Verizon Misses Service Quality Standards, Again

Today the New York Public Service Commission issued a report, received at its November 14 session, indicating that Verizon again missed major service quality targets.  Here is the conclusion of the Third Quarter 2013 Service Quality Report:

The Commission’s approval of Verizon’s revised SQIP in December 2010 established a new reporting paradigm for the company. The revised SQIP was intended to provide focus on repairs for Lifeline customers, special needs customers, or customers who do not have competitive wireline options. It eliminated reporting on certain service quality performance to more closely reflect the realities of competition by moving closer to comparable treatment for competing providers, thereby allowing the market to dictate service quality.
The company’s performance for network reliability, as measured by the companywide CTRR metric, missed the threshold for this metric every month in the third quarter of 2013 and the two-year trend continues to decline. . The company met the Commission’s two timeliness of repair metrics for core customers in each of five geographic areas during each month in the third quarter of this year, with the exception of the OOS>24 threshold being missed in the New York City area in July. The company’s repair service answer bureau missed the threshold for the call center answer time metric every month in the third quarter of 2013, however, the two-year trend is improving. Consumer complaints to the Department were slightly worse during the third quarter of 2013 as compared to one year earlier, despite having lost over 500,000 lines, over that same period. However, the two-year trend shows slight improvement. Staff meets monthly with the company concerning service quality and consumer complaints and will continue to monitor the company’s performance in these regards and report back to the Commission.

In the "Performance Regulation" style for oversight of utilities now in vogue at the Public Service Commission, regulators set a price or revenue limit and purport to measure results, not inputs.  This is thought to encourage the utilities to reduce expenses and keep the added profit from that without reducing their revenues, so long as they provide adequate service.  A failure to meet the criteria can result in financial sanctions.  Critical to this style is that enough of the right things are measured, and that it is not efficient for the utility to breach the standards.  It is becoming obvious that the potential adverse consequences to Verizon for missing the Commission's performance regulation targets are less than the cost of expending the funds and effort to satisfy the standards.