NNI Comments Filed with the NY Public Service Commission, October 2015
In 2015, the New York State Public Service Commission (NYPSC) started a proceeding that included to examine the Connect New York Coalition’s petition that was filed in July 2014. It is based, in part, on our previous reports.[1]
Click to see our previous reports or the Connect New York Coalition filing
Summaries: We have Filed 3 Comments to Date.
Comment 1: Related to the NY Public Service Commission’s Report “Staff Assessment of Telecommunications Services”.[1]
- Originally Published: Huffington Post, August 21st, 2015
- Verizon & the New York State Public Service (“Captured”) Commission
Summary:
- The State needs to redo the report with actual communications bills. What was presented shows that the State can’t do basic research and produce a report with actual accurate data that reflects the actual costs of service, or exposes the deceptive billing practices, made up fees, or massive increases post the promotional price.
- The State needs to audit Verizon’s financial books for massive cross-subsidies, as discussed in our other comments.
- The State has been negligent in its own mandate to make sure that prices are fair and reasonable, and has let basic phone customers be ‘harvested’ over the last decade.
Comment 2: Related the Connect New York Coalition’s Petition.[2]
- Originally Published: Huffington Post, August 21st, 2015
- Did Rate Increases on Verizon NY’s Basic Phone Service Pay for the Use of the Corporate Jet by Verizon’s CEO?
- Billions in “Corporate Operation” expenses are being dumped annually into the state utilities to make “Local Service” look unprofitable.
Summary:
- The State needs to start immediate audits of the accounting of Verizon New York and address the fact that the NYPSC agreed to multiple rate increases on basic phone service, starting in 2006, based on losses that were not audited and were created by expense items that had nothing to do with local service.
- As this article discussed, Verizon placed about $2.6 billion of Corporate Operations expense into the Verizon New York accounting in just 2014, of which 60% was placed in the Local Service category. This was one of the reasons Verizon New York’s Local
- Service showed massive losses. Unfortunately, the State failed to recognize this and simply granted multiple rate increases based on the losses without any rate case or investigation. And it’s been going on for over a decade.
Comment 3: Reply Comments by New Networks Institute
Verizon New York’s response to some of the Connect New York Coalition’s Petition is embarrassing and just plain wrong.
What the State Must Do:
Our information had been supplied to the NY Public Service Commission years ago.
- The State needs to finally investigate the payments by Verizon Wireless to Verizon New York, as compared to AT&T and Sprint (and add T-Mobile), who appear to be paying multiples for network access.
- The State needs to finally investigate Verizon Wireless payments to Verizon New York, as shown in the SEC books, and Verizon New York as compared to the PSC-annual reports. Based on Verizon Wireless’s NY revenues, they are ‘chump change’ and below market prices.
- The State must track the capital expenditures that were dedicated to Verizon Wireless’s wires to the cell towers that were never reimbursed or paid for with a monthly charge.
- Verizon claims that many of the services offered to wireless providers are “jurisdictionally interstate” and “beyond the Commission’s jurisdiction”. Customers paying for the wires to the cell towers opens up a serious can of worms for Verizon. “Cellco”, (D/B/A/ Verizon Wireless) is a separate company which had a joint venture with Vodaphone, an International concern, and it was able to divert billions of dollars that were supposed to be used for the capital expenditures of the state utility networks, and instead, was able to get local phone customers to fund this separate company’s networks without adequate payments or reimbursements for the build out. This created losses, which were used as an excuse to raise rates further, and the State wrote that the increases were also for ‘massive deployment of fiber optics’. This went to connect the cell sites and not to build out the networks that they were paying for.
- Is it legal to charge local utility phone customers for the development of interstate services?
- Verizon’s financial discrepancies between financial books, the “Black Hole” Revenues, which Verizon claims are accounting differences, needs immediate investigation.
[1] http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={20B25546-ACFC-4585-BE04-C361BA42CCE5}
[2] http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={88060763-C380-4492-AD8B-10A3BF858082}