Verizon Settles Suit Alleging FiOS TV Data Was Inflated

Verizon Communications settled a lawsuit with a New York marketing firm that had accused the telecommunications giant of fraudulently including FiOS TV subscribers not yet connected as part of the total number of viewers quoted for advertising rates. 

Verizon and Digital Art Services, based in Great River, N.Y., on Long Island, notified the U.S. District Court for the Southern District of New York of the settlement in a stipulation of dismissal dated March 31.

Digital Art Services, which filed suit in October, purchased $916,000 in advertising for the FiOS TV service based on subscriber data Verizon provided through advertising rep firm Viamedia, which Digital Art Services also named in the suit.

"All parties to the litigation agreed to dismiss and release any claims they may have had arising out of the advertising agreement between Digital Art Services and Viamedia," Verizon media relations director Bobbi Henson said in a statement. "That agreement is terminated. No money exchanged hands as a result of this settlement."

Andrew Hayes, the lawyer representing Digital Art Services, did not respond to a request for comment.

According to the lawsuit, Verizon said it had 115,955 customers in the New York area at the end of June 2007 but more than 38,000 of those customers were “pending,” meaning they were not yet receiving FiOS TV service. 

“Those reported numbers were false and inflated, since they included prospective subscribers who might not become actual subscribers until weeks or months later” -- in some cases taking as long as 10 months, the Digital Art Services’ lawsuit alleged. 

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

Verizon does not publicly report subscriber numbers for individual markets. In January, the company said it had surpassed 1 million FiOS TV subscribers.

Digital Art Services provides advertising services for companies in the New York City area, including TV production, search-engine marketing and Web design. According to its Web site, the firm works “closely” with Cablevision Systems’ News 12 regional news channels to place advertising on special-interest topics.