall we?
  Thanks to a lack of action on the various parts of government that allowed these single source ventures to exist, the Verizons of the world will continue in their government granted monopolies until the people tell the government in no uncertain terms that the state of things is unacceptable. It is also probable that with (ahem) "Free" Trade treaties popping out of the nether regions of corporatocracy, the likelihood of that happening goes way, way down.
  
  The best fix for the marketplace is the marketplace, but it has to be allowed to function, and it currently isn't being allowed to.
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- Colin Dean, 13 Oct 2015 @ 8:53pm
  
  Re: Let's highlight those 'exceptions' shall we?
  Nothing a little wardriving and heuristics couldn't solve in a few hours of wandering around the target neighborhoods.
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- spodula, 14 Oct 2015 @ 12:29am
  
  Re: Let's highlight those 'exceptions' shall we?
  "If the mayor wants to really return the favor and twist the knife, he should prepare a report, to be made public, showing just how large those 'exceptions' are in practice. Maybe via a pair of maps, what Verizon wants people to think it's coverage is, right next to what it's coverage actually is."
  
  That implies They give a cr*p about bad publicity. They have a monopoly in most of these cities. What you going to do? go elsewhere? The legal threat is window dressing. You can guarantee Verizon's lawyers have that aspect of it sewn up.
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limbodog (profile), 13 Oct 2015 @ 8:57am

If only there were some sort of organization that could uphold contracts and punish those who break them. It could take place in a room not unlike a king's court of old, but with an impartial person whose job it is to judge the value and veracity of each person's claims.
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- Baron von Robber, 13 Oct 2015 @ 9:08am
  
  Re:
  /mindblown=enabled
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- scotts13 (profile), 13 Oct 2015 @ 9:08am
  
  Re:
  Sadly, I'm pretty sure they'd be found to have fulfilled the contract terms. Which of course they carefully crafted and buried in the fine print. Funny, you'd think politicians would have experience with such, from crafting budgets.
  
  So, they'd have to get a judge to find the contract terms to have been unconscionable, or patently unfair. Problem is, while companies can't push those who make the laws too far, politicians won't push major contributors too far.
  
  All we'll get, at best, is "They tricked us! There's nothing we can do!" while they wait for things to dies down before the next contract/donation comes around.
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Anonymous Coward, 13 Oct 2015 @ 9:01am

I have altered the deal. Pray I do not alter it further.
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PRMan, 13 Oct 2015 @ 9:12am

Time to start city-wide high-speed municipal broadband
When they complain and sue because the city is not allowed to do that, counter that you are serving those that Verizon refuses to serve.
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ahow628 (profile), 13 Oct 2015 @ 9:27am

"explain its accomplishments"
If you have to explain them, they probably aren't...
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- That One Guy (profile), 13 Oct 2015 @ 6:09pm
  
  Re: "explain its accomplishments"
  I imagine the 'explanation' will go something along the lines of 'Look at all this money we made. If you want any of it, let's shush up about the whole broadband deployment issue shall we?'
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Anonymous Coward, 13 Oct 2015 @ 9:53am

What does Verizon get from the agreement?
If the city backed out of the agreement, would Verizon have to shut down or turn their lines over to the city? Or would they just not be allowed to expand?
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BobOki, 13 Oct 2015 @ 10:39am

Google or city fiber time!
Sounds like the Burgh should let Google move in to actually have competition, or say forget it and start the build out of their own fiber network.
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- LOLBaltSS, 13 Oct 2015 @ 6:32pm
  
  Re: Google or city fiber time!
  Peduto was attempting to lure in Google, but the city is unable to provide the proper maps of the underground. Additionally, Pittsburgh is a difficult city to do buried fiber in due to the topography and Google isn't too keen on running service on the existing utility poles.
  
  I'd love to have Google Fiber here, but it's very low on Google's priority list.
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Bt Garner (profile), 13 Oct 2015 @ 11:10am

It would be easier, and kill a whole lot less trees if we just assembled a list of cities that Verizon did not rip off.
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- Zonker, 13 Oct 2015 @ 1:11pm
  
  Re:
  It would be easier, and kill a whole lot less trees if we just assembled a list of cities that Verizon did not rip off.
  Sure, here is the comprehensive list of cities Verizon did not rip off:
  
  .
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Anonymous Coward, 13 Oct 2015 @ 11:13am

there are no residential areas of the city where Verizon does not offer cable service.

Find a Judge that resides in one of those offered but not serviced areas and things could get really interesting , Which is probably all Judges in the area.

As i said before this is called building a case , many many complaints many other areas a coalition of angry cities and states may make things turn out badly for veriUNZONED.
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Anonymous Coward, 13 Oct 2015 @ 11:21am

France paid Russia a hefty billion dollar contract penalty for failing to deliver two recently-built warships. We should wonder why it was that not one single city thought to include similar penalties in their contracts with Verizon?
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- Anonymous Coward, 13 Oct 2015 @ 11:30am
  
  Re:
  Maybe it was more profitable not to. I have a hard time believing politicians even at a local level weren't aware of what they were doing. They only sign poor contracts when it's not actually being negotiated on their behalf, but the taxpayers.
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  - spodula, 14 Oct 2015 @ 12:34am
    
    Re: Re:
    It sounds a lot like Verizon's lawyers ran rings around the politicians and local government's lawyers.
    I suspect the contract is 200 pages long and the relevent clauses are buried in page 182 and 187 alongside the legal definition of a telephone pole.
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Derek Kerton (profile), 13 Oct 2015 @ 12:25pm

Switcheroo?
Wait, did the Verizon statement just make a bait and switcheroo?

Without the benefit of looking at the contracts, it seems to me that the Agreement is about Fiber FIOS service, yet the Verizon statement seems to refer to Cable:

"there are no residential areas of the city where Verizon does not offer cable service."

Is that just a poor choice of words (cable for fiber) or is Verizon counting some other cable as if it were fiber? Not rhetorical; I'm really asking.
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Christopher (profile), 13 Oct 2015 @ 12:48pm

Enough.
Telcos, cable companies, cell phone companies all need to move back under regulatory oversight again. And Verizon is in sore need of a consent decree.
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Anonymous Coward, 13 Oct 2015 @ 2:31pm

what is the point of trying to get a real deal with Verizon (or the other players) when the contracts give a multitude of 'get out of jail free cards' and the country's most senior politicians, are in league with these main players, getting pockets filled for doing what the companies want, just as they do with the entertainment industries!
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