New York City Sues Verizon in Contract Dispute

Long Island business contract lawyerNew York City’s continued wait for access to Verizon’s FiOS service has resulted in a lawsuit. Verizon promised the city in a 2008 contract to provide access to its fiber-optic FiOS service to all New York City residents by the year 2014. Three years later, Verizon has not come close to meeting the goal. The original contract was agreed upon by the parties in order to provide New York City residents more options for receiving affordable cable television service.

The complaint alleges that the agreement called for Verizon “to install fiber optic cable – in underground conduit, along above-ground utility poles, or otherwise – in front of (or behind) each residential building” by 2014. Also, included in the contract was an agreement for the television provider to timely complete installations as requested by potential subscribers.

Mayor Bill de Blasio commented on the pending lawsuit by saying, “Verizon must face the consequences for breaking the trust of 8.5 million New Yorkers.” He added, “No corporation – no matter how large or powerful – can break a promise to New Yorkers and get away with it.” Verizon responded in a letter to the commissioner of the New York City Department of Information Technology and Telecommunications by claiming it had understood the agreement was only to lay its fiber-optic network along the same route as they previously used for their copper line. They further added that the city’s interpretation was impractical by noting that the contract as the city reads it would require them to dig up City streets and sidewalks, causing unnecessary disruptions to vehicle and pedestrian traffic.

Currently, Verizon has only provided access to its FiOS service to 2.2 million of New York City’s households. This number leaves the company approximately 1 million short of the current households in New York City. In a letter Verizon issued last week, the telecommunications provider stated they are “committed” to expanding FiOS availability to the additional 1 million households. Verizon places the blame on New York City landlords who have not granted Verizon access to run cables across their properties. However, Verizon says it met its obligation by running fiber-optic cable past every home in the city. It argues that the agreement did not call for it to connect every house and apartment building to the cable.

In their attempt to meet the agreement, Verizon has spent more than 3.7 billion dollars to install thousands of miles of fiber-optic cable and other equipment across the city. During that time, the company also employed 4,000 people in the city, and it intends to continue to spend an additional 1 billion dollars over the next four years. It is unclear whether this pending litigation will have any effect on the company’s plan.

Generally, contract disputes end with an award of financial damages, however, there are some situations where the court can order the defendant to honor the agreement instead. Whether you manage a large corporation like Verizon or a small business with only a few employees, it is important to use contracts that clearly define the work to be performed, as well as the obligations of the parties. Seeking advice from an experienced business law attorney in both the drafting and enforcement of a business contract can be the difference in assuring your obligations are met. Blodnick, Fazio & Associates PC supports its clients at every stage of the transaction. From the initial evaluation, through negotiation and drafting, to the final agreement, the firm counsels businesses on the difficult issues surrounding complex corporate transactions. Contact the experienced attorneys at Blodnick, Fazio & Associates, P.C. for a free consultation by calling (516) 280-7105.

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