Bruce Kushnick Is At It Again

Below we have placed links for the new story, the site page for all his other stories that we have covered in the past and a link to a comprehensive report on Verizon and how they have shown a loss while making billions of dollars.  Here are some of Bruce's thoughts on Verizon:

It was asked what's wrong with upgrading to FiOS via Hurricane Sandy and what's wrong with wireless as as replacement.

My take is different than most about FiOS and copper.

In New Jersey, as well as every Bell Atlantic states -- NJ through Virginia the companies signed what are essentially contract to upgrade the Utility plans -- And they pocketed the money doing a bait and switch from 1993-2004 -- where they collected billions wrote off the copper plant and then rolled out DSL over copper

In 2004 they announce FiOS only after the networks that were open to competition -- the PSNIT -- was closed to competitors and they got a 'cable franchise

But, the construction budgets were still the PSNIT upgrades -- and whatever was built as FiOS was --

a) paid for by customers via excess phone charges and

b) privatizing the public utility assets.

In New York, for example, in 2009 the state gave Verizon large rate increases for fiber optics -- and this means that rural and suburban customers who will ever get FiOS got a 84% rate increase on all phone service s-- and that includes call waiting etc.

So, if you ask me about upgrades to the copper or replacing it with wireless

a) Wireless is NOT the PSNIT upgrade -- and it's a separate sub probably for the profits and the work is being done by the utility employees without reimbursement to the customers who are paying extra.
b) This ploy removes it as a telecom service
c) FiOS is an information and cable service -- should Hurricane Sandy money be used to pay for cable upgrades?  Utility law in place now does not allow customers to be charged for non-utility cable service.

d) the real screw is that

1) customers are funding wireless upgrades

2) Where they aren't upgrading FiOS they are forcing customers onto wireless -- or 'leave' 

3) they are forcing customers off the copper and onto FiOS - to upsell them more services and have them lose their rights.

So, there are no audits, no lines of demarcation, and no oversight.

And Verizon, like AT&T are privatizing public assets-- and charging customers for the privilege.

Moreover this massive cross ---subsidization of Verizon's affiliates is happening with them also controlling the wires through vertically integrated products and services benefiting Verizon's affiliates and harming competitors.

OK, let's go through all of the moving parts -- My head spins from the circles but the winner will always be Verizon.
• a) Verizon's copper is dead -- 50 years -75 years old and never replaced -- -- in fact the union guys told me it was all in "paper"
• b) So the question is -- replace the copper, replace the copper with fiber or push them onto wireless.
• c) The company applies and gets billions for the repairs.

1) FiOS is not he utility network. It is a cable service -- should it be allowed to charge the government for FIOS?
2) If you replace the copper with copper as part of the utility -- and it does phone service,w hy isn't repairing the copper an option if the customer wants basic services? It's been copper for decades and in many places Verizon has no plans to upgrade to fiber so ---

3) replace the copper with fiber but it is part of the utility
4) use a wireless alternative

Should the government fund any of this or part of this?

I'm pro fiber but

a) FiOS is not a utility service -- it is a cable service. It is in a separate subsidiary and the profits and revenues do not go back to the utility -- though it appears the expenses go back to the utility
--- so it should be required to not be funded by the government but by shareholders --- And it should not get government subsidies -- though it appears it is getting a free ride.
b) fiber if funded by the government should be at the cost it would be to replace the copper?
c) The copper should be replaced and be part of the utility again? --- why not? -- Customers may just want phone service and this is replacing the original damage wire

Now, if you argue it should be fiber then it should be with all of the utility requirements --- the same constraints and regulations as the copper -- i.e., common carriage and still sell UNE-L.

And should it have all of the various protections and safeguards and be counted as an access line?

d) Shouldn't we have an accounting of all of this and which entity is getting the money and who is paying for the upgrades and... none of this exists today --

d) Wireless? The replace copper with a wireless box at the house hasn't started yet but it is -- we don't want to upgrade to fiber so when the line breaks we're just going to make it wireless ---

1) this removes all rights and obligations as a 'telecom service' and part of the utility.
2) wireless should be a competitor as it is in a different company -- Cellco, which is a joint venture of Verizon and Vodaphone --
3) The wireless doesn't pay the same telecom taxes, it doesn't have the same quality of service issues, you can't take the company to court, and Verizon has an agreement with cable company to market it in areas where there's no FIOS so there are no incentives for Verizon to upgrade, and rewards Verizon to offering a competitive product.

And finally in all of this is the utility -- copper or fiber, which is being dismantled by almost all choices above via multiple affiliates that are dumping expenses into the utility, not paying what other competitors pay for use, and once the wire is changed over, is the destruction of utility property.

Now I would argue at everything I mentioned that in every case Verizon is the winner and customers are the losers -- FiOS is not a replacement for basic phone service but currently a competitor to the utility product -- as it is VOIP -- and moving people to FiOS --regardless of the storm -- removes the customers rights on multiple levels, not to mention manipulates ALL data being used by the FCC and the states -- ie, when the line is upgraded it is not counted as a line, it appears as a 'loss on the books' and it is moving publicly funded assets to a separate non or deregulated subsidiary without reimbursement to customers -- who have been the defacto investors.

So, does the storm change all of these dynamics? Yes, it gives the company carte blanche it would appear -- funded by the government, which again is another tax burden to the users.

And, Verizon will get new rates increases, claiming more 'losses of lines', remove 'quality of service obligations claiming faux competition -- as the lines are not being lost to a competitor but to an affiliate

There are no audits and the storm only gives the companies more money --


And should the copper that was destroyed already have been upgraded to fiber  as part of the original utility plant --- so all of this would be moot?

Conclusion -- Verizon is praying for another hurricane Sandy as a new profit center........

Please pass this on to everyone, co-workers, family and neighbors.  We want to be the advocate for the consumer and need the help of all to ensure that Verizon is accountable to all consumers.

In Unity,

Tom Smith

Here are the links to the story and Bruce's other stories along with the report put out by the New Networks Institute