Verizon Under Scrutiny over Subscriber Numbers

05 October 2007

NEW YORK: US telecoms giant Verizon Communications is facing legal action over claims that it inflated subscriber numbers for its FiOS fiber-optic cable service.

Marketing agency Digital Art Services claims in a Manhattan court filing that Verizon included pending customers, in addition to actual subscribers, in its numbers.

The complaint stated: "Verizon's fraud in overstating the number of subscribers indisputably meant that purchasers of advertising time were paying for FiOS subscribers who did not exist."

The telco, the second biggest in the US, is investing $22.9 billion (€16bn; £11bn) in the FiOS network, which offers a TV service and super-fast web connections to compete with cable companies.

Verizon has dismissed the agency's allegations. Spokesman Eric Rabe ripostes: "We certainly reject the idea that we somehow inflate numbers or overstate numbers or are not honest or straightforward with customers."

He adds: "This is a garden-variety business dispute initiated by a customer who wants to be released from a contract they agreed to."

But Digital Arts president Ed Szydlik insists: "My only concern is how many eyeballs are looking at the screen. If you think you're getting 100, and you only get 70, there's an issue there."

Data sourced from Wall Street Journal Online; additional content by WARC staff