Picture Perfect Deal
Did Verizon scam Pennsylvania?
A 1994 deal between the state of Pennsylvania and Verizon, a long-standing sore spot for critics of the telco, has apparently ended not with a bang, but with a whimper. Critics charge that Bell Atlantic made billions off of the deal, while offering services they knew would never see the light of day.
In 1994 Verizon (then Bell Atlantic) struck a landmark deal with the state of Pennsylvania. The deal provided Verizon with hefty financial incentives if they met certain broadband rollout criteria. It's estimated that those financial incentives over the years clock in somewhere around $2.1 billion dollars.
As part of that agreement, Bell Atlantic agreed to have 20% of the state broadband wired by 1998, and 50% by 2004. By 2015, broadband would be run throughout the state to the majority of Verizon's customers. It's important to note that this wasn't DSL they were talking about...but 45MB/s symmetrical fiber service right to the door of homes and businesses, ambitious and impractical for certain, but nonetheless included in the language of the agreement. While wiring every home with fiber skirts the limits of reality, the financial benefits received from Verizon in the deal were very real.
Out of the 2.1 billion dollars received in the deal, $1.5 billion of it consisted of extra tax deductions. Telco critic Bruce Kushnick suggests in a report
filed in February that this breaks down to $785 per household, a total he and several other telco critics believes Verizon should be forced to pay out in refunds for broken promises to Pennsylvania residents.
Verizon, naturally, says they're more than ready to offer such speeds. Speaking to the Philadelphia Inquirer
last February, Ronald F. Weigel, director of government relations for Verizon's Pennsylvania division, says the company could provide any school, or business within Verizon's service area with a 45 Mbps connection, provided they could pay for it. "I don't care if they're in Altoona or Philadelphia, we're prepared to offer it,"
Kushnick's report goes on to note that by March 28, 2002, the Pennsylvania PUC acknowledged Bell Atlantic's failure to adhere to the state's Alternate Regulation plan: "...this Commission has a legal obligation to reject Verizon PA’s 2000 Update and require it to submit a new update specifying its plans to satisfy its legal obligation to provide a modernized network with broadband capability of at least 45 Mbps upstream and downstream, to be available within five days from the customer request date."
That update, which needed to show Verizon was working toward that 45Mbps goal, never really came. Instead, in a ruling this week
, the state essentially allowed Verizon to completely ignore the agreement, keep all financial incentives, and provide state-wide connectivity via copper lines, ignoring the language of the original agreement.
Commissioner Glen Thomas, speaking in fluent lobby-eese, defended his ruling: "As Pennsylvania considers its telecommunications policy of the future, I believe that our collective energies will be best spent on creating a climate that allows factors such as competition and demand to flourish.
" Application of such 'energies' apparently doesn't include holding companies accountable for billions in profits already pocketed for services that were never deployed.
Commissioner Terrance Fitzpatrick, who has long accused Verizon of backpedaling on the agreement, was the lone dissenting voice in the 4-1 vote. According to Fitzpatrick, he does not "believe this decision is equitable to customers in light of the value to Verizon of being released from its prior obligation."
New York, NY
blatant thefy it's incredible they get away with this. for what it's worth I write many nasty letters to NY State and City Politicians. at some point people have to take some sort of stand and it starts with the politicians. each household was robbed of 785 dollars with a wink and a nod for Pennsylvania politicians. I think they should relentlessly demand that money back from the Politicians and force them to force Verizon to pay. "No Taxation Without Representation" it's time we acknowledge the officials we elect represent Corporate America, we get screwed through charges on our bills which are taxes under different names, the politicians get campaign contributions and they both laugh in our faces. Pennsylvania isn't the only place this is happening and it's not just Verizon. soon we will have the 9% tax on cable modems for the Universal Fund. who gets that money?
| |greywolf520That's All Folks
New Kensington, PA
Deal? What Deal? What gets me is that they had a deal to wire the state for 'braodband' or 45 Mbps and 50% of the state would be wired by 2004. Heck, I don't believe that 50% of the state even knows what broadband is... Outside of the 'big' cities of the state, it's like night and day trying and hoping to get broadband.
Even in the suburbs of Pittsburgh, broadband coverage is spotty. My old place I had to wait until Verizon push the DSL limit to 18,000. In my new place, I'm hoping that the DSL order I placed today goes through. Verizon said I qualified for DSL. Sending me the modem next week. My next door neighbor told me he has been trying for years to get DSL but that Verizon has told me he is too far.
I like Verizon DSL, the speed thing is 1000 percent better than dialup. I just don't like how the slow it's been to expand the coverage. I shouldn't have to worry whether or not if my new house is capable of getting DSL.
Anyone remember 1200 baud modems? Remember how quickly it went to 2400 then the small step (or hiccup) to 33.6 then the big jump to 56K? Why can't broadband be working at that speed? It should have, those moves were all because of customer demand, wants and needs. The demand is there for broadband, just the telcos and ISP don't want to keep up.
Re: Well my 2cents... roll eyes*
"Why would anyone want more than 640K?"
It's a darn good thing that all these freeways weren't built because America wasn't ready for them. Can you imagine the damage when you unleash a car that can do 70mph to your grandparents who don't know a lot about automobiles but just wanna go to a supermarket?
There is a difference. State agencies license and enforce laws governing drivers and their ability to actually drive. They also ensure that there is a "firewall" of insurance (minimum coverage) in most states that is covering the driver/car in question. So if Grandma goes 70mph and kills someone, it will be investigated. There is no local, state or federal government agency that actually checks up on whether you have or know how to engage a firewall, check email and not open attachments from strangers or suspect ones even from friends, and avoid malicious code from browsers and peer to peer file sharing utilities, etc. I'm not certain I want one either, except maybe to verify the sender of email, and shut them down for spam or viruses/worms, and only bring them back up if they are complying.
On another front. I'm from PA. I remember this "bill" and the implications that were brought to the attentions of those I worked for at the time. I did not however research the terms ot the agreement, I just got word of mouth from higher ups in my organization at the time what it entailed and what it would do for us, but didn't check the claims with either the government docs or Bell Atlantic cum Verizon.
The way it was presented to us is this: I worked until 2000 For the Carnegie Science Center, part of the Carnegie Museums Of Pittsburgh, and loosely affiliated in this event with CMU and University of PGH, all the other higher learning schools of the area, and the City of PGH government and school systems. The promise was such: In return for the Tax breaks, and opening some right of ways cheaply for the fiber backbones, they would hook up all Schools, Government buildings and larger Non Profits/Libraries to the back bone for mega projects for free (for some unspecified time). And this evolved into a deal where they would partner (by 1998 or 99) with the groups to do things like making Diskless CPU"s in public places able to access data from Diskless CPU's in Schools, so kids could continue research where ever they were without moving physical stuff around as they moved around. They would log in at the next place and their "workspace:" would be preserved as it was when they left the previous one. Eventually the access would be available in homes as well. To put it simply, I don't believe they fully followed through, but last I checked they were all doing IP6 research with CMU using these installed updates to the local (so to speak) back bone in PGH. So they did follow through with what was promised, though I don't know at what bps or Mbps the connections were made, I do know that my replacement/counter part at the old job told me about the major upgrades both in and outside the building to the whole network, shortly after I left. As I didn't care too much, I didn't ask what speeds all the new fiber was running at (previously a mix of mostly 10 and some 100baseT copper).
And that's the truth. :P
| |N3OGHYo Soy Col. "Bat" GuanoPremium
Pretty sure FIOS is comming to Delaware county, PA Well, for the record, I'm no Verizon fan, and was more than happy to cancel my POTS line.
The past few weeks, driving through my town (Bethel Twp, Delaware County, PA) I noticed quite a few Verizon trucks and spools of fiber optic cable frequenting the intersections of roads. They've also dug up quite a few recently built developments to bury fiber optic cable in front of residential areas.
I decided to speak to a fellow Twp. Employee, the building inspector, who did nothing but bitch about those Verizon guys, and their stupid project to run fiber optic cables to all the houses in the Township.
I'm no detective (well, at least not yet), but I would say it's a good bet Fios is coming my way....
As I said, I'm no verizon fan, but let's face it, you dangle a little bit of the crack of the broadband world in my face, I'm taking a pull.....