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Yahoo and Verizon reportedly move closer to a deal

The latter may ask for a $250 million discount and will share ongoing legal responsibility for recent data breaches

The Yahoo and Verizon acquisition deal has faced many bumps in the road since the deal was first struck last July. In September, details on Yahoo’s data breach of 500 million accounts were made public and threatened the security of the arrangement.

Unfortunately, things only seemed to escalate from there. Rumors circulated that Verizon was seeking a $1 billion discount on the deal, and executives stated that they needed more information before things could move forward. Then, in December, a separate data breach of one billion user accounts was revealed, and many experts proclaimed that the acquisition was as good as dead.

However, Verizon hasn’t left the negotiating table, and now sources are saying that a new deal could be imminent. Bloomberg quotes sources close to the matter as saying that Verizon is close to renegotiating a deal that would reduce the original $4.8 billion price tag by about $250 million.

Additionally, sources say that Yahoo’s renamed entity Altaba would share ongoing legal responsibilities related to the data breaches. While a specific timetable for the announcement has not been set, and the deal could be renegotiated further, sources say the deal could be announced as soon as a few days or as late as a few weeks from now.

Cementing a deal

Yahoo has been under pressure to cement the deal for some time. CEO Marissa Mayer, who was brought in specifically to turn things around for the struggling company, has been at the helm as each data breach was publicized. However, earlier reports suggest that she will be stepping down as a director pending a successful acquisition deal.

Verizon has faced a different sort of pressure connected to the deal. Yahoo’s platform of one billion users would greatly help the company expand into the mobile media and advertising markets, but some shareholders may be leery about doing business with a company that has suffered so much scandal in such a short amount of time. However, ultimately, those same shareholders would have to approve a revised deal before it could go forward.

On news of the deal, Yahoo’s stock jumped 2% to $45.93 just before 11:00 a.m. Consequently, Verizon shares slipped 0.7% to $47.95. 

The Yahoo and Verizon acquisition deal has faced many bumps in the road since the deal was first struck last July. In September, details on Yahoo’s data br...
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Verizon's PopData looks to give consumers short periods of unlimited data

Critics argue that the service falls well short of the mark, though

Consumers have been attempting to manage the data they use on their mobile devices for years, with mixed success. But as technology continues to advance and new media trends take hold, it has gotten more and more difficult to do. Certain services, such as video streaming, can take a big bite out of users’ data if they’re not careful, which can lead to hefty overage charges.

It is for this reason that many providers have changed or abandoned unlimited data plans, which are potentially less lucrative than raking in exorbitant fees related to data limits. However, Verizon recently announced a new mobile data plan that allows users to buy unlimited data for small chunks of time.

The plan, called PopData, allows consumers to take advantage of 30- and 60-minute periods of unlimited data, which could be very useful if you need to download a large file or find yourself in an area without Wi-Fi. The company is pricing the 30-minute periods at $2 per extension and the 60-minute periods at $3 per extension, and the total cost of all extensions will be added to each customer’s bill at the end of the month.

Shortcomings

While the new plan may seem great at first glance, critics have been quick to point out its shortcomings. First, customers should be aware that PopData is only available while they’re in an LTE network; consumers in an area where Verizon’s 3G network is only available WILL NOT be able to use PopData, so data limits will still apply. The plan is also only available to postpaid subscribers, which means prepaid customers won’t be able to access it.

Perhaps more worrying is the way that the timer works on the plan. Once a user selects an extension and starts the timer, there is no stopping it. If there are network problems, like slow speeds or bad performance, the timer will continue to tick down anyway.

For users on less congested networks, this might not be too much of an issue. But for those who might be sharing a network in a city or highly-populated area, having a set time of unlimited data isn’t all that helpful if the network speeds are slow.

So, before signing up for a block of unlimited data, consumers should be well aware of network conditions and how it might affect their mobile activities. To learn more about PopData, visit the plan’s page here and peruse the FAQ section here.

Consumers have been attempting to manage the data they use on their mobile devices for years, with mixed success. But as technology continues to advance an...
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Verizon seeks a $1 billion discount on its Yahoo acquisition

The data company's massive data breach has put a strain on negotiations

When we first reported details about Yahoo’s massive data breach, which compromised user data on 500 million accounts, we mentioned how the timing of the disaster might negatively affect the acquisition deal it established with Verizon.

The telecommunications giant snatched up the struggling data company in July for $4.8 billion. However, since the breach happened in 2014 and it wasn’t properly communicated, that gives Verizon some leverage to re-negotiate a price or back out of the deal entirely.

Now, a new report from the New York Post says that Verizon is pushing for a $1 billion discount off the deal. It seems that news of the breach, along with allegations that Yahoo scanned emails for terrorist signals for a government agency, has put a strain on the negotiations.

“In the last day we’ve heard that [AOL boss] Tim [Armstrong] is getting cold feet. He’s pretty upset about the lack of disclosure and he’s saying, ‘Can we get out of this or can we reduce the price?’” said a source close to Verizon.

Yahoo pushes back

Asking for a discount simply makes good business sense, since the scandal and any financial consequences diminishes Yahoo value. On top of the discount, sources say that Verizon is putting aside $1 billion in reserve to deal with any fallout from the breach. It’s a move that former Yahoo CEO Ross Levinsohn detailed to CNBC on Wednesday.

“If I’m sitting at Verizon right now . . . just from a business standpoint, I’d probably reserve a bunch of money against the deal or go back to Yahoo and ask for a discount,” he said.

At the same time, however, Yahoo is pushing back against the suggestion. The company has balked at the prospect of a discount, saying that Verizon should honor the established deal and that it has no legal avenue to change the terms at this point. Yahoo’s board is set to meet in two weeks to address the issue, but discussions will continue up to that point.

“Tim was out there this week laying the law down and [Yahoo CEO] Marissa [Mayer] is trying to protect shareholders. . . Tim knows how to be fair, while Verizon is pushing him, he can bridge the gap,” said a source close to the situation.

Incentive for a deal

On Verizon’s end, the breach comes at an inopportune time for its other business prospects. The company acquired AOL nearly a year and a half ago for $4.4 billion and had hoped to combine it with its Yahoo acquisition to create a competitive rival to Google and Facebook in the digital advertising market.

Estimates suggest that the combination will reach 1 billion consumers if it closes in the first quarter, and that number could grow to 2 billion by 2020. Wanting to get the Yahoo acquisition put together may provide incentive for Armstrong to hammer out a deal quickly, but at this point the going may be slow and nothing is set in stone.

“They’re being cautious because they don’t know what they’re going to find,” one source said.

When we first reported details about Yahoo’s massive data breach, which compromised user data on 500 million accounts, we mentioned how the timing of the d...
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Verizon acquiring Yahoo business assets for $4.8 billion

Yahoo content will be added to AOL's

In the late 1990s, when few internet users had even heard of Google, Yahoo was the search engine of choice. Since then it has positioned itself more as a content provider and struggled to remain relevant.

Its long expected acquisition by another company is finally taking place, as Verizon announced over the weekend it will purchase Yahoo's operating business for $4.83 billion. The purchase will give Verizon access to more than one billion users for its mobile platform.

For Yahoo, it's the end of a long search for a suitor. For Verizon, it's part of a strategy to combine the company's mobile platform with a steady stream of content.

Linking Yahoo and AOL

“Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers,”said Verizon Chairman and CEO Lowell McAdam. “The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising.”

Verizon said Yahoo will be integrated with AOL and both units will operate under a Verizon executive. Yahoo's core Asian assets – primarily its huge stake in Chinese online retailer Alibaba – are not included in the sale. Yahoo CEO Marissa Meyer said the decoupling will create value for Yahoo shareholders.

“This transaction also sets up a great opportunity for Yahoo to build further distribution and accelerate our work in mobile, video, native advertising and social,” Meyer said.

Verizon says the addition of Yahoo to AOL creates a powerful combination of content and distribution. Combined, the company will have more than 25 brands under one corporate roof. Yahoo will add information content in finance, news, and sports, as well as an email platform with 225 million active users.

Verizon said it expects the deal to close in early 2017, pending approval by regulatory agencies and Yahoo's board of directors.

In the late 1990s, when few internet users had even heard of Google, Yahoo was the search engine of choice. Since then it has positioned itself more as a c...
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Verizon Wireless customers getting more data, for a price

With changes, Verizon bringing offerings more in line with competitors

Verizon Wireless is launching new wireless plans that will cost more but give customers access to more data.

Also, for the first time, customers on the new plans will be able to save unused data for the following month, a feature the company calls “Carryover Data.” The new plans and features take effect July 7.

Customers may switch to one of the new plans using the MyVerizon app. The lowest-cost plan is the S plan, which goes from $30 to $35 a month but doubles the data to 2 gigabytes (GB) per month. The M plan also goes up by $5 while the data allowance goes from 3GB to 4GB.

The L plan rises $10 a month but will offer 8GB a month of data instead of 6GB. The XL plan goes from $80 to $90 but the data allowance jumps from 12GB to 16GB. The largest plan, the XXL, also goes up another $10 to $110. The data allowance goes from 18GB to 24GB.

MyVerizon app

The company says the MyVerizon app will allow you to view your bill at any time, show you how much data is being used, and allow you to get more.

The app will also allow you to order additional devices, pay your bill, and connect with technical support.

“The new Verizon Plan puts your mobile experience in the palm of your hand with the My Verizon app, giving you greater value with new capabilities that get rid of the fear of overages, offer bill simplicity, and help you better manage your overall mobile experience with a few quick taps,” said Verizon marketing VP Nancy Clark.

Catching up to competitors

Clark adds that the app is just a way of putting consumers in charge of their accounts. If Verizon customers like the new options, they can thank many of Verizon's competitors, who adopted many of them years ago.

With the changes, you can have up to 10 consumer and business lines on an account. Some things will remain as they are: line service charges for smartphones is $20 per month, tablets and Jetpack devices are $10 per month, and connected devices are $5 per month.

But Verizon says connected devices won't count toward the limit for devices on an account, whether they’re offered by Verizon or not.  

Verizon Wireless is launching new wireless plans that will cost more but give customers access to more data.Also, for the first time, customers on the ...
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5G, faster mobile speed, may arrive sooner than you think

Verizon plans to start field testing 5G in 2016

Technology keeps moving farther along, pushing the envelope, so you're probably wondering when your cell phone is going to have faster speed.

According to Verizon, it's coming soon, with field trials for 5G technology starting next year.

"5G is no longer a dream of the distant future," said Roger Gurnani, executive vice president and chief information and technology architect for Verizon. "We feel a tremendous sense of urgency to push forward on 5G and mobilize the ecosystem by collaborating with industry leaders and developers to usher in a new generation of innovation."

50 times faster

The current state-of-the-art in mobile speed is 4G. Verizon says 5G is expected to provide about 50 times the throughput of current 4G LTE, latency in the single milliseconds, and the ability to handle exponentially more Internet-connected devices to accommodate the expected increased demands of the Internet.

"When you're planning a technological evolution at this scale it must be a collaboration of players in the ecosystem," said Marcus Weldon, chief technology officer of Alcatel-Lucent and president of Bell Labs. "Having Verizon initiate this effort now, even as 4G LTE technology has so much headroom left, will no doubt add to the rich fabric of our digital lives for many years to come."

Rima Qureshi, chief strategy officer for Ericsson, says the current effort to deveop 5G keeps the U.S. communications industry vibrant and globally competitive. To date, she says a lot of the work of developing 5G technological has come from Asia.

"It's exciting to see a U.S. company accelerate the rate of innovation and introduce new partners," she said.

Pipe dream

It wasn't that long ago that 4G was a pipe dream. As mobile exploded, Verizon began building and testing 4G LTE as early as 2008 with the creation of a 10-cell network sandbox around Boston. The first LTE data call was made in August 2009, and Verizon commercially launched the nation's first 4G LTE network in December 2010 with 39 major metropolitan areas and more than 60 major airports covered.

Today, Verizon says more than 98% of the U.S. population has access to 4G LTE and 87% of Verizon Wireless data traffic is carried over the network.

"Even as Verizon begins the work to make 5G a reality, we continue to grow 4G LTE," Gurnani said. "In addition to significant multi-billion-dollar investments in the network, we continue to work with a growing list of partners to launch new products and services on the nation's largest and most reliable 4G LTE network."

Technology keeps moving farther along, pushing the envelope, so you're probably wondering when your cell phone is going to have faster speed.According ...
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Verizon Wireless Backs Off $2 'Convenience' Fee

Consumer uprising forces company to retreat, following Bank of America's example

Just days after it stumbled badly in its handling of a series of 4G LTE network failures, Verizon Wireless has hastily abandoned an ill-conceived "convenience" fee of $2 for some customers paying their bill online or over the phone.

The holiday period around the end of the year -- when consumers are not paying attention to the news -- is when companies and politicians often try to sneak through new policies they hope will manage to flit under the radar.

It didn't work this time.  Verizon Wireless ran into the same wall of consumer outrage that Bank of American encountered just a few months ago with its $5 debit card fee, also quickly abandoned.  

Speed of light

Verizon's landline division likes to talk about its FiOS fiber-optic service operating at the speed of light, and that's just the speed at which consumers landed on Verizon Wireless. They lit up the Internet in no time with denunciations of grinchlike behavior befouling their holidays.

"I am unhappy with the fee for paying my bill online," said Victor of Lutz, Fla., in a complaint to ConsumerAffairs.com.  

"I think this is terrible," said Ria of Glendale, Ariz. "I will be looking for a different cell phone company that does not charge to make a payment over the phone."

A ConsumerAffairs.com survey of comments made on Twitter, Facebook and other social media wasn't much better.  In fact, it might have been a little worse.

Verizon kept a stiff upper lip and managed to mouth platitudinous assurances that it had had its customers' best interests at heart at all times.

"Improve efficiency"

"The company made the decision in response to customer feedback about the plan, which was designed to improve the efficiency of those transactions," a spokesman said. "The company continues to encourage customers to take advantage of the numerous simple and convenient payment methods it provides."

Even more solicitous was Dan Mead, Verizon Wireless CEO.  “At Verizon, we take great care to listen to our customers. Based on their input, we believe the best path forward is to encourage customers to take advantage of the best and most efficient options, eliminating the need to institute the fee at this time," he purred.

One might reasonably expect there were harsher words behind the scenes as Mead and his lieutenants sought someone to take the fall for the blunder.

The $2 fee would have applied to customers making one-time payments via the Web or over the phone. Besides attracting 100,000 angry consumers who signed an online petition, the affair drew the attention of the Federal Communications Commission, which isn't easy to do over the holidays.

The commission said Friday it was "concerned about Verizon's actions" and was looking into the matter, the Wall Street Journal reported.

Just days after it stumbled badly in its handling of a series of 4G LTE network failures, Verizon Wireless has hastily abandoned an ill-conceived "convenie...
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Verizon Explains 4G Outages ... Sort Of

Vague yet boastful statement attributes outages to "growing pains"

Verizon Wireless is blaming "growing pains" for the three recent outages that left many of its 4G LTE customers without the high-speed wireless service they're paying for.

"Being a pioneer comes with growing pains," Verizon said in a prepared statement. "The recent issues that affected our customers’ 4GLTE service were unforeseen despite careful, diligent planning, deployment and ongoing upgrade programs."

"Nonetheless, we estimate that 4GLTE connectivity has been available approximately 99 percent of the time this year," the statement continued.

Be that as it may, the repeated outages and the delayed, vague explanations are giving Verizon a black eye with at least some of its customers, who are paying a premium for fast, reliable service.

Verizon and other telecoms lose no time texting, calling and emailing when customers fail to pay 100 percent of their bill.  4G customers might reasonably expect the company to notify them when the service they're paying for is unavailable, even if it is only one percent of the time.

99% nothing to brag about

Ninety-nine percent, by the way, is not as great as it sounds.  U.S. airlines are finishing 2011 with only one fatality for every 7.1 million passengers, which is about as close to 100 percent as you can get. A 99 percent record would mean that one of every 100 airline flights crashed.

In its statement, Verizon attributed the problems to multiple, unspecified issues: "Each incident has been different from a technical standpoint. Our engineers have successfully diagnosed those past triggering events, and they have not re-occurred. We also work diligently to rectify technical problems in the Network before they affect any customers."

Whatever the problems might have been, Verizon says it's working to prevent them from happening again.

"We are taking a number of steps, working closely with our network suppliers, to ensure the integrity of our 4GLTE Network. We continue to fortify and improve its performance, and our goal is that our 4GLTE Network meets the same high standards that our 3G Network has set for performance and reliability," the company said.

It's the network

Verizon has spent millions of dollars advertising the supposed superiority of its network, often at the expense of AT&T, which has been struggling with network congestion in major cities for years.

While the latest incidents will most likely not be catastrophic for Verizon, as more serious failures were for rival Blackberry, a ConsumerAffairs.com sentiment analysis of about 4.4 million comments posted on Facebook, Twitter and other social media sites and blogs finds less than negligible dissatisfaction with Verizon's network.

Many companies facing a similar situation would try to nip disaffection in the bud by issuing at least a token refund and a sincere apology to customers, rather than Verizon's boastful and defensive bromide, which includes this rather unseemly bit of chest-thumping:

"The Verizon Wireless 4GLTE Network is BY FAR the largest and the most advanced 4GLTE wireless network in the world. It is available in 190 US markets and covers more than 200 million people, providing the fastest 4G Network in the US."

Well, most of the time, anyway.

Verizon Wireless is blaming "growing pains" for the three recent outages that left many of its 4G LTE customers without the high-speed wireless service the...
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Verizon Stakes Claim to Huge Spectrum Slice

Deals a cruel blow to AT&T, T-Mobile and Sprint

Verizon Wireless is shelling out $3.6 billion for a huge swath of wireless spectrum space that covers about 259 million potential customers.

Dan Mead, President and CEO of Verizon Wireless, said the additional spectrum "will enable us to bring even better 4G LTE products and services to our customers."

In a world where spectrum space is to wireless operators as oil reserves are to energy companies, the deal gives Verizon a huge leg up on its competitors, most notably AT&T, stymied in its attempt to make off with T-Mobile's spectrum.

It not only assures Verizon of continued network dominace but takes a big stack of resources off the table and out of the reach of its competitors.

Verizon is buying the space from SpectrumCo, a consortium made up of major cable companies Comcast and Time Warner as well as Bright House Networks.

Spectrum drought

With consumers increasingly wedded to their smartphones, tablets and laptops, spectrum space is getting to be like water in the desert -- there's just not enough of it to go around and nearly every little bit and byte is already spoken for.

The Federal Communications Commission (FCC) would like to open up more spectrums pace but the only way to do that is to take it away from existing licensees, including broadcasters and other well-organized groups who tend to circle their wagons and aggressively fight off intruders.

There was a time when the cable operators thought they might get into the cell phone business and they bought up as many spectrum licenses as they could.  Today's deal marks the end of that era but it doesn't mean you won't be seeing Comcast and Time Warner competing in the wireless world.

"These agreements, together with our Wi-Fi plans, enable us to execute a comprehensive, long-term wireless strategy and expand our focus on providing mobility to our Xfinity services," said Neil Smit, President of Comcast Cable. 

Resale plans

That's because, in addition to the spectrum sale, the companies have entered into several agreements, providing for the sale of various products and services.  Through these agreements, the cable companies, on the one hand, and Verizon Wireless, on the other, will become agents to sell one another's products and, over time, the cable companies will have the option of selling Verizon Wireless' service on a wholesale basis. 

In other words, Verizon Wireless will be able to sell Comcast and Time Warner cable services in areas where Verizon doesn't offer its FiOS service and, presumably, Comcast and Time Warner will be selling rebranded wireless service from Verizon.  This is an additional blow to AT&T, which currently offers broadband in areas not served by FiOS and, therefore, likely to be targeted by Verizon.

Or as Time Warner Cable PresidentRob Marcus said, "We're excited to be able to offer the nation's best wireless services to our customers and to have Verizon Wireless as a sales channel for our superb wireline services."

Additionally, the cable companies and Verizon Wireless say they have formed an innovation technology joint venture for the development of technology to better integrate wireline and wireless products and services.

The deal requires regulatory approval from the FCC and other agencies.

Verizon Wireless is shelling out $3.6 billion for a huge swath of wireless spectrum space that covers about 259 million potential customers.Dan Mead, Pre...
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Wireless Broadband Plan Would Create 'Super WiFi'

FCC wants to crack open 'white space' in TV signals


The Federal Communications Commission says it has resolved a number of legal and technical issues and is ready to move forward in opening the vacant airwaves beteen TV channels to host super WiFi and other services.

The spectrum, known as white spaces, is the first to be made available for unlicensed use in more than 20 years.

TV white space spectrum is considered prime real estate because its signals travel well, making it ideally suited for mobile wireless devices.

Unlocking this valuable spectrum will open the doors for new industries to arise, create American jobs, and fuel new investment and innovation, the agency said in a statement.

The National Broadband Plan noted the importance of unlicensed spectrum in creating opportunities for new technologies to blossom and recommended that the Commission complete the TV white spaces proceeding as expeditiously as possible.

The FCC began this project more than two years ago, investigating arguments that the use of the spectrum might interfere with existing wireless devices and television broadcast industries.

The National Association of Broadcasters (NAB) was a staunch opponent of the "white spaces" project.

Supporting the use of white spaces is an array of tech titans including Google and Microsoft, as well as consumer advocacy groups such as Consumers' Union, the U.S. Public Interest Research Group (PIRG), and Free Press.

Cheap wireless broadband

Among its uses, the spectrum could be used to deliver low-cost wireless broadband to rural and poor areas, transmit traffic videos, build electric-utility smart grids, create faster home networks, and create services not yet imagined.

MediaG3, Inc. a wireless technology venture, said the company is planning to exploit white spaces airwaves that exists in all U.S. cities.

MediaG3 last week introduced WiFiBridges technology, a multi-channel, multi-mode network which was designed in part to work in these white spaces. It's chairman, Val Westergard, hailed the FCC decision.

"This new spectrum allows signals to penetrate through buildings and walls much better, delivering superfast Internet connections in places other frequencies didn't," said Westergard. "We call this 'Next Generation,' WiFi3 or WiFiCubed. This will bring a whole new level of Internet mobile device usage.

"As more channels and frequencies are added and made available, more and more ways to use them will be developed. This is a very exciting day for all of us in wireless technology. The door to innovation has just been cracked open a little more."

Wireless Broadband Plan Would Create 'Super WiFi' ...
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Verizon Wireless Snaps Up AllTel

Deal would make Verizon the largest wireless carrier

Alltel's 13.2 million cell phone subscribers are about to become Verizon Wireless customers. Verizon Wireless has agreed to buy its competitor for more than $28 billion, creating the U.S.' largest mobile phone company.

The new combined company will have more than 80 million customers, placing it slightly ahead of AT&T, currently the nation's largest cell phone provider.

Alltel currently operates its own network in 34 states, focusing mostly on serving small to medium sized U.S. cities. Verizon is purchasing Alltel from a unit of Goldman Sachs Group Inc., which acquired it late last year.

The deal still must be approved, not only by shareholders, but also by the Federal Communications Commission and the Justice Department. Analysts say Verizon will most likely have to sell off some of its regional assets in places where both companies currently complete.

Even so, executives at Verizon express confidence the deal can close by the end of 2008. Under the proposed terms, Verizon Wireless would aquire Alltel's assets for $5.9 billion and assume more than $22 billion in debt.

Verizon Wireless Snaps Up AllTel...
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Verizon, FCC Cook Up Termination-Fee Plan

Deal would jettison states & suits and possibly sink Sprint's boat

The Federal Communications Commission (FCC) is considering a new proposal submitted by Verizon Wireless that would let consumers cancel wireless contracts without incurring punitive "early termination fees,"and to further prorate fees over the course of a contract.

In exchange, Verizon wants the FCC to block lawsuits against the companies over the fees, and prevent state lawmakers from seeking greater regulation over wireless fees as well.

While Verizon has used the proposal to paint itself as pro-consumer, telecom insiders noted that Verizon and AT&T would both be likely to sign new customers from struggling Sprint, which lost 1.2 million subscribers last year, if termination fees were eliminated or reduced.

"You have to watch both hands when you're dealing with the big telcos," said a longtime Washington hand. "While they're stroking you, they're stabbing someone else."

"As the clock runs out on the Bush Administration, business interests are grabbing all they can before a new crew takes over the cookie jar," this person said. "This is your basic get-it-while-we-can maneuver."

The Associated Press first reported yesterday that the FCC was considering the proposal, which if adopted would enable wireless customers to cancel their contracts for up to 30 days after they sign a cellphone contract or 10 days after they receive their first bill without penalty.

Termination fees would be lowered each month of a customer's contract, but some reports say the fees would not go below $60.

Nullify lawsuits

In exchange, Verizon wants the government to block numerous class-action lawsuits filed in various states over the termination fees. The proposal would also preempt state regulators' authority to regulate wireless fees, making federal authorities the primary source of redress for consumer complaints.

Other details of the Verizon plan remain scarce and the FCC itself has yet to publicly comment, but consumer advocates are already criticizing the proposal as too favorable to industry. Ed Mierzwinski, head of U.S. PIRG, called the proposal an "October Surprise in May."

"If Verizon wins, Martin would slip a bad excuse of a federal early termination fee regulation into FCC rules, so that Verizon can avoid existing lawsuits under state law arguing that early termination fees are unfair and deceptive efforts to prevent cell phone customers from shopping around," Mierzwinski said. "The companies would be required to slightly lower and pro-rate the fees, but not enough to matter."

Targeted for Termination--And Preemption

Termination fees have become a touchpoint for criticism of the wireless industry, with customers, consumer advocates, state regulators, and members of Congress criticizing them as a method to keep consumers locked into wireless contracts.

The wireless industry has claimed that the fees are a necessity in order to sell handsets at lower prices and recoup costs, and that consumers would not buy the phones at their higher, non-subsidized prices.

In addition to the multiple class-action lawsuits over the fees, Senators Jay Rockefeller (D-WV) and Amy Klobuchar (D-MI) introduced the "Cell Phone Consumer Empowerment Act" in 2007, which would mandate that termination fees be prorated by 50 percent after the first year of a two-year contract, and would limit the circumstances where other fees could be imposed.

The combination of class-action lawsuits and the threat of new laws prompted the four major telecom companies in America -- Verizon, AT&T, Sprint, & T-Mobile -- to voluntarily begin prorating their termination fees. Kevin Martin, the FCC chairman, also said his agency would investigate the fees, possibly leading to the discussions surrounding the new proposal.

The usage of federal regulation to block state laws, a tactic called "preemption," is often favored by large industries with strong presences in Washington, and has been added to proposed legislation dealing with everything from identity theft to federal gas mileage standards. Critics of preemption say the tactic enables powerful interest groups with easy access to Congress to get weaker federal laws passed that override stronger state laws.

"The big telecom companies have always preferred 'one-stop lobbying.' It's a lot cheaper and they don't have to deal with all those bothersome states and their pesky citizens," said a Washington strategist who formerly worked with major telecommunications carriers.

Verizon, FCC Cook Up Termination-Fee Plan...
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Wireless Spectrum May Hold Key To Net Neutrality

There's a quiet war being waged over spectrum space

There's a quiet war being waged in political and technology circles, and its outcome could provide consumers with a vast new resource for public communication -- or ensure major telecom companies have even more revenue lining their pockets.

As part of the nationwide conversion from analog to digital television signals scheduled to take place in 2009, the Federal Communications Commission (FCC) is planning to auction off large swaths of the newly-available signal spectrum.

The spectrum, near the 700mhz range, has been used to broadcast traditional UHF television programming to millions of families, and could conceivably be used as the backbone of a new wireless broadband Internet service. The question then becomes -- who should control it, and how should it be used?

Roughly 24 mhz of the spectrum is already earmarked for reclamation by the federal government, which plans to use it for public safety and emergency communication. The remaining spectrum is up for grabs, and the potential revenue from the auction could run as high as $30 billion.

The FCC is currently taking comments from the public regarding the rules by which the spectrum can be auctioned and used, with the deadline for comments closing tomorrow, June 4.

Consumer groups and technology advocates are pushing to open up the spectrum auction and create avenues for new wireless broadband networks. The potental reach of the spectrum could far exceed current municipal Wi-Fi networks, creating a new "third way" for Internet access, particularly in rural and smaller communities.

Columbia University professor and net neutrality advocate Timothy Wu wrote in Forbes magazine that the spectrum auction winner abide by legal precedent and permit users to attach devices to any system that utilizes the new spectrum, much as the wired phone network was mandated to support devices such as answering machines, faxes, and eventually computer connections.

"Attachment rights can break open markets that might otherwise be controlled by dominant gatekeepers," Wu wrote. "Longshot companies like Ebay or YouTube might never have been born had they first needed the approval of a risk-averse company like AT&T."

AT&T and its fellow gatekeeper Verizon are ramping up to bid on the available spectrum as well, and supporters of net neutrality fear that the major telecoms will use their financial muscle to outbid any competition for the wireless real estate. Free Press campaign director Timothy Karr warned that the Baby Bells would "horde this valuable public asset and stifle competitive and cheaper alternatives to their established networks."

"[T]he United States has fallen to 16th in the world in high-speed Internet rankings, with few choices and some of the highest prices for the slowest speeds in the world. We will continue this decline as long as we let AT&T, Verizon and Comcast dictate the terms of Internet access for the majority of Americans," Karr wrote in a solicitation to members of the "Save The Internet" coalition.

As of June 1st, the coalition had gathered over 230,000 signatures to send to the FCC in support of using the spectrum for public wireless broadband.

Silicon Valley startup company Frontline Wireless has already put in a bid to be the company that builds the broadband network for the wireless spectrum. The company is backed by former Google investors, and the search engine heavyweight itself recently petitioned the FCC to enable an open auction of the spectrum.

Even presidential candidates are taking notice of the issue.

Democratic contender John Edwards recently wrote an open letter to the FCC urging it to set the auction rules equitably in order to "unleash the potential of smaller new entrants," ensuring that rural communities could make use of the potential wireless alternative to cable and DSL.

"The upcoming 700 megahertz spectrum auction presents a once-in-a-lifetime opportunity to shape the next generation of American technology," Edwards wrote. "I urge you to seize this chance to transform the Internet and the future."

Wireless Spectrum May Hold Key To Net Neutrality...
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Groups Urge FCC To Create Wireless Broadband Competition

Telephone and cable companies deserve competition, advocates urge

The Federal Communications Commission should use its upcoming auction of the valuable 700 MHz spectrum to create high-speed Internet service that will be a true competitor to broadband services offered by telephone and cable companies, according to a group of public interest and consumer groups.

In a series of three filings with the FCC, the six-member Save Our Spectrum coalition said the Commission should structure the auction of the spectrum, and the service offered over it, so that the service will be operated in a non-discriminatory manner, under an open access structure following auction rules that will allow for greater participation than simply the incumbents.

The members of the coalition are: Public Knowledge, Media Access Project, Consumers Union, Consumer Federation of America, New America Foundation and Free Press.

In the filing on non-discrimination issues coordinated by Public Knowledge and New America Foundation, the coalition said the Commission should "establish a service rule for broadband services operating in the 700 MHz band that protects the consumer's right to use any equipment, content, application or service on a non-discriminatory basis without interference from the network provider."

This recommendation would make certain the landmark 1968 Carterfone decision allowing consumers to attach devices ranging from fax machines to computers to the telephone network, and would implement Net Neutrality principles of non-discrimination.

The open-access filing, coordinated by Consumers Union, argued that broadband deployment has advanced in other countries that allow competitors access to telephone-company networks.

"It is imperative that we learn the lessons of the wireline market and make the appropriate policy corrections in the launch of the most promising wireless broadband markets," the filing said. "Wireless broadband has not been a useful 'third pipe' and will not be in the near future if this spectrum is auctioned to the very same vertically integrated telephone and cable incumbents that dominate the wireline market."

In the proposed auction rules, a filing coordinated by the Media Access Project, the coalition recommended the Commission offer the new spectrum at the wholesale level, and should "either prohibit wireline and large wireless incumbents from bidding, or require them to bid through structurally separate affiliates."

The Commission should also guard against the possibility that winners of the spectrum auction not keep the spectrum from being used by not constructing new services, the groups said.

Groups Urge FCC To Create Wireless Broadband Competition...
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Verizon Cuts Off Northern New England

Vermont, New Hampshire, Maine Set Adrift

January 18, 2007
Verizon is planning to say good-bye to Northern New England, selling off its 1.6 million phone lines in those states to FairPoint Communications, a Charlotte, N.C., company that currently has about 252,000 customers in rural areas of 18 states.

Verizon says the deal would enable it to concentrate on developing its wireless networks, shedding its "plain old telephone service" -- or POTS, as it's known in the telephone business -- and the billing, regulatory and maintenance headaches that accompany it.

Critics said the company was washing its hands of rural areas and noted that only 62 percent of Verizon's customers in the three states had access to DSL service.

In fact, FairPoint has a better record than Verizon in deploying DSL in rural areas. The company said that more than 80% of its customers have access to DSL, and 23% of those use the service.

Verizon is spending about $18 billion to build the nation's fastest fiber optics network in urban sectors of the Northeast and Mid-Atlantic regions and, with its British partner VodaFone, spending heavily to keep Verizon Wireless competitive.

Shortly after the FairPoint deal was announced, Verizon Wireless issued a press release touring its latest 29 new cell sites across Maine's Hancock, Knox, Oxford, Sagadahoc, Waldo, and York counties. In 2006 the company built and activated 100 new cell sites across the Pine Tree State.

In 2006, the company invested nearly $318 million in New England to stay ahead of growing demand for Verizon Wireless voice and data services, the company said.

"Reliable networks are not built overnight," commented Ken Dixon, New England president of Verizon Wireless. "Building 100 sites in one year, in one state, illustrates our strong focus and commitment to make the nation's most reliable wireless network even better."

The FairPoint deal would allow Verizon to transfer $1.7 billion worth of debt to the new company, a so-called "spin merger" that helps reduce the tax consequences of the sale.

FairPoint pledged that it would add about 600 jobs to the Verizon workforce, which currently totals about 3,000 in the three states.

Both Verizon and AT&T are trying to move away from land-line telephone service in favor of wireless, Internet broadband and cable-style video. They have also been unloading their directories businesses and shedding overseas holdings.

Verizon Cuts Off Northern New England...
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Verizon Will Offer Stand-Alone DSL Service

Verizon says it will phase in a policy of allowing customers to buy stand-alone high-speed Internet service

Verizon says it will phase in a policy of allowing customers to buy stand-alone high-speed Internet service. Qwest is currently the only major local telephone company that will sell DSL service to customers who do not have a local telephone number at the same location.

Verizon said current customers in 13 Northeastern states will be allowed to drop telephone service but continue to receive DSL service. However, the company said customers would have to transfer their number to a wireless carrier, to a VOIP provider like Vonage or to a cable company -- not to a competing local phone company that uses Verizon's lines.

Verizon said it will expand the stand-alone option to all of the states in which it operates. Eventually, the company said, it will offer stand-alone DSL to new customers as well as exissting customers but said a timetable has not been established.

Not everyone was pleased. Gene Kimmelman of Consumers Union said Verizon's new policy was "less than what consumeres need to have a vibrant, competitive marketplace."

With the growing popularity of Internet telephone service, many consumers would be expected to get rid of their regular telephone service and rely solely on VOIP, which is not only cheaper in most instances but also offers many features not available with regular telephone service.

Verizon's move leaves SBC and BellSouth as the hold-outs. Neither company currently provides DSL-only service.



Verizon Will Offer Stand-Alone DSL Service...
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