New York State Attorneys General Office
New York, NY
REQUEST TO IMMEDIATELY, AND PUBLICLY INVESTIGATE THE FINDINGS OF THE COMMUNICATIONS WORKERS OF AMERICA REPORT "SERVICE QUALITY & SERVICE QUALITY REPORTING AT VERIZON-NY"
New Networks Institute
826 Broadway, suite 900
New York, NY 10003
Dated: March 15th, 2001
Reason for this Complaint
In November, 2000, the Communications Workers of America (CWA) released a report titled "Service Quality & Service Quality Reporting At Verizon-NY". This report was requested by the New York Public Service Commission to examine service quality issues, and it is part of the ongoing Alternate Regulation plans that governs Verizon's local phone services.
"CWA was directed by the Public Service Commission to institute a service quality program as part of the Performance Regulation Plan for New York Telephone. As part of this program CWA was to 'examine and assess the delivery of service by the Company'."
A copy of this report can be found at:
The CWA's response to Verizon:
The report Findings requires an immediate and public investigation. The Report's conclusions points to current express harm to ALL New York phone customers and competitors, including harm to customer services for everything from a phone line installation to fixing a phone outage, a deterioration of the entire telephone network that is supposed to be New York's Digital lifeblood, a direct and severe impact into the entire economic development of New York state's economy, and even effects the cost of all phone services.
The Report's claims against Verizon include the falsification of company service quality data, inaccurate information, possible consumer fraud for inside wire maintenance plans, deterioration of the current phone networks, lack of experienced management, lack of proper training, harm to company whistleblowers trying to call attention to the problems, among others.
In the CWA's own words:
"CWA Service Quality Program has identified a number of management practices that result in the inaccurate reporting of service quality data to the PSC. Specifically, survey results, Hotline reports and case studies verify inaccurate reporting of data for Customer Trouble Reports, Out of Service over 24 hours, Missed Repair and Installation Appointments, Installations within 5 days, and Answer Time Performance. The misreporting of this data allows the Company to artificially improve its service quality performance and reduce its exposure to PRP penalties and PSC sanctions."
And the litany of documented harm is very serious to all telecom customers, competitors, and even the Verizon workers who are trying to deliver services. Here is some of the information taken directly from the Report:
How bad does it get?
The problems highlighted in the summary are all in-depth issues that need immediate attention. Take, for the example, the first issue mentioned -- falsifying data on reports. The impact on customers is direct and clear. One of the examples provided in the report effected seventy customers.
"Example 7. On or around April 13, 2000, Manhattan management, at the request of Nassau bureau management, closed out seventy customer complaints as "customer miss-dials" due to changes in the area code when in fact, the troubles were due to the Company's ANNC switching problems."
According to the report, this is not a isolated incident.
"Overall, 30% of those surveyed have directly seen management change the status of a trouble report. And they have seen this happen with a high level of regularity. The apparent disparity in the YES column between field technicians and inside technicians can be attributed to the fact that field technicians work outside and thus have fewer opportunities to view managers at their computers. "
Or take the case of something that sounds innocuous, ---- "backtiming", which is changing the completion time of a service report so that the company can improve its results on paper.
"Field technicians, central office technicians and Maintenance/Dispatch Center workers were asked whether they had been directed by management to backtime."
The following chart states the results of the survey.
Each of these charges can have a series of very damaging consequences, not only to service but to those who report problems. In one case quoted, some 50 jobs have been falsified (that's fifty customers being harmed). And while the worker wanted to have the problem cleared up, they were summarily transferred for calling this to the attention of the Verizon management.
"Example 7. In January 2000, a technician uncovered 30 jobs in which data had been falsified. The technician did not want to be part of falsifying data and notified his first level manager. The first level manager stated that if such falsification is happening "I don't want to be part of it either." The first level manager then took the data to the second level manager. The technician then found another 22 jobs with falsified data and gave all the data to company security. The next day the technician was transferred to another location. (report page 9)
Then there is the lack of telecom upgrades that should have been made over the last decade. According to the CWA report, the company is still using outmoded, band-aid solutions, such as line-splitting, where it takes an existing line, and cuts the capacity in half--- or worse. (NOTE: This is different than line-sharing, which is when a competitor can use a verizon line to offer DSL, over the customer's existing phone-voice line.) This is done instead of properly upgrading the networks --- and it has direct consequences to phone service in New York.
"Due to the lack of investment in plant and equipment, there are not enough pairs available for new customer lines. Instead, the Company now uses AMLs (line-splitting) that put two or more lines on one pair. This quick fix solution has consequences for the customer. For example, if a drive pair goes bad, two or more customers can go out of service instead of one. AMLs also cause poor quality dial tone. They also do not work on all C.P.E. equipment and some answering machines. In addition, AMLs reduce the speed for faxes and Internet usage. Because AMLs use 135 volts instead of 48 volts, over time, they may overheat the line causing future failures, as well as causing unsafe working conditions. MLT equipment is not capable of testing AML circuits. Notwithstanding all these problems, the use of AMLs is still widespread. For example, the West Bronx District installs approximately 500 AMLs every 3 months while Brooklyn has 11,000 AMLS."
NNI's Research Supports the CWA Findings
The issues brought up by this report effect virtually all services, from the installation of a phoneline to the installation of DSL and broadband ---- and it effects all phone and data customers. In statements made by Verizon to the public, the company continually claims that there are few problems with their deployment of services, including DSL. For example, Verizon stated on CNNfn that (Digital Jam, 1/26/01)
"95% of DSL installations went through without problems" and "out of one hundred lines, only 5 will have problems... and of those, 60% are caused by customer or competitor error."
However, the NNI survey of New York Internet Providers showed that "over 50% of their installations had serious problems", and actual documentation from both Internet providers and Competitive local Phone companies shows that the number is as high as 70%..
More to the point, one has only to examine the litany of recent articles, or visit the NNI Broadband Bill of Rights' Co-signer page, which was only put upin the middle of February, to see that this problem is not simply a few anecdotal stories.
See to read recent articles: http://newnetworks.com/articles.html
See NNI's Co-signer page: http://www.newnetworks.com/alliance/signatures.php?view=1
The CWA report not only verifies what the competitors' data already demonstrates, but paints a picture of the doctoring of records and fraudulent behavior, inadequate investment in the telephone networks, massive staff cuts leading to direct harm of ALL New York customers and competitors.
NNI has also documented the effects of numerous staffing issues and have conducted interviews with Bell staffers. Over the last decade Verizon and the other Bells have cut staff over 50% for the employees-per-line. These staff cuts were done, not to benefit the customer, but to increase the Bell's shareholder's stock options. This has caused harm to staffers as well as serious drops in customer satisfaction and customer service handling. To read about the staff cuts see: http://newnetworks.com/staffcuts.htm
The CWA Report does address how staff cuts have effected their workers and the quality of service the company can provide.
"Deregulation insured that the Company could boost profits from downsizing, reengineering and reorganizing. With this incentive it eliminated thousands of experienced managers and lowered the benefits for those remaining. It also increased the productivity pressures on those that remained. Here are some of the consequences:
Our interviews with CWA members also found identical problems. And there is ample proof that the staff cuts were done to give the company more profits. NYNEX's 3rd Quarter 1996 report (the original Bell holding company that controlled New York Telephone and New England Telephone) shows massive savings of $650 million dollars from staff layoffs and restructuring of the company. In fact, when the final restructuring was finished 16,200 NYNEX employees have been laid-off, the company expected (and got) a whopping $1.7 billion dollars savings, annually.
"Since the inception of process re-engineering and the special pension enhancement program in 1994, approximately 11,900 employees have accepted the retirement incentives. On an annualized basis, this will equate to an average reduction in wages and benefits of approximately $650 million.
Other Issues and Impacts:
Economic Harm to the State: The harm to New York's and the country's economic development is in the billions of dollars. First, there is the documented harm to the competitors, including the CLECs and ISPs who have tried to supply services to customers. This documented problem shows that Verizon is not only eliminating competition and thus stifling new services to customers, but it is also cost these companies multiple billions in expenses, lost income and lost opportunity.
To examine the harm to customers and ISP competitors see: http://www.newnetworks.com/paycompensation.htm
Secondly, the delay of advanced networks to customers is almost immeasurable. Small businesses depend heavily on services being delivered, and without competitive choices, their company's growth is at stake. Considering that New York City is the home of Silicon Alley, it is inconceivable that Verizon's actions should be allowed to stand.
It can also be argued that the entire slowdown in the economy, which includes the harm to CLECs, but also the harm to those companies that supply the industry with technology, including Lucent, Cisco, or 3Com are directly effected by the slow down in the delivery of DSL and other advanced networks. According to this report, while this slowdown is a deliberate attempt by Verizon to harm phone customers via their harm to their own workforce, it is also having far reaching consequences in the entire health and well-being of the US economy.
Hundreds of Millions of Dollars at Stake: Verizon may have been falsifying data to save millions of dollars annually on penalties and fines that would have been assessed by the public service commission under the current alternate regulation plan. According to the report, while the information from Verizon to the Public Service Commission showed improvements in service quality, these improvements may be more bookkeeping than changes in the work.
"Since the first year of the Performance Regulation Plan (PRP) the New York Telephone Company has apparently improved the level of service quality delivered to customers as measured by reports submitted to the New York Public Service Commission. Based on these reports, staff of the Department of Public Service have publicly expressed their general satisfaction with the progress the Company has exhibited in meeting the service quality targets specified in the PRP for New York Telephone and improving service throughout the state.'On an overall basis, after the third year of the Performance Regulation Plan, we are satisfied with the Company's overall service quality performance...Over the past two years, the Company has improved service quality and focused on meeting the targets of the 7-year incentive plan. (State of New York, Department of Public Service, "New York Telephone Company Third Plan Year Service Quality Report" issued November 6, 1998)'
New York Ratepayers are Paying for Declining Customer Services and Lack of Investment. The Bell phone networks are monopolies and they are virtually 100% funded by the customers, not shareholders. Besides the penalties that might be levied by the Public Service Commission, there is a much deeper issue. Today, the Alternate Regulation plan gives the Bells almost unlimited cash from customers. The regulation plan 'caps' the prices for services, but does not look at profits. This deregulation was made in large part because the Bell companies made numerous statements that they were rewiring the state with fiber-optics and that the networks would be open to competitors. Neither of these developments have come to pass, especially from the residential subscriber, and this has led to massive corporate profits. For example, Verizon's year-end 2000 results shows a return-on-equity of 31.3%, (a standard business measurement) which is about 200% above what a monopoly is supposed to be making. (Source: Business Week Corporate Scoreboard, February 2001). If the money is not being spent on staff or on investment in the network, then why is Verizon being allowed to make such outrageous profits?
Not Just a New York Problem: It should also be pointed out that this is not a New York -o-centric problem but is occurring throughout the old bell system. NNI has be contacted numerous times by other CWA workers and have heard hauntingly similar claims from both the workers, as well as the CLECs and ISPs and customers that are effected. Therefore, New York should take the lead and call this to the attention to the other AG's offices and Public Service Commissions.
The CWA Members Need Support. And finally, we consider the Communications Workers of America courageous to present the truth about their horrendous working conditions. These workers are being asked to do illegal acts, and realize the harm that Verizon's illegal decisions have been causing. We stand behind the worker's requests to remedy these problems immediately.
Therefore, we consider immediate, and public actions are warranted.
March 15th, 2001