While there are some who still believe we will finally turn off the PSTN (Public Switched Telephone Network) in 2018, there are strong indications that the end is actually nowhere in sight. A huge case in point is Verizon’s recent actions in New Jersey in league with the New Jersey Board of Public Utilities (NJBPU), which our friend Bruce Kushnick recently illustrated for me.
Back in 1993 -- over 20 years ago -- New Jersey passed the “Opportunity New Jersey” law, stipulating that by 2010 the PSTN network in the whole of Verizon NJ’s territory would be upgraded from its aging copper wires to fiber optic capable of 45 Mbps in both directions. The law specified that Verizon could charge customers for the upgrades in the ways that such entities do (phone charges, tax breaks, and the like), and Verizon did so to the tune of $15 billion – and counting -- as of 2013.
As of 2013? From the sound of it all it would seem that Verizon is continuing to charge for work they completed three years prior. However, according to state-provided information, as of 2013 Verizon had only fully connected 70 of the 526 New Jersey communities, while partially connecting another 282. Of course, it must be noted that back in 1993 New Jersey’s Interoffice facilities had 100 percent fiber trunking to all central offices, and thus it is something of a surprise that in twenty years the local loop project did not get the local loop further deployed.
In January of this year Verizon New Jersey found a way to sidestep the rest of its obligation, reaching a stipulation agreement with the NJ Board of Public Utilities (NJBPU) that absolves them of their commitment. This, despite the fact that they have left nearly 50 percent of the state in the copper line lurch. Specifically, the stipulation agreement states that if any other companies are offering anything equivalent to DSL over the old copper wires, Verizon doesn't have to do anything. And if the customer doesn't have another option, Verizon can take nine months to supply service, and that service can be the company’s more expensive Verizon Wireless service.
Needless to say, various parties have filed comments to the stipulation to have it dissolved, and calls for investigation into Verizon New Jersey’s business practices have been made as well. In short, the meat of the outcry is that Verizon’s failure to live up to its end of the fiber optic deal has harmed education and the economic growth of the state of New Jersey as a whole. Assertions have been made that Verizon New Jersey manipulated its financial reporting to the NJBPU to cover the fact that the monies received by the company to date have been used to pay for other affiliate business, lobbying efforts, executive bonuses, dividends, and so on.
Verizon’s FiOS also could be suffering due to the change in leadership, which has put it into a different deployment phase. Let’s face it, if you have ever driven the NJ Turnpike below exit 6, you can see why Verizon would be slow to spend monies. Since 1993 Verizon has also been willing to sell off local plants and just retain its profitable core. So perhaps FiOS as a core product is divining areas that can be sold off to the cable operators, though for the time being the offer will be Verizon Wireless? Perhaps the newfound lovefest between Comcast and Verizon Wireless is at play?
Righteous indignation is a double-edged sword, of course, and I will be morbidly curious to watch the Verizon New Jersey versus … well, New Jersey, situation play out. And if history is any indicator we can be sure that Joe Consumer will end up taking the hit when the dust clears (that’s after having his pocket picked prior).
If I were the NJBPU I would be wondering not how I can change the model with one carrier, but how I can enable more competition, because at this time it is hard to believe that the goals of 1993 and the rest of the years of competitive incentives will be achieved.
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