Verizon threatens to end NYC FiOS service over lawsuit

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New York City is suing Verizon for failing to build out fiber to the home service to all residences as promised and Verizon might retaliate by yanking out television service citywide. And stroppy landlords are making it a three-cornered fight.

Like any legal dispute that’s measured in billions of dollars, it’s a complicated affair. But one of the central issues is Verizon’s problems with getting access to apartment buildings and condos – multi-dwelling units (MDUs).

Landlords have not been particularly cooperative. Whether it’s because they have profitable arrangements with other video service providers or they think they can get something out of Verizon or they’re simply being obstinate, they’re preventing a million households from getting FiOS service. At least as Verizon tells it.

As the city sees it, though, Verizon is playing a game. If one landlord blocks access to his property and there are apartment buildings behind it, none of them get FiOS upgrades (h/t to Ars Techica for the documents)…

Verizon’s current position, as stated in correspondence and meetings with the City, is that fulfilling the “premises passed” obligation does not, with respect to a given premises, necessarily involve running fiber immediately in front of or behind the premises. Rather, Verizon has asserted, it should be deemed to have “passed” an individual building if it has run fiber to a nearby intersection and could access the building with further deployment of fiber. In particular, with respect to MDUs, Verizon has argued that an MDU should count as “passed” as long as Verizon intends eventually to run fiber to it, not directly from the street, but rather through an adjacent MDU or a chain of such MDUs, whether or not Verizon has obtained access to any of the MDUs from the property owners.

Verizon responded by saying, in effect, we were so simpatico with New York City that we didn’t have put all that in writing, and threatening to leave the market

Verizon has the option of opening negotiations for a renewal of the Agreement in July. Unfortunately, the City’s intransigence does not create a favorable environment for such negotiations. We would urge the City not to make it impossible for Verizon to continue to provide New York City residents with a competitive alternative to cable TV.

It’s certainly true that landlords can and do block access to competitive broadband companies. San Francisco has taken a different approach and outlawed the practice. That’s yet to be tested in court, though.