MW Verizon blames software hiccup for outage. Growing tech complexity and 'telecom arrogance' could be bigger culprits.

By Bill Peters

Telecom networks increasingly run on the cloud, but the industry suffers from 'old-school telecom arrogance' and has sacrificed staff training for quarterly targets, one expert says

Verizon's outage on Wednesday left users in the Northeastern U.S. without cellphone and data service.

Verizon Communications is giving consumers $20 for their troubles following a service outage Wednesday, but precise details about the outage's cause remain elusive, at least for now.

A Verizon $(VZ)$ representative said the problem stemmed from a "software issue" but did not offer further specifics on the cause or the number of people affected. The outage on Wednesday, which has since been resolved, left parts of the Northeast U.S. without cellphone and data service and created widespread frustration for users.

The cellular carrier's service disruption hit as telecom networks grow more complex, and as potential software disruptions from large tech providers threaten to affect a wider swath of the population.

Lee McKnight, a professor in the School of Information Studies at Syracuse University, said that 5G networks increasingly run on hundreds of cloud services - along with cell towers and fiber wires - that operate in tandem, require constant updates and are subject to software hiccups that can ripple through the larger network.

"Getting a dial tone, completing a call - all those things that used to happen with electromechanical switches or electronic switches - it's all in software now. It's all in software-defined networks," he said.

"So they are subject to the same kind of software misconfigurations as any other software company," he continued.

ABC News reported that law-enforcement agencies believe the outage stemmed from a "server failure in New Jersey" rather than a cyberattack. The Wall Street Journal described the issue as stemming from a software update.

On Wednesday, other cellular networks including T-Mobile U.S. $(TMUS)$ and AT&T $(T)$ said their networks were still running. In a statement Thursday, T-Mobile said that some of its users "had problems connecting if they were calling someone on Verizon's service."

The Federal Communications Commission is "continuing to actively investigate and monitor the situation to determine next steps," a spokesperson said in a statement.

Verizon said Thursday that it was giving customers a $20 account credit. In its statement, the company said consumers could log into the myVerizon app to accept the credit, and that the amount covered "multiple days of service."

"This credit isn't meant to make up for what happened," Verizon said. "No credit really can. But it's a way of acknowledging our customers' time and showing that this matters to us."

According to Downdetector, a website that tracks service outages, the number of people reporting outages on Wednesday over a 24-hour period peaked at close to 180,000 before falling. The last reading just after 4 p.m. Wednesday was below 55,500.

Shares of Verizon were down 0.5% on Friday.

Last year, Verizon said it would cut some 13,000 jobs, or about 13% of the company's workforce.

More broadly, as digitally oriented companies play a bigger role in communications, McKnight said he believed the telecom industry suffered from a certain level of "old-school telecom arrogance" - or the assumption that their dominance of the nation's communications lines was guaranteed. As cloud infrastructure grows more complicated, engineers can have trouble keeping up, and he said he believed the telecom industry had sacrificed investing in training staff for the sake of quarterly financial targets.

He noted that in decades past, the telecom industry was more focused on near-perfect service. But keeping up that level of service got expensive, and competition began to bite.

"There's no place in the consumer contract where they go: 'We promise to be up 99.999% of the time for any retail consumer service," he said of cell carriers today. "They're just saying, 'Yeah, you pay us 50 bucks a month, or 20 bucks, whatever it is, and we'll do the best we can, more or less.'"

-Bill Peters

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January 16, 2026 11:29 ET (16:29 GMT)

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