The facts on Verizon's broadband deployment

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Rich Young

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Verizon is committed to being an active partner in closing the digital divide. We build the networks that move the world forward, and we are committed to making the world a better place. That commitment is also reflected in how we deploy our technology and offer our services. Simply put, we don’t discriminate in how we build our networks or how we set our prices.

A report published online last fall by The Markup asserts otherwise. The report alleges that Verizon and other ISPs are providing their “worst deals”—slower, more expensive service – in lower income, minority neighborhoods while providing faster service in nearby higher income, white neighborhoods. The report characterizes differences in services ISPs offer as discrimination that follows patterns of historical redlining in real estate lending.

The allegations The Markup report makes are serious, and we want to address them head on. Verizon doesn’t discriminate, period. And a close look at the data relied on by The Markup confirms as much. As an initial matter, The Markup’s approach was to seek out instances where less attractive services and prices are available in less-affluent neighborhoods within a city. But at least for Verizon, the report excludes most of our biggest markets because the facts admittedly did not fit their narrative. For example, The Markup initially considered, but then excluded, Verizon addresses in New York City, Boston, and Philadelphia, among other cities, because it found that Verizon’s service offers and pricing “do not contain enough variation to observe meaningful differences.” That’s the whole point. Where we obtained from local governments rights to build-out our Fios network, we did so throughout the entire area, and our pricing does not vary by location. As a result, The Markup report ignored our record in many of our largest markets and only considered a small, unrepresentative sample of about 33,000 Verizon addresses in its analysis—that’s less than 0.2% of the 17 million locations passed by our Fios network. This undercuts the report’s headline finding—that service offers vary by neighborhood or by demographic characteristics.

The lack of discrimination by Verizon in those markets where we offer Fios is no surprise. On pricing, aside from temporary promotional discounts, Verizon offers the same prices for our broadband services everywhere they are offered. Someone seeking Verizon’s Fios fiber internet service anywhere will get the same speed and price offers if Fios is available to them. And they will get the same speed and price offers if our other internet services (e.g., DSL, fixed wireless access) are available to them. Our prices do not vary by region, let alone by neighborhood.

As for service availability, the way we approached our Fios network construction demonstrates our wide-scale deployment. For most of our Fios cities—including the ones mentioned in the study—we built a brand new fiber network on top of the legacy copper and largely tracked the copper network’s boundaries. We worked closely with cities through this process, and we frequently made Fios available in historically lower-income, diverse communities like Anacostia in Washington, D.C. or Roxbury and Dorchester in Boston, before it was available in higher-income, less diverse communities like Georgetown in Washington, D.C. or Beacon Hill in Boston. Similarly, within New York City, we have made Fios available to all the NYC Housing Authority properties, thus making Fios available to some of the most economically vulnerable consumers in the City. The fact that Fios was deployed in this manner across virtually our entire Fios footprint dispels the idea that Fios was only built in higher-income neighborhoods.

So, what do The Markup’s alleged differences in the 0.2 percent of our service locations show? They simply show that in some areas, fiber and DSL technologies coexist. The Markup report’s findings really boil down to identifying this one distinction, with Fios service labeled as “Blazing,” and locations where Fios is not offered, but where Verizon’s DSL service remains available, labeled as “Slow.” Why is DSL offered in Fios cities? Where Fios is available at a location, we no longer offer DSL as an option for new customers. So, when a customer can only get DSL in an area where Fios is generally available, the reason usually is that property owners have not allowed us to connect our Fios networks to their buildings (or to traverse their property to reach other buildings). This refusal by property owners significantly factors into availability of Fios service in apartment buildings, condominiums, and other places where multiple families live. In cities, building owner or manager refusals happen more often than we would like, and frequently enough that they create measurable numbers of addresses where Fios service is not available. Approximately three quarters of the Washington D.C. addresses that The Markup identified as “slow” are in these types of buildings and property owner refusal is likely the reason Fios is not available.

To further debunk the idea that Verizon’s DSL offerings are clustered in certain demographic areas, we analyzed the demographic breakdown of the approximately 4,700 Washington D.C. addresses where Verizon provides DSL service to a subscriber. We found that these DSL addresses cut across demographics - they are in higher and lower income neighborhoods and are in areas with high and low percentages of non-white residents. Only a quarter of them are in lower or moderate income areas. In sum, they almost exactly match the overall demographics of the city.

The Markup also noted that the per-megabit pricing of Fios is significantly lower than for DSL. This is unsurprising as a matter of math and of physics–modern fiber-based networks are orders of magnitude faster than the slower, costlier legacy copper networks on which DSL relies. Given the dramatically different denominator, it is no surprise that the per-megabit price of fiber is significantly lower than for DSL. Moreover, the fact that fiber can be hundreds of times faster doesn’t mean that DSL is hundreds of times less expensive to provide. The antiquated copper networks used to deliver DSL are frequently more expensive to maintain and operate than fiber networks, and those costs are spread over fewer and fewer customers. To illustrate this point, you can compare ticket costs, or overall speeds of travel by air and train. But it wouldn’t make much sense to compare the price-per-mile of the two. And it would make even less sense to say that because planes travel faster, train fares should be less.

We’ll note that while many homes that we couldn’t reach with Fios may have access to older, slower DSL, Verizon is increasingly able to offer faster, cheaper broadband using fixed wireless technology – a service The Markup did not consider but which is widely available and growing in popularity. Today’s fixed wireless broadband services offer speeds that are much faster than DSL and qualifying customers can obtain the service at no cost through the FCC’s Affordable Connectivity Program (ACP). And don’t forget that in most cases, other broadband providers already serve these same buildings, as our Fios deployment brought new competition to cable in almost all cases.

One point on which we agree with The Markup is its demonstration that consumers will continue to benefit from better and more capable services as we all find ways to move from legacy networks to more modern fiber and wireless ones. Verizon has spent nearly two decades pursuing those efforts through its own investments—regularly one of the largest investors in our country’s infrastructure. Over the years, Verizon has invested tens-of-billions of dollars in its networks. If The Markup were to check today, it would find that Verizon has quickly expanded its robust deployment of its next-generation fixed wireless broadband service in the cities it investigated and in others across the country.

Verizon is not alone in creating new options for consumers who remain either unserved or underserved by their available broadband networks. Federal and state policymakers are actively engaged in distributing tens-of-billions of dollars to bring modern broadband to those lacking it today. Verizon is excited about participating in the Infrastructure Act’s programs to bring new high-speed broadband to areas that don’t yet have it.

The new broadband-funding programs will complement work we have been doing for decades to provide broadband to as many people as possible and to close the digital divide. As part of our role as a provider of networks and broadband services, we have a long-standing commitment to help unlock the power of connectivity for those who need it the most. We have invested billions of dollars in these efforts which began long before the Covid-19 pandemic. For example, we are currently celebrating the 10-year anniversary of the Verizon Innovative Learning program, a transformative initiative that has brought connectivity, devices, and digital education to over 500 schools and 1.5 million low income students. We are also on target to provide digital skills training to 10 million youth by 2030 and are offering digital skills training to adults in rural communities. We expect to spend $3 billion between 2020-2025 to help close the digital divide. We are also big supporters of efforts to address broadband affordability, including through our active participation in the ACP. In fact, we introduced our Fios Forward program which offers a 300/300 Mbps service to eligible households for free, after they apply the ACP subsidy. And more recently have introduced free fixed wireless offerings for eligible households as well.

Verizon understands the urgency of the need to close the digital divide and solve the underlying reasons why some people are not connected. These reasons are addressable. We will continue to partner with the FCC as it develops rules this year to prevent digital discrimination, as Congress directed it to do. We also look forward to continuing to work with all stakeholders to succeed in efforts to close the digital divide. But the overly-narrow nature of The Markup’s methodology and the resulting unfounded allegations in The Markup report that Verizon’s pricing and offers for its broadband services differ by neighborhood or by demographics are not helpful to drive solutions. We will continue our efforts to ensure that internet service is available and affordable for everyone as we continue to innovate to bring customers the fast internet that they need and have come to depend on Verizon to deliver.

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