Reality Check: Verizon Wireless creates broadband storm on Fire Island


Editor’s Note: Welcome to our weekly Reality Check column where we let C-level executives and advisory firms from across the mobile industry to provide their unique insights into the marketplace.

It would be unlike me to criticize a carrier for increasing revenues and margins, and Verizon Communications has demonstrated great strategies for selling off or otherwise eliminating expensive-to-maintain landlines. Also, I enjoy research and being part of improving circumstances. However, it has been torturous as a resident trying to get work done along with thousands of other residents in a Verizon wireless experiment on a 32-mile long, one-half-mile wide space 50 miles from New York City with one cell tower. I used to long for FIOs. Now, I long for just my old, slow DSL and reliable POTS line.

The place is called Fire Island. Storm Sandy flooded parts of the 20-some-odd communities last October. Since then, insurance companies and FEMA have been efficient, workmen have repaired houses, sidewalks, boardwalks, piers and pilings, replaced hundreds of appliances and full floors of furniture, raised buildings and a church with new support systems, and probably more items than I could reasonably list. Meanwhile, Verizon charged residents their monthly fees and waited to test residential landline service in the spring. To nobody’s surprise, it didn’t work. In fact, the unsubstantiated rumor on the island is that at least one Verizon workman was digging up lines and cutting them on orders from his manager. It seems, the story goes, that it would be easier for them to manage the outage if none of the lines worked.

The substitutes for previous island systems are wireless wall phones with no DSL, voicemail, fax ability or other basic features.  And it turns out that the islanders aren’t the only ones struggling with communications. One neighbor was offered a voice plan at half the base price, which other customer service reps had never heard of. Islanders pay about $30 for limited voice and $150 for a modem, plus $50 per month for five gigabytes of data with a two-year contract, versus $44 for last year’s full voice and unlimited DSL data plans. Others are paying much more for data with a variety of marginally successful or very expensive plans with unattractive dishes as the best alternatives. Those with line-of-site to a tower with Verizon equipment can get something.  For others, service is spotty and slow.

Sharing the wireless service with an island full of thousands of concurrent users, including all the phone traffic formerly on the wireline network, mobile traffic, smartphone data usage, and iPads and laptops that previously connected to DSL, means dropped calls, painfully slow Internet and even LTE services inadequate under the pressure.

Concerns are more than convenience. As you might imagine, the firemen, medical response folks and other safety sites are up in arms, fearing the unreliable wireless services currently available will result in someone’s death. (The island has many injuries and emergency needs across communities with the only site for helicopter landings located in the only fully un-wired community.)

Meanwhile, a fat fiber passes under that “wireless-only” community to serve the people further east. The fiber apparently was not damaged by Storm Sandy. How difficult would a tap or two on that fiber have been over the many months when the community members were still paying for nonexistent services?

It is strange to experience third-world conditions only 50 miles from NYC. Universal Service requirements only cover voice, but the wireless infrastructure in place is also generating big bucks per building for data and suffering quality issues due to heavy usage. If Verizon wanted a successful “wireless only” experiment to show the Public Service Commission that they didn’t need wires, a few extra temporary towers or small cells may have helped the transition. Now, in a great twist of irony, the same communities that stopped the powerful master builder Robert Moses in the 1960s will be pressing the New York Public Service Commission to pull services back into the 21st century.

Atlantic-ACM CEO Dr. Judy Reed Smith is a Harvard-educated strategist who tackled her first telecommunications industry project in 1987 and worked for such consultancies as Gray Judson Howard (offshoot of Arthur D. Little) and Mercer Management Consulting. In 1991, she founded strategy research consultancy Atlantic-ACM, which planted its flag in the competitive telecommunications space by establishing many of the then-young industry’s first sizing and share forecasts. She has been named to a number of “thought leadership” and “most influential” listings in the telecom and technology sectors, and has been published in media ranging from industry trades to The Wall Street Journal. A recognized thought leader in competitive performance and positioning, she has delivered presentations and moderated hundreds of strategic management panels and forums throughout the United States and abroad.

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Jarad Matula