Verizon, Cable, Telcos Face Heat on Service, Prices, Broadband Availability

SAN ANTONIO -- Verizon in particular and cable and telco industries generally took heat from consumer advocates and others for what they contend are lagging service quality and/or rising prices. The providers don’t face enough competition, aren’t building out broadband as quickly as possible and/or don't always meet their commitments, the advocates and others said in interviews Tuesday. They spoke on the sidelines of the National Association of State Utility Consumer Advocates conference in the same hotel as NARUC, and on a panel (see 10:05 a.m. Tuesday).

New Jersey’s telecom regulator hasn’t always been sufficiently aggressive to hold Verizon to account, said that state’s consumer advocate, Stefanie Brand, who directs the New Jersey Rate Counsel Division and noted her state's partly deregulated. Many places can exercise oversight of only wireline phone. New Jersey's Board of Public Utilities “has been reluctant to step in," Brand told us. That Verizon is deemed a provider of last resort gives her a “hook" to ensure her division can try to get improvements: "It’s helpful to us."

“Our commission has a long history of sort of slowly but surely withdrawing from telecom regulation unless forced into it,“ Brand told NASUCA. “We really do need commission oversight of just basic service quality." In the interview, she called it “a good sign that they opened that service quality proceeding." BPU's look at telcos opened a year ago. The agency's head told us he's firm with regulated entities, noting he's not responding directly to Brand's comments.

“What a farce it is to argue that there is competition to help take care" of concerns about service quality and availability, Brand told the panel. “The only way we got anything done was we just hounded the company," she said of Verizon. The telco had responded to skeptics of replacing things like plain old telephone service that “we’re just a bunch of Luddites, stop being old fuddies, this is the future, deal with it,” she recalled. “Years later, it turns out there are vast areas of New Jersey where they have absolutely no intention of laying fiber.”

New York faces similar issues. Telcos sometimes de-emphasize copper services for fiber, which they put only “where they think it should go," said Public Service Commissioner John Howard. He experienced “really rotten service quality” in his rural area of Duanesburg. He hopes state investments in broadband “go a long way toward ensuring a viable telecom system."

Of Charter Communications, “there’s nothing like threatening someone’s franchise to get them to the table," Howard responded to our question. New York claimed the cable operator didn’t meet broadband commitments agreed to as part of buying Time Warner Cable and another operator (see 1907110045). Charter's “the big dog” in terms of size, Brown said. “Will there be any true competition in that sort of part of the telecom world? My guess is, if you couldn’t do adequate copper wire service in huge parts of the state, that will be equally true with incumbent cable providers as well.” Charter declined to comment.

New Jersey

Though BPU's head recognizes its "control" in telecom "is somewhat limited," he said he takes a firm stance with telcos on service quality and such metrics.

"We are really involved only in customer service," said President Joseph Fiordaliso (D) by phone. "The FCC a few years ago really took most of the authority from the states and really concentrated it" at that federal regulator, he added. "We have them in here on a frequent basis going over those metrics," he said of phone-service providers. That's to ensure customers "are getting what they pay for and I emphasize that every time I meet with them."

"I will not tolerate anything less" than high-quality service, said Fiordaliso, a member of the board for 13 years. Such quality overall in New Jersey is OK, he said. "There is always room for improvement and we are constantly on the companies to improve. And sometimes, I think they really get tired of hearing my voice." There’s room for more competition, the regulator said. "That’s the American way. Competition many times … affects the price and the quality of service." Fiordaliso said BPU is working on scheduling service-quality hearings.

Verizon makes "significant investments in fiber and our plant," a spokesperson emailed about the service gripes. It's deploying 1,400 miles of U.S. fiber monthly, he said. "We've also worked hard to both provide a smooth transition for customers in areas served by fiber and to address service concerns -- and give customers options -- in areas not served by fiber." The telco didn't provide figures to us on New Jersey fiber investment.

Consumer Concerns

Consumer concerns about cable are more about price than service quality, we were told.

“It’s not price-regulated,” but maybe it should be, said economist Susan Baldwin. “There’s not competition in broadband," added Baldwin, who does work for state consumer advocates. The complaints her division gets involve cable prices that are “through the roof,” New Jersey's Brand told us. “There’s no competition," she said about broadband service. “It’s the same areas that don’t have phone service, that don’t have fiber, that also don’t have cable.” NCTA didn’t comment.

The New York PSC “made it clear" that if Charter doesn’t meet its broadband buildout commitments now, its “feet will be held to the fire again," said New York Public Utility Law Project Executive Director Richard Berkley in an interview. “We still have widespread service quality problems" in New York generally, he said. He deems his state’s regulator “active on service quality issues" and hopes that continues. Consumers generally don't always understand why their prices for cable and bundled telecom services “seem to change all the time," he said: “They don’t get good explanations."

In Pennsylvania, concerns don’t appear to be widespread about wireline phone service problems or about increasing rates for other, nonstate regulated prices, based on feedback that Barrett Sheridan, the state’s assistant consumer advocate, told us she gets. “Consumers who have had the bundles for a long time just become accustomed" to price increases or try to switch providers when possible to stave off rate hikes, she said. Basic local phone service is all the Public Utility Commission can regulate in telecom, the advocate said, “The companies haven’t bothered to implement large increases because the real action for them, in my opinion, is the bundles, where they can put an increase" into effect.

“By and large," Verizon has been meeting its commitments in a settlement with the Communications Workers of America about service quality in Pennsylvania, Sheridan said. She noted the accord (see 1706020050) ending a CWA PUC complaint doesn’t have public reporting of service quality metrics. The union didn’t comment. The 2017 settlement didn't involve any PUC monitoring, and the agency hasn't received complaints about Verizon's performance under the deal, a commission spokesperson said. The onus would be on stakeholders to raise any issues, he added. Docket P-2015-2509336 hasn't had substantive updates since the accord.

Sheridan said it’s good to get “examples of fully litigated cases." There are drawbacks, too, so settlements can make sense. Pressing a case “requires a lot of involvement, commitment by the consumer,” she said: That may come at the expense of the subscriber “not having good service till the end of the case."

NASUCA Notebook

An FCC official who visits such conferences wants to hear from state and local officials about telecom issues. "Reasonable minds can differ on things like small cell deployment and cable franchise fees," said Consumer and Governmental Affairs Bureau Office of Intergovernmental Affairs Chief Gregory Cooke at NASUCA (see 9:30 a.m. Tuesday). "The point is to keep the lines of communications open." Though "not everybody likes everything that we do," the lawyer's task is to make sure people aren’t surprised by the commission's actions. There's a "relationship to what is happening at the state and local level" in some of what the FCC does, he noted. "There are a lot of issues that are not federal issues, that are not FCC issues." Telehealth has much state involvement, said Cooke. He noted nominations are due Dec. 6 for the Intergovernmental Advisory Committee, which was recently reauthorized (see 1911060034).