Dear Reporters, Regulators and The Public: Verizon & Frontier Merger Exposes the Underlying Con that Created the Digital Divide and Must be Investigated.

Dear Reporter, while reading the collection of news stories about Verizon purchasing Frontier’s scattered US properties, it is now clear to us that most of you have no idea about the history of Verizon or Frontier, much less how these companies failed to properly upgrade their state telecommunications utilities.

And we also assume you have no idea that Verizon’s “footprint” is actually a collection of public telecommunications networks that still exist. Moreover, not one reporter mentioned the hundreds of billions of dollars that have already been paid by residential and business customers — including those in rural areas or low income families — for a fiber optic future we never received and this shell game continues today.

The IRREGULATORS will take this time to tell you the story because — you are not alone. The history has been erased and rewritten so, we decided we should fill in a few gaps, as even your AI queries will be biased into quoting a made-up storyline — we just checked.

America has a Digital Divide because Verizon, which is comprised of GTE, Bell Atlantic and NYNEX never upgraded its current state “Footprint” with an upgrade of the utilities for an all fiber state infrastructure. However, it has continually charged customers to contribute to its construction budget annually and it continues in 2024.

And worse, these construction budgets were diverted to wireless instead of building out the fiber to the home networks. And the real kicker, whole areas of the states were never going to get a FiOS franchise and so it would never get the fiber it paid for — because the fiber was never designated for non-Fois areas.

But the real news is — If Verizon, who claims it has been unprofitable to fulfill the obligations to upgrade their state telecom utilities, somehow has $20 billion in cash to purchase part of the Frontier network then America should stop all government subsidies and investigate how Verizon is harming their current ‘customers’.

And underneath you can feel that this merger is a con. Besides the fact that Verizon sold off the original GTE properties to Frontier because it wanted to get rid of the ‘rural areas’ — anyone who thinks Verizon is going to start now wiring up homes with fiber or even neighborhoods hasn’t realized Verizon’s current plans — Verizon has started a

massive deceptive advertising bait and switch campaign to brand its FWA (Fixed Wireless) as FiOS. So, retaking control of the original GTE territories, Verizon’s more rural utilities and cities will allow them to use the utility perks for its fixed wireless roll out — as well as get lots of government subsidies — pleading poverty in the ‘rural areas’.

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Let’s review some basic facts about fiber optic broadband in America and Verizon’s role in the Digital Divide.

1) THEY ALL Filed with the FCC to Upgrade Millions of Households, 1992–1995.

The chart above supplies the ‘committed’, permanent fiber optic upgrades that were filed with the FCC — 30+ years ago — and these became Verizon — GTE, NYNEX, Bell Atlantic, and throw in SNET in CT (now owned by Frontier), and virtually none of it was ever built.

In whole cities, states, schools, libraries government offices in their service areas, there were actual filings with the FCC to upgrade these areas with fiber optics wire infrastructure, replacing the original copper, and these were so-called ‘video-dialtone’ upgrades, which were separate but aligned with the other state commitments and tied to the hype presented in the annual financial reports and regulatory filings.

2) Annual Reports, Press Releases and Fiber To The Hype.

Starting in 1991 with the call for upgrading America to fiber, known as the “Information Superhighway”, each telco made thousands of state and federal statements, filings, etc. to convince investors they were going to make sure America was going to be first with a fiber optic future…

GTE Video Services, 1995 Annual Report: January 1996

“In 1991, GTE Telephone Operations became the first telephone company in the United States to offer interactive video services… Expanding on this success, the company in 1994 announced plans to build video networks in 66 key markets, covering 7 million households over the next 7 years.“

Bell Atlantic1993 Annual Report

“First, we announced our intention to lead the country in the deployment of the information highway.… We will spend $11 billion over the next five years to rapidly build full-service networks capable of providing these services within the Bell Atlantic Region. We expect Bell Atlantic’s enhanced network will be ready to serve 8.75 million homes by the end of the year 2000. By the end of 1998, we plan to wire the top 20 markets.… These investments will help establish Bell Atlantic as a world leader….”

NYNEX, 1993 Annual Report

“We prepared to install between 1.5 and 2 million fiber optic lines through 1996 to begin building our portion of the Information Superhighway.”

And in 1996, with the hype at levels that would makes 5G sound like a whisper, Bell Atlantic announced 12 million households — starting in 1996. And notice that Philadelphia and other parts of Pennsylvania was a starting point:

“Bell Atlantic plans to begin its network upgrade in Philadelphia and southeastern Pennsylvania later this year. The company plans to expand this Full Service Network deployment to other key markets over the next three years. Ultimately, Bell Atlantic expects to serve most of the 12 million homes and small businesses across the mid-Atlantic region with switched broadband networks.”

There are some very important points.

• First, this was an upgrade of the original existing mostly copper-based state public telecommunications utilities.
• Second, this is “broadband”. That’s right; it is a telecom service, Title II, network that few regulators have never examined. It is not an “information service”, Title I; it is not a “cable service”, Title VI; it is part of the existing telecom networks (We assume that the Bell Atlantic number included the NYNEX fiber plans.)

And this is critical because for all these years, state laws were changed to be able to charge wired customers for these network upgrades; and this has been continuous — and is still going on in 2024.

This chart summarizes how these 3 holding companies that control the state utilities had made statements and commitments, filings, etc. that they would be installing 19 million lines of fiber optic services to the home — not wireless — by the year 2000–24 years ago. And customers were charged EXTRA for upgrades to the state infrastructure — actual wires for broadband, and it is estimated that by 2000, about $30–50 billion in rate increases and tax benefits was paid in by customers of these 3 holding companies — with virtually nothing to show for it. But get this; no state utility commission stopped these increases that were supposed to be used for network upgrades. Talk about “Captured Agencies”!

3) The “Commitments for the Verizon Deal” — Toilet Paper and a Captured FCC.

According to the Bell Atlantic press release, “Bell Atlantic and GTE Merger Promotes Vigorous Competition in Communications”, December 23, 1998. This merger would “ignite nationwide competition” between the Bell companies.

“Bell Atlantic (NYSE:BEL) and GTE Corp. (NYSE:GTE) today will file reply comments with the Federal Communications Commission (FCC) on their proposed merger, saying the transaction would ignite nationwide competition in local, long distance, wireless, Internet and data communications services.

“Local Service Competition — The new company created by the merger of Bell Atlantic and GTE will have a far greater ability to enter and compete quickly and effectively in key markets outside Bell Atlantic and GTE’s current service areas. Local exchange customers in GTE’s and Bell Atlantic’s current service territories will also benefit from the combined company’s ability to compete with others on price, service quality and range of product offerings.”

Verizon promised not only wireline phone competition, but also spending $500 million in 36 months, including advanced fiber networks — broadband.

“Within 36 months from merger closing, Bell Atlantic/GTE will spend a minimum of $500 million to provide competitive local service, including traditional local telecommunications services and advanced services, outside of its service areas or will provide competitive local service to at least 250,000 out-of-region Customer lines.”

Verizon is still in the original Bell Atlantic-NYNEX footprint, for the most part. And this FCC merger requirement was never even close to being met.

At any time after the passage of the Telecommunications Act of 1996, Verizon could have just entered AT&T or Frontier territories — but due to the ties to the benefits of using the state telecommunication public utility as a cash machine for construction along with additional perks, both Verizon and AT&T have been in their ‘footprint’ a fact that every reporter should be examining.

4) Then we have FiOS, 2004–2010

Verizon claimed that it would spend $23 billion dollars and cover 18 million homes — by the year 2010. This quote from 2006 details that this would cover over 50% of the 33 million Verizon homes, with an additional percentage being added each year.

THIS IS ONE DECADE AFTER THE ORIGINAL PLANS. And consider that the original plans for these states was to have 19 million homes completed by 2000, as the starting point…

Verizon FiOS, EDN, 2006

“The estimated 18 million homes to be passed in 2010 would represent more than 50 percent of its base of 33 million homes served in its 28-state service area. By the end of 2006, 6 million homes will have access to FiOS, with 3 million added each year through 2010. By then, Verizon expects to sign up 7 million customers for Internet services and 4 million for FiOS TV.”

But it was all just a show. In 2010, the Wall Street Journal reported FiOS was a fait accompli . March 30, 2010

“Verizon Communications Inc. will no longer seek new cities to roll out its FiOS TV service as the company nears the end of its $23 billion network upgrade project. The New York-based telecommunications provider has wagered heavily that its bundle of faster Internet service and television would give it an edge over its cable rivals and has spent the last six years replacing much of its older, slower copper lines with faster fiber-optic ones.”

5) Verizon Drops the GTE-Rural Territories.

Verizon Doesn’t Want Rural Customers and Will Not Give Them Fiber To The Home.

This is from the original Verizon press release to sell off their former GTE holding to Frontier. It was to get rid of their rural areas as best as possible. It was never about the actual customers’ needs that the company served.

“Verizon to Divest Wireline Businesses in 14 States; Significant Benefits to Verizon Shareholders 05/13/2009

“NEW YORK — In a move that will further accelerate the company’s focus on wireless, broadband and global IP, Verizon Communications Inc. (NYSE:VZ) today announced plans to divest its local wireline operations serving residential and small-business customers in predominantly rural areas in 14 states and that these operations will be acquired by Frontier Communications (NYSE:FTR).

“The transaction is expected to strengthen Frontier’s position as a premier rural communications provider and return a total value of $8.6 billion to Verizon and its shareholders, as Verizon continues to transform its growth profile and asset base around the fastest-growing parts of its business: wireless, fiber-based wireline (FiOS) and global IP (Internet protocol) networks.”

And now,Verizon is incredibility lucky because America has institutional amnesia and doesn’t remember anything past the length of a tweet. Does anyone think that Verizon has the best interests of the Frontier customers? Verizon will later claim they should get crap fixed wireless, which has line of sight, capacity and distance limitations, instead of an actual fiber to the home service. And of course, any statement or commitments Verizon makes will be honored.

Every state utility regulator that is supposed to be overseeing Verizon’s state telecom utility should be demanding audits to examine basic questions:

===How did Verizon fail to properly upgrade their state telecom public utilities over the last 3 decades after they received massive financial incentives — read rate increases and tax perks — to build out the fiber networks even in rural areas?

====How, by 2012, did Verizon pull a bait and switch and illegally used the construction budgets that were supposed to be used for the fiber upgrade of the state telecom utilities but instead were used to illegally cross subsidize it’s wireless affiliate’s infrastructure and thus creating then Digital Divide in America?

Verizon claims this deal adds to the Verizon “fiber” footprint but looking at the numbers it shows Verizon just stuck its state telecom utility footprint in its mouth. Verizon probably wants more state and federal government subsidies in these more rural areas and can force customers onto fixed wireless while claiming it is doing fiber to the home.

“NEW YORK & DALLAS — September 5, 2024 — Verizon Comm. Inc.

(NYSE, NASDAQ: VZ) and Frontier Communications Parent, Inc. (NASDAQ: FYBR) today announced they have entered into a definitive agreement for Verizon to acquire Frontier in an all-cash transaction valued at $20 billion. This strategic acquisition of the largest pure-play fiber internet provider in the U.S. will significantly expand Verizon’s fiber footprint across the nation, accelerating the company’s delivery of premium mobility and broadband services to current and new customers”.

CONCLUSION: We Documented the Last 3 Decades of the Fiber Optic Failed Deployments in America

“The Book of Broken Promises” is a series that started in 1998 with “The Unauthorized Bio of the Baby Bells”, with a foreword by Dr. Bob Metcalfe, (co-inventor of Ethernet). In 2004 we published $200 Billion Broadband Scandal, which was featured on Bill Moyer’s PBS special “The Net at Risk” in 2006; our section was called ‘the new Digital Divide”

FREE DOWNLOAD: DISSCONNECTED: was written to deliver a fast-read summary of how the Digital Divide was created by Big Telecom and Cable, and their ability to capture the regulators.

$200 Billion Broadband Scandal: Two Chapters

• Chapter 17: The Verizon-Bell Atlantic-NYNEX-GTE Mergers Were the Death of State Fiber Optic Deployments: The “Con Job”. `
• Chapter 18: Analysis of Verizon’s Merger Conditions and “Truth in Speech”

And to stress why this is important now?

Verizon states never fulfilled its obligations to upgrade the state utilities for 30 years, and yet they have and continue to get paid to replace the existing copper wires with fiber optics — not do a bait and switch with inferior wireless services.

The current Verizon’s footprints are state telecommunications public utilities, and they have ended up being used to fund the other lines of business, including wireless, and this continues now. Besides this merger showing just how ridiculous this proposed deal is — Verizon does not care about the customers — especially the frontier customers.

Moreover, they will use all of this as an excuse to get more government subsidies — without the government investigating just how Verizon et al failed to upgrade America and created the Digital Divide.

But what is most disconcerting is the fact that America’s reporters and media are just parroting the press releases and have no clue about the history, the companies or therefore what the possible outcomes will be.

Please Sir May I have Another?

In 2015 we documented the status of Verizon’s Fiber Optic Deployments:

Oh, but it gets worse — This is a partial map by New York City Comptroller’s offices showing that large areas of NYC had not been properly upgraded to FiOS fiber to the home based on the franchise agreement for 100% coverage for residential customers.

Verizon claimed it completed its FiOS deployment in 2014 and the City had to take Verizon to court, and then had to threaten to not renew the Franchise. — which the City did as a strategy to get 500,000 lines of fiber put in by July 2023.

This chart supplies information about holes in the deployment of FiOS, especially in low-income urban areas, that has played out in every Verizon state, Where’s the investigations?