Advertiser claims Verizon inflated FiOS numbers

Less than two weeks after Verizon Communications celebrated its two-year anniversary of FiOS TV, an advertiser is accusing the carrier of fudging subscriber data for the fiber-based service. New York-based Digital Arts Services filed a lawsuit against Verizon on Wednesday, claiming the service provider inflated the customer count of its FiOS TV offering.

Digital Art Services is seeking a class-action suit. The company allegedly purchased $916,000 in advertising for the FiOS TV service based on subscriber data provided by Verizon to an outside sales agent, Viamedia, which is also named in the suit. The company claimed the inflated numbers were used to determine advertising rates, causing it to pay more than it should have for advertising on Verizon's network.

Verizon reported 115,955 FiOS TV customers in the New York area at the end of June. The lawsuit alleges that more than 38,000 of those customers were “pending,” meaning they were not yet receiving the service. Verizon claimed that these pending customers could be included because they are usually converted to active subscribers within two weeks.

According to Digital Arts Services, however, many of these prospective customers waited up to 10 months for their service to be activated. “Those reported numbers were false and inflated, since they included prospective subscribers who might not become actual subscribers until weeks or months later,” the complaint read. “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.”

Verizon disputed the allegations in a prepared statement, calling its numbers rock solid and audited internally before being released. “We are honest and straightforward with potential advertisers about the FiOS TV audience and the advantages of advertising on FiOS TV,” a spokesperson said. The service provider said that Digital Arts Services is using the lawsuit to get out of a contract they agreed to with Verizon.

Verizon does not publicly report subscriber numbers for individual markets, but claimed that as of June 30 of this year, Verizon FiOS TV had 515,000 subscribers and was available to reach more than 3.9 million households in nearly 500 communities in 12 states. The company said it will update its statistics when it reports third-quarter earnings on Oct. 29.