Todd Spangler

FiOS Phantoms?
October 4, 2007

There's some interesting data about Verizon's FiOS TV growth stuck into Exhibit 3 of the lawsuit filed yesterday against Verizon Communications by small marketing-service firm Digital Art Services.

But how much of it is believable?

The lawsuit itself calls into question the veracity of those numbers: Digtal Art Services alleges that the telco reported bogus numbers for FiOS TV subscribers by including "pending" customers who haven't yet actually been hooked up with service. 

In the New York/New Jersey market, the number of "pending" subscribers was substantial, according to Digital Art Service's complaint -- about 33% of the total. Citing a document puportedly obtained through Verizon's ad sales partner, Viamedia, the suit says 38,059 of the 115,955 customers in the New York City metropolitan area as of the end of June were "pending," not "active," customers. 

FiOS TV customers can take up to 10 months to get service, according to the Digital Art Services suit. Ten months? ("Hi, we'll be there to set up your fiber connection sometime between Oct. 15, and Aug. 15 of next year. Just sit tight!")

Verizon would not confirm whether the documents in the complaint reflect authentic company data, but it called the lawsuit "a garden variety business dispute with a company that wants to get out of a contract."

The suit, garden variety or not, includes a breakdown supposedly showing FiOS TV growth in nine key markets:

How many of these are phantom, sort-of-but-not-yet customers, and how many are real?

Clearly, there's something fishy going on here, because Verizon publicly reported having 515,000 FiOS TV subs as of June 30. The total from the table above for June 11 comes to 541,138. 

It appears Verizon has gotten ahead of itself, if these documents are genuine. Here's another question: How many "pending" customers churned away before the FiOS truck could show up?

[Update: Verizon director of media relations Sharon Cohen-Hagar sent me a statement that said, in part: "The TV subscriber numbers that we provide to Wall Street reflect actual, billable subscriber accounts, and do not include pending orders, as Digital Art alleges." She also said the lawsuit "represents nothing more than a misguided effort to use litigation tactics to obtain leverage" in a commercial dispute between Digital Art Services and Viamedia, Verizon's local ad-sales contractor. ]
 

Posted by Todd Spangler on October 4, 2007 | Comments (1)