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Comment by exabrial | Hacker News Reader

Are there are build-out guarantees on the contract? I'd love to see the companies be sued once they fail to deliver.

This is playing out right now in New York City with Verizon FIOS:

https://www.nytimes.com/2017/03/13/nyregion/ny-sues-verizon-...

The difference was that New York never paid Verizon anything (indeed, Verizon paid New York millions of dollars for the right to enter the market at all).

New York City granted Verizon a franchise agreement as this would provide a needed source of revenue to the city. See page 26. So not only did the city lose out on revenue but this also represents an opportunity cost for the city as they could have granted a fiber franchise(an obtained full revenue) from someone else.

10. FRANCHISE FEES

10.1. Payment to City: Franchisee shall pay to the City a Franchise Fee of five percent (5%) of annual Gross Revenue (the “Franchise Fee”).

https://consumermediallc.files.wordpress.com/2016/09/verizon...

There is no out-of-pocket cost, because the city is not paying anything. Verizon is putting up all the capital. There is also no opportunity cost, because the franchise is non-exclusive:

4.3. Grant Not Exclusive: The Franchise and the rights granted herein to use and occupy the Public Rights-of-Way to provide Cable Services shall not be exclusive, and the City reserves the right to grant other franchises for similar uses or for other uses of the Public Rights of-Way, or any portions thereof, to any Person, or to make any such use itself, at any time during the term of this Franchise. Any such rights which are granted shall not adversely impact the authority as granted under law or this Franchise to provide Cable Service.

>"There is also no opportunity cost, because the franchise is non-exclusive:"

There is most certainly an opportunity cost, NYC is some of the most expensive real estate in the world and the space in the public right-aways, cable vaults and trenches is limited and quite expensive. And there are plenty of fiber providers competing for that limited space:

http://www.telecomramblings.com/metro-fiber-maps/new-york-me...

Is there any evidence that anyone else was clamoring to offer residential fiber service in NYC that Verizon happened to beat out?

That's not the point. There was no "bid." Maybe you don't understand what an opportunity cost is? No other fiber provider in the future is going to go into city sanctioned "Verizon fiber territory" and try to offer FTTH service now or in the future.

Also this is a classic telecom tactic, carriers put in skeletal infrastructure and let it sit fallow. If NYC comes along next year and decides to do Metro Area Broadband, Verizon's army of lawyers will come along and cry "Foul" saying the city has an unfair advantage and get an injunction against the city's plans. They will tie this up in court for as long as possible. Again an opportunity cost.

And yes there was also a financial cost to the federal taxpayer as well as New York residents with this FIOS debacle.

First the local cost to New York residents:

>"Verizon raised traditional wired telephone rates in New York some 84 percent between 2006 and 2009, blessed by regulators in return for its "massive investment in fiber optics."[1][2]

[1] http://www.theverge.com/2014/5/14/5716802/game-of-phones-how...

[2] https://www3.dps.ny.gov/pscweb/WebFileRoom.nsf/Web/B849A0203...

And the cost to the Federal tax payer is that these carriers receive FCC broadband subsidies for upgrades and investments to their network regardless of how incomplete the project is. [3]

[3] http://www.pcworld.com/article/2147360/fcc-adds-9-billion-to...

Often doesn't happen. They'll just promise to deliver, not do it, and then wheedle their way around the penalties. Already this is playing out in New York: https://arstechnica.com/tech-policy/2016/09/nyc-threatens-to...

It happened with Verizon in NYC. AFAIK the suit is ongoing.

The lawsuit was formally filed four weeks ago. I've anecdotally heard that Verizon is scrambling to restart fiber deployment in order to save face.

Makes sense, there are tons of trucks laying fiber outside of my apartment and elsewhere. The larger question: will it get into my building?

Unfortunately for you, it will be too short to reach.

That's....sadistic.

Why is it sadistic to expect a corporation to fulfill their promises?

It's not.

The parent is expecting them not to, so he can enjoy the lawsuit that follows.

>"I'd love to see the companies be sued once they fail to deliver."

You've misinterpreted. It's quite reasonable based on history to expect them not to deliver. It's also quite reasonable to feel good about justice when it is so short in delivery to bad actors these days. Also, sadism by definition applies to living beings, not corporations.

"corporation" literally means "body" or "person"

> The parent is expecting them not to...

A fair expectation, given telcom promise history.

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