Rate Counsel Challenges Agreement Between BPU and Verizon New Jersey

Telecom giant says it can deliver high-speed Internet access over wireless and DSL, but rate counsel insists original deal called for fiber everywhere

Stefanie Brand, director, Office of Rate Counsel
The New Jersey Division of Rate Counsel is challenging a decision by state regulators that it says will ease requirements for Verizon New Jersey to supply high-speed Internet to households and businesses.

In a lawsuit filed with the appellate court, Division of Rate Counsel Director Stefanie Brand said a settlement between the telecom company and the state Board of Public Utilities materially alters the intent of a decades-old decision requiring Verizon to provide broadband access to New Jersey.

The dispute is over how Verizon provides that service.

The agreement between the company and the BPU earlier this spring would permit Verizon to meet its obligation for some customers through wireless or digital subscriber line (DSL) service. Those options, Rate Counsel argues, are not as reliable and are more expensive than what is available to other customers.

Many who participated in the case echoed that argument but their views were ignored by the BPU, according to Rate Counsel. “This matter should have been adjudicated as a contested case and the board’s failure to do so denied ratepayers’ fundamental due-process rights,’’ the lawsuit stated.

Verizon disagreed. “The investments that Verizon has made in New Jersey has made it one of the most wired states in the nation,’’ said Lee Gierczynski, a spokesman for Verizon New Jersey.

In the lawsuit, Rate Counsel noted that 63.5 percent of those who commented on the settlement approved by the BPU opposed it, with 36.5 percent supporting. Most of those who opposed it worried the agreement would halt the deployment of fiber-optic lines in the state.

Verizon has spent billions of dollars deploying high-speed fiber-optic service to customers in New Jersey, which allows consumers and businesses to have their phone service, broadband access, and television and video programming over a single line.

In approving the settlement back in April, however, state officials insisted that requirement was never included in the original 1993 order requiring Verizon to deploy high-speed Internet access.

According to the state settlement, New Jersey is one of only five states in the nation where 81 percent to 97 percent of its rural population has access to high-speed broadband service.

Verizon contends it has met all of its obligations under the 1993 agreement, ordering it to deploy high-speed Internet access to its customers.

Ever since the state changed the law dealing with cable TV franchises, Verizon has been very aggressively investing in bringing fiber-optic service to customers in New Jersey.

Under the law, however, Verizon does not have to build out its fiber-optic network throughout the state, a source of frustration to many communities that would like that option.

In its lawsuit, Rate Counsel also questioned why customers who can only get broadband access through a wireless option would have to first agree to a one-year term of service and pay a $100 deposit.

Many unions also opposed the BPU settlement, particularly its provisions allowing Verizon to provide high-speed access over its traditional phone lines, which they argued are not being properly maintained. Others, including business groups, supported the agreement as building on the success Verizon has made in making New Jersey one of the most wired broadband states in the nation.

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