The D.C. government and Verizon have set aside past differences and entered into a $51 million, three-year contract for telecommunication services that District leaders expect will save taxpayers several million dollars annually.
That the District needs the new deal, however, confirms its $100 million internal fiber optic network, called DC-NET, is not being expanded into government facilities as quickly as its architects would have hoped.
“We’re not just going to magically get rid of all Verizon lines, because DC-Net is not in every government building,” said Vivek Kundra, the District chief technology officer. “We realize we will be using a portion of Verizon services no matter how aggressively we push forward with DC-NET.”
D.C. and Verizon came to virtual blows in 2005 over millions in unpaid bills and other issues. At onepoint, Verizon threatened to cut off the city’s phone service, leading to emergency court appearances and nasty rhetoric between the parties.
The consequences of the dispute were costly: Verizon refused to renew a preferred contract with the District, forcing it to pay standard rates that increased the city’s phone bills by about $4 million a year.
“I’m not interested in history,” Kundra said. “This is ridiculous, the way we structured our contract, because that’s not how they’re structured in other parts of the country.”
Verizon spokesman Harry Mitchell called the D.C. government a “valued customer.”
“We have worked on our relationship with this customer over the past several years, and we’ll continue to work at the relationship,” Mitchell said.
The new deal for basic phone and data services will save the District $2 million to $4 million a year, Kundra said.
Launched five years ago, DC-NET was designed to move the city away from Verizon, linking every government facility to reliable voice, data and video service on a cost-effective internal fiber-optic network. Despite promises of millions in savings, the price of telephone service has climbed from roughly $24 million in fiscal 2004 to an estimated $32.5 million in fiscal 2008.
Kundra laid off dozens of DC-NET contractors earlier this year, saving an estimated $263,000 a month.
