Confronting the Digital Divide: New York City vs. Verizon

Photograph Source: Poster Boy – CC BY 2.0

The United States is a divided nation, one expressed in all-too-many ways as evident by the 2020 presidential election and the failed January 6th insurrection. Unfortunately, one of its most telling expressions is the digital divide, in which more well-to-do urban and suburban locals get superior if over-priced telecom services while whole swaths of urban and rural areas are over-charged for inferior services.

The digital divide has been compounded by the twin crises of the Covid-19 pandemic and the ongoing economic recession. Its effects are graphically evident in New York City along with other large urban centers.

In April 2020, as the first wave of the pandemic spread through the country, the Citizens’ Committee for Children of New York (CCC) reported that an estimated 500,000 – of the 3.3 million – city households lacked internet access. It estimated that more than 800,000 New Yorkers lived in households without internet access, including over 150,000 school-age kids of the city 1.1 million students. Bronx County is a 42.4 square mile (110 sq km) area and home to 1.4 million people, many among the poorest of the city’s five boroughs. Over the last few years, it witnessed a 10 Mbps (i.e., megabits per second) drop in broadband speeds.

CCC warned that “digital inequities are preventing the city’s most vulnerable populations from accessing financial and food supports, education, and needed health and behavioral health services in this time of crisis.” Lacking internet access was greatest in neighborhoods with higher rates of poverty (earning below $20,000 annually) like Borough Park and Sunset Park in Brooklyn and Manhattan’s Lower East Side. To cope with “digital inequities,” New York education officials reported receiving 175,000 computing devices (i.e., computers and tablets) and that Apple and T-Mobile provided 300,000 students with LTE-enabled iPads; Apple partnered with IBM to enable internet connectivity.

Months later, on November 24, 2020, Mayor Bill de Blasio announced the settlement of a six-year dispute with Verizon to wire 500,000 additional homes for high-speed internet service.

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In September 2005, Verizon announced the launch of its FiOS service, an optical fiber-to-the-premise (FTTP) delivery network that would replace copper wires for greater speed and quality of communication. It would directly compete with cable television services. FiOS offered three services – telephone, internet and streaming video – at three tiers of speeds: (i) 15 Mbps/download and 5/Mbps upload, (ii) 25 Mbps/download and 10 Mbps/upload, and (iii) and 50 Mbps/download and 25 Mbps/upload.

Initially, Verizon had very ambitious plans for its FiOS service. In 2006, it announced plans to “pass” or reach 18 million premises by the end of 2010 — more than half of the approximately 33 million households in the company’s 28-state wireline service area. By year’s end 2006 alone, the company planned to pass 6 million premises and add an additional 3 million a year through 2010. The company projected the costs of this undertaking at $18 billion over six years; it calculated costs as $23 billion in the fiber rollout minus $5 billion in spending on copper.

The telecom conglomerate rolled out its first installation site in Keller, TX, available for 9,000 customers. Other deployments quickly followed in northern Virginia and for 35 communities in Pennsylvania’s Bucks, Chester, Delaware and Montgomery counties for an initial 80,000 households. It announced plans to deploy FiOS in Delaware’s southern New Castle County for 13,000 households and secured a franchise of 9,000 households in Dedham, MS.

Nevertheless, in 2010, Verizon suspended FiOS expansion due to the high cost of building a fiber-optic network and running connections to homes. Bill Kula, a Verizon spokesman soft-peddled the obvious: “We’re simply doing what we originally pledged to do. We said we would enable approximately 18 million households to receive FiOS, and we stated that more than five years ago. We never said we would deploy our fiber optic service to 100 percent of all residences we serve.” After four years of deployment and subscriber sign-ups, FiOS passed 12.7 million homes but secured only 3.4 million subscribers in 16 or the 18 states it had originally planned to pass. Most troubling, it had not completed fiber deployment in Washington, D.C., Philadelphia or New York City.

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Shortly after taking office as mayor in 2014, De Blasio gave the keynote address at the annual Internet Week conference. He announced a bold initiative:

The goal is quite simple – we must have universal, affordable, high-speed internet access throughout this city. It’s as simple as that. And broadband is essential for everything this community needs to do.  It’s essential for everything we need to do to be a fair and just city, because we can’t continue to have a digital divide that holds back so many of our citizens.

In 2008, under Mayor Michael Bloomberg, The City signed an agreement with Verizon under which the company committed “to extend its FiOS network to every household across the five boroughs by June 30, 2014.”

In June 2015, de Blasio provided a status-report audit of FiOS deployment. “Through a thorough and comprehensive audit, we have determined that Verizon substantially failed to meet its commitment to the people of New York City,” he said. The city reported that the Fios rollout only passed 2.2 million households, falling short of the 3.3 million estimated when the telco made the agreement. The mayor added, “As I’ve said time and again, Verizon must deliver on its obligation to the City of New York and we will hold them accountable.”

In 2017, the City sued Verizon claiming the telecommunications conglomerate broke the 2008 contract to provide citywide fiber coverage. Mayor de Blasio said, “Verizon must face the consequences for breaking the trust of 8.5 million New Yorkers. Verizon promised that every household in the city would have access to its fiber-optic FiOS service by 2014. It’s 2017 and we’re done waiting. No corporation — no matter how large or powerful — can break a promise to New Yorkers and get away with it.” In part, the complaint read as follows:

The Agreement … required Verizon to install fiber optic cable — in underground conduit, along above-ground utility poles, or otherwise — in front of (or behind) each residential building. In other words, as stated by a Verizon representative, it required Verizon to “have fiber up and down each street and avenue in the entire city.”

A Verizon representative pooh-poohed the mayor, claiming it provided service to 2.2 million residents while the city claims it has 3.1 million households. Craig Silliman, Verizon’s executive vice president of public policy and general counsel, claimed, “Digging up City streets and sidewalks on the scale that you are demanding would cause enormous and unnecessary disruptions to vehicle and pedestrian traffic, and would impose immeasurable inconvenience and hardship on countless residents and businesses.” The city began exploring building out an open-access broadband network.

In January 2020, the De Blasio administration announced the New York City Internet Master Plan to bring broadband services to all city residents. The plan was based on “issuing a Universal Solicitation for Broadband (USB) to steer the relationship between the City and the private sector toward universal service with a focus on covering areas of the City that currently lack connectivity.” The Master Plan noted that “46% of New York City households living in poverty do not have broadband in the home. The Bronx has the highest percentage of residents without home broadband at almost 38%.” The Plan called for the city to allow internet service providers (ISPs) “access to the city’s real-estate assets, like rooftops on public buildings and utility poles, would, in theory, increase competition and lower the price of broadband internet.” It was argued that this would increase competition and lower subscriber fees.

In July, the City announced it would “make a historic $157 million investment in ending digital redlining and providing high-speed internet, including $87 million redirected from the NYPD budget.” According to the City, the “investment will extend new internet service options to 600,000 underserved New Yorkers, including 200,000 NYCHA residents over the next 18 months.”

De Blasio’s proposed use of a public-private partnership to bring universal broadband is but the latest joint venture effort that he’s used in other areas of city live – and that have repeatedly. For example, it underwrites his effort to increase affordable housing, to care for parks, to provide children’s services and to the terminal renovation at LaGuardia. For broadband, the city would have to rely on good-faith commitments from the Verizon and other telecom companies that have broken past agreements.

On November 24th, a settlement to the City-Verizon suit was announced. At a press conference, de Blasio reminded New Yorkers and others of a simple truth. “Internet access is an economic right in New York City, no matter your ZIP code. Tech giants will not stand in our way to deliver high-quality broadband to New Yorkers – they must be a part of the solution,” he said. “COVID-19 has further exposed the inequalities in internet access while changing the way New Yorkers work, learn, and live. We will continue to hold any corporation that fails to deliver on its promise to New Yorkers accountable.”

Law suits against a giant telecom company like Verizon is one option for a city to address the digital divide. Another option for New York and other cities is municipal broadband services. One estimate finds that “more than 560 communities across the country are served by municipal networks and more than 300 are served by a cooperative.” Electric Power Board (EPB) of Chattanooga, TN, implemented the world’s first community-wide 10-gig Internet service, available to more than 170,000 homes and businesses.

David Rosen is the author of Sex, Sin & Subversion:  The Transformation of 1950s New York’s Forbidden into America’s New Normal (Skyhorse, 2015).  He can be reached at drosennyc@verizon.net; check out www.DavidRosenWrites.com.

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