Luddites who’ve stayed with Verizon’s old-fashioned phone service unwittingly help pay for everyone else’s Internet and mobile-phone hookups, a consumer advocacy group claims.
The 2 million or so New York state residents who still get dial tones from Verizon landlines were overcharged $1,000 to $1,500 apiece over the last few years, says the New Networks Institute.
The group claims the excess charges were wrongly diverted to building Verizon’s mobile and Fios fiber-optic networks and on corporate expenses. New Networks says the money should have been spent maintaining what utility regulators call POTS — an acronym for “plain old telephone service.”
The overcharges total billions of dollars, says Bruce Kushnick, New Networks’ executive director. The group is plotting legal challenges to Verizon’s pricing and financing.
New Networks’ allegations come as the state Public Service Commission begins a probe of whether Verizon takes proper care of its copper-wire network, which dates to the late 1800s.
Verizon says it will cooperate with the state probe, and denies Kushnick’s claims of overcharges.
“There is absolutely no factual basis for his allegations,” the company said.
Kushnick, a longtime phone company consultant and analyst, says that because of the copper network’s age — its construction was paid for years ago — there’s little doubt Verizon’s landline prices should be lower.
“All the copper networks have been written off,” he says. “Copper-based phone services should be $10 or $20 [per month].”
Verizon’s landline customers pay a basic, state-set charge of $23 — but that’s just for starters. Taxes and fees boost that $23 fee to over $30. Unlimited local and long distance push charges to over $60, the state reported last year. Fees for voicemail, call waiting and home wire maintenance increase bills even more.
Kushnick said some of Verizon’s overcharges are breathtaking. For example, he said, Verizon charges about $7.95 per month for call forwarding and call waiting — which costs the company only 2 or 3 cents.
Verizon’s charges were once closely regulated by the state. Now the only regulation is the $23 basic charge, which was set in 2006. Verizon is free to set its other fees as it wishes.
The number of POTS subscribers in New York state has plunged from around 13 million in 2000 to about 2 million today.