PAULA M. CARMODY STATE OF MARYLAND ASSISTANT PEOPLE’S COUNSEL PEOPLE’S COUNSEL WILLIAM F. FIELDS THERESA V. CZARSKI GARY L. ALEXANDER DEPUTY PEOPLE’S COUNSEL RONALD HERZFELD JOSEPH G. CLEAVER MOLLY G. KNOLL JACOB M. OUSLANDER JOYCE R. LOMBARDI OFFICE OF PEOPLE’S COUNSEL MIKHAIL RAYKHER 6 Saint Paul Street, Suite 2102 Baltimore, Maryland 21202 (410) 767-8150 (800) 207-4055 FAX (410) 333-3616 WWW.OPC.STATE.MD.US January 13, 2017 David J. Collins, Executive Secretary Maryland Public Service Commission 6 St. Paul Street, 16th Floor Baltimore, Maryland 21202 Dear Mr. Collins: Enclosed for filing, please find an original and seventeen (17) copies of the Petition Of The Maryland Office Of People’s Counsel For An Investigation Into Verizon Maryland’s Provision Of Basic Local Phone Service Over Copper Or Fiber Neworks. Should you have any questions or concerns, please feel free to contact me. Sincerely, /electronic signature/ Joyce R. Lombardi Assistant People’s Counsel JRL/bl Enclosure cc: Suzan D. Paiva, Assistant General Counsel - Verizon Leslie M. Romine, Staff Counsel – Maryland Public Service Commission Annette Garofalo, Staff Attorney – Maryland Public Service Commission Vincent Trivelli, Counsel – Communications Workers of America BEFORE THE PUBLIC SERVICE COMMISSION OF MARYLAND PETITION OF THE MARYLAND OFFICE OF PEOPLE’S COUNSEL FOR AN INVESTIGATION INTO VERIZON MARYLAND’S PROVISION OF BASIC LOCAL PHONE SERVICE OVER COPPER OR FIBER NETWORKS Dated: January 13, 2017 Contents I. SUMMARY ............................................................................................................................ 3 II. BACKGROUND .................................................................................................................... 8 III. 1,200 CONSUMER COMPLAINTS SHOW A PATTERN OF NEGLECT AND WARRANT FURTHER INVESTIGATION ............................................................................... 12 A. Poor Service Quality ...................................................................................................... 13 1. Evidence of neglect or de facto retirement ................................................................. 14 2. Service Quality in Rural and Other Non-fiber parts of Maryland. ............................. 17 B. Forced Migration To Fiber ............................................................................................. 21 C. Forced migration to/upselling of unregulated Digital Voice or to wireless VoiceLink . 23 IV. CONCLUSION....................................................................................................................... 26 1 PETITION OF THE MARYLAND OFFICE OF PEOPLE’S COUNSEL FOR AN INVESTIGATION INTO VERIZON MARYLAND’S PROVISION OF BASIC LOCAL PHONE SERVICE OVER COPPER OR FIBER NETWORKS The Maryland Office of People’s Counsel (“OPC”), by its undersigned attorneys, hereby requests, pursuant to Maryland Code Ann., Public Utilities Article (“PUA”) §2-204(a), that the Maryland Public Service Commission (“PSC” or the “Commission”) open an investigation into the practices of Verizon Maryland, LLC (“Verizon” or “the Company”) related to its provision of basic local exchange service over its copper network. Attached to this Petition and incorporated by reference is the Affidavit of Susan M. Baldwin (“Baldwin Affidavit”) and her Appendices A through E. (Exh. 1). OPC’s concerns include but are not limited to: 1) Verizon’s copper voice service quality in fiber and non-fiber areas of the state; 2) how it is transitioning customers to its regulated fiber network in some parts of the state, and 3) its aggressive upselling of and/or unauthorized migration to its unregulated voice services throughout the state. OPC previously filed a Petition with the Commission to review (and suspend) Verizon’s notices of copper retirement (“OPC Copper Notice Petition”).1 Although the Commission subsequently ordered that Verizon, Staff and OPC convene in response to that petition “for the purpose of discussing and developing changes to the Company’s Maryland-specific notices, including any general information sent regarding copper retirement, service over fiber, and battery backup,” 2 the current Petition exceeds the scope of that order. Given the long history and nature of the complaints detailed in this Petition and attached exhibits, OPC believes that a 1 Petition for an Investigation into the Copper Retirement Notices Sent by Verizon, Maryland LLC to Maryland Retail, Customers and Request for Immediate Suspension of those Notices Pending an Investigation (Mail Log No. 202479) October 28, 2016. 2 Commission Letter Order dated December 14, 2016 (Mail Log No. 206676). 2 docketed Commission investigation, with full discovery, is necessary and appropriate to ensure that satisfactory basic telephone service is provided to Verizon’s residential telephone customers, and that they are protected from unreliable service, wrongful migration to unregulated services, and -- for those customers with specific needs not met by the fiber network -- unnecessary or premature migration to regulated fiber service I. SUMMARY Verizon Maryland is Maryland’s predominant regulated telephone company, its incumbent local exchange carrier (ILEC). Verizon provides several voice services in Maryland: 1) regulated telephone voice service over traditional copper landlines, often called “plain old telephone service” or POTS; 2) regulated fiber voice over its fiber network; 3) FiOS® digital voice, which is a specific type of voice over Internet protocol (VoIP), and is also provided over Verizon’s fiber network but is unregulated; and 4) wireless (cell phone) voice, or Voice Link, which is provided over a wireless network but is not expressly regulated.3 Regulated Network Copper voice yes copper Fiber voice yes fiber FiOS® Digital Voice no fiber Voice Link no4 wireless 3 FiOS® is the trade name given to Verizon’s fiber-optic communications network to the premises, which can provide voice, video and data services on a stand-alone basis or as a bundled service (the so-called “Triple Play”). Verizon’s TV and Internet services can be bundled with regulated fiber voice, regulated copper voice or unregulated FiOS digital voice. 4 While wireless voice is not regulated, see PUA §1-101(ll)(2), the Commission has not yet determined if Verizon may replace a regulated service with a wireless Voice Link product. See Baldwin Affidavit at p. 17. 3 Verizon’s regulated voice services are subject to an alternative form of regulation (AFOR) authorized by the General Assembly and approved by the Commission. As a public service company, Verizon must “furnish equipment, services, and facilities that are safe, adequate, just, reasonable, economical, and efficient.”5 Further, while Verizon has been granted flexibility over time in terms of the types of services subject to regulation and the pricing of those services, the “quality, availability, and reliability of telecommunication services throughout the State” must be maintained.6 More specifically, these requirements apply to Verizon’s regulated basic local telephone service, however it is provided.7 That is the quid pro quo of this grant of permissive alternative regulation by the State. Unlike other states that have given up on regulating basic telephone service, Maryland has chosen to maintain regulatory oversight over this essential service.8 The Commission is responsible for ensuring that Verizon’s equipment, services and facilities are provided and maintained properly. The obligations of Verizon, as the regulated company, and the Commission, as the state regulatory agency, are not diminished because of the technology transitions that we are undergoing in the telecommunications arena or by the rulings of the 5 Maryland Code Ann., Public Utilities Article (“PUA”), Section 5-303. As part of its AFOR, Verizon is subject to service quality standards for retail customers set forth in by the Commission in 2010. See Order 83137 issued in: Case No. 9072, In The Matter of the Request of Verizon Maryland Inc. to Reclassify Certain Retail Bundled Services to the Competitive Services Basket As Provided By the Commission’s Price Cap Plan, Case No. 9114, In the Matter of Commission’s Investigation into Verizon Maryland, Inc.’s Service Performance and Service Quality Standards, Case No. 9123 ,In the Matter of Commission’s Inquiry into Verizon Maryland Inc.’s Provision of Local Exchange Telephone Service Over Fiber Optic Facilities; Case No. 9133, In the Matter of Appropriate Forms of Regulating Telephone Companies, et al; In Re Verizon Maryland Inc., 279 P.U.R.4th 504 (February 2, 2010) Mail Log 121510. 6 PUA § 4-301(b)(1). 7 Regulated basic telephone service does not include wireless telephone service, or voice over internet protocol (VOIP) service. See PUA § 8-602. 8 Indeed, the Maryland legislature has declined legislation that would deregulate Maryland’s telephone service, such as House Bill 472 or Senate Bill 577 in 2015. Also, in a report commissioned by the Maryland General Assembly, Commission Staff opined that carriers should not be allowed to withdraw basic local service and 911 services at this time and that Verizon must provide basic local service to all customers who request it. Retail Service Withdrawals within the Telecommunications Industry (December 2015), Mail Log No. 178776. 4 Federal Communications Commission (“FCC”) regarding these transitions, including the retirement of copper facilities.9 Verizon has installed fiber facilities, as a supplement or alternative to copper