With New York City officials accusing Verizon of not finishing required fiber construction, the telco is claiming that it doesn't actually have to install fiber throughout the city.

A 2008 agreement with the city that gave Verizon a cable television franchise required the company to "pass all households" with fiber by June 30, 2014. Verizon claims it has passed all buildings, but can't get into all of them due to disagreements with landlords. However, Verizon says its fiber doesn't actually have to pass in front of buildings in order for them to be "passed."

As New York considers whether to take legal action against Verizon, the City Council grilled company officials yesterday. Video of the meeting shows council members and Verizon arguing about the definition of "pass" around the two-hour mark. Gothamist published a roundup of the meeting today:

Verizon reps Leecia Eve and Kevin Service stated at the hearing that Verizon has unquestionably met its promise to "pass" all households in the five-borough area, which essentially means extending the fiber so that a building could theoretically then be connected to the network. As one council member pointed out, that's like installing water pipes but not hooking them up to individual apartments: the water's flowing on by, but no one can actually drink it. "We consider it to be passed if we're within the realm of substantial fiber placement," Service said when pressed on how the term is actually defined. "I'm not a lawyer, but here's what I would say: we're passed if, when we get the request for service and have the necessary rights of way, what we have left to do does not create a delay in bringing service to that customer. Under that Kevin Service Definition, we've passed every household."

While Service appears to have come up with that definition himself, it matches what Verizon said in response to an audit report issued by the city in June.

"The term 'pass' is not defined in the Agreement," Verizon told the city at the time. "General dictionary definitions of the term refer to going by, past, beyond, or through a place (such as a building), and include no requirement as to how close a place must be approached in order to constitute a 'passage.' Thus, there is nothing inherent in the word itself that would require Verizon to run cable directly in front of every building in the City in order to 'pass' those buildings."

City Council Member Helen Rosenthal was disappointed in Verizon's response at yesterday's meeting:

The Fiber to the Home Council, an industry group, says a home is passed only if service can be activated "without further installation of substantial cable plant such as feeder and distribution cables (fiber) to reach the area in which a potential new subscriber is located."

Getting service from Verizon is no simple matter in New York, with city officials saying that Verizon takes credit for "passing" households even when it declines to accept orders for service installations. According to the city's audit report, "Verizon still does not accept orders from all City residents. In fact, it still informs residents that service is 'unavailable' at an address if their network has not been created on the block." Verizon has "systematically failed" to meet 6-month and 12-month deadlines to fill installation orders to residential buildings, the audit said. The report also accused Verizon of violating its agreement by demanding bulk or exclusive deals from landlords before installing fiber.

Besides disputing the Fiber to the Home Council definition of "pass," Verizon said that the definition would be irrelevant even if it is accurate. "Even assuming the cable industry uses the term in that way, [New York City] fails to explain why that usage should govern the unique undertaking that is described in the Agreement," Verizon wrote.

After the June audit report came out, city officials ordered Verizon to complete the fiber build. While the 2008 agreement lets NYC "seek and/or pursue money damages" from Verizon if it fails to deliver on its promises, city officials are trying to reason with Verizon before taking legal action.

UPDATE: After this story published, Verizon pointed Ars to letters from the city Department of Information Technology and Telecommunications that say "Verizon has met its obligations," though the letters only cover the period through 2011.