Qwest’s head of financial matters told Bloomberg News the company’s decision to sell out to CenturyLink made good financial sense because the telecommunications industry needs more industry consolidation.

Chief Financial Officer Joe Euteneuer said the time was right for Qwest to sell operations in the north-central and mountain west region because there were too many competitors in the marketplace.  Euteneuer said the telecommunications market needs to resemble the cable-TV business, which has been heavily concentrated into two huge powerhouses — Comcast and Time Warner Cable.

Qwest’s merger with independent telephone company CenturyLink continues the consolidation underway among independent phone companies not affiliated with AT&T or Verizon Communications.  The merged entity will challenge Frontier Communications’ position in the landline marketplace.  Regulators in Qwest’s service area have been giving cursory review of the proposed merger and the company expects few problems in getting the merger deal approved in every state affected.

The merged entity, tentatively to be called CenturyLink, has been spending most of its public relations efforts talking up the reshuffling of its management and executive office operations.

CenturyLink is promoting executives to new regional management positions the company unveiled Friday.  CenturyLink’s new regional structure:

• Eastern, headquarters in Wake Forest: President Todd Schafer, current president of Century Link’s Mid-Atlantic region. Member states are Georgia, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee and Virginia.
• Midwest, headquarters in Minneapolis: President Duane Ring, current president of CenturyLink’s Northeast region; Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, North Dakota, South Dakota, Wisconsin.
• Mountain, headquarters in Denver: President Kenny Wyatt, current president of CenturyLink’s South Central region; Colorado, Montana, Utah, Wyoming.
• Southern, headquarters in Orlando: President Dana Chase, current president of CenturyLink’s Southern region; Alabama, Arkansas, Florida, Kansas, Louisiana; Mississippi, Missouri, Oklahoma, Texas.
• Northwest, headquarters in Seattle: President Brian Stading, current vice president of network operations and engineering for Qwest; California, Idaho, Oregon, Washington.
• Southwest, headquarters in Phoenix: President Terry Beeler, current president of CenturyLink’s Western region; Arizona, New Mexico, Nevada.

For both companies’ tens of thousands of employees, there is some trepidation about “cost savings” (translation: job losses) that are also expected from this deal.

In Nebraska, more than one thousand employees remain unsure whether they’ll still have jobs after the merger.

Qwest’s president for Nebraska operations, Rex Fisher, is not waiting around to find out.  He’s leaving, saying CenturyLink’s plan to restructure management roles “weren’t opportunities I was interested in,” the 53-year-old executive said.

A Qwest spokeswoman told the Omaha World-Herald the change in itself will have minimal immediate impact on the workforce level in Omaha.

Joanna Hjelmeland told the newspaper specific changes for Omaha’s workforce will “become more clear down the road,” Hjelmeland said.

“We are combining two companies, and in some instances there are going to be redundancies,” she said. “Eventually there are going to be job reductions as a result of the merger.”

[flv width=”512″ height=”404″]http://www.phillipdampier.com/video/WKBT La Crosse WI CenturyLink moving regional headquarters out of La Crosse 12-1-10.flv[/flv]

WKBT-TV in La Crosse, Wis., reports the city is going to lose Qwest’s regional headquarters, formerly located in La Crosse, as part of the merger shuffle.  (1 minute)

Brian Stading, current vice president of customer operations for Qwest in Denver, is now preparing to relocate to head the regional office in Seattle.  He outlined some of the changes expected to impact Qwest/CenturyLink customers in the region.

“I think you’ll see the continued focus on providing the highest quality service at the best possible price, both from a local phone service as well as from a high-speed Internet perspective and you’ll see a continued emphasis on expanding our broadband capability both in the city as well as in regional areas,” Stading told the Puget Sound Business Journal.

Stading claims the company will be refocusing efforts to improve the reliability of its core business – landline service, and make incremental upgrades to broadband capability and speed.

“A lot of that does overlap with our high-speed broad deployment because any time we have the opportunity to go put in new fiber lines, it just provides additional quality throughout our backbone networks, so the two really do go hand in hand, both the expansion as well as the continued emphasis on reliability,” Stading said.

But there is every indication Stading is referring to middle-mile fiber infrastructure — cable that runs between telephone company central office facilities, and not to individual customer homes.  CenturyLink, like Qwest, relies almost exclusively on DSL service delivered over standard telephone lines for broadband services.  Qwest has also been deploying ADSL 2+ technology, a more advanced form of traditional DSL, in some areas in the Pacific Northwest and mountain west region.  But many Qwest customers have no access to broadband at all, because of the remote areas the phone company serves in many states.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Qwest’s Euteneuer Says Industry Consolidation Was Needed 11-18-10.flv[/flv]

Bloomberg News talks to Joe Euteneuer, Qwest’s CFO about why Qwest merged with CenturyLink.  (4 minutes)

Verizon Communications has announced a new option for landline customers to ditch their local phone company with a new device that routes home phone calls over Verizon Wireless’ cellular network.

Verizon has chosen two test markets for its new Home Phone Connect service — Rochester, N.Y., serviced by Frontier Communications and Time Warner Cable and Connecticut, which is served by AT&T and Comcast.  (Thanks to our reader Bob for sharing the news with us.)

The service works with your existing home wired and cordless phones.  Customers signing up under a one or two year service contract will receive the base unit free of charge.  Installation is as easy: Just unplug the phone cord from the wall and plug it into the back of the Home Phone Connect device.  The unit supports up to two hard wired (non-cordless) phone lines and a cordless phone base station.  When you pick up any phone around the house, the base station will deliver a familiar dial tone, but all calls are made and received over the Verizon Wireless cell phone network.  You can download an read a copy of the installation manual here.

The service is priced at $9.99 per month for existing Verizon Wireless customers with any existing Family SharePlan that has two or more lines with at least a 700 minutes calling allowance per month.  Customers using Home Phone Connect under this plan will use minutes from their existing wireless service plan.  But since calls to and from Verizon customers and all calls placed during nights and weekends do not eat minutes, this may be a viable option for many customers.

For heavy talkers, or those without a qualifying Verizon Wireless service plan, an unlimited talk time plan is available for a flat $19.99 per month.

All local and domestic long distance calls are included, and the service also comes with these features:

• Call Waiting
• Call Forwarding
• Caller ID (not currently compatible with Caller ID + Name)
• International Dialing (charged at prevailing Verizon long distance rates)
• 3-Way Calling
• Basic Voice Mail (*86)
• Account Balance (*225)
• Device Provisioning, (*228)
• Account Payment (#786)
• 311, 411, 511, 611, 711 & 911 (some services not available in all areas)
• Last Number Callback (*69)
• National Domestic Hope Line (#4673)

The base unit includes a backup battery to power the unit for up to 36 hours idle time/2 hours talk time in the event of a power failure.  Customers relying on landline service that works with a monitored alarm system should check with their alarm company to ensure compatibility with cell network technology.

Michael Murphy, Verizon’s public relations manager for the New England Region, said consumers have the option of keeping their existing home phone number or requesting a new one.  Customers who do switch their current home phone number to Verizon will automatically cancel their existing landline service.  Frontier customers should carefully check their bills to make sure they are not on a Frontier “Peace of Mind” contract before switching.  Any expiration dates adjacent to the type of home phone service described on your bill likely means you are on a term contract.

Customers dumping Frontier before their contract expires could be exposed to early termination fees of up to $300 or more, which will appear on a customer’s final bill.  If you did not authorize a service contract, demand that Frontier drop it from your bill before you switch, and follow up with a complaint to the New York Attorney General’s office if the company fails to comply.

The device is intended to be portable, so you can take your “home phone” with you to any area served by a Verizon Wireless signal.  Just pack the Home Phone Connect base station and take it along.

Verizon carefully chose test markets outside of Verizon landline service areas.  That allows them to pick up new “landline” customers without harming their own landline business.

Verizon Wireless has a very large share of the Rochester, N.Y., market because of its ownership of the legacy Rochester Telephone cellular network.  Verizon delivers far more robust coverage than any other regional cellular provider in western New York.  With a built-in customer base wide open to Verizon’s marketing machine, the phone company could grab a significant number of Frontier landline customers who will see significant savings over Frontier’s comparable landline feature plans that run close to $50 a month after taxes and fees.  The company could also poach a number of Time Warner Cable’s Digital Phone customers, especially those whose first year promotional discount has expired.

In Connecticut, Verizon is challenging AT&T, which provides most of the state with its landline service.  Comcast is the dominant cable operator.

Comcast seemed unimpressed with the challenge being raised by Verizon in its service area.  The cable company hinted Verizon’s lack of a bundled service option including phone, cable, and broadband would hurt its chances of success.

Indeed, Verizon will have to develop some creative marketing to make its Home Phone Connect stand out.  Younger customers have no landlines to switch.  Most of those eager to cut their home phone line have already moved to cellular or Voice Over IP services from their local cable company or other providers like Vonage.  Existing Verizon Wireless customers may be hesitant about using a service that burns their wireless minutes away.  Older customers are unlikely to understand the product and have a built-in resistance to dropping traditional phone service.  Many may resist the notion of being stuck with at least a one year contract for an untested service.

T-Mobile attempted to market an almost identical service under its @Home brand, but judged it a failure and disconnected it earlier this year.

Because the service is being test marketed, its availability is limited to selected Verizon Wireless stores:

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Verizon Home Phone Connect 11-23-10.mp4[/flv]

The New Haven Register set up a video interview with a Verizon representative to demonstrate its new Home Phone Connect service. (1 minute)

Frontier Communications is continuing to suffer service outages and problems across many of their respective service areas.  Some of the most serious continue in West Virginia, especially in the northern panhandle region where emergency response agencies continue to complain about sub-standard service from the phone company that took over Verizon phone lines this past summer.

Hancock County officials report their T1 line that connects emergency dispatchers with the county’s dispatch radio system was out of service again early Wednesday evening.  This Frontier-owned and maintained circuit has suffered repeated outages over the past year, and the latest outage comes after company officials promised to inspect the 12,000 foot line inch-by-inch.  Once again, the county’s emergency agency is relying on help from nearby counties and a backup radio system to communicate with at least some of the area’s police and fire departments.

Outages of 911 service are not just limited to West Virginia.  Illinois Valley (Oregon) Fire District Chief Harry Rich was forced to rely on amateur radio operators and extra staffing in county firehouses to cope with a 911 system failure caused by Frontier service problems in late September.  Rich called a public meeting in late October with Cave Junction Mayor Don Moore, Josephine County Sheriff Gil Gilbertson and Josephine County Commissioner Dave Toler to discuss the implications of Frontier’s outage and what steps the region needs to take to mitigate future outages.

In Greencastle, Indiana a Frontier phone outage disrupted service for DePauw University and the Putnam County Hospital Oct. 20.  In Meshoppen, Pennsylvania an outage caused by a downtown fire on Oct. 24 left 1,200 homes in the community without telephone service for most of the day.  Frontier has also suffered periodic copper wire thefts, particularly in the Appalachian region where illicit sales of copper can bring quick cash for those addicted to drugs.  In Eastern Kanawha County, West Virginia, some 100 customers lost service for at least a day after thieves yanked phone cables right off the poles.

In Minster, Ohio village officials have hired a law firm to sue Frontier Communications over a wiring dispute.  Village officials accuse Frontier of being intransigent over the removal of telephone lines from poles to bury them underground.  Village Solicitor Jim Hearn told the local newspaper utility companies should be responsible for the costs of installing underground wiring.

In Wenatchee, a community in north-central Washington state, Frontier’s general manager is going all out to try and assuage customers Frontier will provide better service than Verizon.  Steve Sandman went as far as to hand out his direct number to the local media, inviting residents with service problems to call.  It’s (509) 662-9242.

Sandman promises other changes for his customers, according to The Wenatchee World:

Sandman said all Frontier technicians will be fully trained in the installation of phones, internet and TV. No more modems sent through the mail for the customer to install by themselves, he said.

“We’ll be there on the premises for complete installation,” he said. “And, if the customer needs it, we’ll provide some fundamental training on how to turn on the computer, hook up to the internet and get started using online services. Or give advice on how to use the TV remote.”

But all of these issues pale in comparison to the all-out battle forming in the state of West Virginia over broadband stimulus money awarded to help Frontier extend fiber broadband service to local government and community institutions.  One of their biggest competitors, Citynet, has launched a well-coordinated attack on what it calls “a flawed plan that does nothing to provide faster Internet speeds or lower the majority of Internet costs for West Virginians.”

Frontier will spend $40 million of federal broadband stimulus money on a network that will deliver fiber-fast speeds only to government, educational, and health care institutions.

James Martin II, president and CEO of Citynet argues Frontier is building a state of the art fiber network very few West Virginians will ever get to use, from which it will profit handsomely delivering service to government entities with which it already has contracts.  For the rest of West Virginian homes and businesses, Frontier will deliver outdated DSL service delivering an average of 3Mbps service at a time when adjacent states are enjoying service 2-4 times faster.

Citynet argues funding would be better spent on a middle mile, open fiber backbone available for use by all-comers.  Martin notes West Virginia is one of the few states in the northeast and mid-Atlantic region almost completely bypassed by the core Internet backbone.  The only exception is a fiber link connecting Pittsburgh with Columbus, Ohio, which briefly traverses the northern panhandle of West Virginia.  Citynet’s perspective is that West Virginia cannot improve its poor broadband standing — 48th in the nation, unless it has appropriate infrastructure to tap into for service.

As an example, Martin points to the community of Philippi, served by fiber to the home cable TV and broadband service.  The community’s fiber network is capable of Lamborghini speeds between homes within Philippi. But the community can only afford a single 45 megabit DS-3 connection to the outside world, provided by Citynet for just under $8,000 a month.  That line is shared among every broadband customer in Philippi trying to get out onto the Internet. The result is that Philippi residents can only buy a broadband account with speeds up to 2Mbps for $60 a month on that all-fiber network. That’s equivalent to being forced to drive that Lamborghini on a dirt road.

Martin says if the broadband stimulus money was spent on constructing a statewide open fiber backbone, they could sell the community a 1Gbps pipeline for around $3,000 a month.

“West Virginia is at a crossroads,” Martin said in a prepared statement. “We can build a ‘middle-mile’ solution for high-speed Internet infrastructure and create jobs, or we can stick with the status quo and watch West Virginia fall behind once again. The outcome will determine our state’s economic growth for years to come.”

The state, according to Martin, is reneging on its promise to build a broadband network that will deliver improved service to institutional users as well as at least 700,000 homes and 110,000 business in the state.

Instead, the project would only serve 1,000 “points of interest,” he said. The state’s plan would limit Internet speeds and make broadband service unaffordable, Martin argues.

“If the state were to build a true middle-mile solution, then businesses and residential Internet customers would see a significant reduction in price, as well as an increase in quality, capacity and speed,” Martin said. “Regretfully, the state chose to support a plan that relies on outdated telephone lines and a monopoly.”

Of course, Citynet does have a vested interest in the outcome of the project.  As a provider specializing in selling bulk broadband lines, they would be a prime beneficiary of a government-backed middle-mile broadband network.  Citynet’s argument that funding should be spent primarily on that network ignores the reality few new entrants are likely to enter West Virginia’s rural broadband market, with or without the benefit of a robust broadband backbone.  One of the biggest flaws of broadband stimulus spending is that much of the money will never directly provide “last mile” access to individual consumers and businesses that want broadband service where none is available.

Citynet needs to acknowledge much of West Virginia’s broadband is going to come from the phone company or a local municipality that elects to build its own network.  While cable companies deliver service in larger cities and suburban areas, large swaths of the state will never be wired for cable.  In fact, West Virginia is poorly covered even by wireless companies who see little benefit building extensive cell tower networks in the notoriously mountainous areas of the state that serve few residents.  The only existing rural telecommunications infrastructure universally available is copper telephone wires.  Like it or not, Frontier Communications will be the biggest provider of broadband in rural West Virginia.  A fiber backbone network alone delivers minor benefits to those residents who either cannot connect at any broadband speed, or are stuck with Frontier’s current 1-3Mbps DSL service.

Still, Citynet’s campaign is a useful reminder that too many broadband stimulus projects direct most of their money to networks ordinary consumers and businesses will never access.  And so long as local governments, schools, and hospitals “get theirs,” they have little interest in fighting to share those networks with consumers and for-profit businesses.

Citynet produced two radio ads criticizing West Virginia’s allocation of broadband stimulus money, and Jim Martin appeared on a local radio show to explain to West Virginia why this issue matters. (Ads from 11/2010 — Interview with Jim Martin: September 16, 2010) (18 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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Ultimately, Verizon may get the last word, even after they abandoned the state’s landline customers.  Charleston, the state capital, has been selected as one of the early communities to receive Verizon Wireless’ new 4G LTE wireless broadband network, according to WTRF-TV:

Verizon subscribers in Charleston with devices that are 4G compatible will see changes within the next six to seven weeks. The whole city is expected to be covered by the network by mid-2011, according to company officials. From there, it will be expanded to cover Huntington, Parkersburg, Wheeling, Weirton, Beckley, Clarksburg, Morgantown, Fairmont and Martinsburg by 2013.

The company also plans to expand coverage along the entire Interstate 79 corridor from Charleston to Clarksburg.

The decision to include Charleston among the 39 metropolitan areas where Verizon would deploy its 4G network left many analysts of the industry scratching their heads, although they noted in online posts that Rockefeller chairs the Senate committee that regulates the telecommunications industry.

Should West Virginians find Verizon Wireless a suitable replacement for their landlines, Frontier may have bought themselves a pig in the poke.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/West Virginia Frontier 11-4-10.flv[/flv]

WTOV-TV covers the emergency services outage in northwestern West Virginia in two reports, WBOY-TV covers the Citynet-Frontier controversy, and WTRF-TV covers the arrival of Verizon’s LTE upgrade, starting with Charleston.  (7 minutes)

A Boynton Beach family’s tragic story may give Comcast phone customers second thoughts about whether the cable company’s “digital phone” service is a help or hindrance in an emergency.

Seymour Reiner arrived home last Thanksgiving to find his wife of 62 years dead on the floor from a cut ankle.  But his shock turned to anger when he learned his beloved wife Sidell’s death likely came after Comcast, the company that delivers his phone service, could not quickly manage to provide emergency officials with their home address.

Comcast customers in south Florida who dial “0” from their Comcast phone lines hear a message indicating they should press “0” if the call is a 911 emergency, which Sidell apparently did at least 10 times.

“Help me! Help me, please! Help me! Help me!” Sidell pleaded in disturbing recordings (warning: graphic content) obtained by the Sun Sentinel newspaper.

Sixteen minutes later, when paramedics finally arrived, it was too late.  An hour after that, Seymour arrived home to find the phone laying next to Sidell’s body.

The 81-year old Florida grandmother cut her ankle after dropping some crystal glassware, hitting an artery that caused major bleeding.  She reached for her phone and dialed “0” hoping to reach an operator, but was instead connected with Comcast’s call center.  The cable company eventually transferred the call to Palm Beach County’s 911 emergency services center, but by that time, her anguished pleas for help were barely audible.

The county’s 911 dispatcher asked Comcast’s operator for Reiner’s address, which she could not provide.  Minutes passed as Comcast tried to figure out the address where the call originated from, and an ambulance was eventually dispatched.  Emergency responders arriving at the Sidell’s home left after nobody answered their knocks on the home’s locked front door.  Sidell was unconscious by that time.

Now the Reiner family has filed a lawsuit against Comcast demanding unspecified damages for the cable company’s performance during the tragic events, and also has served notice they may sue the county and fire rescue service for their alleged negligence.

Reiner appeared visibly upset at a press conference held earlier today announcing the lawsuit.  He told several reporters he doesn’t want anyone else to suffer the tragedy he faced when his phone provider couldn’t quickly handle a call for help that ultimately resulted in his wife’s death.

Gary Cohen, the family’s attorney, was livid about Comcast.

“They have her address when it comes to a bill, but when it comes to saving her life, they can’t find her address?” Cohen asked.

The lawsuit led the news across several cities in south Florida, and viewers heard the story first-hand:

“Her phone number, when we put in her phone number, it is showing that there is no information available on that number,” the Comcast operator says.

“Oh, goodness,” the Boynton Beach operator responds.

Cohen accused Comcast of being indifferent about the urgency of Reiner’s desperate pleas for help and said the cable company dropped the ball.

“This was a life-deciding call and there doesn’t seem to be a lot of communication that this is a desperate situation,” Cohen said. “”Nobody took responsibility in saving her — no one went that extra mile and did what they needed to do.”

Cable company and other “Voice Over IP” phone services have been criticized in the past for not passing through important caller-ID information to emergency responders that includes up to date addresses of where the calls originate.  Some traditional phone companies have used past failures by alternative providers to warn consumers not to disconnect landline service because of possible delays in emergency response.  The Reiner family may prove to be a case in point.

Comcast spokeswoman Marta Casas-Celaya said her company does not comment about pending court cases and declined to answer general questions about services provided when a caller dials “0.”  Another statement indicated the company felt “deeply saddened for the Reiner family’s loss.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Boynton Beach Tragedy 10-27-10.flv[/flv]

Several Florida TV stations gave this story the lead on their evening newscasts. [WPBF-TV & WPTV-TV West Palm Beach, WFOR-TV Miami, WPEC-TV West Palm Beach]  (9 minutes)

Verizon’s lobbyists are warning western New York politicians that unless they defeat a state measure to allow Verizon ratepayers to share in the proceeds of any future landline network sell-offs, Verizon may take a multi-billion dollar proposed data center elsewhere.

The Niagara county community of Somerset, population 2,900, is the planned home for the new high-tech infrastructure project.  Verizon officials propose to use Lake Ontario breezes and water to help cool the energy-intensive facility, to be located on 160 acres just yards from the shoreline.  In all, the Verizon campus will consist of three buildings — each 300,000 square feet in size.  If built as proposed, it would be among the largest of Verizon’s 250 data centers around the world.

But there’s a hitch.

While Verizon project manager Bruce Biesecker showed drawings and answered questions from an eager audience of local residents, Verizon lobbyists were telling reporters the entire project could end up in another state because of legislation under consideration in the state legislature.

Our regular reader Smith6612 dropped us a note wondering if we knew about the project.  Yes, we did.  But we also noticed company officials spending almost as much time complaining about interference from Albany threatening to derail the data center as they spent talking about the project itself.  Company officials also rarely named the exact bill in question or how it would directly threaten its data center investment.

Stop the Cap! covered the introduction of New York Assembly Bill 2208/Senate Bill 7263 earlier this year.  Introduced by Assemblyman Richard Brodsky (D-Westchester) and Senator Brian X. Foley (D-Blue Point), the companion bills came in response to watching Verizon sell off large segments of its landline network in a dozen states to Frontier Communications.  Both legislators were concerned the deal forced subscribers to deal with a new phone company that earned an “F” rating from the Better Business Bureau, all while personally enriching company executives and shareholders in a tax-free transaction.  They don’t want to see a repeat performance for rural New York residents.

Brodsky and Foley argue that such sales should be in the interests of ratepayers, especially rural customers who have few alternative choices.  Their legislation would compel Verizon to share 40 percent of the proceeds of any sale with their customers — the ones that pay the monthly bills that made Verizon’s network possible.  Alternatively, Verizon could spend an equal amount on verifiable infrastructure improvements and escape writing checks to ratepayers.  In either case, the legislation forces Verizon to spend less on bonus bonanzas for a handful of deal-making executives and more on the customers who have to live with the results.

Verizon lobbyists and company officials have routinely mischaracterized the legislation, claiming it singles out the state’s largest phone company with a “40 percent tax” that “exempts cable companies.”  They have also repeatedly hinted the legislation could force Verizon out of the state.

“That weighs as heavily in our decision as do things like power, taxes, environment,” Verizon spokesman John Bonomo said. “The business climate in the state is as important as some of those other factors.”

Verizon officials have not exactly been subtle about what they want to get the multi-billion dollar project ultimately built:  solid opposition to the two bills, which garnered support from consumer and ratepayer groups and the Communications Workers of America.  The legislation passed the state Assembly but ultimately died in the Senate several weeks ago.  Verizon is obsessed about keeping such bills from being reintroduced.

With billions at stake, the western New York delegation of politicians in Niagara and nearby Erie Counties have been especially supine to Verizon’s arguments.  In particular, some Republicans in the state legislature have made it their mission to see the bill permanently killed.

Unfortunately, the quality of the reporting done by local media about Verizon’s lobbying agenda has been especially underwhelming — frequently shallow, lazy, and downright inaccurate.  The assertions raised about the Brodsky/Foley legislation in area newspapers and television news reports makes one wonder if any of the reporters actually read the bills in question.

Take Bill Wolcott’s piece in the Lockport Union-Sun & Journal.

Wolcott never strays far from Verizon’s talking points, describing the bills as “[containing] conditions for givebacks of 40 percent for telephone providers, but does not do the same with cable TV corporations.”

Wolcott does not bother to accurately depict “givebacks” in terms of what they actually are — refunds to Verizon customers.

Verizon’s red herring complaint of unfair treatment is also repeated by the reporter, who apparently does not realize there are major differences between Time Warner Cable, which controls the overwhelming majority of cable subscribers in western and central New York and Verizon’s telephone operations:

1. Time Warner Cable has no plans to sell off its network to the highest bidder, abandoning rural and suburban areas served today.  Verizon did exactly that in most of the dozen states it left on July 1st;
2. Verizon’s landline network provides universal service to New York telephone customers, for which it receives a substantial subsidy from the Universal Service Fund;
3. Time Warner Cable is not held to universal service standards, something Verizon rarely complains about these days now that the phone company is in the same business as Time Warner through its selectively deployed FiOS network (which incidentally is not available in the Niagara county area where the data center is proposed.)
4. Verizon’s prior landline selloffs have almost always resulted in bankruptcies for the buyers, leaving phone customers uncertain about the level of service they will ultimately receive.

The Buffalo News reporter did little better, misrepresenting a fundamental part of the bill (underlining ours):

Under the weight of a multibillion- dollar deficit, the State Assembly in the spring passed a bill that would require telephone companies to return 40 percent of their proceeds to the state if they reached a joint venture with another company or sold off some of their properties in New York.

Reporter Teresa Sharp managed to bungle an important fact.  The state of New York would not receive the proceeds — Verizon ratepayers would.

Most television coverage didn’t bother to challenge the inaccurate assertions made by Republican lawmakers or Verizon representatives either.  Talking points were read and reporters simply nodded their heads.

As a public service to the Buffalo-area media, Stop the Cap! presents a primer on the actual language of the legislation Verizon wants to see dead (underlining ours):

         (1) PROVIDES SHORT-TERM AND LONG-TERM ECONOMIC BENEFITS TO RATEPAYERS.
   49    (2)  EQUITABLY ALLOCATES, WHERE THE COMMISSION HAS RATEMAKING AUTHORI-
   50  TY, THE TOTAL SHORT-TERM AND LONG-TERM FORECASTED ECONOMIC BENEFITS,  AS
   51  DETERMINED  BY  THE  COMMISSION, OF THE PROPOSED MERGER, ACQUISITION, OR
   52  CONTROL BETWEEN SHAREHOLDERS AND RATEPAYERS.  RATEPAYERS  SHALL  RECEIVE
   53  NOT  LESS  THAN  FORTY  PERCENT OF SUCH BENEFITS; PROVIDED, HOWEVER THAT
   54  REINVESTMENT OF SUCH BENEFITS  IN  A  TELEPHONE  CORPORATION'S  IN-STATE
   55  INFRASTRUCTURE MAY BE DEEMED TO SATISFY SUCH REQUIREMENT.

What this means is that Verizon has two choices if it chooses to throw its rural New York landline customers overboard — before paying enormous cash bonuses to executives and deliver subscribers into the waiting hands of a potentially unstable buyer, up to 40 percent of the proceeds must be reinvested in improving the existing telephone network.  Barring that, the same percentage of proceeds must be returned to ratepayers in the form of refund checks or service credits.

Verizon may have a major problem giving customers their fair share, but they have no problem asking New York taxpayers for generous tax breaks.

Verizon has applied for a 20-year payment-in-lieu-of-taxes, or PILOT agreement, which would deliver substantial property tax savings, not a small matter in a region with the highest property taxes in the country.  It also wants a sales tax exemption on building materials and the equipment to be installed at the data center.  The sales tax break alone is expected to cost state taxpayers up to $330 million in lost tax revenue.

Because Verizon is upset about the legislation, local politicians have done one better expressing outrage that Albany politicians could drive Verizon to pack up its data center and head out of state.

Somerset Supervisor Richard Meyers was quoted in Wolcott’s piece suggesting New York residents don’t want any part of a bill that returns money to phone customers if Verizon sells them out.

“I’ll tell you who’s calling the shots in the Senate, and that’s the residents of New York state,” Meyers said. “The average citizen in New York state does not like this bill, and I don’t either. I think it stinks. It’s not a necessary bill, and there’s a lot of time and energy wasted.”

Assemblywoman Jane Corwin, (R-Clarence) characterized the legislation as a union plot, quoted bashing the bills in the Lockport newspaper:

“It’s a very bad bill, being pushed by the Communication Workers of America, the union that represents the workforce at Verizon,” she said. “Of all the people that stand to get hurt, it’s the employees that would get hurt the most, and the investors as well. The whole bill doesn’t make sense.”

“This bill chills any business incentive to invest in New York state … because they stand to lose 40 percent of that investment down the line. The playing field will be made uneven, if we start taking 40 percent of that potential away from Verizon and not from the cable companies and Internet companies.”

She  contends that the CWA was putting pressure on the Assembly. “The shame of it all is that it’s been driven by a special interest group. They are the ones pushing this bill.”

What is especially chilling is that Corwin never bothers to mention concern for the one group affected above all others: Verizon landline customers.  To her, they are incidental.  The CWA?  A “special interest group.”  Verizon?  A source of campaign contributions for her.  This year, she has already picked up some nice change from the folks at Big Red:

VERIZON COMMUNICATIONS INC 140 WEST ST. ROOM 2613 NEW YORK, NY 10007	250.00	16-MAR-10	JANE CORWIN CAMPAIGN COMMITTEE	2010 July Periodic	B	Member of Assembly	142
VERIZON GOOD GOVERNMENT CLUB-NEW YORK 140 WEST ST; RM 2613 NEW YORK, NY 10007	300.00	01-SEP-10	JANE CORWIN CAMPAIGN COMMITTEE	2010 32 Pre General	C	Member of Assembly	142

Source: New York State Board of Elections

That’s not bad for a New York Assemblywoman serving a rural district whose total campaign take since her first election is just under $125,000.

State senator George Maziarz (R-Newfane) is just as bad.

“It’s a terrible piece of legislation, and I’m doing all I can to make sure it doesn’t pass,” said Maziarz, who heads the Senate’s Energy and Telecommunications Committee.

Verizon also thanks Maziarz for his efforts, for which he has been well-rewarded in the last two election cycles:

VERIZON COMM FOR GOOD GOVT 140 WEST NY, NY 10007	500.00	06-MAY-08	COMMITTEE TO ELECT MAZIARZ STATE SENATE	2008 July Periodic	C	State Senator	62
VERIZON COMM INC GOOD GOVT 140 WEST NY, NY 10007	4,000.00	26-MAR-08	COMMITTEE TO ELECT MAZIARZ STATE SENATE	2008 July Periodic	C	State Senator	62
VERIZON COMM INC GOOD GOVT CLUB 140 WEST NY, NY 10007	3,000.00	12-FEB-10	COMMITTEE TO ELECT MAZIARZ STATE SENATE	2010 July Periodic	C	State Senator	62
VERIZON COMMUNICATIONS PAC 140 WEST NY, NY 10007	3,000.00	11-MAY-10	COMMITTEE TO ELECT MAZIARZ STATE SENATE	2010 July Periodic	C	State Senator	62
VERIZON GOOD GOVT CLUB NY 140 WEST NY, NY 10007	3,000.00	27-JUL-10	COMMITTEE TO ELECT MAZIARZ STATE SENATE	2010 32 Pre General	C	State Senator	62

Source: New York State Board of Elections

The prospect of new high technology jobs and investment are more than promising to an upstate economy that has suffered difficult economic times for years.  But Verizon’s threats to skip Somerset for its new data center because of “anti-business” hostility ignores the company’s own willingness to abandon its rural customers.  In states where Verizon has sold off landline service — ending the prospects for real improvements in broadband and other modern services — communities like Somerset were the first to go, seen as too small and isolated for Verizon’s urban-based business plans.

The legislation Verizon fears protects New York residents, including those in Niagara County, from deals that enrich a handful of executives and Wall Street bankers while delivering sub-standard service to customers left behind.  Verizon’s record of sell-offs has been a disaster for customers, forced to endure long-term service disruptions, inaccurate bills with unfair charges, low quality broadband, and high prices.

Ironically, Verizon’s fear is totally misplaced, assuming they intend to remain committed to serving customers across the state — from cities as large as New York -and- towns as small as Somerset.  Even using Verizon’s own language, they can avoid the 40% “tax” if they simply keep providing service to their customers.

That’s just one of many facts the media in western New York needs to do a much better job of communicating to their readers and viewers.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Verizon Data Center 10-18-10.flv[/flv]

WIVB and WKBW-TV in Buffalo delivered several one-sided reports about the proposed Verizon Data Center while allow inaccurate information about Assemblyman Brodsky’s proposed bill to go unchallenged.  (8 minutes)