Letter to New Jersey Economic Leadership

New Jersey’s Most Important Economic Leadership Forum Needs to Ask: Why is New Jersey Not a “Fully Fiber-Optic-Based” State? — Will Verizon “Shut Off the Copper”?

 

Fact: By the end of 2010, based on current state laws, literally 100% of Verizon New Jersey’s residential and business customers as well as schools and libraries should have been upgraded to a fiber optic-based, very high speed Internet and broadband service, capable of at least 45 Mbps in both directions, for  uploading and downloading.

And yet, at this time, at least 1/3 of all municipalities will not be upgraded and the plan is to literally “shut off the copper” and force customers onto wireless services.

As leaders of New Jersey’s business community that are concerned with the economic growth of the state, we implore you to call for an investigation of why the State of New Jersey has not been properly upgraded to a ‘fully fiber optic’ state and what are the plans to eliminate wired services in un-upgraded areas.

Fact: Over two decades ago, now-Verizon New Jersey claimed that fiber optics was  essential for New Jersey’s future to “achieve the level of employment and job creation in that state”,  to “advance the public agenda for excellence in education”,  and to  “improve quality of care and cost reduction in the healthcare industry”.

Verizon convinced the state legislature and commission that it would rewire 100% of their territory (about 95% of the entire state), replacing the aging copper wiring of the state utility with a fiber optic wire and completed by 2010. In exchange, starting in 1993, Verizon was allowed to raise rates and received tax perks —  the excess profits to be used for the construction of this new ‘information superhighway’. In 1997, the State added that schools and libraries should also benefit from these wondrous new networks.

By 2014, New Jersey would have been a world leader in innovation and technology, not to mention an attractor for new businesses and start ups, and the speeds should have increased to 100 Mbps to 1 Gbps for the entire state.

And this is not old news; these commitments are still the law. In 2012, the NJ Board of Public Utilities issued a ‘show cause order’ asking Verizon to explain why two towns, Stow Creek and Greenwich, were not upgraded. And while Verizon stated that it had fulfilled its commitments, in 2013 Verizon NJ was ordered to do the wiring.

Verizon has no plans of completing their commitments even though they collected an estimated $15 billion to do this work – which customers paid for.

How far did Verizon get? In 2006 Verizon applied for and received a ‘system-wide’ cable franchise and in 2013, during the cable renewal process, it was revealed that Verizon was only required to have 70 communities fully upgraded. Verizon claimed it would also do only parts of 352 other communities. With 526 municipalities in its coverage area, at least one-third of all communities will never be upgraded and about one-half of the entire state will not have received the benefits.

“Shut Off the Copper”. Verizon’s CEO Lowell McAdam announced that their plan is to force customers in non-upgraded areas onto wireless services and to literally “shut off the copper”. This would mean that all data services based on reliable copper wiring, from ATM machines to alarm circuits, could be shut off.  Worse, after the Sandy Storm, Verizon forced communities, including Mantoloking. to use inferior and more expensive wireless. Verizon refused to even fix the copper wiring, even after a storm, even after an emergency, and has filed with both the State and the FCC to not fix the wires.

This impacts everyone in the State. Take the NJ Banker Association’s chairman,  Lakeland Bank.  At least 1/3 of the bank’s branches are in ‘have not’ communities that are not getting upgraded and these communities and even the bank could lose or have to refit their current working services.

And while the hype is that everyone is going ‘wireless’ or that technologies like voice over the internet, VOIP,  will replace the wires,  simply put, wireless can’t replace high speed broadband, only 5-10% of businesses are ‘wireless only’, and there are problems with VOIP replacing copper-based services today.

What did New Jersey Lose?  The Garden State should have been the first fully-fibered state and this would have attracted new, innovative Tech businesses among other industries,  and increased job growth.  It would have expanded tax revenues, thus lowering every home owners’ tax burden, while increasing property values.  Schools throughout the state, not to mention students, would have had exceptional broadband and Internet services for education. Instead, we estimate that the lack of upgrades cost the state over $225 billion in economic GDP growth.

Worse, if Verizon does not upgrade New Jersey and actually begins to ‘shut off the wires’, rural communities or areas that were not upgraded will be  ‘digital deserts’, harming education, medical care, and every small business.

You have a choice. You can simply ignore the facts – or you can help. Make this a topic of discussion at the Economic Leadership Forum with a plan to take action.

Don’t take our word for any of this.  Read the story of fiber optics in New Jersey or check out the other documentation—from the state laws to the state-provided information on the cable deployments.

New Jersey Broadband: Resources

Contact us for more information.

Bruce Kushnick, New Networks bruce@newnetworks.com

Tom Allibone, West Amwell Cable Advisory Committee tallibone@comcast.net

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