4 ms·

>Verizon raising rates on its own customers to pay for its fiber network is some sort of questionable act. No, his point is that using Title II status to legal

>Verizon raising rates on its own customers to pay for its fiber network is some sort of questionable act. No, his point is that using Title II status to legally enforce rate increases under the guise of telephone upgrades and then using that money to invest in a completely different business (cable and broadband) is a questionable act And further, to take advantage of this status as Title II to increase capital investment and then turn around and claim that Title II decreases capital investment is glaringly hypocritical. I do agree, however, that Ars is on an anti-telco hunt these days. >Ars paints telecom service as this cash cow, but the fact of the matter is that nobody in the U.S. is making money on fiber on deployments of any substantial scale. This is a really misleading sentence. I agree that fiber deployments arent a big money generating enterprise, is any capital investment? They make money off of subscribers, not capital investment and they certainly are raking in plenty of cash doing so (over 120 billion revenue in 2013 for verizon) edit: added the phrase 'questionable act'

rayiner 12y ago
> And further, to take advantage of this status as Title II to increase capital investment and then turn around and claim that Title II decreases capital investment is glaringly hypocritical. The problem with the argument is the phrase "take advantage of this status as Title II." The default state of affairs is that a company does not need a reason to raise its prices. Title II forces rate regulation. So Verizon didn't "take advantage of Title II" to raise rates. It raised rates despite Title II. Doing that is not at all hypocritical against the argument that Title II will decrease capital investment. Indeed, it's entirely consistent with that argument. Investors are less likely to throw $23 billion into building a fiber network if they have to work within a regulatory regime where they need permission to raise prices to fund upgrades.
- unprepare 12y ago
  When I said take advantage of Title II i was referring more to the massive amounts of money solicited from state governments supposedly for telephone infrastructure upgrades or large network buildouts, as well as rights to government property under Title II.[1][2] from the article: >every fiber optic wire appears to be Title II." That includes fiber lines used to deliver home Internet service and the fiber lines that feed into Verizon Wireless' cell towers, >Verizon provides Title II-regulated phone service over both copper and fiber, but the fiber network also supports FiOS Internet, TV, and the largely unregulated Digital Voice service. Despite its claims about Title II harming broadband providers, Verizon used its common carrier status to gain perks that helped build the fiber network. You can't say capital investment is harder under Title II, then use your Title II branch of your company to gain investment for buildouts of your non-Title II business. That is directly hypocritical. If it were true, you would be seeing their fiber rollout financed without the guise of their Title II upgrades, by private investment rather than public. [1]http://www.njspotlight.com/stories/14/03/26/state-s-deal-with-verizon-on-high-speed-internet-service-finds-few-friends-in-garden-state/ http://www.njspotlight.com/stories/14/03/26/state-s-deal-wit... [2]http://www.dslreports.com/shownews/30544 http://www.dslreports.com/shownews/30544 edit: formatting
  - rayiner 12y ago
    > i was referring more to the massive amounts of money solicited from state governments supposedly for telephone infrastructure upgrades As I have described before, there never was any "massive amounts of money" paid by state governments. What Kushnick calls "subsidies" was just agreements that allowed the phone companies to increase their prices. To Kushnick, that's a "perk."
    - unprepare 12y ago
      The advantages aren't only in the form of agreed upon rate increases - this includes tax incentives/credits, real estate, and cash payments. [1]https://www.techdirt.com/articles/20131012/02124724852/decades-failed-promises-verizon-it-promises-fiber-to-get-tax-breaks-then-never-delivers.shtml https://www.techdirt.com/articles/20131012/02124724852/decad... [2]http://www.nyc.gov/html/doitt/downloads/pdf/verizon_nyc_franchise_agreement_approved_by_fcrc.pdf http://www.nyc.gov/html/doitt/downloads/pdf/verizon_nyc_fran...
    - kushnick 12y ago
      No. What I call 'tax' perk has multiple layers. First, around the original fiber optic deployment time, Verizon et al took one-time tax deductions under something called FASB71 -- of-$25 billion dollars, which was 2-3 billion per bell company (like Bell Atlantic or Ameritech) Second, they were able to 'accelerate' depreciation, meaning write off the networks faster, regardless of the life of the network product, such as the copper or fiber wires. Depreciation, in this case, lowers the taxes paid as it is an expense, but in the old days, it was part of the calculations of the costs to offer service, so more expenses would mean -- oh, we're losing money, give us more rate increases. I don't have problems with accelerated depreciation -- if they actually were doing what they said which was replacing the aging copper utility wires with fiber optics -- but in most of these cases, they didn't replace it but took the deductions and got the benefits. Go into an audit with the IRS and tell them you wrote off equipment that you didn't buy or that you didn't replace-- see how that works for you.
tw04 12y ago
Anti-telco hunt? They're on a pro-consumer hunt, and we should be thanking them for it. If the incumbent's have their way we'll be stuck paying per MB for ALL data while the rest of the world laughs away.
- rayiner 12y ago
  It was the last generation of "pro-consumer" types that got us into the current mess to begin with. Because at the end of the day, Verizon and AT&T may not like Title II, but they have the legal horsepower to deal with it. It's the smaller potential competitors who can't deal with the extra taxes to fund rural deployment, or having to build out to neighborhoods too poor to subscribe to fiber service, or having to petition rate authorities to set their prices.
  - warfangle 12y ago
    > smaller potential competitors who can't deal with Ok, you've got my attention > extra taxes to fund rural deployment Well, no, the small guys don't have extra (federal) taxes imposed on them, unless they're interstate. "Every telecommunications carrier that provides interstate telecommunications services shall contribute, on an equitable and nondiscriminatory basis, to the specific, predictable, and sufficient mechanisms established by the Commission to preserve and advance universal service." S.254(d) On the other hand, even if they are interstate, "The Commission may exempt a carrier or class of carriers from this requirement if the carrier's telecommunications activities are limited to such an extent that the level of such carrier's contribution to the preservation and advancement of universal service would be de minimis." S.254(d) continued They may, however, have extra (state) taxes imposed on them: "Every telecommunications carrier that provides intrastate telecommunications services shall contribute, on an equitable and nondiscriminatory basis, in a manner determined by the State to the preservation and advancement of universal service in that State." S.254(f) But that same section limits what kind of additional regulations states can impose: "A State may adopt regulations to provide for additional definitions and standards to preserve and advance universal service within that State only to the extent that such regulations adopt additional specific, predictable, and sufficient mechanisms to support such definitions or standards that do not rely on or burden Federal universal service support mechanisms." > having to build out to neighborhoods too poor to subscribe to fiber service Well, yes. That's kind of what the universal service fund is _for_. > having to petition rate authorities to set their prices. That's what that whole forebearance thing is about. Nobody wants to put that kind of rate control on ISPs. (I'd be all for putting that kind of rate control on backbone-tier ISPs, though)
Karunamon 12y ago
I do agree, however, that Ars is on an anti-telco hunt these days. Do they not have it coming? Consumer satisfaction with telecom companies, across the board, is horrible. Nobody likes their phone company or their ISP in the USA, they're a company that is dealt with out of necessity, and is usually (rightly) seen as operating in bad faith. The behavior of the largest telcos are extremely dubious if not outright evil. (Examples: Comcast, Time Warner..) They're not quite mustache-stroking Saturday morning cartoon villains, but dammit, they're trying!
- mindslight 12y ago
  > Nobody likes their phone company or their ISP in the USA I do. Sonic.net Fusion ADSL2+ resold by Omsoft. 14M/1M for $50/mo, bonus copper POTS included with free nationwide calling (nice emergency backup). Purportedly you can bond two lines for twice the speed, and/or Annex M for 5M/3M instead, but I haven't had the need. No data caps - I've had many months >1TB. And this kind of attitude, too: http://www.jwz.org/blog/2012/06/sonic-net-we-delete-user-logs-after-two-weeks-your-isp-should-too/ http://www.jwz.org/blog/2012/06/sonic-net-we-delete-user-log... The few times I've called with a problem, Omsoft has been ahead of me in diagnosing, which is actually a bit unnerving because with every other "customer service" these days, it's your job to figure out the problem and then additionally figure out how to convince them to fix it. They can do all this because they're able to obtain unbundled copper from AT&T, as per 1996 telcom deregulation. The real problem with this larger debate is that we're having it after the fact. The US infrastructure is still based around DSL, yet most people thought it was a good idea to jump ship to monopoly cable companies for higher advertised speeds. Of course once you're hooked into a cable company contract, traffic caps and engineering congestion leave you worse off than DSL. If you're in a decently sized metropolitan area and want to actually vote with your wallet (and lower your stress level), check to see if you have any competitive DSL options left. Even if it's just a business-oriented connection from Megapath (Speakeasy), wouldn't you rather give your money to people who appreciate you?

rayiner 12y ago

> And further, to take advantage of this status as Title II to increase capital investment and then turn around and claim that Title II decreases capital investment is glaringly hypocritical. The problem with the argument is the phrase "take advantage of this status as Title II." The default state of affairs is that a company does not need a reason to raise its prices. Title II forces rate regulation. So Verizon didn't "take advantage of Title II" to raise rates. It raised rates despite Title II. Doing that is not at all hypocritical against the argument that Title II will decrease capital investment. Indeed, it's entirely consistent with that argument. Investors are less likely to throw $23 billion into building a fiber network if they have to work within a regulatory regime where they need permission to raise prices to fund upgrades.

unprepare 12y ago
When I said take advantage of Title II i was referring more to the massive amounts of money solicited from state governments supposedly for telephone infrastructure upgrades or large network buildouts, as well as rights to government property under Title II.[1][2] from the article: >every fiber optic wire appears to be Title II." That includes fiber lines used to deliver home Internet service and the fiber lines that feed into Verizon Wireless' cell towers, >Verizon provides Title II-regulated phone service over both copper and fiber, but the fiber network also supports FiOS Internet, TV, and the largely unregulated Digital Voice service. Despite its claims about Title II harming broadband providers, Verizon used its common carrier status to gain perks that helped build the fiber network. You can't say capital investment is harder under Title II, then use your Title II branch of your company to gain investment for buildouts of your non-Title II business. That is directly hypocritical. If it were true, you would be seeing their fiber rollout financed without the guise of their Title II upgrades, by private investment rather than public. [1]http://www.njspotlight.com/stories/14/03/26/state-s-deal-with-verizon-on-high-speed-internet-service-finds-few-friends-in-garden-state/ http://www.njspotlight.com/stories/14/03/26/state-s-deal-wit... [2]http://www.dslreports.com/shownews/30544 http://www.dslreports.com/shownews/30544 edit: formatting
- rayiner 12y ago
  > i was referring more to the massive amounts of money solicited from state governments supposedly for telephone infrastructure upgrades As I have described before, there never was any "massive amounts of money" paid by state governments. What Kushnick calls "subsidies" was just agreements that allowed the phone companies to increase their prices. To Kushnick, that's a "perk."
  - unprepare 12y ago
    The advantages aren't only in the form of agreed upon rate increases - this includes tax incentives/credits, real estate, and cash payments. [1]https://www.techdirt.com/articles/20131012/02124724852/decades-failed-promises-verizon-it-promises-fiber-to-get-tax-breaks-then-never-delivers.shtml https://www.techdirt.com/articles/20131012/02124724852/decad... [2]http://www.nyc.gov/html/doitt/downloads/pdf/verizon_nyc_franchise_agreement_approved_by_fcrc.pdf http://www.nyc.gov/html/doitt/downloads/pdf/verizon_nyc_fran...
  - kushnick 12y ago
    No. What I call 'tax' perk has multiple layers. First, around the original fiber optic deployment time, Verizon et al took one-time tax deductions under something called FASB71 -- of-$25 billion dollars, which was 2-3 billion per bell company (like Bell Atlantic or Ameritech) Second, they were able to 'accelerate' depreciation, meaning write off the networks faster, regardless of the life of the network product, such as the copper or fiber wires. Depreciation, in this case, lowers the taxes paid as it is an expense, but in the old days, it was part of the calculations of the costs to offer service, so more expenses would mean -- oh, we're losing money, give us more rate increases. I don't have problems with accelerated depreciation -- if they actually were doing what they said which was replacing the aging copper utility wires with fiber optics -- but in most of these cases, they didn't replace it but took the deductions and got the benefits. Go into an audit with the IRS and tell them you wrote off equipment that you didn't buy or that you didn't replace-- see how that works for you.

tw04 12y ago

Anti-telco hunt? They're on a pro-consumer hunt, and we should be thanking them for it. If the incumbent's have their way we'll be stuck paying per MB for ALL data while the rest of the world laughs away.

rayiner 12y ago
It was the last generation of "pro-consumer" types that got us into the current mess to begin with. Because at the end of the day, Verizon and AT&T may not like Title II, but they have the legal horsepower to deal with it. It's the smaller potential competitors who can't deal with the extra taxes to fund rural deployment, or having to build out to neighborhoods too poor to subscribe to fiber service, or having to petition rate authorities to set their prices.
- warfangle 12y ago
  > smaller potential competitors who can't deal with Ok, you've got my attention > extra taxes to fund rural deployment Well, no, the small guys don't have extra (federal) taxes imposed on them, unless they're interstate. "Every telecommunications carrier that provides interstate telecommunications services shall contribute, on an equitable and nondiscriminatory basis, to the specific, predictable, and sufficient mechanisms established by the Commission to preserve and advance universal service." S.254(d) On the other hand, even if they are interstate, "The Commission may exempt a carrier or class of carriers from this requirement if the carrier's telecommunications activities are limited to such an extent that the level of such carrier's contribution to the preservation and advancement of universal service would be de minimis." S.254(d) continued They may, however, have extra (state) taxes imposed on them: "Every telecommunications carrier that provides intrastate telecommunications services shall contribute, on an equitable and nondiscriminatory basis, in a manner determined by the State to the preservation and advancement of universal service in that State." S.254(f) But that same section limits what kind of additional regulations states can impose: "A State may adopt regulations to provide for additional definitions and standards to preserve and advance universal service within that State only to the extent that such regulations adopt additional specific, predictable, and sufficient mechanisms to support such definitions or standards that do not rely on or burden Federal universal service support mechanisms." > having to build out to neighborhoods too poor to subscribe to fiber service Well, yes. That's kind of what the universal service fund is _for_. > having to petition rate authorities to set their prices. That's what that whole forebearance thing is about. Nobody wants to put that kind of rate control on ISPs. (I'd be all for putting that kind of rate control on backbone-tier ISPs, though)

Karunamon 12y ago

I do agree, however, that Ars is on an anti-telco hunt these days. Do they not have it coming? Consumer satisfaction with telecom companies, across the board, is horrible. Nobody likes their phone company or their ISP in the USA, they're a company that is dealt with out of necessity, and is usually (rightly) seen as operating in bad faith. The behavior of the largest telcos are extremely dubious if not outright evil. (Examples: Comcast, Time Warner..) They're not quite mustache-stroking Saturday morning cartoon villains, but dammit, they're trying!

mindslight 12y ago
> Nobody likes their phone company or their ISP in the USA I do. Sonic.net Fusion ADSL2+ resold by Omsoft. 14M/1M for $50/mo, bonus copper POTS included with free nationwide calling (nice emergency backup). Purportedly you can bond two lines for twice the speed, and/or Annex M for 5M/3M instead, but I haven't had the need. No data caps - I've had many months >1TB. And this kind of attitude, too: http://www.jwz.org/blog/2012/06/sonic-net-we-delete-user-logs-after-two-weeks-your-isp-should-too/ http://www.jwz.org/blog/2012/06/sonic-net-we-delete-user-log... The few times I've called with a problem, Omsoft has been ahead of me in diagnosing, which is actually a bit unnerving because with every other "customer service" these days, it's your job to figure out the problem and then additionally figure out how to convince them to fix it. They can do all this because they're able to obtain unbundled copper from AT&T, as per 1996 telcom deregulation. The real problem with this larger debate is that we're having it after the fact. The US infrastructure is still based around DSL, yet most people thought it was a good idea to jump ship to monopoly cable companies for higher advertised speeds. Of course once you're hooked into a cable company contract, traffic caps and engineering congestion leave you worse off than DSL. If you're in a decently sized metropolitan area and want to actually vote with your wallet (and lower your stress level), check to see if you have any competitive DSL options left. Even if it's just a business-oriented connection from Megapath (Speakeasy), wouldn't you rather give your money to people who appreciate you?