New York City officials today ordered Verizon to complete fiber builds that the company was supposed to finish a year ago. If Verizon doesn't comply, the city can seek financial damages.

"In a 2008 agreement with New York City, Verizon committed to extend its FiOS network to every household across the five boroughs by June 30, 2014," said the announcement of an audit released today by the city's Department of Information Technology and Telecommunications (DoITT).

Verizon's FiOS fiber network delivers Internet, TV, and phone service to areas traditionally served by Verizon's copper landlines and DSL Internet.

“Through a thorough and comprehensive audit, we have determined that Verizon substantially failed to meet its commitment to the people of New York City,” Mayor Bill de Blasio said. “As I’ve said time and again, Verizon must deliver on its obligation to the City of New York and we will hold them accountable.”

The agreement, which gave Verizon a cable television franchise, says NYC may "seek and/or pursue money damages" from Verizon if it fails to deliver on its promises.

Verizon also failed to meet broadband promises in Pennsylvania and New Jersey, but those states let the company off the hook.

Verizon is disputing New York City's findings. Verizon met the requirement to pass all households with fiber, though not all residents can actually buy fiber service, the company says. Verizon last year blamed landlords for delays. It also blamed Hurricane Sandy from October 2012, even though Verizon was still claiming to be "ahead of schedule" in April 2013.

"We indeed have met the requirement to install fiber optics through all five boroughs," a Verizon spokesperson told Ars. "Our $3.5 billion investment and the 15,000 miles of fiber we have built have given New Yorkers added choices and a robust set of advanced, reliable, and resilient services. The challenge we have is gaining access to properties which of course would expand availability. We look forward to working with the City to seek solutions to this issue."

Verizon further said that "it is important to note that it’s not a mere coincidence that the report is made public today, and labor negotiations with our largest union begin on Monday. It’s well known the union has ties to the city administration, and things like this are a familiar union tactic we have seen before." The Communications Workers of America union has blamed Verizon's fiber shortcomings on job cuts.

Verizon has also called complaints about its landline maintenance "meaningless rhetoric and hyperbole from the unions."

The city's audit report said refusal of access by landlords cannot explain the full extent of Verizon's failure to bring fiber to all residents. Property managers interviewed by the city said Verizon has refused to extend service to buildings unless the company was granted exclusive agreements that would shut out other providers.

The city audit report said "Verizon must build facilities on every residential block in the City to comply with its households passed obligations."

"Because Verizon claims to have passed 100 percent of residential premises in the City, Verizon must no longer indicate that cable television service is 'unavailable' at any premises," the report also said. "Instead, Verizon must inform all prospective subscribers that they can place NSIs." The acronym refers to requests for "non-standard installation."

"Verizon must ensure that sufficient staff and resources are deployed in order to complete NSIs not related to refusal of access by landlords of multiple dwellings within the six-month and 12-month deadlines," the audit said.

The city summarized its findings as follows:

Verizon has not run fiber throughout enough of the City’s residential neighborhoods to deliver on its commitments. DoITT field inspections confirm that blocks claimed by Verizon as completed in fact have not installed the necessary equipment to deliver service. Verizon’s own records indicate that service is “unavailable” at certain residential addresses, despite company claims that it can deliver service to all New Yorkers who want FiOS. In fact, there is evidence of callers being told by Verizon that the company has no plans to bring FiOS to their address. And for prospective customers, details about current and future FiOS availability are unavailable from either Verizon’s customer service representatives or the company’s website. Verizon has failed to consistently document service requests. Verizon staff admitted to DoITT that they did not record or track inquiries from prospective customers who requested service before fall 2014. This is in direct violation of the franchise agreement, which requires Verizon to track requests for cable service. Where Verizon has accepted requests for service, it has consistently failed to respond to service requests within the required six- and 12-month timeframes. DoITT’s audit reveals that 75 percent of the more than 40,000 non-standard requests—i.e. requests from buildings that had not previously been wired for FiOS service—that were labeled outstanding as of December 31, 2014, had been outstanding for over a year. Despite clear requirements in the franchise agreement, Verizon has only tracked complaints from actual subscribers and has not tracked complaints and inquiries from prospective customers. The franchise agreement requires Verizon to keep records of all complaints—with no distinction between current and prospective customers—for six years. However, Verizon’s own complaint procedures, glossary, and interviews reveal that the company only records and tracks complaints of actual paying subscribers, rather than potential subscribers who request service in their neighborhoods. Verizon failed to cooperate with the City’s audit of FiOS rollout, in violation of its franchise agreement. Verizon initially failed to provide access to the systems used in calculating the status of network build, with access granted five months after the initial request. Throughout the course of the audit, and in violation of its franchise agreement, the company significantly delayed or failed to provide access to various other records, reports, and contracts requested by the City to conduct a full assessment of FiOS implementation.

In a response published as an addendum to the audit, Verizon said it did cooperate with the investigation. "DoITT undertook a freewheeling approach to its investigation—one that demanded direct, unmediated access to databases and systems that hold confidential customer information relating to Non-Cable Services, as well as numerous categories of collateral information that were unrelated to the obligations imposed by the Agreement and therefore outside the scope of verifying Verizon’s compliance with its contractual obligations," Verizon wrote.

The city acknowledged Verizon's response to the audit but said the reply did not materially change its findings.