Lawsuit: Verizon Falsified FiOS TV Sub Base
New York Marketing Firm Alleges Telco Inflated Customer Count, Ad Rates
By Todd Spangler -- Multichannel News, 10/4/2007 4:11:00 AM
A small New York marketing firm has sued Verizon Communications, alleging that the telephone company fraudulently reported FiOS TV subscribers that were not yet connected as part of the total number of viewers quoted for advertising rates.
Digital Art Services, a marketing-services company based in Great River, N.Y., filed the lawsuit Wednesday in federal court in Manhattan.
“Those reported numbers were false and inflated, since they included prospective subscribers who might not become actual subscribers until weeks or months later” – as much as 10 months after first signing up, the Digital Art Services’ complaint said.
Digital Art Services did not respond to requests for comment.
According to the lawsuit, filed in the U.S. District Court for the Southern District, Verizon said it had 115,955 customers in the New York area at the end of June. However, the lawsuit alleges, more than 38,000 of those customers were “pending,” meaning they were not yet receiving FiOS TV service.
In a statement, Verizon called the lawsuit “a garden variety business dispute with a company that wants to get out of a contract with Verizon.”
“We are honest and straightforward with potential advertisers about the FiOS TV audience and the advantages of advertising on FiOS TV,” Verizon director of media relations Sharon Cohen-Hagar said, in an e-mailed statement.
Digital Art Services had purchased $916,000 in advertising for the FiOS TV service, according to the suit. The firm, which has about a dozen contract employees, was using subscriber data Verizon provided through advertising rep firm Viamedia, which Digital Art Services also named in the suit.
Verizon does not publicly report subscriber numbers for individual markets. The company most recently said it had 515,000 FiOS TV subscribers in 12 states as of June 30.
Digital Art Services provides advertising services for companies in the New York City area, including TV production and Web design, according to its Web site.
The company says it works “closely” with Cablevision Systems’ News 12 regional news channels to place advertising on special-interest topics.
