During and after the pandemic, policymakers frequently cited wireless expansion — including 5G — as essential to closing the digital divide. However, many residents have asked a different question: what happened to the fiber infrastructure that ratepayers were already charged to fund?
This page explores allegations that billions of dollars collected for fiber deployment in Maryland were never fully translated into fiber-to-the-premises service. It examines how wired broadband compares to wireless networks in terms of reliability, cybersecurity, environmental impact, regulatory oversight, affordability, and resident choice.
Ensuring universal access to affordable, wired fiber infrastructure may offer a more durable and equitable solution to connectivity gaps — while preserving residents’ ability to choose their level of exposure to wireless technologies.
The IRREGULATORS: An Independent, Expert Telecom Team
The Irregulators is an independent consortium of senior telecommunications experts, analysts, forensic auditors, and attorneys, including former senior staff from the FCC, state public advocate offices, Attorneys General offices, and former telecommunications consultants. Members of the group have worked together in various configurations since 1999.
According to the Irregulators, American telephone customers were charged for a national fiber-optic network that was not completed as intended. The Irregulators allege that instead, telecom companies spent funds on wireless infrastructure expansion.
Learn more at Irregulators.org.
Fiber Deployment & Ratepayer Accountability
Adapted from a 2021 MoCoSafeG.org fact sheet
- Fiber-optic Internet (fiber-to-the-premises, or FTTP) is widely described as fast, reliable, resilient during extreme weather events, and more secure against certain forms of network intrusion than wireless systems.1
- Maryland ratepayers were charged telecommunications fees beginning in the 1990s that resident advocates argue were intended to fund statewide fiber deployment.2 3
- Analysts have estimated that overcharging in Maryland may total billions of dollars, including an estimated $2.6 billion over a recent five-year period, with earlier years not fully accounted for.4
- Resident advocates and telecom analysts allege that funds collected for fiber deployment were redirected toward other corporate purposes, including wireless network expansion.5
- Fiber-to-the-premises deployment was publicly discussed as a target for completion by approximately 2010 in Maryland.6
- Advocates argue that incomplete fiber-to-the-premises deployment has contributed to ongoing digital access disparities in rural and underserved urban communities.6
- Publicly available data indicated that as of 2015, only 44.81% of homes and businesses in certain Maryland counties had FiOS coverage, leaving over half without fiber upgrades.14
- States retain authority through public utility commissions and franchise agreements to review telecom obligations and, where appropriate, enforce compliance or pursue financial remedies.13
- New York State and New York City have taken enforcement action related to broadband deployment commitments, including a 2020 agreement expanding fiber availability to approximately 500,000 households.7
- Verizon was obligated by order of the New York Public Service Commission to install between 10,000 and 12,000 fiber optic lines in underserved areas.8
- In Maryland, fiber service is regulated by the Maryland Public Service Commission, while wireless infrastructure is primarily regulated at the federal level.9
- Cybersecurity analysts have noted that wireless network architectures present different security considerations compared to wired systems.10
- Wired Internet connections do not rely on radiofrequency transmission for the final connection into homes and businesses, a distinction some residents cite in discussions of exposure concerns.11
- Wired communications infrastructure is described in policy literature as more resilient to storm, flood, and fire events compared to dense wireless infrastructure.1
- Security considerations are one reason many large enterprises rely heavily on wired connections for mission-critical operations.12
- Fiber deployment has been supported by labor organizations, including the Communications Workers of America.6
Irregulators’ Financial Analysis of Maryland Telecommunications Charges
The Irregulators have published financial models estimating potential overcharges related to local telecommunications services in Maryland. Their calculations are based on publicly available materials, including:
- Verizon New York 2019 Annual Report
- Prior decade of state-based annual reports
- SEC quarterly filings
- FCC Automated Reporting and Management Information System (ARMIS) data
These estimates examine corporate operations expenses, construction and maintenance costs, and marketing expenses allocated to local service categories.
According to the Irregulators, FCC accounting rules permitted corporate operations expenses to be allocated to state utility accounts. The group argues that, on average, a substantial percentage of these expenses were attributed to local service categories, and that this allocation pattern increased over time.
“Every state utility has been using the FCC accounting rules [which allocate Corporate Operations expenses into state utility accounts] and, on average, 72% of this expense was put into the Local Service category. Since 2007, this expense doubled in Verizon New York, and the Irregulators assume this pattern occurred in other states.”
Estimated Partial Annual Overcharging of Verizon for Maryland Local Services Utilities 2019
FULL CALCULATION BY STATE*
| UTILITY | STATE | 2019 LOW | 2019 MEDIUM | 5–YEAR (2015-2019 |
| Verizon- | Maryland | $628,074,661 | $426,990,325 | $2,637,662,465 |
* Note: This accounting has multiple variables as we decided to return to examine each state’s potential estimated partial overcharging, but as it clear, the original analysis is within a rounding calculation-and the FCC’s own supplied financial information has major anomolies between the different areas of the same report.
“Every state utility has been using the FCC accounting rules [which dump Corporate Operations expenses into state utility accounts] and that, on average, 72% of this expense was put into the Local Service category. We also note that since 2007, this expense doubled in Verizon New York and we assume that this pattern happened in every state.”
http://irregulators.org/overchargedamerica/
AT&T, Verizon & Century Link Corporate Operations Expense by State, 2007
Table shows almost $240,000 for Maryland in 2007 alone.
Source: FCC ARMIS REPORTS
| Total | Local | Access | Local | Access | |
|---|---|---|---|---|---|
| Verizon-California GTE | $258,859 | $203,080 | $55,780 | 78% | 22% |
| Verizon Florida LLC | $162,990 | $122,508 | $40,482 | 75% | 25% |
| Verizon-Maryland | $239,740 | $173,268 | $66,472 | 72% | 28% |
| Verizon- Massachusetts | $326,090 | $216,948 | $109,142 | 67% | 33% |
| Verizon-New Jersey | $425,805 | $303,828 | $121,977 | 71% | 29% |
| Verizon New York Telephone | $1,092,744 | $740,543 | $352,201 | 68% | 32% |
| Verizon Pennsylvania | $422,168 | $303,753 | $118,415 | 72% | 28% |
| Verizon Washington D.C. | $67,115 | $43,884 | $23,231 | 65% | 35% |
| Total Percentage – | 72% | 28% |
Additional data and methodology are available at:
http://irregulators.org/overchargedamerica/
Related analysis:
https://kushnickbruce.medium.com/cooked-books-verizon-nys-local-service-was-charged-1-8-24f2324d7eb5
Telecommunications companies, including Verizon and other major carriers, have been subject to enforcement actions, regulatory investigations, and class-action settlements related to billing practices and contract compliance. These documented cases involve specific legal claims and should be understood in that context.
Documented Enforcement and Settlement Examples
- U.S. Department of Justice – False Claims Act Settlement (2011):
Verizon agreed to pay approximately $93.5 million to resolve allegations that it overcharged the U.S. government under certain telecommunications contracts. The matter was resolved without an admission of liability.
View DOJ Press Release - FCC Settlement Regarding Improper Data Charges (2010):
Following an FCC investigation into unexplained data charges, Verizon Wireless agreed to refund approximately $52.8 million to customers and pay an additional civil penalty to the U.S. Treasury.
Read Coverage of FCC Settlement - Wireless Administrative Fee Class Action Settlement (2023–2024):
Verizon agreed to establish a $100 million settlement fund to resolve claims related to administrative and “telco recovery” fees added to postpaid wireless plans. The company denied wrongdoing while settling the case.
Read Settlement Overview - Third-Party Billing Class Action (Landline Customers):
Verizon faced litigation regarding alleged unauthorized third-party billing charges on landline accounts, resulting in a settlement and refund process.
Read Case Summary
Scope and Context
These enforcement actions and settlements involve specific billing practices, contractual disputes, or regulatory compliance matters. They illustrate how telecommunications pricing and accounting practices have been subject to oversight and, in some cases, legal challenge.
At the same time, broader questions about historic fiber deployment commitments and ratepayer-funded infrastructure have been raised by organizations such as the Irregulators, SafeG, and Americans for Responsible Technology. These groups draw on historical rate structures, franchise agreements, and accounting records to argue that additional review of fiber buildout obligations may be warranted.
These materials are included here to reflect concerns raised by resident advocates and to provide access to publicly available documentation. Readers are encouraged to review original court filings, regulatory decisions, settlement agreements, and independent analyses to better understand the range of perspectives.
Sources
- Schoechle, T. (2018). Re-Inventing Wires: The Future of Landlines and Networks. National Institute for Science, Law & Public Policy.
- Kushnick, B. (2019). Irregulator Treasure Map; Part 1. Medium.
- New Networks Institute. Dirty Phone Bill.
- Kushnick, B. (2020). Rattle the Cage: $20+ Billion Annually to Fix the Digital Divide — Now. Medium.
- Irregulators v. FCC (U.S. Court of Appeals, D.C. Circuit, 2020).
- Kushnick, B. (2015). The Book of Broken Promises.
- Office of the Mayor of New York City (2020). Mayor Holds Verizon Accountable to Connect Households to Broadband.
- New York Public Service Commission (2018). Order Adopting Terms of Joint Proposal.
- Maryland Public Service Commission. Consumer’s Guide to Verizon’s Copper to Fiber Transition.
- Wheeler, T., & Simpson, D. (2019). Why 5G Requires New Approaches to Cybersecurity. Brookings Institution.
- Russell, C. (2016). A 5G Wireless Future: Smart Nation or Unhealthy One?
- Veltec Networks. Situations Where You Should Use a Wired Connection Instead of Wireless.
- Kushnick, B. (2018). States’ Rights, Net Neutrality & 5G. Medium.
- Kushnick, B. (2015). Verizon’s Massive East Coast FiOS Coverage Analysis. HuffPost.
Additional Advocacy Resources
Organizations including Americans for Responsible Technology (ART) and SafeG have published additional materials regarding fiber deployment and telecommunications accounting practices.
