Blog posts tagged with 'Verizon'
Thursday, August 04
Over at The Street, our own Bruce Mehlman has an op-ed on Verizon’s recent about face when it comes to investment and facilities-based competition, particularly in the business data services market. An excerpt:
Since 2003 — a virtual eternity in the fast-paced world of telecom — Verizon has staunchly advocated for investment, deployment of fiber, and facilities-based competition. Verizon’s once-visionary leadership coined the phrase ‘new wires, new rules/old wires, old rules’ used by the FCC to create pro-fiber investment policies that helped spur the deployment of its modern high-speed broadband network. The “Fi” in FiOS, a central part of Verizon’s corporate strategy and broadband buildouts — stands for fiber, after all.
Yet Verizon now trumpets a deal with the competitive local exchange carrier (CLEC) trade association INCOMPAS that favors price regulation in the BDS market. Why the sudden change? Some might suggest that Verizon’s proposed mergers currently pending before the FCC and other government agencies might be the reason why the company is now simply driving 55 past the speed trap giving a friendly wave to the regulatory cops.
But there’s another likely reason: In a highly regulated environment, it can be tempting to let regulators determine outcomes in markets rather than doing the hard work of competition.
You can read Mehlman’s full piece at The Street.
Friday, September 12
The Progressive Policy Institute has released its annual list of “Investment Heroes,” and at the top of the list are AT&T and Verizon, with estimated capital expenditures of more than $20 billion and $15 billion, respectively. That’s a lot of investment dollars, but as Hal Singer warns in Forbes, current regulations being considered by the FCC could severely hurt that investment going forward:
This week, PPI released its third annual report on “U.S. Investment Heroes,” authored by Diana Carew and Michael Mandel, which analyzes publicly available information to rank non-financial companies by their capital spending in the United States. Once again, AT&T and Verizon ranked first and second, respectively, with $21 and $15 billion in domestic investment in 2013. Comcast, Google, and Time Warner also made PPI’s top 25 list, each investing over $3 billion. The authors credit investment in the core of the network with sparking the rise of the “data-driven economy.”
In light of the results from prior experiments in rate regulation, the FCC should eschew calls to regulate ISPs under Title II. The incremental benefits (potentially barring fast lanes) are dubious, but the incremental costs (less investment at the core of the network) would be economically significant. Given its size and contribution to the U.S. economy in terms of jobs and productivity, even a small decline in core investment in response to rate regulation would impose social costs beyond the immediate harm to broadband consumers from an atrophying network.
Tuesday, January 14
Wall Street and K Street are separated by a mere 225 miles, but for many companies they are worlds apart. In particular, industry observers would do well to compare everything said to policymakers with statements by the same competitors made to Wall Street investors. Defense companies, for example, warned policymakers that sequestion would spell the death of the defense industry, yet defense stocks more than doubled since the law prescribing the spending cuts was passed and defense players figured out how to deal with the changes, as they promised Wall Street they would. Telecom companies likewise present sometimes radically-divergent world views on K Street and Wall Street.
Take Sprint. In a January 7 filing at the FCC, Sprint argued that the special access market “in almost every part of the country does not support competition for core DS-1, DS-3 and similarly sized Ethernet channel termination facilities [.]” Sounds pretty dire. Unfortunately, in its conversation with the FCC, Sprint failed to include some other important facts it shared with its understandably-bullish investors. Specifically:
• Two years ago, Sprint entered the market for competitive alternatives for their back haul services to replace incumbent telephone company special access in its network – under the project name “Network Vision.”;
• Sprint initiated a competitive bidding process for its “Network Vision” project that it expected to have 25-30 “significant backhaul providers.”
• Following the competitive bid process, Sprint awarded numerous contracts for their backhaul services to competitive backhaul providers. In fact, in a filing at the FCC, Verizon confirmed that it bid for Sprint’s backhaul business in this process, yet was awarded only 6% of Sprint’s backhaul sites in Verizon’s incumbent telephone company footprint.
• Sprint recently provided details regarding its Network Vision project to the Securities and Exchange Commission, and noted in its 2013 10-K filing that “Network Vision will encompass approximately 38,000 cell sites. We have more than 13,500 sites on-air and have launched LTE in 88 cities. Further deployments of Network Vision technology, including LTE market launches and enhancements of our 3G technology, are expected to continue through the middle of 2014. We expect Network Vision to bring financial benefit to the Company through migration to one common network, which is expected to reduce network maintenance and operating costs through capital efficiencies, reduced energy costs, lower roaming expenses, backhaul savings, and reduction in total cell sites.
• In short, Sprint told the SEC not only that Network Vision was proceeding but that it expected further deployments through 2014.
Investors will reasonably conclude that the market is competitive for what Sprint terms “core DS-1, DS-3, and similarly sized Ethernet channel termination facilities.” And Sprint seems to have a reasonable competitive position and strategy that is proceeding apace. Good news for customers and investors, but tougher news for those aiming to perpetuate the perception that our highly-competitive telecommunications network lacks competition in the special access market.
Monday, January 06
2014 is here, and the year ahead promises to be a big one in tech, beginning with a major court ruling that could shake things up in the next few days. As Kate Tummarello of The Hill reports, the D.C. Circuit Court of Appeals may soon rule on the FCC’s “net neutrality” rules:
Verizon argues the FCC cannot regulate Internet providers like traditional telephone companies and is hoping to triumph over the administration in the second most powerful court in the land.
A decision against the rules would be a blow to President Obama, who made net neutrality a campaign pledge in 2008. It would also erase one of the central achievements of former FCC Chairman Julius Genachowski.
Flashbacks to three years ago, anyone?
Friday, August 30
Verizon has flirted with purchasing European-based provider Vodafone for years now, and as Ryan Knutson, Spencer E. Ante, and Dana Cimilluca of The Wall Street Journal report, the talks have heated up again:
Verizon Communications Inc. \ and Vodafone Group PLC have rekindled talks about a buyout of the U.K. company’s stake in their U.S. wireless joint venture in a deal that would likely cost Verizon well over $100 billion, people familiar with the matter said.
Vodafone confirmed Thursday that it was in talks with Verizon to sell its stake, but said there is no certainty an agreement will be reached.
With competition in the U.S. hotter than ever, don’t be surprised if similar international deals start taking shape.
Friday, June 21
In an op-ed for The New York Times, Verizon chairman and chief executive Lowell C. McAdam argues that a light regulatory touch has kept America’s wireless industry booming, and that if we’re going to continue leading the world in mobile broadband, that light regulatory touch needs to continue:
Fifty-six percent of American adults have smartphones that give them access to mobile broadband data and video. Our country is the center of a booming mobile ecosystem in which new devices and applications are being used to do everything from personal health monitoring and e-commerce to tracking deliveries and saving energy.
Contrast this with the European Union, where innovation and investment in advanced networks have stagnated under an onerous regulatory regime that limits investment and innovation, and where today only about 2 percent of households have access to broadband networks with 100-megabit-plus speeds. “Once, Europe led the world in wireless communication: now we have fallen behind,” Neelie Kroes, the European Union official responsible for broadband policy, said in a speech in January. “Europe needs to regain that lead.”
Friday, May 17
In a speech before the Media Institute yesterday, Craig Silliman, Senior Voce President of Public Policy for Verizon, argued that outdated regulations risk holding back innovation and investment. It’s a similar argument other telecom providers have made recently. As Silliman told the crowd:
[W]e need to ensure is that we do not let an increasingly outdated regulatory regime for the Internet ecosystem slow innovation and investment. The 1996 Telecom Act succeeded in what it was designed to achieve, but almost two decades later it is leaving the FCC struggling to shoehorn Internet-era technologies into phone-era regulations. I am not suggesting that the answer is to abolish all regulation. But I am suggesting that we need a 21st century policy framework that is designed for 21st century technologies and marketplaces, not 19th century ones.
We need to start by asking the right questions. It has been suggested that a key question for the next FCC chairman will be how to keep the FCC relevant in the Internet era. I believe that is the wrong question. I recognize, of course, that tactical battles to secure budgets and resources are part of any organization or entity, including the federal government. But a strategic view of policymaking starts by asking what objective we are trying to achieve, and then asking whether regulation is needed, why it is needed, and who is best placed to administer it.
The full speech is worth checking out.
Thursday, April 11
Via Sue Marek of Fierce Wireless comes a staggering number from Verizon:
Video accounts for 50 percent of Verizon Wireless’ network traffic today and by 2017 the carrier estimates video will make up two-thirds of all traffic over the network. Speaking at the National Association of Broadcasters conference here yesterday, Verizon Communications CEO Lowell McAdam said that the company’s investment in its LTE network is what is making the delivery of that video possible. “With 3G you have video clips but there is buffering. With 4G you can stream video,” he said.
50% of wireless traffic and counting. Wow.
Friday, February 01
How important is spectrum to the wireless industry? So important that normally fierce competitors are working together. As Phil Godstein of Fierce Wireless reports:
AT&T Mobility, Verizon Wireless and T-Mobile USA inked an agreement with the Department of Defense to explore the possibility of sharing 95 MHz of spectrum that is currently used by the Pentagon and other federal agencies located in the 1755 - 1850 MHz band.
The announcement comes as the FCC and National Telecommunications and Information Administration encourage spectrum sharing between commercial and government users as one way to meet Americans’ seeming insatiable demand for mobile broadband.
So far, Sprint is sitting out the agreement, though Goldstein notes they will “follow the group’s work.”
Friday, December 07
With Verizon’s challenge to the FCC’s net neutrality order still making its way through the courts, John Eggerton of Broadcasting & Cable reports at least one Commissioner is worried the outcome could lead to more regulation of the Internet:
If a D.C. federal appeals court upholds the FCC’s network neutrality rules, Republican commissioner Ajit Pai expects the Democrat-led commission to expand regulation of the Internet, including into the mobile wireless space and usage-based pricing.
That came in a speech to the Phoenix Center in Washington on Thursday, according to a copy of the text.
Commissioner Pai also stated that any attempt to reclassify broadband under Title II would “dramatically slow broadband deployment.”
Monday, November 19
As Verizon continues to battle the FCC’s net-neutrality regulations in court, the company has argued the rules are a violation of first amendment rights. This, Brendan Sasso of The Hill reports, is not sitting well with some Democratic House members:
Three top Democrats on the House Energy and Commerce Committee wrote a letter to their colleagues on Friday, calling attention to a “troubling” constitutional argument Verizon has made in its bid to overturn net-neutrality regulations.
Democratic Reps. Henry Waxman (Calif.), Anna Eshoo (Calif.) and Edward Markey (Mass.) warned that Congress’s power to regulate the communications industry would be severely restricted if the court accepts Verizon’s claim that the net-neutrality regulations violate its First Amendment free speech rights.
Friday, August 24
Last week, Verizon’s bid to purchase spectrum from cable companies got the nod from the Justice Department. Yesterday the FCC weighed in. Via Brendan Sasso of The Hill:
The Federal Communications Commission (FCC) has approved Verizon’s $3.6 billion purchase of cellular frequencies from the nation’s largest cable companies.
The five commissioners voted unanimously to approve the deal on Tuesday, and the order was publicly released on Thursday.
Approval didn’t come free from hitches, however:
FCC Chairman Julius Genachowski said the original deal “posed serious anti-competitive concerns and would not serve the public interest.” But he decided to approve it after the companies agreed to a series of concessions.
Genachowski argued that the “substantially modified transaction” will give customers access to more spectrum for mobile broadband, while preserving competition.
Friday, August 17
After months and months of lobbying and negotiations, Verizon has received a nod of approval from the Justice Department for its $3.9 billion spectrum deal with cable providers. Sinead Carew and Jasmin Melvin of Reuters report:
The U.S. Department of Justice said on Thursday it would approve the spectrum sale, and the head of the Federal Communications Commission said the commission should also give the deal the go-ahead.
The spectrum purchase will give Verizon Wireless additional capacity to help it cope with rising demand for video on mobile devices and data services such as Web surfing.
Approval for the deal came with conditions, however:
The Justice Department said on Thursday that it wanted changes to Verizon Wireless’s commercial agreements with the cable companies under which they planned to market each other’s services and form a technology joint venture.
For example, the Justice Department said in a settlement proposal it filed that Verizon Wireless should not be allowed to market cable company products in areas where its parent, Verizon Communications Inc, sells FiOS television and Internet services that compete with those of cable providers.
The department also said that it would limit the duration of the proposed technology venture so that it would not “dampen the companies’ incentives to compete against one another.”
It also said that the companies should tweak their service resale agreement so that cable companies would be allowed to sell services from Verizon Wireless rivals after five years.
Friday, August 03
It’s not secret that the explosive growth of mobile broadband has forced wireless providers to search for more spectrum due to looming capacity constraints. For Verizon, that search has led to a proposed deal with cable companies, but as Diane Bartz of Reuters reports, the company’s road to regulatory approval is a rocky one:
Verizon Wireless may need to agree to tough conditions to win approval for its deals to buy spectrum from cable companies and market each others’ products, according to three sources knowledgeable about the negotiations.
The Justice Department and Federal Communications Commission are reviewing plans by Verizon Wireless, the biggest U.S. mobile provider, to buy spectrum from a consortium of cable providers, including Comcast (CMCSA.O) and Time Warner Cable (TWC.N), for about $3.9 billion. The transactions were proposed in December.
While the Justice Department and FCC appear prepared to approve the spectrum portion of the deals with minor adjustments, antitrust regulators have sought strict limits on controversial side deals.
Thursday, July 05
When the FCC announced its net neutrality rules two years ago, major Internet provider Verizon was quick to challenge them in court, pushing for a lighter regulatory touch. On the other end of the spectrum, advocacy group Free Press was also quick to challenge the rules, long calling for the FCC to enact expanded regulations.
Now, Brendan Sasso of The Hill reports, the group has dropped its court challenge in order to “direct our resources elsewhere in the continued campaign to preserve the open Internet.”
Tuesday, July 03
Verizon is still seeking FCC approval for its proposed spectrum deal with cable companies, but that’s not stopping the wireless provider from continuing to fight the Commission’s net neutrality rules in court. As The Hill‘s Brendan Sasso reports:
In Monday’s filing, Verizon argued that instead of “proceeding with caution” in light of the Comcast ruling, the FCC adopted rules that “go even farther than its prior action and impose dramatic new restrictions on broadband Internet access service providers.”
“Here again, the FCC has acted without statutory authority to insert itself into this crucial segment of the American economy, while failing to show any factual need to do so,” Verizon wrote.
The company argued that Congress never authorized the FCC to regulate Internet access and that the agency acted without sufficient evidence to suggest the rules were necessary.
Verizon claimed that the rules violate its First Amendment free speech rights.
According to Sasso, the FCC’s legal response to the suit should arrive in September.
Monday, June 25
With its spectrum deal with cable companies still receiving government scrutiny, Verizon has announced a proposed swap of airwaves with competitor T-Mobile. As Brendan Sasso of The Hill reports:
The deal includes some of the spectrum that Verizon is trying to buy from a coalition of cable companies, including Comcast and Time Warner. Verizon and T-Mobile will only complete their deal if regulators first approve the Verizon-cable transaction.
By selling some spectrum to T-Mobile, the smallest national carrier, Verizon could boost its hopes of winning regulatory approval for its $3.6 billion deal with the cable companies.
Friday, June 08
Yesterday, Verizon CTO Tony Melone criticized the FCC’s pace when it comes to freeing up much-needed spectrum for wireless. As CNet’s Marquerite Reardon reports:
Melone said the FCC needs to speed up the process for approving spectrum sales and license transfers in the secondary market. He used his company’s own bid to buy wireless spectrum from a consortium of cable companies—collectively known as SpectrumCo—as an example. In December, Verizon promised to pay $3.6 billion for nearly 20 MHz of wireless spectrum in the AWS band.
The FCC and Department of Justice are reviewing the transaction, which also includes a co-marketing deal, which some critics say is anti-competitive. The agencies have been reviewing the deal since December when it was announced and are expected to finish up their inquiry by the end of July.
Melone said that he thinks the process, which is expected to take a little over six months, is too long. And he said it’s a barrier to getting unused wireless spectrum into companies that can put it into use. And he criticized the agency for taking too long to evaluate the transaction.
Given the increasing demand for mobile broadband — and the FCC’s own warnings that we will soon be hitting a “spectrum crunch” — it’s easy to see why Melone and other wireless providers are frustrated with the slow pace of the Commission’s process.
Thursday, May 24
As Verizon’s $3.6 billion proposal to purchase spectrum from various cable companies continues to be examined by both the FCC and the Justice Department, The Hill‘s Andrew Feinberg reports Sen. Heb Kohl, head of the antitrust subcommittee of the Senate Banking Committee, wants the deal to be run through with a fine-toothed comb:
In a letter addressed to FCC Chairman Julius Genachowski and Attorney General Eric Holder, Kohl makes clear that he’s not prejudging the deals to be unlawful under the Communications Act or antitrust laws. But he also makes clear that he believes the transactions should be “examined closely” because they present “serious competition concerns.”
Wednesday, March 21
In anticipation of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights hearing on the proposed spectrum deal between Verizon and cable companies, Comcast’s Executive Vice President David Cohen has previewed his testimony on the company’s public policy blog:
The spectrum license transfers are consistent with the Communications Act, FCC rules, and the antitrust laws. They also will further the spectrum policy goals of Congress, the Administration, and the National Broadband Plan. Neither the License Assignment nor the Commercial Agreements reduce or harm competition in any product or geographic market. In fact, the agreements will offer further competition and innovation in the marketplace.