New York Attorney General Eric Schneiderman this week accused Verizon of trying to "depart from a century of telephone service regulation" by ending wireline telephone service in a part of Fire Island devastated by Hurricane Sandy in October, 2012.

In addition, Schneiderman has accused Verizon of violating a state order by telling customers outside of Fire Island that they should accept wireless phone service instead of repairs to their landline service. He says Verizon should be fined $100,000 per customer, per day.

Verizon says it has not violated the state order, and that its offer of wireless service outside Fire Island is strictly optional. Verizon is, however, trying to gain state approval to end wireline service entirely in western Fire Island.

Killing the public switched telephone network, one step at a time

It's no secret that telcos want to abandon the traditional public switched telephone network (PSTN) and switch to all-IP networks. AT&T has asked the Federal Communications Commission to lead this transition and also get rid of the "conventional public-utility style regulation" associated with landline phone service.

Such a transition will take years on a national level, but it's happening on a small scale in Fire Island, where Verizon says the infrastructure costs of repairing damaged phone lines are too great. On May 3 of this year, Verizon asked the New York Public Service Commission to allow the discontinuation of wireline phone service in western Fire Island and let Verizon replace it with a similarly priced wireless phone service called Voice Link.

Verizon's proposal would also pave the way for all-wireless deployments in other parts of New York. Verizon proposes amending state regulations to allow wireless-only service when facilities are destroyed or when it is simply deemed reasonable because of geographic location or availability of competing services.

Before Hurricane Sandy, Verizon provided voice service to about 1,100 customers on eastern Fire Island and to 2,700 customers on western Fire Island. In the western part, Verizon says its copper infrastructure suffered extensive damage, making repair costly and difficult. That's why Verizon would rather provide Voice Link, which uses the same cellular technology as conventional mobile phones and places a small transmitter and receiver in customers' houses. The unit's battery life has raised concerns that residents would only have a few hours of voice time during power outages.

"For the present, Verizon believes it can continue to provide service in the eastern portion of Fire Island through the use of existing land line facilities," Verizon said in its proposal. "However, in the western portion of the Island, where a large percentage of Verizon's copper facilities were damaged beyond repair, Verizon is offering a wireless service known as 'Verizon Voice Link' as its principal service option. Where existing copper pairs are still functional, Verizon will continue to use them to provide service to the extent possible. However, Voice Link service will be provided where outside plant facilities were destroyed by Hurricane Sandy, and as surviving copper facilities go out of service. All orders for new service will be fulfilled using Voice Link."

On May 16, the Public Service Commission permitted Verizon to deploy Voice Link services "pending further review," in the interest of getting phone service to customers quickly. But the commission did not authorize Verizon to exit the wireline phone market in western Fire Island. Verizon's "general market exit" proposal was suspended "pending further review."

This decision, and all other filings, are available on the New York Public Service Commission website.

Schneiderman wants the commission to require Verizon to keep offering wireline phone service in all areas, or force Verizon to exit the market entirely and be replaced by another carrier. On Tuesday, Schneiderman wrote:

For over a century, the Commission has maintained a consistent policy promoting universal access to wireline telephone service. Approving Verizon's Voice Link tariff proposal would abandon this long-established commitment. Replacing wireline networks with a wireless Voice Link service would deprive customers of the ability to continue using wireline-dependent services such as fax machines, alarm systems, medical alert devices, and Digital Subscriber Line Internet access that serve essential security and commercial needs, as well as enable participation in 21st century digital communications on the Internet. Unlike wireline service, which continues to function even when customers lose electric power, Voice Link's backup battery only allows a brief period of use during blackouts, when customers' need to communicate is often greatest. The Commission should not jettison wireline service merely because Verizon business strategy prefers a wireless business plan. Many incumbent local exchange providers continue to provide wireline telephone service to customers, both in New York and across the nation. The Commission should instead require that Verizon divest those portions of its New York franchise where it is no longer willing to continue providing wireline service and replace Verizon with another carrier that will provide wireline service.

Verizon disagrees, of course. In a statement sent to Ars, Verizon said it "uses the best technologies to meet our customers’ needs, and Voice Link is an innovative use of a proven product that is already delivering reliable voice service to satisfied customers on Fire Island and in other areas. It’s an excellent solution for customers with lingering difficulties with their copper-based telephone service, utilizing a resilient technology that tens of millions of people use each day."

As for Schneiderman's claims regarding power outages, Verizon said that "unfortunately, a falling tree or branch does not discriminate and can just as easily knock down a power line as it can a phone line."

Hundreds of Fire Island residents have written to the commission, most opposing Verizon's plan to go all wireless. "The Voice Link system, which has only been up and operational for less than a month, is a substandard service to that which was available prior to the storm," one resident wrote.

The issue will play out over several months. The commission recently extended the deadline for comments to September 13.

AG wants Verizon to pay $100,000 penalties

In addition to the question of whether Verizon should be able to exit the wireline business in western Fire Island, Schneiderman says Verizon should face multiple $100,000 fines for allegedly violating the commission's limited approval of Voice Link deployments.

On June 26, Schneiderman filed an "emergency petition … preventing Verizon from illegally installing Voice Link service in violation of its tariff," saying that Verizon violated the commission order by expanding Voice Link service outside of western Fire Island, in the Catskills village of Monticello. The AG wrote:

The Attorney General's Office has recently learned that Verizon intends to require customers outside of the Fire Island pilot area seeking to have their wireline service installed accept instead wireless Voice Link service, notwithstanding the Commission's May 16 Order. According to reports by representatives of the Communications Workers of America, Verizon has delivered a pallet load of Voice Link devices to its Monticello Installation/Maintenance Center, and has instructed its technicians in that region to provide summer seasonal customers returning to Catskill vacation homes, who have long received Verizon wireline service, only Voice Link service. The union's report is corroborated by two complaints of Verizon seasonal customers who have been told Voice Link will be installed instead of repairing their wireline telephone service. Only by firmly refusing Voice Link were both customers able to keep their wireline service.

For this alleged violation, Schneiderman said Verizon is "subject to a $100,000 civil penalty for each and every offense," and that the Public Service Commission should impose the $100,000 fine for each customer and for each day of continuing violation.

Verizon disputed this accusation, saying the Commission order doesn't prevent Verizon from offering Voice Link as an optional service outside Fire Island. Even the customers referred to in Schneiderman's complaint were not denied wireline service, Verizon noted.

Schneiderman repeated his allegations on Tuesday, saying Verizon is repeatedly pressing customers to accept Voice Link instead of a repair of their wireline service. "Even when a customer makes a choice not to accept Voice Link, Verizon continues to press for the substitution at every point of contact," Schneiderman wrote. "Verizon provides false information, such as asserting that storm damage from Sandy rendered the land line network in the Catskills beyond repair."

Verizon has not yet formally responded to this latest allegation, but a Verizon spokesperson told Ars via e-mail that "[a]ny claims of abandonment of service are flat out wrong. ... Contrary to claims in a recent (July 2) petition filed by the New York Attorney General’s Office with the Public Service Commission, Verizon is abiding by a PSC order regarding the company’s use of Voice Link. Fire Island presents a unique situation because Hurricane Sandy washed away our equipment on the Western shore. Outside of the areas impacted by Sandy, we are offering our customers the option of the reliable service that Voice Link offers. But don’t take my word for it, look at the Attorney General office’s original filing which cites an example of a customer who decided to keep the copper service and Verizon did exactly as the customer requested. Again, this is in the AG office’s own filing."

As for gaining permanent approval to deploy Voice Link as the sole option in western Fire Island, Verizon said "we will continue to provide [the commission] with the information they need to judge the long-term effectiveness of Voice Link."