Verizon Allowed To Charge Customers More For 'Deteriorating' Service Due To Deregulation, Petition Claims

A group of New York State lawmakers and consumer advocacy groups say that Verizon Communications Inc. (NYSE:VZ) ignores millions of customers who rely on its copper network for phone service there, allowing it to fall to ruin while raising prices as much as 84 percent for a single line. They are asking that the telecom be investigated in a petition the groups filed with the New York Public Service Commission, or PSC last week.

While Verizon tries to persuade customers to switch over, its FiOS is not universally available. Verizon recently missed a deadline to connect all of the five boroughs to its fiber-optic network, which it said it would install by June 30 in an agreement with New York City. The telecom claimed that Hurricane Sandy, and Hurricane Irene before it, were to blame.

The deregulation of the rates at which telecoms can charge for phone service has been bad for customers, the groups claimed in the petition. In New York City, while Verizon's standard phone service prices rose 84 percent, the cost of “inside wire maintenance” went up 132 percent.

"Telecommunications providers tout the reliability of fiber optic networks, and the marketplace is full of claims for the desirability of wireless service," the petition said. "But millions of New Yorkers continue to rely on a network that runs on copper for voice and data services. That copper network is becoming increasingly deteriorated, is not adequately maintained, and the quality of service received by millions of people in the State is getting worse each year."

Consumer protection groups like the AARP and Common Cause New York signed the letter to the PSC, as did a congressman, US Rep. Tim Bishop, D-NY, seven state Senate members, 49 Assembly members, and several mayors, county and town officials from around the state.

The PSC said it had already announced a year-long study in March that would look at changing laws to more strictly govern telecoms. The study asked whether “the current regulatory system sufficient ‘to protect the interests of customers and whether current laws or regulations should be changed or amended to enhance or strengthen oversight and regulation over the entire telecommunications industry’?”

The petition asks the PSC to instead start a new investigation that looks at “the successes and failures” of its adopted competitive model. While the PSC “repeatedly assert[s] that competition will drive improved service,” that has not been the case, it said.

John Bonomo, regional director of communications for Verizon, said the petition was without merit and a waste of taxpayer money, considering the PSC's existing investigation.

“The petition offers a combination of misleading or unsupported allegations, faulty analyses, and counterproductive public policy recommendations," Bonomo said in an email. "In addition, the Public Service Commission has already announced that it is conducting a comprehensive review of the communications industry in New York and of the regulatory framework that governs that industry, so any separate examination of these claims in isolation would be a waste of agency resources. The coalition’s opinions should be treated as comments submitted in that proceeding, so that the PSC can evaluate it in the broader context of its Staff’s own research and the views of other interested parties.”