Verizon Permitted to Default on PA Broadband Deal

Rich writes "This is simply amazing to me. Broadband Reports has the latest chapter concerning Verizon's con of Pennsylvania unearthed by telco-critic Bruce Kushnick last February. A 1994 agreement between Verizon and the state of Pennsylvania paid dividends to Verizon in excess of $2.1 Billion in tax cuts and other deregulatory goodies over the years. Verizon's part of that deal was to deploy 45Mbps symmetrical fiber service fiber to PA homes and residents by 2015 (something they knew would never happen). This week the well-lobbied state has apparently voted to totally ignore the 1995 agreement, after Verizon's already walked away with the cash, leaving PA residents (who are already pretty low on the broadband food chain according to a new report) high and dry."

Comments

I suspect

[rsilvergun]

there's more going on here than just bribery. $2.1 billion is too much money for legislature reps to walk away from. I mean, the votes you could buy with that kind of money far outweight whatever campaign contributions where involved. Maybe I'm wrong (it's possible that all this is happening so quietly no one's really noticed besides the /. crowd). But this is a hell of a lot of money for the legislatures to just kiss goodbye.

verizon answer to inquiry

[sublime99]

Hello, I live in an area outside of a small town in Pennslyvania, and i am about 1/2 mile away from two way cable modem, i got stuck with one way. With the lovely technology known as one-way i have to go through verizon for the upload (local phone company). When i talked to a tech support person at Verizon, i was told "28.8 is an acceptable speed" . I am in area where I can not get two-way cable or dsl, so whoever gets to my area first will gain 47 new customers, and I have the petition to prove it. My tax dollars are NOT getting spent well at all in my opinion. That money that was given to Verizon could of probably been used for the public library funds they are trying to cut in this state....

Re:verizon answer to inquiry

[codepunk]

If you go 47 people interested then it should be no problem getting a self funded wireless project going. Sounds like you are only a few miles outside of town. If you need help doing it drop me a mail message , email on my home page.

Japan's situation

[Nakanai_de]

Just look at what happens to countries like Japan, Korea and Taiwan where the telecoms are state owned monoplies. You wouldn't want to end up like that, would you?

Not sure what you meant by this comment. There was a /. story a couple of days ago about 12Mb/s broadband access in Japan for $21 a month, which I'm sure is a situation a lot of people here would like to end up in (judging by the comments to the article).

In fact, because NTT is state-run, the government is very good at ensuring adequate competition- a bill was just passed forcing NTT to cut the rates it charges competitors for use of its lines. So I'd say that the telecom situation in Japan isn't that bad.

Re:Unanswered, what are the other parts of the dea

[Trigun]

Cliffnotes version:

Verizon says that they can wire the state for $X.
Legislators say 'We can't give you $X, but we can cut you a tax break'
With $X cut off their expenses, Verizion stock raises. Options are cashed. Resultant stock is sold for hefty profit.
Dot-com bubble bursts.
PA is left rubbing its ass, Verizon scales back, C*o's laugh all the way to the bank.
Verizon management states that it is impossible to do what they promised because the (choose one or more):
A)Economy
B)Lack of infrastructure
C)Technology did not keep pace
D)Management found out what Fiber actually is
E)Hackers
F)Lack of demand
G)Sunspots

(Editors note: This comment is purely speculation, and should be treated as such by all parties currently or previosly employed by Verizon, its subsidiaries, or anyone in a position to sue my ass off.)

The real point of this article

[Anonymous Coward]

The real point of this article is not to inflame the reader about corporate greed and political scandal. As long as you haven't been living under a log for your entire life, you should be well aware of this.

The article shows me that simply a mistake was found by some intelligent people in state government, and it was repealed. The only reasonable alternative in this case was that Verizon continued to have its state-paid benefits for 11 more years, which is unreasonable. Thank God that the Mennonites decided to take their heads out of their rears now instead of later.

If you're incensed about the fact that Verizon got off "scott-free", then get over it. That kind of thing can't be fixed. Who's going to pay back the state of Pennsylvania? A company always hovering near rock-bottom? Where is Verizon going to get all the cash to pay the state back? Even worse, why would Verizon ever have to pay back money that was due to it by contract?

Supplying fiber to every home in PA was a joke. I'm just glad that they caught this in 2003 instead of waiting until the year 2015 to whine about it.

GO LEGISLATURE!