Customers, employees and political leaders are criticizing the telecom giant for failing to bring fast internet to low-income neighborhoods. The company says it’s just more union troublemaking.
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Verizon reported a $4.2 billion profit for its most recent quarter on Tuesday morning, saying customers are flocking to it for "network reliability and superior value." But as the company celebrates drawing in more than a million new mobile customers, it is dragging its feet on resolving two major contract disputes involving more than a dozen major Northeastern cities and tens of thousands of its own workers.
Those two disputes are merging into one, as advocates for low-income neighborhoods claim they've been denied contractually-promised high-speed internet service while Verizon's unionized employees have been working without a contract since talks broke down this summer.
Now, a coalition of mayors in the tri-state area has taken up these causes, with an audit, letters, and a public hearing into what they claim is bad-faith behavior by the telecom heavyweight, both in its stalled fiber-optic cable installation and labor negotiations. Verizon maintains the elected officials are being played by the union, and that it has met all its contractual obligations in the city. But that defense appeared to wear thin at a City Council hearing last week, where audience members heckled defensive executives and cheered citizen accounts of the uneven broadband roll-out.
Back in 2008, Verizon signed a franchise agreement with the city of New York, agreeing to wire all five boroughs with fiber-optic cable for high-speed internet access by 2014. The city's goal was to break up the Time Warner-Cablevision duopoly and improve internet connectivity in the five boroughs, closing a persistent digital divide. "No other provider has said it will build in all of New York," said Virginia P. Ruesterholz, then-president of Verizon Telecom, at the time. "The other competitors haven't built everywhere, but just taken their turf."
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The company is yet to make good on this promise. In June, a withering audit by the New York mayor's office found the company "substantially failed to deliver" on its obligation, prioritizing service requests for "bulk properties" rather than delivering connections equitably. This means property owners who agreed to the installation of multiple connections at one time, or who promised to do business exclusively with Verizon, would be serviced more quickly than a location with fewer guaranteed customers.
The audit found Verizon overlooked many communities with disproportionately low-income residents. Among the allegedly disconnected neighborhoods are much of Harlem, Washington Heights, Bedford Stuyvesant, Jackson Heights, Bay Ridge, Bensonhurst, and Sunnyside. Counsel to the Mayor Maya Wiley pledged to hold the company accountable, proclaiming "There's a new sheriff in town."
Helping that sheriff keep the heat on Verizon is the Communications Workers of America (CWA), a 700,000-strong union with a vested interest in holding a spotlight on one of the biggest employers it does business with. Since the summer, Verizon has been locked in negotiations with the CWA and the International Brotherhood of Electrical Workers (IBEW) over a contract covering 39,000 unionized workers. CWA, which represents 7,500 Verizon workers in New York City, had testified in favor of the franchise agreement in 2008, "hoping that it would lead to both continued employment and the provision of a state-of-the-art broadband product to the people of this city," in the words of Bob Masters, Assistant to the Vice President for CWA District 1 in New York.
CWA has since criticized Verizon's FiOS rollout, citing failures to adequately staff the project and a stall in work after the 2012 naming of Lowell McAdam as CEO. McAdam came from Verizon's wireless, rather than wireline division, and Masters testified last week that field technicians saw a slowing in the company's FiOS deployment after he took the job.
Verizon disputes the allegations of union leaders and politicians. "In all areas where Verizon has franchises and agreed to deploy FiOS, we have met or surpassed our deployment obligations," the company said in a statement to BuzzFeed News.
The company described complaints by the mayors as part of a "PR stunt" related to ongoing labor negotiations. "Since Verizon started bargaining this year with the CWA, we've seen numerous half-baked and inaccurate letters and statements from Union leaders regarding Verizon's FiOS commitments and more. It's all nonsense," Verizon said.
In June, when the New York audit was released, a Verizon representative called the findings a "union ploy" in an email to BuzzFeed News.
But some New York City officials roll their eyes at Verizon's suggestion that the CWA is using Northeastern mayors in a political ploy to improve their contract bargaining position. "They can talk all they want about political machinations, but they are just avoiding the question," said one official. "It's really very, very simple. Large swaths of New York City still don't have FiOS. That's literally all that this is about."
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