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Verizon CEO Ponders Killing Off Rural Phone/Broadband Service & Rake In Wireless Profits

McAdam

Verizon CEO Lowell McAdam wants you to spend more with the phone company, and if his vision of Verizon’s future comes true, you will.

The company’s newest CEO spoke on a wide-ranging number of topics for the benefit of Wall Street investors at the Guggenheim Securities Symposium. A transcript of the event delivers several newsworthy revelations on the company’s future plans.

McAdam rose through the ranks of Verizon Communications with a specialty in the company’s immensely profitable wireless business. His predecessor, Ivan Seidenberg, spent his career at Verizon Communications working with the company’s legacy wireline (landline) network. While Seidenberg envisioned a new future for Verizon’s landline business with an upgraded fiber optic network called FiOS, McAdam maintained a different vision having run Verizon Wireless as a profit-making machine since 2006. McAdam believes Verizon’s future earnings and focus should be primarily on the wireless side of the business, because that is where there is serious money to be made.

“The first thing I did when Ivan sort of named me as the Chief Operating Officer was we had a very well-defined credo in the wireless side,” McAdam said. “We created it when we first came together in ’99 because we had seven different companies and we knew we had seven different cultures and we needed to tell people what it was we were really looking for. So we created that document. We spent a lot of time on it. We do a lot of reward and recognition as a result of it and that culture really took root in wireless.”

McAdam’s leadership also aggressively challenged the long-standing telephone company philosophy of earning a stable, predictable profit as Verizon did when it was a regulated monopoly. Instead, McAdam shifted the work culture towards an obsession with shareholder value.

“We took the top 2000 leaders through what we call ‘Leading for Shareholder Value’ and that was really a cultural shift for us because, if you think about it, the wireline side of the business has come out of the defined rate of return culture and we left that competitively a while ago. I am not sure we left it culturally,” McAdam said. “So we have been far more pushing why do you make that investment, what is the return on it, what is the priority of that investment versus another investment.”

Verizon’s Plans to Abandon Rural Landline Customers – Sign Up for Our Expensive LTE 4G Wireless Broadband With a 10GB Usage Cap Instead

Some of the most revealing commentary from McAdam came in response to questions about what Verizon plans to do with its enormous landline phone network, dominant in the northeastern United States.

In comments sure to alarm rural Verizon customers from Massachusetts to Virginia, McAdam clearly signaled the company is laying the groundwork to abandon its rural phone network (and DSL broadband) as soon as regulators allow. Dave Burstein at DSL Prime estimates that could impact as many as 18 million Verizon customers across the country.

“In [...] areas that are more rural and more sparsely populated, we have got [a wireless 4G] LTE built that will handle all of those services and so we are going to cut the copper off there,” McAdam said. “We are going to do it over wireless. So I am going to be really shrinking the amount of copper we have out there and then I can focus the investment on that to improve the performance of it.”

Elsewhere, in more urban and suburban areas, McAdam also wants Verizon to purge its network of copper.

“The vision that I have is we are going into the copper plant areas and every place we have FiOS, we are going to kill the copper,” McAdam said. “We are going to just take it out of service and we are going to move those services onto FiOS. We have got parallel networks in way too many places now, so that is a pot of gold in my view.”

In other words, McAdam would shift money spent maintaining and upgrading rural landline service into the company’s wireless network in rural America and its FiOS network in more urban environments, both of which will improve profits. FiOS allows Verizon to pitch television, broadband, and phone service in one profitable triple-play package, while also discontinuing standalone DSL service. Rural customers pushed to wireless LTE for broadband will face onerous usage limits and more expensive service for phone calls and broadband. Using Verizon’s LTE network for video would be prohibitively expensive.

McAdam hints the company has used its lobbyist force to make preparations to abandon rural customers first in Florida, Virginia, and Texas where state regulators approved legislation that eliminates the requirement Verizon serve as “the carrier of last resort.” That law required Verizon to deliver landline phone service to any customer in its service area on request. With that provision stricken in those three states, Verizon can abandon any landline customer it chooses after serving written notice.

McAdam said he intends to continue lobbying other states to adopt similar deregulation, and chided legislatures in both New York and New Jersey for “being backward” because they have repeatedly refused to allow Verizon to walk away from its rural customer obligations.

Burstein thinks the changes in progress at Verizon will be a disaster for affordable rural broadband.

“This makes a mockery of ‘affordable broadband,’ especially when Verizon and AT&T are boycotting the plan for discounts for poor schoolchildren,” Burstein says. “The detente between telcos and cable companies means the prices of modest Internet speeds (3-15 megabits down) are typically going up from $30-45 to $55-70.”

Burstein also notes the change spells disaster for competitors who sell DSL service over existing phone networks.

“Nationwide, alternatives to the telco/cablecos have less than 5% of the residential market but in some areas they remain important,” Burstein says. “The most interesting, Sonic.net in California, offers unlimited calls and Internet up to 20 meg for $50/month, 20-50% cheaper than AT&T.”

“High prices, unacceptable service choices and further rural depopulation are bad policy,” he adds.

Verizon still earns enormous revenue from its remaining landline customers, revenue McAdam hopes will be replaced by selling business-focused services instead.

“Cloud [service] is continuing to pick up for us. Security is I think going to be an even more important play for us as we go forward,” McAdam noted. “I think these large enterprise accounts, offering them kind of a global service with those up the stack [...and...] applications on top of it drive it as well. So there is a number of pieces in the portfolio that I think will take us up and more than compensate for some of the falling off of copper-based services like DSL and voice and that sort of thing.”

Verizon’s Unionized Employees Are Wrong-Headed Defending Verizon’s Landline Network

McAdam also blamed the company’s unionized employees for remaining loyal to the company’s traditional role in the landline business.  Unions like the Communications Workers of America continue to push Verizon to expand its FiOS fiber optic network in more places, but the company has left its FiOS expansion on hold, diverting investment into its wireless business. Both McAdam and the union agree the days of copper wire networks are numbered, but McAdam hints that union concessions (and fewer unionized employees) are required before the company will again expand FiOS.

“Our employees see that it is not sustainable to keep having copper plant out there. You really can’t invest in it; it is difficult to maintain it; and they want to see us improve on FiOS,” McAdam said. “And when I am out in the field, the techs and the reps will be the first to point out kind of some of the dumb policies I call them that we have around the business. Well, a lot of those are based on rules that were negotiated with the union back in the ’60s and ’70s.”

“So we have to get the union leadership to understand that if the company is able to be more flexible in meeting customer needs then we can grow things like FiOS, which will provide good long-term jobs,” McAdam added. “Will it be the same number as what we had in the past? No.”

Verizon’s Enormous Offshore Bank Accounts: Waiting for a ‘Business-Friendly’ Administration to Let Them Bring the Money Back, Tax-Free

McAdam also signaled investors that the phone company’s profits massed in overseas bank accounts are going to remain in place until they know who wins the next election. Verizon wants to repatriate some of that offshore money, but they want to do it tax-free.

“Everybody is kind of waiting to see who controls the Senate and who controls the White House and they are waiting to make those — you have got to understand what the tax situation is going to look like, so we are all waiting to make those investments,” McAdam said.

‘Share Everything’ Lays the Foundation to Monetize Your Data Usage… Forever

McAdam is a big supporter of the company’s new Share Everything wireless plan, which charges smartphone owners $90 a month for unlimited voice calling, texting, and a small 1GB bucket of data that he is convinced customers will be prepared to spend more to enlarge.

“If I know that I have an intelligent home that I can get to any number of ways. If I know that I can do everything I want in my car that I can do in front of my TV set or my PC or on my tablet, I think it just takes away a lot of the restraints,” McAdam said. “Is it going to cost them more money? Yes, but it will probably shift their wallet spend from other things that they do individually into this sort of a bucket of gigabytes. And so I think it will be a significant [revenue] stream for us.”

FitchRatings, a credit ratings agency, agrees in a new report.

“The new pricing structure taken by the industry leader is a disciplined pricing action that could create more cash flow stability longer term within the wireless industry,” the credit ratings agency said last week.

Fitch notes data services are increasingly becoming a larger source of revenue for wireless phone companies. In the first quarter alone, data revenues at Verizon Wireless, AT&T, and T-Mobile USA — all carriers that abandoned flat rate wireless data plans, grew 19% year over to year to $14.2 billion. That represents 41 percent of the companies’ service revenues.

Despite assertions from Verizon that the new plans deliver convenience and better value for subscribers, Fitch found they actually represent a substantial price increase for many customers.

“These increases are sometimes material, depending on whether the legacy rate plans have low recurring charges for text messaging or calling minutes. As a result, prices have generally increased for new subscribers,” Fitch reports.

Fitch warns investors Verizon is likely to lose customers over its new pricing strategy, and experience a slowdown in new customer growth as well, at least until competing carriers realign their pricing and plans to be similar (or match) those Verizon introduced last month.

The Days of Your Subsidized Android/iPhone May Be Numbered

McAdam’s vision also includes a re-examination of device subsidies as customers increasingly depend on wireless devices. McAdam previously indicated the wireless device subsidy was designed to get customers to adopt and embrace new technologies, and as adoption rates have soared, the need to keep discounting technology that customers depend on diminishes.

He echoed that sentiment at the Guggenheim Securities Symposium, noting that Verizon this month abandoned subsidies on tablet devices. For McAdam, discounting wireless technology serves one purpose: to quickly establish a new business relationship with a customer that probably would not buy their first device at full price.

But McAdam recognizes changing the company’s subsidy that customers expect to receive must happen gradually. It has already started, first by eliminating early upgrade discounts, then by dropping the company’s loyalty discount “New Every Two” plan. Now, the company will only allow grandfathered unlimited data plan customers to keep those plans if they agree to forego any subsidy on their next smartphone.

“If you look at the telematics industry today [services like OnStar], the car companies subsidize a device that goes into the car. So I think that we have a tendency over the years to sort of look and say, oh, something is going to happen very quickly,” McAdam said. “Things have a tendency to evolve over a long period of time, so I think you will have some devices, like the tablet today, that [are] not subsidized and you’ll probably still have certain devices that are because you want to establish that relationship with a customer and that is the easiest way to get there.”

Verizon Wants You to Use the Cable Industry’s Growing Wi-Fi Network

McAdam’s vision also offloads as much of Verizon’s 3G and 4G traffic to other networks as possible. Ironically, one of the biggest networks he hopes customers will use instead of his are the growing number of Wi-Fi services offered by his competitors in the cable industry.

“It is interesting that a lot of people have said, well, I can’t believe you’re going to partner with [cable companies],” McAdam said. “You are not going to use their Wi-Fi are you? Well, of course, we are. I mean we want to shift as much onto FiOS or onto the fixed network where we can and then provide — use that capacity to provide those higher demand services like video.”

McAdam added he does not want customers sitting in their homes watching video over his LTE 4G network. He also wants that traffic shifted to Wi-Fi.

“So our thinking going forward as we talk about kind of the ‘One Verizon’ approach is we want to use every network asset we have and if that means jumping onto FiOS or using the cloud services for mobile as well as fixed line, using security across all of our different access technologies, we want that network to be seamless and that is what our CTO, Tony Melone, is driving hard on in the business right now,” McAdam said.

One preview of that thinking at work can be found on Verizon Wireless’ hottest new device — the Samsung Galaxy S3. Verizon’s version of the phone browbeats customers with prominent menus that encourage Wi-Fi use wherever possible. The phone’s persistent reminder has become a pest according to many of the phone’s owners, who consider both the message and the difficulty keeping Wi-Fi shut off obtrusive.

Verizon’s partnership with large cable companies including Comcast, Time Warner Cable, Cox, and Bright House Networks originally involved the acquisition of excess wireless spectrum cable companies originally intended to use to compete with the mobile phone industry. With the cable industry abandoning those plans, the proposed collaboration involving Verizon Wireless grew to include cross-marketing each other’s products and services, and now apparently includes sharing the cable companies’ growing Wi-Fi networks.

Verizon Believes The Future of Telecommunications Needs to Be In the Hands of Two Companies — Verizon and AT&T

A point of shared belief between market leaders Verizon CEO Lowell McAdam and AT&T CEO Randall Stephenson is that excessive competition just does not make sense. Both believe federal regulators have it all wrong when they push to maintain the level of competition that still exists in the telecommunications business. When the Department of Justice effectively pulled the plug on a merger between AT&T and T-Mobile, Stephenson was outraged and, in one investor conference call, launched a tirade against regulators and suggested that AT&T would throw in the towel on expanding rural broadband in a retaliatory move.

McAdam and Stephenson both believe that competition in telecommunications represents wasted investment, inefficiency, and value destruction.

“I think the fundamental problem here, and it is sort of like fighting gravity I think, is that it is so expensive to build these networks that you are not going to support seven or eight carriers,” McAdam told investors. “I don’t — frankly, I think you’ll be lucky if you can support three in a healthy environment.”

But McAdam recognizes that if it achieves a wireless duopoly with AT&T, it must be a benevolent one, or else the marketplace abuses the wireless industry has a track record engaging in will invite regulatory scrutiny.

“We have a tendency to create a great club and hand it to our detractors and say please beat me with this because we do some dumb things like fighting some of the number portability and trying to push a direct wireless directory,” McAdam said. “I mean there are things that have really upset customers and that invites regulation. So I think the industry has the responsibility to act in the best interests of the customer as part of the mix with a shareholder, but I think there is always going to be the battle with regulation.”

McAdam admits he is uncomfortable with the fact the Obama Administration has allowed the regulation pendulum to swing more towards enforced competition and checking the power of dominant carriers in the marketplace. He prefers the Bush Administration’s “hands-off” approach that allowed both Verizon and AT&T to snap up smaller competitors with scant regulatory review.

McAdam believes the Obama Administration’s FCC and Justice Department is slowing down wireless investment, innovation, and the industry’s ability to earn profits at a time when unemployment in sky high and increased investment will help drive the economy forward.

Currently there are 67 comments on this Article:

  1. Duffin says:

    I always wonder if people like this guy have any trouble sleeping at night. Probably not. Getting paid to essentially think up ways to screw people out of more and more money is quite rewarding, I’m sure.

  2. Jordan Kratz says:

    My plan is done first week of August.I won’t be renewing any kind of Contract, will only use a Pre-Paid Unlimited Monthly Type plan, and only use a dumb phone.
    My Monthly Bill is going to be a lot cheaper than it is now.

    • Scott says:

      My 2yr iPhone 4 contract with AT&T is up, I’m done and won’t be signing another agreement either. I don’t use voice anymore, data is a convenience, and mostly started using texting with friends/family these days. If Apple’s free iMessage had a text gateway to AT&T/Verizon/etc for a nominal charge, that’d be perfect.

    • David says:

      Agreed. Dropped our contract service a while back and bought two new unlocked smart phones off Amazon. We couldn’t be happier to get away from the overpriced service. Getting involved in a cellular contract is one mistake I won’t make again. Only thing that worries me is that so many customers are leaving the Big Four and going prepaid now. And if the prepaid companies are buying spectrum from them, who’s to say the Big Four won’t raise their selling price to compensate. In turn our low cost rates will rise. Not sure how it all works and hopefully I’m wrong.

      • Scott says:

        AT&T and Verizon already started changing plans and jacking up their pre-paid phone rates the last 1-2 years straight, so they’ve been well aware of the change in customer preference.

        The problem with our alternatives like Straight Talk and other value pre-paid cellular plans is that they rely on reselling ATT, Verizon, Spint, T-Mobile coverage.. thus any change with the terms between those companies and your Pre-paid company mean a major change for you and your future costs and terms.

        All is fine now, but as soon as usage sky rockets with a few resellers, don’t expect AT&T and V to not take notice and re-negotiate their terms that are only there to make it look like they have competition in the market.

  3. Chisom says:

    Carriers are far too powerful in the US…we are literally at their mercy…
    http://chizzwhiz.wordpress.com/2012/07/17/at-the-carriers-mercy/

  4. metalbuoy says:

    He is pretty old and close to death. He should make peace with God now and stop trying to lay off thousands of workers and throw them into this pathetic Obama sociaistic disaster we have at the moment.

    • RoKat says:

      Don’t know if Metal bouy read the last part of the article. Verizon and AT&T want a duopoly in the market and Verizon wants to get rid of land lines. That makes all of us dependent on Verizon and AT&T wireless who will fix the prices and we all will be at their mercy. They will have total control.
      Obama is trying to keep competition, if Romney gets in we WILL have the duopoly. This is very concerning and scary.
      Wonder how much is in that offshore bank account. They are not going to move it back in the USA until they can do it tax free??? Really? Leave it up to the middle class to pay the taxes…..apparently the rich don’t have enough yet. Unbelievable..this guy is a piece of work!

      Please people, Corporate America is taking over our country. It doesn’t matter what party flag you wave, we the people have to stand up for our rights. I encourage everyone to go to this website http://www.unitedrepublic.org This is a little about them. This is not affiliated with one party.
      About United Republic
      -Where the will and concerns of the people aren’t drowned out by the financial influence of the few.
      -United Republic is a bold, new challenge to the undue influence of well-financed special interests over American politics and government.
      Thank you!

      • Gail says:

        Did anyone ever see Terminator? The backstory of the movie is because we let the government take over and did nothing until it was way too late! My poor grandchildren!

    • floyd george says:

      all ways got to be a jerk trol saying its Obamas fault. Hey dipS where were you for the 8 years that texan want a bee shafted the US. He started out with a surpless, eneded up 10 t in the hole started 2 wars and never got ben lodden. Obama DID.

  5. verizonpoops says:

    Verizon is as greedy as they come. Hope google goes to more cities with their wired broadband because it truly is the best, Verizon only wants money and I hope they go bankrupt, I used to be management there and they treat employees like garbage and blame the workers, union, and government regulations as roadblocks when it’s the upper management who is so out of touch it’s sickening. Verizon is fighting the tax loophole being stopped in NJ about sending phone calls for customer service overseas saying they need it and the ability to outsource jobs to be competitive. Really, making 20 billion isn’t enough already while increasing workers co-pays and sub contracting in america. Pathetic

    • Harry says:

      Agreed !

    • verigreedy says:

      You nailed it! They conveniently blame the “union” for all their $20,000,000,000 PROFIT woes…………..If the paying public only knew!

    • Gail says:

      After all telephone, be it wireless or wired is a utility! Maybe there should be NO PROFITS allowed on utilities? Just saying… cap the amount of money that is allowed to be spent on salaries and then the prices will come drastically down! GREED is a deadly sin!

      • Beenthere says:

        Wasn’t able to get thru the whole thing but VZ ticks me off. I gave them 32 yrs. of my life and for what? Nothing. Just sitting here and watching my benefits slipping away. The pension is terrible – my whole check goes to the landlord every yr. I took an offer – be careful of any offers !!! I didn’t realize my pension would be reduced at 62, that I’d have to file for SS at 62. I was hoping to hold off on SS so I would get more. Well, that didn’t happen!!
        I left 17 yrs. ago and there’s no COLA/CPI in pensions. I worked as a clerk and then a mgr.
        My son works for them – he’s between a rock and a hard place. The money is good & he’s invested wisely but doing away with landlines ( I refuse to give up mine!!!!) will cost him his job. They are still working without a contract – it’s been a yr. now. VZ has become ridiculous in their demands on the workers. They have to wear “uniforms”, a minute late has become a “suspension” and other foolishness.
        I asked my son about CPI in pensions. His answer was “the union doesn’t bargain for you. They don’t care about retirees.” Really?????? My sister used to be a bargaining rep.for the IBEW and part of bargaining was retirement plans.
        So where’s the unions in all this? Nobody is budging. The money is “off-shore” – sounds like a GE thing and not paying taxes !!!! Take some of the profit and spread some to the retirees – we worked for it. We implemented changes, technology, gave our ideas & suggestions to make the company and the services we provided better for our customers, not to line the pockets of McAdam, Seidenberg and the rest of that crew. They wouldn’t know what to do – all they see is the bottom line. They forget – we’re not only active or retired employees, most of us own stock in VZ. We’re shareholders, too and they’d better smarten up.
        Two more things – VZ had an enormous pension fund but then, as did gov’t., began to underfund it. It’s only within the past yr. or so that they started to bring it back to par.
        And yes, I’ll continue to use my land-line. I don’t have or want a cell. It works just fine – better than a cell !!! My “pension” doesn’t have the money to pay cell bills.
        I’m disgusted. I thought I had seen it all when I worked there but they are out of control now.

  6. Ivan says:

    This guy is nuts to bring this to the attention of his customers. I see a mass exodus to prepaid services and a move in the home to broadband (Cable Modem) where it’s available. Who made him CEO? Not me!

    • metalbuoy says:

      HAHA whatever ivan seidenberg, .go retire in your own filth…and thanks for handing over the reins to another racist republican old white ***** mcadam…..

  7. Jimmy says:

    I have been 10 months without a cell and I feel like a free man. I actually have something to talk about now when speaking to friends and relatives. No Facebook, No Cell. I just have my good ole dependable landline and oh yeah if I dont answer leave me a message I will return your call at my convienance. AND…
    I do not understand why the same reugulations that apply to landline companies are not applied to wireless— you wanna talk monoply!

    • RoKat says:

      I agree Jimmy. I have given up cable TV and while everyone is complaining about their bill..my mom’s is $85 for basic Comcast and ma-in-laws is $150 for phone and cable we are doing without it. We get 15 channels and it is fine and surprisingly clear. If I want the weather I look online or can download a movie or TV shows for a monthly fee….just get what I want with our new tv.

  8. jon says:

    Agreed

  9. eric says:

    All I will add is… NO FIOS NO PEACE!!!!

    and if this CEO want to experience a real revolt then do what he is proposing in this interview. He won’t need and employees because he won’t have any customers!!! I for one have been recommending all my clients move to FiOS; if this continues I will be looking for ANY alternatives!

  10. tom says:

    well said v poop

  11. nopcspokenhere says:

    I retired after 35 years starting with ATT/BellSystem in Pennsylvania and all its other incarnations.
    You had something that was regulated, ATT and the Bell System that worked for over a century.

    Talk about fixing something that wasn’t broke???? Find Judge Green and see if he agrees this was a good idea.

    You can keep your cell phones, but ‘out of my cold dead hands’ will you take my landline!

    At least when there is a disaster, you have some generator back up if the Central offices aren’t impacted.

    Oh for the good old days, YOU HAD A NETWORK that worked, not perfectly but now you want to build more. Go ahead not off my back or my pension. Let Judge Green figure out how to get the ‘intra-web’ and cell ‘power’ out to the boonies. ATT and the Bell System found away.
    They all make the simple so hard.

    • txpatriot says:

      @nopcspokenhere: Judge Greene died in 2000.

      In fairness, it wasn’t Judge Greene who broke up the Bell System. The DOJ brought the anti-trust suit that resulted in the break-up and it was AT&T itself that proposed the Divestiture (it was called “The Plan of Reorganization”, remember?). AT&T and DOJ agreed to settle the lawsuit: AT&T would spin-off the RBOCs and the DOJ would drop its lawsuit. All Greene did was approve the settlement..He was not the “Bad Guy”. If anything, he was a friend of the RBOCs; originally, AT&T planned to keep Yellow Pages but Greene modified the settlement so that the RBOCs got to keep the highly-profitable (at the time) Yellow Pages.

      If you’re looking for a bad guy, look no further than AT&T CEO Charlie Brown for agreeing to the break-up and the AT&T Board of Directors for approving it.

    • Gail says:

      “They” make it hard because they all came into the company through the “college up” plan. None of them ever held a tool in their hands. “They” have no idea how anything works other than robbing people to put more in their pockets! Shame shame shame on “them” and you all know who you are! DISGUSTING! CORPORATE! GREED!

      • KarenW says:

        I totally agree with you Gail. We all worked our way through the company, not like these idiots who are now in charge and never picked a tool or knew what they were for. Unbelievable! I am not even proud to say I worked there anymore because of the disgusting tactics they use and how they screw retirees!

    • Charlotte says:

      Here in rural central PA we do not have access to anything but Verizon, no cable or ATT, cell service is very iffy at best, I get tv via satellite. I would be unconnected without my landline and being in a rural area depend on the phone in case of emergency.

      • Mendy says:

        I Am A Verizom Retiree 41+ years DC Area

        Years Ago Their Came A Thing Called “Universal Service”.

        thia Allowed Telephone Companies To Raise Charges in

        Urban Areas in order to Suplement Rural Service. This was a GOOD Idea.

        Cost lower per account with Many subcribers. thes helped pay for areas with MILES between locations. Now they sell off above ny city to main and West Verginia ect. BUT Dont Give up that hidden profit added to Urban coustomers. SO Lets lower bills in urban areas and/or PAY large cost to rural telcos . also areas sold to other companys such as FRONTIEER also get ALL thea areas retirees. if they FAIL then their retirments STOP. After All Sosial Security is plenty to live on.

        What A Big Joke. Medical benifits also.

  12. Worm says:

    Lowell Mcadam only care’s about one thing, it is not the development of the economy, or steering the industry toward new horizon’s, it is all about putting money in the shareholders and his pockets. Most people in the urban and rural areas will not be able to sustain service because the price will be raised EVERY YEAR, once there is no other choice but wireless or/LTE. —

    The dropping of the wired line will break the back of the Union (Wire line personnel) in the Northeast (45,000 currently w/o a contract). He has systematically divided the employee’s and killed any sort of moral in company he is new in. Each quarter he has destroyed division by continuously FIRING employees.

    He should be visited by the 3 ghost, to show him the future of a city when 45,000 are unemployed and he is the driving force behind it…

    Hey Lowell, I am sure your Grandkids eat well, how about letting other have a seat at the table

    • t says:

      As a shareholder, and as every share holder should… be happy thats the only thing he cares about. That is his JOB!

      • Except for that pesky fact that Verizon, like AT&T, both agreed that with deregulation, they would continue to act as the “carrier of last resort” for rural Americans with no other choices.

        It may be his job to represent the shareholders and earn as much as possible, but not if it means violating the agreement both phone companies soberly signed.

        Just like the cable industry, these companies are going too far and the inevitable backlash will bring re-regulation which, as a shareholder, you should also be concerned about.

        As I tell all of my investor friends, you have to spend money (to upgrade your network) to earn money (higher profits from increased ARPU). This “short term is the only thing that matters” mentality is going to harm both the companies and our national potential to move to the next generation of technology in a globally competitive marketplace.

        As an American, I also don’t believe we should be leaving anyone behind.

        • txpatriot says:

          Philip what signed deregulation agreement are you referring to? If they are truly “deregulated” then there should be no COLR obligation.

          For example, wireless providers are (for the most part) not subject to retail regulation and they have never had a COLR obligation. The same is true of retail ISPs and VoIP providers.

          The only reason local exchange carriers like AT&T, VZ, CenturyLink and others have a COLR obligation at all is because they ARE regulated for purposes of local exchange service.

          • As I’ve previously indicated in another piece, when I talk about COLR, I am referring to wireline. As an example, AT&T (via BellSouth) is the dominant wireline carrier in Georgia. In that state and others, they are fighting to abandon that carrier obligation provision. Verizon has the same obligation in its wireline service areas. Now it has become inconvenient and they both want to change the rules.

            • txpatriot says:

              But what deregulation agreement did they sign?

              • Jes says:

                Hi TXpatriot,

                I believe he is referring to the Telecom Act of 96 which is also referred to as deregulation. The stated intent was to provider increased competition among providers which ‘should’ lead to a greater quantity of and more cost effective choices for consumers.

                As an ILEC/public utility, a company is FCC and PUC ‘regulated’ in the sense of having to file public tariffs and being held to certain public utility standards.

                Despite ILEC’s being regulated the industry as a whole was ‘deregulated’ by this act because it forced local providers to sell LEC services to competitors(resellers) as a means to enable the mandated deregulated competition.

                In the article Lowell is suggesting that Vz no longer wants to be in the last mile business. Public utilities have to legally make an effort to provide service to all customers….how those ‘attempts’ are measured I am not sure.

                I do know that on the LEC side there are parity metrics that public utilities have to follow to show that they are not showing preference to direct retail customers versus wholesale customer who resell their service. This is all monitored and regulated and LEC’s can be fined for falling below or going above parity metrics. (depending on the standard)

                For myself, I can see how in ways this deregulation increased overall costs because the profit margins of clecs have to come from somewhere and ILEC’s don’t want to loose a dollar either. To believe that the answer to this woe is to allow an almost super monopoly that is void of oversight, has authority to choose to serve or not serve customers at will and dictate the type of services available and at what cost. Theodore Roosevelt. Carnegie Steel. Original Monopolies existed in a time where the country and industry was growing nationally. We are in a time where with globalization, a monopoly of the past would be eaten up by what Verizon seeks to be. The Greed and single-minded focus expressed by this article is frightening for consumer and employees alike.

                • txpatriot says:

                  Jes you may be right but I’d really like to hear it from Phillip.

                  “Carrier of last resort” is a STATE responsibility, not federal. The FCC has no rules about COLR because there is nothing in the Communications Act about it (despite the lofty language of “universal service”). The ’96 Act added a universal service section, and in exchange for USF funds, the FCC can (and does) require recipients to serve upon request, but the FCC does not extend that obligation to carriers that do not accept USF funds.

                  Again, COLR is written into STATE laws; the FCC and the “deregulation” bill have next to nothing to do with it.

  13. Matthew says:

    Clever. Did Mr. McAdam use to work for Enron?

  14. Fran Currier says:

    Im a retired employee of the Telephone industry…we worked to make it what it is today. Unfortunately, there’s always someone to “screw things up”…in this day and age…its McAdam and his self serving ideas…no concern for the general population just the MONEY!!

  15. bruce says:

    Also a retired NY Tel / Verizon worker. No way will I switch to wireless internet
    at a much higher cost and with a data cap. Not to mention totally unsecure.
    There is no way I would log onto ANY Financial Sites using a Wireless or WiFi
    connection. If they bring FIOS into my area of Wayne, New Jersey I would
    probably switch over to it either with or without a land line dial tone. If not, then
    the only other move would be to cable modem service with Cablevision. The one
    company that would never get my business, is Verizon Wireless.

    • Bette says:

      All you Verizon workers should really be paying attention to what’s being said here.

      I retired from NYNEX after 36 years – then they became Bell Atlantic and then Verizon. Verizon decided to spin off its yellow pages business to Super Media – and with the spin off, they divorced themselves from their retirees – one day you get a letter that says “you are no longer a retiree of Verizon”…then they take away concession service…and then last week, SuperMedia sends their retirees a letter saying you no longer have health, life insurance, dental or vision, effective Sept 1

      I see the same thing happening with the land lines business – there stupid move just cost me, a retiree, about $700 per month — I hate them

    • Willliam Gray says:

      Imagine the day Verizon and AT&T control communications for this nation. Imagine their dis-interest in how high prices go and how helpless those who wish to communicate will feel at the cost and lack of choice in alternatives. Imagine the continuing lack of interest by Verizon and AT&T in providing anything like truly universal communication coverage in rural and remote areas of this country. Image, just imagine the huge salary increases these top managers will find ways to reward themselves with. Imagine the stock options and such they will take, whether they do a good job or not, as they golden parachute to another equally profit at any cost company. Imagine the glee they already feel at refusing any cost of living increase to retirees, while they search for ways to abandon retiree pensions, health care and insurance. Imagine the joy of destroying the unions that have protected their workers from their abuses. Imagine that they have any sense of decency or concern for anyone but themselves and their financial well being. Imagine the Alice In Wonderland “Off With Their Heads” mentality that permeates upper management in most of our corporate Upper Management and Board of Director rooms. Imagine how much fun you will have in the bread lines of tomorrow as the “Big Boys” drive by in their limos. With full disclosure, I retired from what is now Verizon in 1991 and am convinced Verizon, AT&T and every other corporation will walk, more likely run, from any obligation, past or future, to retirees, employees or customers. They have to be teaching this corporate mindset in our institutes of higher learning. Where does that leave us? In a place our Congressmen and Senators will never have to worry about going. You can take that to the bank, if you can get an off-shore account, that is. Verizon’s comments about off-shore money and bringing it back tax-free is beyond priceless!

      • I think the game playing with retiree pensions has become an all-too-common Wall Street style maneuver to cut costs. Verizon considers their landline business an afterthought, and it seems clear to me McAdam would dump the whole thing to companies like Frontier, FairPoint, CenturyLink, and Windstream if he thought they had the money. He’d dump their pension obligations as well if he could get away with it.

        FairPoint went through bankruptcy over the acquisition of landlines in northern new England. HawTel did as well after buying up Verizon Hawaii. Frontier is mired in debt with their acquisition (tax-free by the way thanks to a nice loophole in the federal tax code). Locally, we have family that worked for Rochester Telephone for decades who were lucky to keep their pensions after the company was first acquired by the dot.com disaster Global Crossing. Citizens (later renamed to Frontier) eventually picked up those pieces and covers those pensions, but one always has to wonder how long.

        Here is what I never understood, and this is not directed at anyone in particular:

        1. How does a company expect to survive when it won’t invest in its network, operations, and employees to expand and keep up with the times. It’s clear Verizon is helping along its own landline demise by slashing employee wages and benefits, reducing investment in its legacy network, and curtailing spending on the next generation FiOS fiber technology it really needs to stay in the game.

        2. The attacks on unions I expect from Wall Street. I can’t understand it from the public at large, except perhaps from the thinking that those non-union workers doing the complaining have already lost good pay and benefits and figure if they can’t have them, unionized workers shouldn’t either. It’s the biggest race to the bottom ever. Can’t we, for once, fight for something better instead of the ‘if I can’t have it, take it away from them too’ thinking?

        3. Verizon and all of the Baby Bells made a deal with deregulation and they are reneging on it as they attempt to squirm out of their responsibility to serve as the carrier of last resort for rural Americans. You can’t expect a rural resident to rely on cell phone service as a landline replacement, much less for heavily-capped wireless broadband.

        Regulators who allow these companies to walk away from their responsibilities should be handed an AT&T or Verizon cell phone, placed in rural America, and let them see how that works out for them.

        • Scott says:

          I’ve worked in Union and non-union positions, and you’re right on the money. My non-union co-workers that are anti-union all believed that union employee’s all got better salaries, healthcare, retirement, etc and put an unfair burden on companies.

          Its similar in a way to a lot of the anti-government worker sentiment that had been stirred up too .

          There are some major issues with unions, especially in our past, but they also have provided a much needed balance against management and investors that are increasingly lowering the quality of living for average american workers in big companies by taking away benefits and pensions while slashing effective wages.

          Like you said though, workers should be fighting together for fair benefits and wages, not trying to drag down the person you believe is above you to your level.

  16. tom c. says:

    sounds like mcadams never work an honest day in his life. if we stick together for what we earned as employees of verizon maybe we can vote the grinch from mendham out of office. lets all keep local IBEW 827 in out thoughts.

    • William T. says:

      Seidenberg received 20.2 million dollars for services from Verizon his last year of service.

      I’ve been retired since 1985 with no increase in my pension. Why don’t we stockholders gang up and straighten things out?

      • KarenW says:

        I think we should too! Not one penny increase in our pensions to allow for the cost of living increases. That is OUTRAGEOUS! The price of EVERYTHING keeps going up. You are now forcing retired people back out into the workforce in order to pay for their medical and dental as well as every day items!

  17. Mary says:

    I am going to sell all my stock after working 29 years for this company I am retired and scared to death I will have to pay for it.. I get 9,000 a year . I see is I can transfer my bell styem plan over to something else. He wants to fire peoeple like Romney they must be close friends

    Mary

  18. artie d says:

    in my house I cant get a signal on my cell phone and therefore I rely on my land line to communicate to the world, if you take that away I would have to get in my car and drive a good distance in order to get a signal………. boy that makes sence …… is isnt my father’s company anymore…….

  19. KarenW says:

    I worked there for 32 yrs and it not the company I retired from. It is now a bunch of greedy people who feel their billions in profits are more important than anything else. We can’t get signals in the house either from Verizon, I rely on my land line. They keep blaming the union for their problems, if it wasn’t for the union workers you wouldn’t have a company. The union workers are the ones doing all the work, not the executives who are out to lunch with or on the golf courses making your greedy disgusting deals for YOUR profit! Quit your BS, quit raking people over the coals and charging outrageous prices. Corporate power has to end or this country will fail even more than it has.

  20. rdtelman says:

    I knew they were hiding all that $$$$$$$ they short-changed the pension plans. You had to hide it somewhere. We earned that ———- money, give it back to the people who earned it!

  21. JuJu says:

    The late Paul Harvey stated after the breakup of the telecoms in l984 that AT&T would eventually start buying all the baby bells back and we would have a return to a monopoly. He didn’t count on a two company monopoly. The move to Texas during the Bush administration was a portend of this prophesy. Move to the state with little regulation and complete devotion to commerse and little regard for the blue collar crowd. Throw a bone (big T-bone) make a pick up truck affordable and maintain peace. This is the same culture Mitt Romney demonstrates so if this move by McAdam is a bitter pill to swallow then show your dissatifaction in November and don’t just pay lip service.

    • Marge P from PA says:

      Juju is right on target! Any blue collar worker or middle class american who votes republican this fall is going to be sorry when they allow our pensions and healthcare to go away. McAdam and Mitt probably already have a deal!

  22. vz worker says:

    as a current employee that has watched management and union workers dwindle in numbers i have to say lowell mcadams is out of his mind. copper lines were built by the union workers and the phone company made profits for over 100 years, fios was built by the same union workers and we were verizon did not excpect to make a profit on thier investment in fios for 7 years. Funny verizon starting making a profit on fios after just 4 years and now quarter after quarter thay make record profit but still want to lay off union workers and management. fios is the fastest most secure and reliable product out there making profit and this guy has the balls to tell america that verizon has billions of dollars in offshore accounts that they refuse to invest in a product that is proven to make a profit until they get the president they want in office?? if i were obama i would tax the crap out of verizon just for that arrogant statement. lol

  23. vz worker says:

    we were told sorry for the mistake but this guy gets me so worked up. lol

  24. Little Stevie says:

    Amazing string of comments going on ! As a current Verizon employee I ask myself every day ” what about the moral and ethical implications of holding views such as the CEO of this company ? ” These are views that we working here have guessed or suspected for serveral years now, but seeing them in print or hearing them spoken in public makes the impact much much greater.

    What ever happened to corporate America doing the right thing by people for the right reasons? Because if you do, the profits will always follow . The hubris and greed of this ceo and others is stunning, and they are completely not shy about all of us knowing about it !

  25. verizon sucks says:

    verizon sucks.
    they tie you in to a two year contract and do not support hardware for that period, even if you get an insurance plan.
    My droid burned itself up at temperatures of over 230 degrees.
    Their solution? Pay $700 for a new one because they don’t support my model, even though I bought it from them less thank six months ago.
    Verizon is crap, their customer service is crap. I filed a BBB complaint.
    In the complaint I mentioned that they were doing R&D at the expense of their consumers and that my phone burned up.
    Their solution?
    They tried to CALL ME over and over, would not respond to email (cause it is legally binding and traceable) and claimed I was not reachable. Despite the fact that I explained MY PHONE BURNED UP.
    They told me that they would give me a new phone if I retracted the complaint. When I did, they said, “oh, we meant you could be eligible for an upgrade, which is only $300″
    Criminals. Just putting the word out there.
    Don’t believe them. They lie shamelessly, put fake extra service fees that they cannot explain on the bill, pass you around to “managers” that are just other employees, and they purposely under educate said employees so that there can be no resolution, because the people you need to mediate through are retarded. (sorry that is an insult to retards)
    My next filing is with the California department of consumer affairs.
    Avoid them if at all possible.
    P.s. their network is crap, and they try to limit tethering so that you cannot use their unlimited data plan in a way that is convenient without also purchasing more hardware.

  26. service?? says:

    Why do the top echelon of big companies keep their email and phone contact info secret?

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