Part 2: Verizon Wireless Bait & Switch: What Verizon Tells Investors But Has Been Hiding from the Public.

FULL REPORT 5: 5G: The Wireline-Wireless Bait & Switch: Because It Makes Them More Money.


1) Verizon “Cut off the Copper” in Rural Areas, 2012

““Cut the copper off” said Lowell McAdam, former Chairman and CEO of Verizon Communications, speaking at the Guggenheim Securities Symposium, June 21, 2012.

At the September 2012 J.P. Morgan analyst conference, McAdam said moving the customers to wireless makes the company more profits:

In every statement, there is no mention that these networks are part of a utility with obligations to serve the entire state. There is no mention that there have been changes in the state regulations to fund these upgrades in rural areas, or worse, that the state utility budgets were diverted to fund other lines of business — but essentially charged to the local customers.

2) The NY Attorney General Found Massive Wireless Cross-Subsidies.

In 2012, the NY Attorney General filed in a proceeding at the NY State Public Service Commission, discussing how there had been a shift; Verizon New York, the state telecommunications utility, was being shortchanged to support Verizon Wireless instead of building and maintaining the wired networks.

And they continued:

3) Verizon’s Boston Bait-and-Switch: Promise them Fiber; Give them Wireless.

Throughout the US, Verizon and AT&T have figured out that they can do a bait-and-switch and announce that they are doing fiber to the home, but instead, are using the fiber wireline budgets, staff, and rights of way, etc., to roll out their wireless services.

At the Oppenheimer 19th Annual Technology Internet Communications Conference, August 9th, 2016, Timothy Horan, an analyst at Oppenheimer & Co., asked Verizon about their Boston deployment:

David Small, Verizon, EVP responded that they were doing a few small ‘suburb’ areas, and beyond that it will be wireless.

Notice that Verizon claims that the areas being covered are ‘suburbs’. In fact, Roxbury and Dorchester are neighborhoods of Boston, not the burbs.

4) Verizon Boston is a Bait & Switch: It was about Fiber to the Home; Not Wireless.

This is clearly a bait-and-switch. One has only to read through the articles, like The Boston Globe, to realize that ‘wireless’ substitution was never part of the story told to the public.

The Boston Globe, in April, 2016, wrote that this deployment was for the whole city and it was supposed to be wired fiber optic service.

5) Why Stop Doing FiOS FTTP? To Save Money and Get Rid of the Unions.

According to Verizon, this is not about building infrastructure of the state utility, but is being done because it is cheaper and gets rid of the unions.

Francis Shammo, former EVP, Verizon, stated at the Goldman Sachs Communacopia Conference, September 22, 2016:

And it is worth noting that Lowell McAdam also pointed out in the second quarter 2016 investor call that — I paraphrase: ‘Well, wireless is so much cheaper (and more profitable), why bother doing fiber to the home? (“ONT” is an “Outside Network Terminal”.)

6) The FiOS Fiber-to-the-Home Expenses are Dumped into Local Service as is Wireless; Part of the State Utility

In the franchise applications for FiOS TV in Boston, Verizon was asked to provide maps of the areas of coverage. Verizon’s response was that this FTTP is just a network upgrade of the existing copper “Title II” networks, and it doesn’t have to provide maps.

Verizon was also asked whether there will be any other ‘non’ fiber to the home, FTTP, components, meaning — Are you planning on using wireless? Verizon claims it is doing FTTP. These responses are directly contradicted by the statements we just quoted from the executives to the investor community, where the company stated plan is to substitute the fiber to the home with fixed wireless.

7) Verizon New Jersey Wireless Bait-and-Switch at the Speed of DSL.

The ‘promise-them-fiber-optics-to-the-home’, then switch to wireless at the speed of the aging copper-wire based DSL happened in multiple states.

One of the most egregious bait-and-switch cases has been in New Jersey. “Opportunity New Jersey”, (“ONJ”), was an agreement with New Jersey Bell (now Verizon New Jersey), the state telecommunications utility, that required the company, starting in 1996, to have 100% of their territory covered with fiber optic services, capable of 45Mbps in both directions, and completed by 2010. Verizon completed less than ½ of their Garden State territories (representing 94–96% of the state), then halted. In 2014, Verizon was allowed a bait-and-switch to substitute wireless, at the speed of DSL, for the home-based high speed broadband connection.

Leecia Eve, Verizon VP, in her testimony, March 24th, 2014, concluded that there were never any requirements to do fiber previously until FiOS, which was not deployed until 2006. And Verizon adds that FiOS did not exist in 1992. Therefore, it was OK to create a stipulation agreement that removed any obligations.

We estimate that over $13–15 billion was collected to upgrade to a ‘fully fiberized’ state, starting in 1993 through 2015, thus overcharging customers for networks they never received.

This same pattern happened in Pennsylvania, which had requirements to have rural, urban and suburban areas upgraded to fiber by 2015, only to have various maneuvers that would allow for wireless to replace this agreement with speeds of 1.5Mbps, not 45Mbps in both directions.

8) Wireless to Replace the Wires — Not Just in Rural America Anymore.

In 2016, there was a shift. Originally, the shut off was in more rural areas, but by 2016 it now included everywhere, including cities. The ‘last mile’ — the connection to the home or office — will be wireless.

Reflecting on the Boston plan, Verizon’s CEO Lowell McAdam said at the 44th Annual J.P. Morgan Technology, Media and Telecom Conference, May 24, 2016, that Verizon, it appears, is not going to be deploying fiber to the home, but fiber-to-the-antenna — as an overall plan nationwide; a ‘wireless-last-mile’.

Motley Fool reported at this event, that Verizon ‘hinted’ that 5G will be offered nationwide.

9) There Are a Series of Subplots: Get Rid of the Unions, Get Rid of ‘Wired Regulations’, Get Rid of Other Expenses — Are Just a Start.

This message has been repeating over and over: Get rid of ‘labor intensive’ activities and lower expenses. Lowell McAdam, at the May 24, 2016 event:

10) 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.

11) Verizon 2018 Is Still Cross-Subsidizing the Wireless Fiber Optic Build Outs Via the Wireline CapEx

On the Verizon 2nd Quarter 2018 Earnings Conference Call, July 24, 2018, Jennifer Fritzsch of Wells Fargo asks about the wireline construction expenses.

Matthew Ellis, Verizon CFO, responded; we’re just going to continue what we’ve been doing.

“Consistency”, in this case, is to have the wireline networks fund the fiber optic build outs for wireless. The wired, copper-based, intrastate services, and thus the customers, are funding and cross-subsidizing this fiber optic deployment for wireless.



New Networks Institute,Executive Director, & Founding Member, IRREGULATORS; Telecom analyst for 40 years, and I have been playing the piano for 65 years.

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Bruce Kushnick

New Networks Institute,Executive Director, & Founding Member, IRREGULATORS; Telecom analyst for 40 years, and I have been playing the piano for 65 years.