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Verizon Sells Off Wireline Operations, Blames Net Neutrality Plans

Posted by timothy on from the seems-a-reasonable-reason dept.

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.'"

35 of 214 comments (clear)

  1. F(ck them. by Anonymous Coward · · Score: 5, Insightful

    That's just an excuse.

    1. Re:F(ck them. by Anonymous Coward · · Score: 5, Insightful

      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.

    2. Re:F(ck them. by bleh-of-the-huns · · Score: 5, Informative

      Verizon has been trying to shed their wireline service for years. They have done a few here and there, using Reverse Morris Trust (basically a way to fuck the company buying VZ's assets, and the constituents... Frontiernet has screwed up everything they have touched)

      The timing just coincides with the FCC ruling, and a great opportunity for VZ to talk out of it's collective ass

      --
      I came, I conquered, I coredumped
    3. Re:F(ck them. by phantomfive · · Score: 3, Insightful

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

      --
      "First they came for the slanderers and i said nothing."
    4. Re:F(ck them. by Sri+Ramkrishna · · Score: 4, Interesting

      Frontier is awesome! They are the only company I know that lowered my monthly rate and up'd my speed. Unheard of.

  2. So, pass the buck to government ... by UnknownSoldier · · Score: 4, Insightful

    ... 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.

    1. Re:So, pass the buck to government ... by bigfinger76 · · Score: 5, Informative

      By "Obama Phone" I assume you mean the Lifeline Assistance program, which was put in place long before Obama took office. In fact, it was instituted under none other than Ronald Reagan.

      I have an uncle like you., and it's depressing.

    2. Re:So, pass the buck to government ... by andydread · · Score: 2

      All the taxes placed on a land line to pay for Obama Phone and E911

      You sir are as complete brainwashed moron. - smh. The so called "Obama phone" is a program started by reagan

    3. Re:So, pass the buck to government ... by Anonymous Coward · · Score: 2, Insightful

      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.

    4. Re:So, pass the buck to government ... by Zontar+The+Mindless · · Score: 2

      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.

      Let's hear that again, I think some folks might have missed it.

      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.

      If you still didn't quite get that, allow me to translate: These monopolies intend to re-architect the Internet to suit their profit model, and to prevent others from getting started the way that they did.

      Give this AC a cigar. And some upmods.

      --
      Il n'y a pas de Planet B.
    5. Re:So, pass the buck to government ... by jmac_the_man · · Score: 2
      The so-called Obamaphone program started under George W. Bush, although it was modeled on the Lifeline Assistance program which began during the Reagan era.

      The program is run by cell phone companies, who get a subsidy from the Federal government for each subsidized subscriber. The name Obamaphone originated with the companies. Some of them decided to call their version of the program "Obamaphone" to imply that their service (and not their competitors') were endorsed by President Obama, who is very popular in the demographic that they are advertising to.

      For President Obama, this has the added benefit of implying that if a Republican gets elected, "Obamaphone" goes away. The Republicans would almost definitely not end the free cell phone program. However, they should put a stop to the companies CALLING it "Obamaphone." The government (and its private sector allies) should not be allowed to brand public assistance benefits as a gift from a particular politician or a particular party.

    6. Re:So, pass the buck to government ... by Jason+Levine · · Score: 2

      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.

      If you still didn't quite get that, allow me to translate: These monopolies intend to re-architect the Internet to suit their profit model, and to prevent others from getting started the way that they did.

      There's also the other wrinkle to this whole discussion: Verizon brought this upon themselves. The FCC enacted some weak network neutrality rules that almost all of the ISPs liked. It would have essentially let the ISPs do whatever they wanted. Only Verizon didn't like having any rules at all so they sued. They were successful in getting the rules knocked down, but at the expense of the courts telling the FCC they would have to declare that ISPs fall under Title II. So the FCC did this. Verizon got greedy and it came back to bite them in the rear.

      --
      My sci-fi novel, Ghost Thief, is now available from Amazon.com.
  3. It's so not fair by Billly+Gates · · Score: 4, Insightful

    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.

    --
    http://saveie6.com/
    1. Re:It's so not fair by Solandri · · Score: 4, Insightful

      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.

    2. Re:It's so not fair by Fire_Wraith · · Score: 3, Informative

      It's because most people today tend to grossly misunderstand what socialism is, and what "market capitalism" is.

      An actual "Socialist" would want to do something like nationalize all the major telecom companies.

      Market Capitalism, on the other hand, relies on the Government acting as arbiter and enforcer of basic rules of fair competition, because that is a core requirement. When Adam Smith was alive, Socialism hadn't even been thought up yet. Instead, you had the government (generally run by a Monarch/Nobility) granting exclusive privileges or outright monopolies to certain individuals or corporations, like giving the East India Company a monopoly on the import of tea.

      Sound familiar?

      This is what we're having the argument over, here - whether or not the government will act to encourage competition and curb monopoly abuses, or whether it will let the status quo of monopolistic preferences and abuse continue. Nobody's even remotely talking about nationalization.

  4. Translation... by thesupraman · · Score: 5, Insightful

    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.

    1. Re:Translation... by TubeSteak · · Score: 4, Insightful

      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.

      --
      [Fuck Beta]
      o0t!
  5. " and it's not good for jobs here in America.'" by Anonymous Coward · · Score: 3, Interesting

    Funny... Verizon outsourcing jobs is good for america but this isn't?

    "This was all in an effort to cut costs and make larger profits. And profits they’ve made. During the same period of laying off thousands of workers, Verizon made more than $19.7 billion in profits and received a $758 billion federal tax refund."

    http://www.goodjobsnow.org/201...

  6. Just a chance to threaten america by Anonymous Coward · · Score: 3, Interesting

    Verizon sucks up tax breaks and rebates for building out fios and then tosses it usually to frontier that just barely maintains it. This is how they operate, they hardly ever keep landlines once they are done building in the area and frontier never adds to the network. It is a scam they have ran since they started installing fios as keeping and running the actual network is a not as profitable.

  7. Nonsense by sonicmerlin · · Score: 4, Insightful

    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.

  8. Good for the "Public" ... by Frosty+Piss · · Score: 3, Funny

    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

    Fine, if Verizon has a problem with Net Nutrality, perhaps they should not be in the Internet business anyway.

    I think their best be is to go the HP route and switch to ink-jet printer ink.

    --
    If you want news from today, you have to come back tomorrow.
  9. Re:Uncertainty by rtb61 · · Score: 3, Interesting

    Talk of uncertainty is simply PR=B$ to hold up the sales price. They are simply selling the copper network which they have degraded to crap with poor maintenance, other bits are tacked on in order to protect that price. Incumbents all over the world are looking to dump their degraded copper networks with only idiots looking to buy or scams like in Australia where Toxic Tony and crew who strangled the national NBN project to death are going to dump billions of dollars of taxpayer money straight into the pockets of two corporations and their investors by buying a degraded copper network.

    Here's betting exactly what the incumbents will do once they dump the copper, install a new fibre to the premise network and burn the suckers who bought the copper with gold. I wonder how many countries governments will be corrupts enough to buy into the same deal being done in Australia.

    --
    Chaos - everything, everywhere, everywhen
  10. Been there, done that by stevel · · Score: 5, Informative

    This is not new for Verizon at all - they have been shedding their landline and FiOS business for years. Back in 2007 they abandoned Maine, New Hampshire and Vermont, selling off the business to FairPoint Communications, a tiny North Carolina company that struggled for years to overcome billing system issues. FairPoint announced then that they would not be expanding the fiber Internet service (FiOS TV never got started here) and the service has been static since then. (On the positive side, my bill hasn't increased since 2007!)

    Even in Massachusetts, where Verizon still operates FiOS TV, they announced a couple of years back that they would not expand service to more areas. This tripe about Net Neutrality is just a convenient smokescreen for what they've been planning all along.

    1. Re:Been there, done that by Moridineas · · Score: 2

      Ironically, Verizon sold off their North Carolina services to a Connecticut based company (Frontier).

  11. To ensure consistent customer experience by penguinoid · · Score: 5, Funny

    Our customers expect to get screwed over, and this legislation would put a stop to that for wired service. To ensure consistent customer experience, we must unceremoniously dump our wireline customers.

    --
    Don't waste your vote! Vote for whoever you want, unless you live in a swing state it won't matter anyways
  12. What a load of bull.... by QuietLagoon · · Score: 5, Informative
    Verizon tries to blame Frontier sell-off on net neutrality has another take on this topic.

    As we've noted, Verizon's been looking to offload its fixed-line assets for years, since the company clearly finds wireless service (and caps and overages) a far-more profitable venture. As such they've spent the last few years actually raising rates and neglecting unwanted customers in the hopes they'll leave to wireless, or leave to companies like Comcast (where they'll then be pitched...you guessed it...Verizon Wireless services as part of a co-marketing arrangement). After massive sales to Frontier and Fairpoint in years past, Verizon this week convinced Frontier to buy all of the company's DSL and FiOS customers in Florida, Texas and California. Amusingly (or not), Verizon is trying to spin the latest deal to pretend they were forced down this path because of net neutrality: ...

  13. Verizon on Net Neutrality by mckellar75238 · · Score: 3, Interesting

    '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.'" It's SO nice to realize that they have their customers' best interests in mind...

    I know, I know -- they have to make a profit. But it would be nice if someone would realize that net neutrality is about fairness to the consumer, not about maximizing corporate profits.

  14. Actually this is good and bad by Virtucon · · Score: 2

    First the Good, Yeah I won't have to deal with their fucked up customer service anymore. Here that Verizon? You suck donkey balls!
    The baby bells became too big and with too much consolidation. If they want to take their ball and go home crying fine. Maybe I can now buy my set top boxes because your network is built out now and being sold. I'm tired of paying fucking fees just because "you're building your network out" It's been over 5 years now, let me buy the box or get Tivo without it costing me an arm and a leg.

    The Bad, I don't know who this other company is or how it treats its customers but I'll find out. I also can assume that they'll jack up the rates to pay the $10 Billion it'll cost them to buy this infrastructure from VZ. If they don't work out I can always go to TW/Comcast...Oh shit I'm screwed.

    --
    Harrison's Postulate - "For every action there is an equal and opposite criticism"
  15. Re:And, for those of you who like government... by circletimessquare · · Score: 4, Insightful

    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)

    --
    intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
  16. Use FairPoint, avoid Comcast by Okian+Warrior · · Score: 2

    Crap, I'm moving to Hudson, NH and my two wired choices are FairPoint or Comcast. Should I really choose Comcast over FairPoint (I only care about Internet, not phone or TV)? FairPoint doesn't have any prices listed anywhere on their website. I really hate businesses like that.

    No. Go with Fairpoint and avoid Comcast.

    I live in NH (about 3 towns over from Hudson) and have used both. While Fairpoint is annoying, it's manageable and they don't fuck up too badly or very often. If you can manage your own computer configuration you can generally keep them at a distance and just reboot your modem once or twice a week.

    Comcast is completely and totally interested in what you do, how you do it, and whether it violates their TOS. They will silently do lots of shit to prevent you from doing things, at random intervals. Also, Comcast oversells their bandwidth on what is effectively a shared line, so you won't ever get those "blazingly fast" XFinity speeds they advertize.

    Comcast is "not a lot of benefit" for "whole lot of hassle".

    Go with FairPoint.

  17. FTFY Verizon by Cantankerous+Cur · · Score: 4, Insightful

    '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'

  18. If you want certainity by PineHall · · Score: 4, Insightful

    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.

  19. Spending My Karma: Fuck You Verizon by BrendaEM · · Score: 2

    What's the matter? Can't extort? Aw, poor thing.
    Please leave Verizon, tomorrow.

    --
    https://www.youtube.com/c/BrendaEM
  20. Re:And, for those of you who like government... by circletimessquare · · Score: 2

    the idea is to pass laws against corrupt regulation

    if you get rid of regulation, you still have the monopolies. except without regulations, now they screw you without even having to pretend to be following fake rules they paid for

    the idea that less regulations is somehow better is fucking stupid

    the idea that regulations are automatically corrupt is spineless cynicism

    there are plenty of countries with effective regulations. they get those with strong rules against corruption

    meanwhile, the usa has legalized corruption. buying congresscritters by funding their elections. owning regulators by giving them cushy jobs after government work. both should be illegal

    but instead of a large grassroots movement against corruption, we have hordes of low iq propagandized douchebags against government

    government is not wonderful. government does plenty of things wrong. but it's just that, on the issue of natural monopolies, government regulation is the only fucking solution, the least worst option

    we have so many spineless, stupid people in the usa who think regulations are the problem and thereby support a horrible status quo with their ignorant, cynical inaction

    *corrupt* regulations are the problem, not regulation, on the topic (only the topic, before i get accused of loving government which i don't) of natural monopolies

    i'm not asking anyone to trust government

    i'm asking people to see, on the *specific* topic of natural monopolies, the real culprit is plutocrats, not government, via corruption

    fight corruption, not government

    without government they will still screw you, but more happily, because now they don't even have to waste money on corruption. without government, the problems of natural monopolies don't just disappear in magic free market fairy farts. there are no free market solutions to natural monopolies. only (noncorrupt) government regulatory solutions

    --
    intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
  21. Re:AT&T isn't far behind by wiredlogic · · Score: 3, Insightful

    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.

    --
    I am becoming gerund, destroyer of verbs.