from the regulatory-capture dept
We’ve previously discussed how in 1993 Verizon conned the state of New Jersey into giving the telco all manner of subsidies and tax breaks in exchange for a promise to wire the majority of the state with symmetrical fiber. Fast forward to 2015, most of New Jersey remains on aging DSL, and the state decided it would be a wonderful idea to simply let Verizon walk away from its obligations. Of course this isn’t new: Verizon’s regulatory capture allowed it to do the exact same thing in Pennsylvania, and it’s currently busy trying to dodge New York City FiOS build out requirements as well.
But apparently, New Jersey is getting screwed harder than state residents even knew. In addition to the sham 1993 agreement, Verizon got New Jersey officials to sign off on a 2006 statewide franchise agreement that also let the company wiggle out of FiOS deployment obligations. Essentially, Newark and Fulop Mayors began noticing that many buildings in their cities were waiving their right to have FiOS installed, something not happening in more affluent areas:
“Mayor Steven Fulop of Jersey City and Mayor Ras Baraka of Newark are expected to call a press conference to discuss whether Verizon is fulfilling its obligations under the act. Public records show that 21,392 different properties in Newark have waived their access rights under the franchise agreement, opting out of any right to FiOS availability. In Jersey City, that number climbed to 25,311, nearly a fifth of the city?s properties. In richer municipalities like Trenton, Weehawken, and Hackensack, that number never climbed above 3,000.”
Verizon’s 2006 franchise agreement required that the telco make its fiber-based FiOS service available to New Jersey’s 70 densest municipalities, including poor areas in Newark and Jersey City that might not otherwise see coverage. But Verizon appears to be abusing a loophole in the franchise agreement that allows it to add buildings to an acceptable “waiver” list of exemptions should Verizon run into trouble during installs. But Verizon appears to be making it intentionally difficult for landlords in poorer cities to successfully contact and schedule installs with Verizon:
“What we understand the practice to be is that, if you’re in a wealthy high-rise next to the water in Jersey City, they will bend over backwards trying to get into that building,” says Seth Hahn of the Communication Workers of America union, which has supported the mayors in their efforts to get more cable laid. “But if you live on the other end of the tracks, they’ll send you a letter saying, ‘We’d like access to your building.?” After a labyrinth of phone calls and offerings, the landlord will often end up on a waiver list without realizing it, Hahn says.”
None of this is to say landlords can’t be difficult. In a 2013 PSC filing with the state of New York (pdf), Verizon claims many landlords refused the telco access to building infrastructure, and some even tried to charge the telco for building access. But looking at the data, it seems somewhat obvious that there’s a big discrepancy among waiver totals in poorer cities:
But the core of this problem is again regulatory capture and these statewide TV franchise agreements. The new laws were pushed by AT&T and Verizon in dozens of states around ten years ago, and were quickly rammed through by campaign-cash soaked state legislatures under the promise of new jobs and lower TV prices thanks to increased competition. But most if not all of the agreements were written by telco lobbyists and lawyers. As such, most of them are basically phone company wishlists, and in some places like Wisconsin, went so far as to gut all consumer protections and even some eminent domain rights.
So yeah, if you didn’t realize it already companies like AT&T and Verizon all but own many state legislatures, as evident by the fact they literally write the laws governing their behavior. The end result of that may not be surprising, but the fact that we never seem to learn from decades of this kind of behavior should be.