Report: Verizon Claimed Public Utility Status To Get Government Perks

An anonymous reader writes "Research for the Public Utility Law Project (PULP) has been released which details 'how Verizon deliberately moves back and forth between regulatory regimes, classifying its infrastructure either like a heavily regulated telephone network or a deregulated information service depending on its needs. The chicanery has allowed Verizon to raise telephone rates, all the while missing commitments for high-speed internet deployment' (PDF). In short, Verizon pushed for the government to give it common carrier privileges under Title II in order to build out its fiber network with tax-payer money. Result: increased service rates on telephone users to subsidize Verizon's 'infrastructure investment.' When it comes to regulations on Verizon's fiber network, however, Verizon has been pushing the government to classify its services as that of information only — i.e., beyond Title II. Verizon has made about $4.4 billion in additional revenue in New York City alone, 'money that's funneled directly from a Title II service to an array of services that currently lie beyond Title II's reach.' And it's all legal. An attorney at advocacy group Public Knowledge said it best: 'To expect that you can come in and use public infrastructure and funds to build a network and then be free of any regulation is absurd....When Verizon itself is describing these activities as a Title II common carrier, how can the FCC look at broadband internet and continue acting as though it's not a telecommunication network?'"

Comments

Corruption

[Anonymous Coward]

Really, all these articles assume that the US government isn't run solely for the benefit of a handful of corporations. If there's evidence that it's not then I'd like to see it.

Re:Corruption

[Karmashock]

Its worse then corruption... its incompetence. Basically its all too complicated for the limited number of politicians to manage and most of them don't really care anyway. So its all left to bureaucrats that often don't really have authority to do anything unless its kept quiet... which means there is a "don't rock the boat" mentality which means they just take the path of least resistance in all cases.

Now you could give them more authority... but then you wouldn't have even a fig leaf of democracy because you'd have a technocracy rather then a democracy. We already see some of that happening already with the EPA etc just doing what they want indifferent to law, court orders, or public opinion. But it could get a lot worse.

Truly, I think the solution is to scale back the government's authority or localize things more so the politicians aren't so overwhelmed with responsibilities. I really think they're just overwhelmed with the complexity of the system they're supposed to govern. So... simplify it by decentralizing it. Increase local autonomy and you if anything enhance democracy while improving efficiency.

Will corruption go away? No... it will just be more local instead of federal which I'm actually happier with because local corruption at least recognizes that the corrupt have to still live in the place they're being corrupt. If its done at the federal level then the corruption can profit people thousands of miles away that care nothing at all for the consequences.

Re:Corruption

[The Rizz]

Decentralization isn't the solution to this. If you think the system is a clusterfuck now, just think about how much worse it would be if instead of one law there were 50+ (states + DC + territories) - or, thousands (county/city level). It would keep small businesses from easily doing work outside of one area, while allowing mega-corps the ability to even more easily venue-shop for their headquarters.

You want a solution that gives more authority to regional/etc. agencies? Simple: Allow each agency, at each level, to throw up a challenge to this type of shenanigans. Verizon pulled some bullshit costing NYC $4.4billion? Then NYC can turn around and enforce the Type II requirements, and send a ripple up the chain to have the feds declare it so nationally. However, you have to be able to stop some in-Verizon's-pocket federal agency from telling NYC, "no."

Re:Corruption

[postbigbang]

You ignore the public utility regulatory agencies of the 43 states that have them. This entire morass came after the TCA of 1998 and subsequent revisions of the FCC rules and regs brought on in the post Judge Greene rulings that initially broke up the Bell System.

Public utilities had to deal with all of these regulatory authorities, and then calculatedly lobbied to create US Federal control so that they'd only have to bribe-- I mean lobby and render campaign contributions-- to one target instead of so many. In-state vs Intrastate vs Interstate issues helped hold them to the floor.

NYC is not a regulatory authority. NY State is, as is the FCC, and to a smaller extent, the NTIA.

Decentralization was good for several reasons: rights of way and easements are local, even personal issues. These are last-mile issues. State issues concern everything from keeping infrastructure support fair and even (including low-profit/sparsely populated areas) to zoning policy, and so forth.

The FCC has evolved what was once called "data communications" as a separate classification, away from telephony. Now these things are the same, but the public's needs have evolved. Decentralization isn't so much meaningless as it's the ability to tailor historical infrastructure to locally evolving needs, and is better democracy.

  It's time to conflate consumer communications into a single mandate, IMHO. It has to service we consumers, whether in urban, suburban, or rural areas. Whether it's a text, phone call via wire or cell, or a browser session, it ought to have to meet a set of basic standards, where consumers have well-known and flexible rights.

Re:Corruption

[Karmashock]

This community is too smart not understand the virtues of decentralization in management systems.

Understand... I'm not trying to patronize you or slight you... just express my opinion here and hope you at least give it a look before rendering a judgement.

Here we go:

Think back to the old city states in Europe. Look at them in your mind on a map. Notice how at the center of each is a large capital city from which everything is run. Okay, note the history where in each of those powers going into nation states continually tried to expand. They'd eat far flung islands and various powers all over europe only to lose them again if they were too far from their base of power.

Note the continuing failure of those powers to hold on to anything that was more then about 500 miles from their capital city.

Then consider the great exceptions in this pattern... the colonial empires of Spain and England. Note that they had to employ a decentralized power structure because employing a centralized power structure was obviously impossible at that range. Notice how powers that previously were unable to hold on to things at more then 500 miles suddenly can hold on to things thousands and thousands of miles away.

Why? Decentralization. Limited autonomy.

Now consider the United States. The US is one of the largest countries in the world both by geography and population. Yet it holds together better then many powers a great deal smaller. Why is that?

There is a general lack of insurrection due to democratic and republican governmental forms. However, just as important is the state system where in local populations have a greater say in local administration then does the national system or people that don't actually live there. This ensures that government is more responsive to local issues, attentive to local sentiments, and that if there are conflicts of interest they tend to favor local interests rather then national interests. This helps bind the country together because there is less downside/cost to the union.

What breaks apart big countries is ultimately that the people in those countries decide it is in their interest to break up rather then stay together.

To help hold a union together, you want as much as possible for there to be few if any downsides to the union and as many upsides as possible. The instant it is more in the interest of a given portion of the country to break away then stay together you will have to hold a gun to their head to hold them there.

Holding that gun there is both expensive and unstable because the instant the gun comes off they'll likely slit your throat or equivalent.

Police states are very aware of this which is why they make a point of never putting the gun down. Examples of what happens when the gun gets put down would be the French revolution... bodies in the street, corpses hanging from rafters, and other fun stuff. A general explosion of violence against the authorities.

I'm going through all this just to explain my understanding of the basic political forces that hold large numbers of people together.

Now if you look at the US government, we have a federated system rather then a unitary government. That is, unlike France or England, the US has 50 states with limited autonomy as well as various territories that are afforded something of the same interdependence.

This is a hierarchical command structure. With lower and more localized elements given authority to make certain types of decisions independently while other nominally higher authorities are given responsibility over different decisions.

Ideally, you want the more localized systems to handle all problems that they reasonably can handle while those at the higher and more generalized level are left with either managing the interrelationships of these powers or dealing with miscellaneous problems that impact all the various states.

In effect, you want the localized systems to handle nearly everything themselves... really as much as you can pos

Re:Corruption

[Gr8Apes]

Decentralization for wire ownership is the answer. The wires are owned by local municipalities, and ISPs provide services over those wires. With fiber, there's no excuse not to go this route. The feds can tax and provide service to disadvantaged areas much like the Universal Service Fund now, in fact, there would need be little to no change there. Just that the wires belong to the local municipalities, and they cannot sell the property, only maintain and improve it as necessary. Cities, counties, states, etc, can work to improve the infrastructure, but at it's core, it's still locally owned. What else matches this pattern? Roads, railroads, the electrical grid and various pipelines all at least started this way, as does the global internet. So there's no reason this particular component cannot be handled this way at a more local level and finally remove the evil specter of Ma Bell and its wanna be clones.

Who has senators/congressmen on the committee?

[spiritplumber]

They should be hammered with this. Make it simple, so that staffers can relay the information. Make it a net neutrality issue. Make it a no-pork issue. This is great news because it's a simple message. Someone needs to ask, at the right moment, "So Mr. Verizon Guy, were you bullshitting last year, or are you bullshitting now?"

Re:Who has senators/congressmen on the committee?

[ALeavitt]

Verizon does.

Law & Money

[Thanshin]

To expect that you can come in and use public infrastructure and funds to build a network and then be free of any regulation is absurd

To expect a government to take decisions based on reason, morality or legality is naive. In what regards corporations, the only law is money, the only lawyers are lobbyists and the only judges are (corrupt) politicians.

If Verizon has made about $4.4 billion in additional revenue in New York City alone, they clearly had enough to pay for a lot of campaigning, lobbying and bribery.

Re:Law & Money

[sumdumass]

Its not that simple.

First, verizon actually is deveral businesses in one. The internet portion is and has been considered an information service while telecommunications portion is regulated. The problem arises when those portions of the businessvare not separate from each other. The internet should be spun off into a subsidiary that leases access to the infrastructure to make it clear. Of course that would lead to others getting lessvrestricted access and cause competition.

It is the same problem with cable internet. Thecuse the regulated portion to build out infrastructure then ride the internet on top of it. It they were forced to separate and lease this out, there would be more competition for the internet all the way around.

But looking at verizon or comcast as one entity with obe type of product isn't accurate. The separation just needs to be more separated.

Re:blame Republicans for Robber Barons

[some old guy]

Bullshit. Money knows no party affiliation, and your sainted Democrats are equally as corrupt.

The only difference between the two faces of the Oligarch Party is the range of hot-button issues they use to create an illusion of real choice.

The most traditional pass time is...

[phamNewan]

Isn't running circles around government regulation the oldest pass time in America. Look back at how effectively the Stamp Act was circumvented, 250 years ago. The more complex the laws gets, the easier it is to get away with things like this, because even the government can't sort through the complexity of the laws.

The solution is not more regulation, but simplifying it. If a corporation can make billions, by simply hiring 50 lawyers, or 500, to find a way to make billions, that is huge return on investment. Anyone who expects an efficient and responsive government is dreaming. The only effective solution is to make it so simple, that dodging becomes impractical.

Re:blame Republicans for Robber Barons

[Attila Dimedici]

You are absolutely correct that there is no comparison when it comes to ruling for the moneyed interests. All you have to do is look at which party the moneyed interests make their home. Let's see, John Corzine, Tom Steyer. George Soros, Warren Buffet, Bill Gates, to name just a few.

Quite easily ...

[gstoddart]

When Verizon itself is describing these activities as a Title II common carrier, how can the FCC look at broadband internet and continue acting as though it's not a telecommunication network?'

Because the head of the FCC is a former cable and wireless lobbyist.

Wheeler knows all of the dirty tricks these companies use, likely because he was involved in them. Which means there is no way as the chief of the FCC he isn't aware of these shenanigans.

Which means he's quietly happy to allow it, knowing that when he finished his term at the FCC there will be some big fat checks waiting for him for all of his help through the years.

In other words, your regulatory system is broken when you start appointing lobbyists to be your regulators.

It's the fox guarding the hen house. You might as well appoint Bernie Madoff as the head of the SEC.