On January 14, Verizon’s network across the Northeast went offline, causing widespread disruption as calls could not be completed. This is the latest in a series of outages that continue to disrupt our increasingly connected world, and it's raising concerning issues about reliability.
Around 12:30 on January 14th, Verizon customers throughout the Northeast noticed their phones had gone into emergency mode, a sign that their network was down. They could still access Wi-Fi if they were in a location with Wi-Fi coverage, but their 5G towers were offline for more than 7 hours. No one could call anyone on the Verizon network, and even those from T-Mobile and AT&T could not access those on Verizon. Fortunately, or unfortunately, it wasn’t caused by a cyber-attack, but rather a currently undisclosed software issue.(1)
This kind of shutdown reveals an increasingly worrying trend of network crashes and hacks. The world is increasingly connected, and as a result, network outages disrupt everyday life. This was no more apparent than when the airline industry collapsed due to an undetected error by CrowdStrike.
CrowdStrike’s security systems are centered on what is known as an endpoint protection service. Endpoints are what you access the internet with every day, from laptops and tablets, computers, and even your cellphones.(2) Malicious actors target these endpoints because they are the gateway into private servers and other valuable data. Viruses such as Emotet, which target them, are nearly impossible to remove and may require replacing the infected device.
When they launched a routine update, the update contained code that, when it connected to Windows, Windows rejected it and caused the affected systems to enter safe mode. While it was caught in time to roll back the updates for personal systems, for the airline industry, it was essentially Armageddon for the US airline industry, as it took over a week for airlines to get back online.
Although legacy systems were shown to be part of the issue, incidents such as Verizon and CrowdStrike demonstrate that networks can easily disrupt everyday life. In the latter’s case, the issue was found to be the legacy systems of many of these big companies. These legacy systems aren’t supported or went out of support years ago. These systems are integrated into their company infrastructure and not as easily upgradable. As a result, they tend to be more vulnerable to disruptions and shutdowns.
Perhaps the biggest problem is the potential costs of a shutdown. Even a ten-minute shutdown of a network can cost millions of dollars. “In a 2024 survey by Splunk, enterprises reported more than $400 billion in annual downtime costs across the Global 2000 — and a significant portion of that loss came from impact assessment and communication delays (Splunk, 2024).
During the initial 30 minutes of an incident, 15–20% of the total cost is typically consumed by impact assessment alone. Ongoing monitoring adds another 10–15%, and post-incident reporting can contribute an additional 5–10% (Uptime Institute, 2022).
That means most outage’s cost accrues before remediation is even underway.
Meanwhile, the Mean Time to Detect (MTTD) across security and service incidents remains around five hours (Splunk, 2023). And even after detection, many organizations spend additional hours — or days — mapping which users and locations are affected.
This reactive approach isn’t just inefficient; it’s financially crippling.
- Personnel Costs: Overtime for IT staff conducting user-impact analysis.
- Idle Time: Salaries paid to employees unable to work while systems are being assessed.
- External Consulting: Engagement of incident-response specialists to quantify scope.
- Communication Overhead: Stakeholder updates, compliance documentation, and audit reporting.
For a typical four-hour outage, the direct impact assessment costs alone can exceed $750,000–$1.5 million — and that’s before lost productivity or customer impact is considered. (3)
While Verizon's tower issue was not on the scale of what happened with CrowdStrike, the potential for massive losses is there. Over 1.5 million customers were affected across the Northeast. The damage might have been relatively small, especially with their $20 credit to affected customers, but if it were more widespread, they would have been dealing with it in different ways, with potential damage in the billions.
Verizon's outage in the Northeast was the latest of a concerning trend of technology shutdowns that impact millions. No company is completely immune to shutdowns and outages, whether through equipment failure or more nefarious attacks. When they go down it impacts millions and cost billions. Companies to be more prepared for their networks going doing because it could easily be much worse.
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Formed in 1999, Axis Insurance Services, LLC is a nationwide leader in the professional and management liability insurance industry, developing innovative risk management solutions for today’s evolving businesses. We offer insurance programs to a broad array of professionals and industries, including insurance agents/brokers, attorneys, commercial real estate firms, technology, healthcare/medical, financial institutions, architects/engineers, consulting firms, media, and many others.
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