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State Accuses Verizon Of 'Willful' Service Lapses, Seeks Fines

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By RICHARD MULLINS

The Tampa Tribune

Published: May 16, 2008

TAMPA - Verizon Communications Inc. could pay a heavy price for what state regulators call subpar telephone service in the Tampa Bay area.

Florida's top law enforcement official Thursday called for $6.5 million in fines against Verizon for what he called "willful" and "repeated" lapses in Verizon's telephone service.

The probe could expand. Florida's attorney general, other state officials and AARP on Tuesday called for an ongoing Public Service Commission investigation into service quality that they say has fallen to levels not seen since 2001 when the company faced millions in penalties.

"This is a grave concern for us, and not only from the standpoint of customers getting what they paid for," said Florida Public Counsel J.R. Kelly, whose agency represents Florida utility customers. "There are a great number of residents who do not rely on cell phones, but rely heavily on that land line." If they dial 911, he said, the phone has to work.

Verizon southeastern regional president Alan Ciamporcero said the company will "be making a strong case to the commission that no new investigation is needed, and that the allegations in today's filing do not in any way justify the punitive fines suggested."

The probe was sparked in part by a series of Tampa Tribune investigations this spring into Verizon's service quality that detailed tangled customer bills, long waits for repairs and employees picketing company sites over what they call poor service provided to customers.

The stakes are high for Verizon amid the probe. Verizon is now in fierce competition with cable and satellite TV companies for every customer in the Tampa Bay area, and will spend about $1 billion in the Bay area to build a state-of-the-art fiber optic network for combined cable TV, phone and Internet service. The Tampa Bay area is among the first two U.S. markets to receive the service.

Meanwhile, regulators in several other states have started pressuring Verizon over service quality, including Maryland, New York and Maine.

"Reliable and available telephone service can be critical to consumers during emergencies," said Mike Twomey, an AARP attorney. "Verizon should obey the rules or be penalized for its failure to comply."

Verizon Wanted Exemption

Florida tightly regulates telephone company service, in part to ensure that residents have basic communications and can call 911 in an emergency. The Florida Public Service Commission has authority to regulate many aspects of telephone service, but not cable TV or Internet service.

The Public Counsel's Kelly said work on the probe started in March when Verizon and other telephone companies asked the state to exempt them from rules on phone service quality. Instead, when his office looked at service records, Kelly said the data showed a decline in service quality. Amid the work, Kelly said his office and the attorney general's took notice this spring of the Tribune's reports of problems with Verizon's customer service.

State rules require phone companies to repair service within 24 hours at least 95 percent of the time in a given area.

Since 2002, Verizon's record declined steadily, and failed to meet the standards 262 times in 2007, compared with five times in 2001.

Verizon officials traveled to Tallahassee in April to tell regulators that the company was simply overwhelmed with demand for the FiOS service, and according to the Attorney General's office, Verizon officials promised to improve service. The attorney general's office has since forwarded 100 cases of poor customer service to Verizon for improvement.

Now, state law enforcement authorities are formally petitioning the PSC to issue fines against Verizon, and open an ongoing probe into service lapses. Based on $25,000 a violation in 2007, the petition calls for slightly more than $6.5 million in fines.

The attorney general also asked the PSC to open a formal docket to further investigate Verizon's service quality, potentially leading to depositions and hearings, PSC officials said.

The last time state authorities stepped in to question Verizon's service was in 2001, and the company agreed to a $2 million settlement.

Verizon Admits To Some Problems

Verizon officials have acknowledged hiccups in repair service amid strong demand for its FiOS fiber optic phone, Internet and cable TV service. During the early months of 2008, Verizon shifted a number of its repair technicians away from fixing traditional telephone service to install service for new FiOS customers.

In some cases, that meant customers who lost traditional telephone service waited a week or more before it was restored, said officials with Verizon's largest union of repair workers.

Verizon also ran into shortages of HDTV set-top boxes and the free TVs they offered to new customers.

Those and other problems led Verizon employees to picket the company's locations twice this spring. They complained the company focused too much on pushing employees to sell new services rather than taking care of customer problems with bills.

The issue is now in the hands of the PSC, which has opened a formal case file on Verizon. In the past, the PSC has held hearings on topics such as rate increases and service quality by utilities.

Reporter Richard Mullins can be reached at (813) 259-7919 or rmullins@tampatrib.com.

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