Verizon Sells Off Wireline Operations, Blames Net Neutrality Plans

itwbennett (1594911) writes "Verizon Communications will sell its local wireline operations in California, Florida and Texas for $10.5 billion, citing uncertainty around federal Internet regulation as one reason for the move, although Verizon executives said the sale has been in the works for several years. It's no secret that local wireline phone service has been a shrinking industry, and Verizon and other carriers see mobile as their greatest growth opportunity. Verizon Chairman and CEO Lowell McAdam cited the Federal Communications Commission's upcoming net neutrality proposal as another potential threat to the growth of wired services. 'Washington should be very thoughtful how they go forward here,' he said. 'This uncertainty is not good for investment, and it's not good for jobs here in America.'"

Comments

F(ck them.

[Anonymous Coward]

That's just an excuse.

Re:F(ck them.

[Anonymous Coward]

convenient one at that.. considering the deal was likely in the works long before there was even a hint of the threat of internet regulation.

the real reason: verizon has huge debt and just committed to spending bazillions more on new wireless spectrum and they need some way to pay down some of that new debt.

Re:F(ck them.

[phantomfive]

Indeed, the fact that someone bought it implies that someone thinks they can run the system profitably.

So, pass the buck to government ...

[UnknownSoldier]

... for your fuckups and lack of revenues?

Gee, here's an idea .. about you stop with the crappy customer service .. so you know, you actually can *acquire* customers for the long term.

Re:So, pass the buck to government ...

[Anonymous Coward]

Do you think the government regulate underwear manufacturers? Serious question. I ask to highlight that unlike telecom, underwear manufacturing is not a natural monopoly. Anyone can enter. Anyone can sell any colour and style of underwear. Over any sales channel. Red Jockey briefs don't get a 'fast-lane' to the consumer and blue trunks the slow lane. If a department store puts 'special arrangements' for red briefs, the demand blue trunks is met by another sales channel - another department store, or mail order catalog, or a specialist tailor in Phuket who stiches and ships bespoke blue trunks - the best in the world.

The government is regulating a bunch of utilities - large telecoms and ISPs - that are defacto monopolies. (Broadband Internet is a defacto monopoly for a host of reasons - right-of-way agreements, wireless spectrum ownership, trenching costs, agreements with municipalities).

The government is regulating because these utilities plan to do away with business practices (peering, traffic neutrality) that were widely accepted and taken for granted when their respective monopolies were awarded.

This change of behavior is for a variety of reasons - none of which are concerned with improving productivity, and increasing employment. In fact, one specific reason is favored treatment of its own third-party products (e.g. entertainment networks the utilities own, or partner with). That particular reason is plain 'third line forcing' monopolistic behavior.

Frankly, to expect any other behavior by government would be irresponsible. Like any corporation, a government is responsible for the interests of its real shareholders - the citizens. Each citizen of age gets 1 share and 1 vote. Every now and then, the board gets too close to a few suppliers. The shareholders then cause a spill. (If they are wise).

Verizon is selling? Good. The ones buying think they can do a better job with wireline. The only jobs lost will be poorly paid network traffic cops Verizon planned to employ to skim profits. If you were hoping to be one of those, my sympathies. But be robust and move on.

It's so not fair

[Billly Gates]

Why can't they have legal monopolies and abuse their position to compete with Netflix via throttling and charge $100 for a 2 Meg pipe and still be a broadband provider which means no taxes. Wahaha EVIL socialist bastards.

Re:It's so not fair

[Solandri]

Wahaha EVIL socialist bastards.

I'm not sure why people keep trying to cast these stories as a failure of market capitalism, and socialism to the rescue. The cable and telecom industries in the U.S. are a classic example of a failure of government regulation. The monopolies exist because they were granted by the local governments, which prohibit competition. And many of the problems we see like net non-neutrality would in fact be solved by allowing market competition. If Comcast had had competition and they deliberately degraded Netflix service, they would've bled customers once word got around that Netflix sucked on Comcast but worked great with competing ISPs.

"Socialist" Europe has actually gotten this one right. For the most part they're not trying to control their ISPs with heavy-handed regulations. They're regulating it just enough to maximize competition. i.e. Their ISP is closer to a free market than in the U.S.

Translation...

[thesupraman]

Our huge profit margins are not maximized under the current plans, and it means we cannot use our government enforced cartels to force other companies to pay us again for services the end users are already paying for.

Therefore we will 'protest' by selling off an area of the business we have been planning to sell of for normal commercial reasons for quite some time, but using our highly paid group of lobbyists and spin doctors, we will make you think this is bad for you, and therefore change the playing field to make us even more profitable, at your expense.

The sad thing is some people will actually fall for this rubbish.

And the sadder thing is it wont matter if you dont fall for it, because 'campaign contributions' mean they get whatever laws they desire anyway, given enough time and no one peaking behind the curtain.

Welcome to the new world.

Re:Translation...

[TubeSteak]

Therefore we will 'protest' by selling off an area of the business we have been planning to sell of for normal commercial reasons for quite some time, but using our highly paid group of lobbyists and spin doctors,

Lobbyists and spin doctors?
Any media who reports "Verizon blames net neutrality" is basically falling down on the job.
Journalists and editors are supposed to have some minimal obligation towards reporting the truth.

âoeWashington should be very thoughtful how they go forward here,â [Verizon Chairman and CEO Lowell McAdam] said. âoeThis uncertainty is not good for investment, and itâ(TM)s not good for jobs here in America.â

The sale of the wireline operations has been in the works for several years, Verizon executives said.

Those should not be paragraphs 5 and 6.
Heck, "in the works for several years," should have been the headline.

Nonsense

[sonicmerlin]

This is actually quite silly. Plans to sell 11 figures worth of business assets ($10,000,000,000) don't happen overnight. This has obviously been years in the making.

Re:And, for those of you who like government...

[circletimessquare]

it's called a natural monopoly

http://en.wikipedia.org/wiki/N...

zero government regulation doesn't mean magic free market fairy makes everything fair. it means you still have a monopoly, because the barrier to entry is too high: no one has billions to invest in building more conduits. or they have the money, but it's not worth the risk to them to invest billions and they don't make enough back after years, the network effect works against them

http://en.wikipedia.org/wiki/N...

google can compete, sure. so just wait for them to show up in your city in 40-50 years

meanwhile, you're still shafted in the ass with zero recourse whatsoever

government is not the problem

in fact, the ONLY solution you have to natural monopolies is government, via regulations

the problem we have in the usa is legalized corruption

corporations, by buying your congresscritters by funding their elections, and promising revolving door regulators a cushy job, *corrupt* your government

http://en.wikipedia.org/wiki/R...

there are other countries, canada, the nordics, where corruption is greatly reduced (it will always exist, the point is to minimize it). these countries do not have the same problems we have (see also: healthcare as another example of where the usa is corrupted and we are financially shafted with low quality, and our social and economic peers don't have the same level of problem)

if you were an intelligent person, you would be arguing for laws against corruption in your government. you would be asking them to heavily regulate natural monopolies, especially in regards to profit taking. please note heavy regulation does not mean *corrupt* regulations, which of course have to be reversed

but if you are a propagandized moron, you ask for a weakened government, which works for the plutocrats, because now there is no regulatory capture they have to engage in or corruption they have to fund. that makes them happy, and you get shafted even more in broadband (and healthcare)

FTFY Verizon

[Cantankerous Cur]

'This uncertainty is not good for investment, and it's not good for jobs here in America.'

'Overpriced unreliable internet is not good for investment, and it's not good for jobs here in America'

If you want certainity

[PineHall]

The FCC is trying to create an environment of certain well defined rules, but you, Verizon, keeps taking them to court. If you want certainity in federal regulation, stop suing the FCC.

Re:AT&T isn't far behind

[wiredlogic]

The problem is that they're selling off to bottom feeders like Frontier who will do nothing to improve the copper infrastructure which could still be useful if it were tidied up to achieve VDSL2 speeds.