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Claim: FiOS Count Inflated

A small New York marketing firm sued Verizon Communications, alleging that the telephone company fraudulently reported FiOS TV subscribers who were not yet connected as part of the total number of viewers quoted for advertising rates.

Digital Art Services, a marketing-services company based in Great River, N.Y., filed the lawsuit Oct. 3 in federal court in Manhattan.

“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,” the Digital Art Services complaint said. Some FiOS TV subscribers do not receive service for as much as 10 months after first signing up, the lawsuit alleged.

The suit seeks class-action status on behalf of other FiOS advertisers and asks for unspecified damages.

According to the lawsuit, filed in U.S. District Court for the Southern District of New York, Verizon said it had 115,955 customers in the New York area as of July 11. However, the lawsuit alleged, more than 38,059 of those customers were “pending,” meaning they were not yet receiving FiOS TV service.

In a statement, Verizon called the lawsuit “a garden-variety business dispute with a company that wants to get out of a contract with Verizon.”

“We are honest and straightforward with potential advertisers about the FiOS TV audience and the advantages of advertising on FiOS TV,” Verizon director of media relations Sharon Cohen-Hagar said in an e-mailed statement.

Andrew Hayes, the attorney representing Digital Art Services, responded to Verizon’s statement by saying, “People who find they’ve been defrauded often want to get out of a contract.”

Digital Art Services had purchased $916,000 in advertising for the FiOS TV service, according to the suit. The firm, which has about a dozen contract employees, was using subscriber data Verizon provided through cable rep firm Viamedia, which Digital Art Services also named in the suit.

Verizon does not publicly report subscriber numbers for individual markets. The company most recently said it had 515,000 FiOS TV subscribers in 12 states as of June 30.

Digital Art Services provides advertising services for companies in the New York City and New England areas, including TV production and Web design, according to its Web site.

The company, on its site, says it works “closely” with Cablevision Systems’ News 12 regional news channels to place advertising.