FCC’s Wireless 5G Conflicts-of-Interest & the Ligado Deal.
The term “conflicts-of-interest” now appears to mean that a former senior executive from Verizon, now US Attorney General William Barr, can cheer on a wireless company, Ligado networks, where the former CEO of Verizon, Ivan Seidenberg, is now the Chairman of the Board of Advisors, and congratulate the FCC on a massive giveaway where the FCC Chairman Ajit Pai is a former Verizon attorney and one of the Commissioners, Brendan Carr, worked for Verizon and the CTIA, the wireless association which is funded by Verizon and AT&T. In fact, the 5G plan of the FCC was taken from ‘model legislation’ that was created by a group called ALEC, the American Legislative Exchange Council, which has been funded by these companies. ALEC has infested over 20 state legislatures where much of the time, the politicians that present these biased plans are funded by AT&T, Verizon et al., not only through campaign contributions but they can also receive major funding from the companies’ foundations as grants for pet projects in their districts.
And, as we previously documented, the FCC has decided to use a hodge-podge market research report that was funded by the CTIA in 2016 and appears to claim that 5G will generate an additional $500 billion in economic growth. Yet, this actual number, “$500 billion”, appears to be lifted from a report about wired broadband published in 2001 — a report that was funded by Verizon.
All of this is being played out with a backdrop of America being gripped by a pandemic where we are all being told to stay at home and those who have kids, but not broadband, are being instructed to go to the parking lots of schools to use inferior wireless services, instead of having a fiber optic connection to their homes that they paid for multiple times — but never received.
Not only did the FCC leave out the mention and impacts of this pandemic in these new proceedings or research, but at the same time it is pushing through questionable gifts to the wireless telcos instead of investigating all of the cross-subsidies and funding that are in place and need to be stopped.
And this Ligado deal appears to be one of those giveaways. I’ll get back to that in a moment.
Congress, (which also appears to be dripping wet from the corporate downpour of money and buying into a high decibel level of hype about 5G), should be dragging these people in for an investigation of the obvious, blatant conflicts-of-interest, and stop what will be remembered as the 5G-Wireless ‘disaster capitalism’ give away.
Soon, as the pandemic winds down, we will all be sitting here asking ourselves: If 5G requires a fiber optic wire every few blocks, where’s the government subsidies for the fiber? Or more importantly, why are we giving gifts to companies that failed to provide fiber optic broadband for the last 3 decades but got paid to do it? And if the fiber is going past a person’s home or office, why, exactly, aren’t they being offered a fiber optic, wired service, instead of inferior wireless?
How William Barr and Verizon Harmed Broadband and Created Net Neutrality Concerns and the Digital Divide
In 1994, William Barr, after being the Attorney General of the United States, became the senior lawyer for GTE, which controlled incumbent wired telecommunications utilities in 28 states and was independent from the other companies known as the “Regional Bell” companies. At the break up of the original Ma Bell in 1984, seven “Baby Bells” were created that controlled the primary local utilities in most states, including Bell Atlantic and NYNEX, which merged in 1996 and was renamed Bell Atlantic; the new entity then controlled the East Coast from Maine to Virginia.
In 2000, GTE merged with Bell Atlantic to become Verizon, with locations throughout the US.
Our Fiber Optic Future that Never Showed Up.
All of the Verizon state utilities and companies claimed that they would be deploying fiber optic services and have 17.5 million households with fiber, starting in the 1990’s, with most of this being completed by 2000. Some of the Verizon territories, like New Jersey, were to have 100% of the Garden State completed by 2010. This is a partial list.
In every state, laws were changed to give the companies more money to fund upgrades of the existing networks, which were done in the form of higher phone rates and tax perks.
Moreover, the companies filed, not only in each state, but with the FCC, something called “Video Dialtone”, which was an overlay to the state commitments. Here are some of those commitments. Notice the word “permanent”, meaning that these were not tests but long term deployments.
In 1999, GTE, with the help of William Barr, and Ivan Seidenberg of Bell Atlantic, announced that the companies would merge and rename the company “Verizon”. Talk about hype….:
“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 that it would also spend $500 million in 36 months for ‘advanced services’, meaning wired broadband and internet.
“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.”
Ironically, Bell Atlantic and GTE should have been competing for the wireline business — but that never happened. Bell Atlantic, in almost every state, as well as GTE, were supposed to have upgraded their state utilities to fiber optics, about ½ by 2000 — never happened. Verizon was supposed to be competing out-of-region in 24 AT&T and CenturyLink states for wired services, including broadband and internet — never happened.
Worse, as part of Verizon, Barr helped to close these networks to competition, which killed off most of the small, independent Internet Service Providers, “ISPs”, that had brought America to the internet. Claiming that Verizon would be competing and would be upgrading the networks if they didn’t have to keep their networks open to competition, they got the FCC to shut the networks to competitors, causing Net Neutrality concerns. I.e., if there was serious competition, a consumer could just leave and get some other company that did not block, degrade, track or other customer-unfriendly practices.
Thus, in 2004, Verizon announced FiOS, even though they never completed the previous fiber optic plans in their states; at the same time, AT&T, which had been independent from 1984, was now bought by one of the other Bell companies, SBC, and it changed its name to AT&T. And it announced U-Verse, which was a bait and switch; SBC-AT&T convinced the FCC that it was rolling out fiber to the home, when it, instead used the existing copper wires, thus copper-to-the-home’, with fiber somewhere in the neighborhood.
Enter the FCC’s ‘Conflict-of-Interest’ Masters: Ajit Pai and Brendan Carr
In 2007, Verizon and AT&T filed to get rid of the basic accounting rule requirements that were controlled by the FCC. Known as ‘forbearance’, while the laws would remain in place, they were not going to be enforced — and Brendan Carr, then working at Wiley Rein, was listed as one of Verizon’s attorneys.
In 2011, Carr then works for the CTIA, the wireless association, which was suing the City of San Francisco pertaining to wireless issues. After this, Carr went to work at the FCC and ended up working for now FCC Chairman Ajit Pai, a former Verizon attorney; Pai claimed that this case of the wireless association against the City of San Francisco was a ‘first amendment case’. After digging for the details we found that this was protecting the rights of the Wireless association, not the public.
In 2018, Brendan Carr, now an FCC Commissioner, announced the FCC’s 5G plans, which appears to have been constructed out of the plans created by the AT&T et al. funded group, ALEC, the American Legislative Exchange Council, that has been creating biased model legislation for the corporations for decades — it never has been about the public interest.
Everyone is Really Excited about 5G… Yawn.
5G has been essentially a bait-and-switch of massive proportions. First, it requires a fiber optic wire and has a range of a few blocks. So the idea that this is going to fix the Digital Divide in rural areas and or replace a fiber optic wire is ludicrous.
Next, if you read the 5G info at the FCC site, and you scroll down the page, you find that there are a few paragraphs no one talks about — it has been a plan to get rid of all wired regulations, as well as Net Neutrality since the start.
“Modernizing Outdated Regulations
“The FCC is modernizing outdated regulations to promote the wired backbone of 5G networks and digital opportunity for all Americans.
“Restoring Internet Freedom: To lead the world in 5G, the United States needs to encourage investment and innovation while protecting Internet openness and freedom. The FCC adopted the Restoring Internet Freedom Order, which sets a consistent national policy for Internet providers.
“One-Touch Make-Ready: The FCC has updated its rules governing the attachment of new network equipment to utility poles in order to reduce cost and speed up the process for 5G backhaul deployment.
“Speeding the IP Transition: The FCC has revised its rules to make it easier for companies to invest in next-generation networks and services instead of the fading networks of the past.
“Business Data Services: In order to incentivize investment in modern fiber networks, the FCC updated rules for high-speed, dedicated services by lifting rate regulation where appropriate.”
This says, we get rid of any net neutrality protections, we get rid of the rights of cities to govern their own cities, we can close down all of the existing wires (‘fading fast’) and we can make the publicly funded ‘business data services’ (which are also called “backhaul”, the wires to the cell sites) private property — even though all of this has been subsidized by local phone rates.
And all of the FCC’s data has left out three critical points.
- Verizon Wireless networks were mainly paid for by wireline phone customers.
In 2012, Fran Shammo, former Verizon CFO, told investors that the wireless company’s construction expenses have been charged to the wireline business.
“The fact of the matter is Wireline capital — and I won’t get the number but it’s pretty substantial — is being spent on the Wireline side of the house to support the Wireless growth. So the IP backbone, the data transmission, fiber to the cell, that is all on the Wireline books but it’s all being built for the Wireless Company.”
- Verizon claims it can get rid of labor, and doesn’t mention that the wireless high profit margins are due to not paying multiple expenses.
Lowell McAdam, former Verizon CEO, in talking at an investor function, claimed that 5G will make the company more money through the mantra: Get rid of ‘labor intensive’ activities and lower expenses.
“So if you think about it if I can get we than say a 1000 meters of a business and I give them a router, a basic router that has a 5G service inside it and I’m up and operating immediately, I mean, think about the difference for the carrier in the cost structure; half of our cost to establish high speed data whether it’s consumer business is inside the four walls of the business.
“Once you go wireless, you don’t have to run co-ax, you don’t have to do any of those high labor intensive activities and so you light up service overnight. So then you get into how much capacity do you want and you can — the pricing models can change dramatically.”
Erase All Obligations and Regulations for 5G Wireless
Getting bolder, Verizon’s press release on June 28th, 2018, stated that 5G is all about infrastructure reform and changing public policies — more deregulation. In fact, this press release just reinforces the FCC’s path to remove the barriers that block 5G, which is a euphemism for no more regulations on any service.
“Models & misdirection: infrastructure reform remains crucial for 5G. Policy reforms governing cell siting, access to rights-of-way and more are needed to simplify and speed up 5G deployment.
“The existing process impedes the roll out of services that customers want and imperils our country’s ability to remain in the lead internationally with the transition to 5G.
“Thankfully, the FCC has recognized this challenge, and is well underway in considering much-needed reforms to encourage small cell deployment. Likewise, many other jurisdictions — including approximately 20 states and some cities — have already acted and put in place measures that facilitate the deployment of wireless infrastructure. These reform efforts are vital and must continue.”
- Ties to the AT&T et al. funded group, ALEC.
Which brings me to the conspiracy afoot where a group called ALEC, American Legislative Exchange Council, and others create ‘model legislation’ that are designed to strip all of the remaining obligations and regulations on the wireline networks — and block cities and states from doing anything about it.
We detailed how Brendan Carr was invited to Indiana to announce the FCC’s 5G plans which were based on the ALEC bills. The FCC’s press release even mentions ‘small cell’ bills, but never bothered to explain that these were created by AT&T et al., and handed to politicians who the wireless companies have been funding through foundation grant money in their districts or grooming the politicians for jobs in the state legislatures.
“Carr’s plan, set to be voted on at the FCC’s September 25 Open Meeting, is modeled on the small cell bills enacted in 20 states across the country … We do not disturb nearly any of the provisions in the 20 state small cell bills that have been enacted.”
Again, the idea that the FCC is claiming this is going to solve the Digital Divide in rural areas, is just plan ludicrous. The companies are NOT going to run fiber in rural areas that they haven’t done before — even when they were paid to do so.
According to Fierce Wireless:
“In a Monday post, LightShed analysts Walter Piecyk and Joe Galone described how Ligado spectrum presents an immediate opportunity to operators Verizon and T-Mobile, could improve dynamic spectrum sharing technology expected to be deployed in 2020, and give a boost to millimeter wave and C-band spectrum.
“We believe Ligado could supply an operator like Verizon with at least two years of wireless data growth on a network, based on our observations of the speed at which it converted existing spectrum to LTE from 3G,” wrote the LightShed team.”
Remove all the jargon — “c-band”, “millimeter wave”, “LTE”, “3G”, etc. and we have a picture forming that these few companies are working together to get deals in place that will ultimately help Verizon et al. and they have nothing to do with the public interest.
And it is all being played out using this pandemic as a hook to make these deals happen.
Official picture of Verizon’s leaders; Seidenberg and Barr, 2005.