Verizon Sued for Overstating Subscribers to Ad Company

Verizon Communications Inc, the No. 2 U.S. phone company, is being sued for fraud by ad company Digital Art Services Inc, for allegedly overstating its subscriber numbers for its FiOS TV Service.

Digital Art claims that Verizon included pending customers as actual published customers in the New York region to the network. As a result, the ad company paid over 5 million dollars for the Verizon ad space, which they claim is extremely inflated.

Verizon argues that pending customers became active customers within 2 weeks, while Digital Art claims it took as long as 10 months.

Verizon says the ad company simply wants to get out of their contract because their results weren’t as good as they’d originally hoped for.

Digital Art discovered the “pending” customers during a meeting with the company's sales agent, Viamedia Inc, which was called to discuss poor results in the first place.

The lawsuit was filed Wednesday in the U.S. District Court for the Southern District of New York.

Competing with cable and satellite operators, Verizon has been fervently rolling out its fiber-optic-network FiOS TV service. At the end of the second quarter, FiOS TV was available in more than 12 states with 515,000 total reported subscribers.

Verizon FiOS Fiber Optic Service

According to Verizon, FiOS stands for "fiber-optic service." FiOS service generally brings telephone, HDTV, and internet services to the subscriber's premises. Most recently, Verizon has attracted consumer and media attention in the area of broadband Internet access as the first major U.S. carrier to offer such a service as it boasts speeds faster than cable.