The cell phone provider serving Yosemite National Park and the surrounding California counties of Tuolumne, Calav­eras, Amador, Alpine and Mari­posa has been acquired by Verizon Wireless.

The independent Golden State Cellular provides cell service in rural areas of the Mother Lode and cen­tral Cal­i­for­nia, largely bypassed by larger carriers since 1989.

Verizon had maintained a minority interest in the cellular company for several years and provided roaming service for the company outside of its home areas.

GSC operates as a partnership between several regional independent telephone companies.

Verizon would provide funding for 4G LTE upgrades and potentially expand coverage in tourist areas around the region.

The acquisition is awaiting FCC approval.

Cincinnati Bell threw in the towel on its wireless mobile business Monday when it decided to sell its wireless spectrum licenses, network, and 340,000 customers for $210 million to its larger rival Verizon Wireless.

While most analysts say the transaction is the inevitable outcome of a wireless industry now dedicated to consolidation, at least one analyst said the threat of Google Fiber eventually entering the Cincinnati market may have also contributed to the decision to sell.

The future of Cincinnati Bell’s wireless division had been questioned for more than a year, ever since the arrival of the company’s newest CEO Ted Torbeck in January 2013. Cincinnati Bell, one of the last independent holdouts of the Bell System breakup that have not been reabsorbed by AT&T or Verizon, had struggled since Torbeck’s predecessor made some bad bets on acquisitions, including an investment in microwave communications provider Broadwing that left the company with more than $2 billion in debt in 2004. Another $526 million acquisition of data center Cyrus One left the company further in debt.

Torbeck

Torbeck promised a frank evaluation of Cincinnati Bell’s operations last year and keeping its declining wireless division no longer made sense with Torbeck’s focus on replacing the company’s aging copper wire network with fiber optics.

For years, Cincinnati Bell’s biggest competitor has been Time Warner Cable, which has taken away many of its landline customers. Cincinnati Bell’s mobile phone division was created to protect its core business, picking up wireless subscribers as customers dropped their landlines. But the cable company’s bundled service packages made landline service much less expensive than sticking with the phone company, and many wireless customers prefer a national wireless phone company offering better coverage and a wider selection of devices.

Rampant wireless industry consolidation has concentrated most of the cell phone market in the hands of AT&T and Verizon Wireless, giving those two companies access to the most advanced and hottest devices while regional carriers made do offering customers less capable smartphones. Its competitors’ march towards 4G LTE network upgrades also challenged Cincinnati Bell with costly capital investments in a 4G HSPA+ network that Torbeck recently decided no longer made economic sense.

Cincinnati Bell’s wireless revenue for 2013 was $202 million, a decrease of 17 percent from 2012. The company also lost 58,000 subscribers last year, an unsustainable drop that showed few signs of stopping.

“Our business has been in decline for five or six years,” Torbeck told the Cincinnati Business Courier. “This is absolutely the right time to make this deal. It was probably the highest value we could get at this point in time.”

Torbeck believes Cincinnati Bell’s best chance for a future lies with with fiber optics, capable of delivering phone service along with a robust broadband and television offering that can effectively compete with Time Warner Cable.

“We’ve got to grow market share in Cincinnati and fiber optics is the way to do it,” Torbeck said in 2013. “We have about 25 percent of the city covered and we think from a financial perspective we can get to 65 or 70 percent so we’ve got significant growth opportunity there.”

Last year, Cincinnati Bell had passed 184,000 homes with fiber optics – a 28 percent market share. But only 52,000 homes subscribed to Fioptics — Cincinnati Bell’s fiber brand. Time Warner Cable had managed to keep many of its wavering 446,000 customers loyal to the cable company with aggressive discounting and customer retention offers. But now that many of those discounts have since expired, Torbeck wants to reach 650,000-700,000 homes in its service area covering southwestern Ohio and northern Kentucky and convince 50% of those customers to switch to fiber optics.

Torbeck isn’t interested in limiting his business to just greater Cincinnati either.

“At some point in time, we’d like to expand regionally into Indianapolis, Columbus,” Torbeck said. “Louisville is another opportunity. But that’s probably a little down the road. From a fiber standpoint, we could look at acquisitions and get into metro fiber. These are things we’re looking at, but these are things that are down the road. We got a lot of room for growth just here in Cincinnati.”

But financial analysts warned Cincinnati Bell’s enormous debt load limits the company’s potential to invest in expansion. Torbeck’s decision to sell off the company’s wireless unit is another step in reducing that debt and further investing in fiber optics expansion.

The company’s unique position as the last remaining independent phone company that still bears the name of the telephone’s inventor may make the company a target for a takeover before Torbeck’s vision is realized. One analyst thinks Cincinnati Bell would be a natural target for Google, which has a recent record of repurposing fiber networks built by other companies as a cost-saving measure to further deploy Google Fiber.

“They are a small and cheap company with the infrastructure that Google could use,” said Brian Nichols. “My theory is that Google will buy undervalued companies like Cincy Bell to save on the mounting costs of buildouts, which could top $30 billion,“ Nichols wrote in an email to WCPO-TV.

Google did exactly that in Provo, Utah, acquiring struggling iProvo from the city government for $1 in return for agreeing to expand the fiber network to more homes.

Cincinnati’s local phone company would sell for considerably more than that, but it would still prove affordable for Google, which has a market value of $361 billion, about 470 times that of Cincinnati Bell.

Cincinnati Bell has already spent about $300 million on Fioptics and plans to spend an extra $80 million this year on expansion. Before the network is complete, the phone company is likely to spend as much as $600 million on fiber upgrades. But the payoff has been higher revenue — $100 million last year alone, and a stabilizing business model that has reduced losses from landline cord-cutting. Telecom analyst Nicholas Puncer offers support for the investment, something rare for most Wall Street advisers.

“It’s a reasonable strategy,” Puncer said. “There’s only going to be more data going through networks in the future, not less. The way we consume content is going to be a lot different 10 years from now than it is today. This is their effort to be on the right side of that, giving people more options to receive that content.”

But if Google Fiber comes to town, it may not be enough.

“Google has an unprecedented luxury,” Nichols said in his email to WCPO. “They are [attaching] fiber to existing poles owned by AT&T (and other telecom companies), and then targeting areas where consumers agree for service before the network is even built. Given this demand, and its mere ability to operate in such a manner, I do think Cincinnati Bell will have major problems once that day comes (likely sooner rather than later). In fact, I don’t think they stand a chance of competing against Google.”

Cincinnati Bell said it will continue to offer wireless service for customers for the next 8 to 12 months. The company will notify customers with further details regarding transition assistance around the time of the closing, which is expected to be in the second half of 2014.

It was not immediately clear on Monday if the sale will impact jobs. Cincinnati Bell Wireless employs about 175 people, including retail store employees.

[flv]http://www.phillipdampier.com/video/WKRC Cincinnati Cincinnati Bell selling wireless spectrum to Verizon 4-8-14.flv[/flv]

WKRC in Cincinnati reports on what the sale of Cincinnati Bell Wireless to Verizon Wireless means for customers. (1:24)

Verizon has been upset with the tone and accuracy of many New Jersey residents who have written the state’s Board of Public Utilities urging them to reject a settlement offer than would allow Verizon to walk away from its commitment to deliver high-speed broadband to 100% of the state.

While calling many of its opponents misinformed about the company’s original commitments, a Verizon spokesperson targeted a particularly nasty response to one of its strongest critics — Teletruth’s Bruce Kushnick, who has accused Verizon of breaking its promises in New Jersey and substituting outdated DSL and expensive, usage-capped 4G wireless broadband as a broadband equivalent.

Northwest, central and southern New Jersey all lack solid broadband coverage. (Map: Connecting NJ)

Kushnick has argued that Verizon has cooked the books, diverting funds that should have been spent on FiOS expansion into its more profitable wireless subsidiary Verizon Wireless instead. He wants New Jersey to conduct a thorough investigation of Verizon’s financial reporting and learn why the company has reneged on a broadband commitment that originally promised a minimum of 45/45Mbps high-speed broadband for 100% of the state by 2010 in return for rate deregulation and tax breaks. Verizon got the deregulation and tax breaks but much of the state is still waiting for the faster broadband it was promised.

Now Verizon wants the state to approve a settlement that will redefine its commitment from 45/45Mbps to 4Mbps DSL or wireless 4G broadband.

Verizon spokesman Lee Gierczynski said criticisms about the company’s performance in New Jersey are “way off base.” He said there never was any commitment to deploy FiOS across all of New Jersey because FiOS did not exist at the time of the original agreement.

“Nobody knew what FiOS was 20 years ago,” Gierczynski said. “It wasn’t until 2004 when FiOS came on the scene.”

What about the 45/45Mbps speed commitment?

“[The agreement] didn’t say a minimum of 45Mbps,” Gierczynski said, “it just says ‘up to’.”

Gierczynski particularly bristled over Kushnick’s ongoing criticisms of Verizon.

“For nearly two decades, he has made the same, tired baseless allegations over and over again about Verizon and its predecessor companies — not only in New Jersey but in other states as well,” Gierczynski told The Record in an email. “His specious arguments are devoid of fact, relying on misinformation and myths to prop up his claims. This filing is no different.”

With more than 1,000 comments on file with the BPU, Verizon invited the regulator to dismiss critics that demanded Verizon live up to its original commitments:

“The vast majority of comments opposing the Stipulation that have been posted by the Board to date were submitted via a standard form letter generated by the New Jersey State AFLCIO with the subject line “Tell Verizon to Live Up to the Opportunity New Jersey Agreement.”

“Other comments opposing the Stipulation offer inaccurate claims about what was contemplated by Opportunity New Jersey or what is in the Stipulation.”

“AFL-CIO Letters:  These letters opposing the Stipulation appear less convincing when the locations of senders are examined— More than 25 are from people located outside of New Jersey and some appear to be from municipalities not in Verizon’s service territory. “

Verizon did not bother to mention the circulation of a pro-Verizon form letter that was submitted by hundreds of people, many Verizon employees and retirees, as reported last week by Stop the Cap!

Two of those letters were signed by Paul A. Sullivan, Verizon’s regional president of consumer and mass business markets in New Jersey and Tracy Reed, a Verizon manager… in Atlanta. Neither identified themselves as Verizon management.

Further concerns were raised by Kushnick when he found that the people and businesses Verizon touts as supporting Verizon’s position all have some relationship with Verizon:

• New Jersey Technology Council — Board member,  Douglas Schoenberger, VP, Public Policy, Verizon NJ, Inc
• The Meadowlands Chamber of Commerce — Donnett Barnett Verley, Director of Public Policy and Corporate Responsibility, for Verizon New Jersey.  “I am responsible for Verizon’s philanthropic and community outreach efforts throughout the state. I serve as an active board member of …the Meadowlands Chamber of Commerce.”
• Greater Paterson Chamber of Commerce — “Hi. I’m Rick Ricca, Director – External Affairs. I am responsible for the company’s relationship and interaction with municipal and county governments… I also serve on… Greater Paterson Chamber of Commerce.”
• The Commerce and Industry Association of New Jersey (“CIANJ”), Member of the Board, Sam Delgado V.P. Community & Stakeholder Affairs Verizon
• Greater Elizabeth Chamber of Commerce — “Verizon, a telecommunication company received the Member-to-Member Award for its important contribution to Elizabeth’s business.”
•  Cooper’s Ferry Partnership —Verizon is on the Board of Directors. “The organization’s operational budget is currently divided into three main categories: board membership… investments from these valued partners that has allowed CFP to grow its mission and expand throughout the city of Camden.”
• Puerto Rican Association for Human Development —“Verizon Presents $20,000 to PRAHD”
• Latino Institute  — Our Partners and Funders, Verizon
• Gudino, David Joseph — Associate General Counsel, Verizon Wireless
• NJ SHARES —“Verizon New Jersey partners with NJ SHARES for Communications Lifeline outreach and enrollment efforts.”

“In fact, it’s hard to identify any legitimate group that supports the Verizon stipulation and is not funded by Verizon,” said Kushnick.

U.S. wireless carriers are on track to earn more than $100 billion this year from usage-based billing plans for mobile data, the first country in the world to break the symbolic $100 billion mark in data revenue.

Analyst Chetan Sharma reports Verizon Wireless and AT&T are statistically the largest recipients of revenue earned from metering data usage. For the first time in 2013, mobile data revenue surpassed voice revenue in the U.S., making data usage the most lucrative product available from wireless carriers.

A graph from the Economist published last year explains the runaway revenue growth at U.S. wireless carriers. The lack of significant competition has allowed U.S. companies to charge an average of $85 a month for data plans, which are nearly always bundled into compulsory packages of unlimited voice calling and texting. In contrast, customers in China pay just $24 for data plans. In the United Kingdom, the average charge is $9 a month.

Sharma said the only disruption to this revenue growth in the United States comes from T-Mobile USA, which has recently cut prices on its service plans, forcing AT&T and Verizon Wireless to react with moderate price cutting. But with the significant disparity in market share between AT&T and Verizon vs. T-Mobile, neither larger carrier is expected to take a significant hit to their bottom lines without a mass exodus to the country’s fourth largest provider.

Softbank, the Japanese company that now controls Sprint, has launched a lobbying effort to secure permission to acquire T-Mobile and merge it into the Sprint network. But with reports showing T-Mobile’s willingness to disrupt the wireless market, regulators are likely to be reluctant to remove that competition from the playing field.

Bait and switch broadband

Since 1991, Verizon telephone customers in New Jersey have paid at least $15 billion in surcharges for a promised high-speed broadband network that would reach every home in the state by 2010. But now critics charge Verizon diverted much of that money to shareholder dividend payouts and building infrastructure for its highly profitable wireless network, leaving almost half the state with slow speed DSL or no broadband at all.

In the early 1990s, Verizon’s predecessor — Bell Atlantic — launched “Opportunity New Jersey,” a plan promising the state it would have the first 100% fiber telecommunications network in the country. In return, the company enjoyed more than two decades of generous tax breaks and collected various surcharges from customers to finance network construction. But a review of Verizon’s promises vs. reality suggest the company has reneged on the deal it signed with the state back when Bill Clinton was beginning his first term as president.

Verizon promised at least 75 percent of New Jersey would have a fiber service by 1996 offering 384 television channels and 45/45Mbps broadband service for $40 a month. The network would be open to competitors and be deployed without regard to income or its potential customer base.

The state suspected trouble as far back as 1997, when the Division of the Ratepayer Advocate with the New Jersey Board of Regulatory Commissioners blasted the company’s progress five years into the project:

Bell Atlantic-New Jersey (BA-NJ) has over-earned, underspent and inequitably deployed advanced telecommunications technology to business customers, while largely neglecting schools and libraries, low-income and residential ratepayers and consumers in Urban Enterprise Zones as well as urban and rural areas.

By 2006, New Jersey was being introduced to FiOS, which some believed was part of Verizon’s commitment to the state. But a decade after Verizon’s target dates, customers were still waiting for FiOS video service, the maximum broadband speeds offered at that point were 30/5Mbps and the cost of the package ranged from $180-200 a month. Most of Verizon’s FiOS deployments were in the northern half of the state, leaving southern New Jersey with few, if any service improvements.

Despite Verizon’s repeated failures to meet its target dates, that same year New Jersey made life even easier for the phone company by passing a statewide video franchise law allowing Verizon to bypass negotiating with each town and city regarding its video services and instead run FiOS TV as it pleases anywhere in the state. The company argued a statewide video franchise would allow for more rapid deployment of Verizon’s fiber network. In reality, the company was falling further and further behind. By 2013, when Verizon sought renewal of its statewide franchise, Verizon only offered FiOS TV to 352 of the 526 communities hoping for service. At least 174 communities still waiting for FiOS are likely never going to get the fiber service, despite paying Verizon’s surcharges for more than 20 years. Verizon suspended its FiOS expansion project more than two years ago.

Bait and Switch Broadband

From promises of a cutting edge fiber future to good-enough DSL.

Despite early commitments of providing New Jersey with advanced fiber broadband speeds unheard of elsewhere in the country in the 1990s, Verizon changed its tune when it became clear the company wanted to prioritize investment in its more lucrative wireless network. Instead of a commitment of 45/45Mbps, providing basic DSL broadband at any speed was now seen as adequate. Verizon spokesman Lee Gierczynski told both Newsweek and the Inquirer the company never promised a statewide deployment of FiOS.

“Nobody knew what FiOS was 20 years ago,” Gierczynski said. “It wasn’t until 2004 when FiOS came on the scene.”

Forget about that commitment for 45/45Mbps speed as well.

“It didn’t say a minimum of 45mbps,” Gierczynski said, “it just says ‘up to’.”

That means DSL service will be a part of southern New Jersey for the near future. Customers unimpressed with the 5Mbps DSL service they get from Verizon can always pay substantially more for access to Verizon Wireless’ usage capped LTE 4G network that Gierczynski believes can be used to download movies.

In effect, ratepayers that wrote checks to pay artificially higher phone bills to help subsidize a promised 100% fiber optic future have instead funneled working capital to Verizon Wireless’ network expansion and helped enrich shareholders with generous dividend payouts.

Opportunity New Jersey Verizon: Christie Administration Proposes Letting Verizon Off the Hook Permanently

Gov. Christie

Most victims of costly bait and switch schemes get angry and demand justice. In New Jersey, the Christie Administration believes Verizon is the victim of unreasonable expectations and has proposed a sweetheart deal to both let the company off the hook and keep the surcharges it collected from New Jersey ratepayers for the last 21 years.

While the rest of the country clamors for better broadband, Governor Christie’s State Commission, his Attorney General’s Office and the state Consumer Rate Counsel believe that basic DSL is good enough, and making life difficult for Verizon by insisting it live up to its part of a mutual agreement just isn’t very nice.

All eyes were on incoming president of the Board of Public Utilities Dianne Solomon, wife of close Christie associate Lee Solomon. The BPU has direct authority over Verizon’s compliance with its promises to the state. But Dianne’s only apparent experience is as an official with the United States Tennis Association. Critics immediately pounced on the odd nomination, accusing the governor of using the BPU as a lucrative parking lot for political patronage. Three of the four current commissioners are all politically connected and their experience navigating telecommunications law is questionable.

Instead of demanding that Verizon be held to its commitment to the state, government officials are bending over backwards to let Verizon walk away from its promises forever.

A stipulation proposal would allow the company to shred its commitment to upgrade New Jersey with fiber optics. Instead, Verizon gets permission to discontinue service if you have any other option for service — including cable or wireless. Not only would this stipulation eliminate any hope bypassed communities have to eventually get Verizon FiOS, it would also let Verizon scrap its rural landline network and kill DSL, forcing customers to its lucrative wireless broadband product instead.

Solomon

The agreement also eliminates any commitment Verizon had to deliver fiber-fast speeds. Instead, Verizon will be considered in good standing if it matches the slowest speed on offer from Verizon DSL.

“Broadband is defined as delivering any technology including Verizon’s 4G wireless, fiber, copper or cable, data transmission service at speeds no less than the minimum speed of Verizon New Jersey’s Digital Subscriber line (DSL) that is provided by Verizon New Jersey today.”

New Jersey customers can file comments about the proposed agreement until March 24, 2014 with the Board of Public Utilities.

We have found a good sample letter you should edit to make your own. You can e-mail the secretary directly and/or send your message to the general e-mail address: [email protected] (be sure to include “Verizon New Jersey, Docket No. TO12020155” on the Subject line):

New Jersey Board of Public Utilities
Kristi Izzo, Secretary
44 South Clinton Avenue, 9th Floor
P.O. Box 350 Trenton, NJ 08625-0350

Email: [email protected]

Re: In the Matter of Verizon New Jersey, Inc. Docket# TO 12020155

Dear Secretary Izzo:

I want to alert you to an urgent matter pending before the New Jersey Board of Public Utilities. Pursuant to a 1993 law called Opportunity New Jersey, Verizon NJ was obligated to upgrade New Jersey’s “copper wire” network by 2010. To fund the Opportunity New Jersey expansion, Verizon NJ was permitted to collect excess charges from their customers and received lucrative tax breaks from the State. These charges and tax breaks began in the 1990s and are still being collected today.

Verizon failed to meet its timeframe requirements under the Opportunity New Jersey agreement to New Jersey residents. As a result of Verizon’s failures, on March 12, 2012, the New Jersey Board of Public Utilities initiated a legal action against Verizon NJ. The Board and Verizon NJ have now entered into a proposed settlement agreement which I believe is inadequate and not in the best interests of myself and other New Jersey residents who have paid for this service that was not fully delivered.

I oppose the Board’s proposed settlement agreement and demand that The Board of Public Utilities hold Verizon to the original Opportunity New Jersey agreement which requires Verizon to expand broadband services to every customer in the State. The proposed settlement has the potential of costing myself and other residents even more money than I have already paid for the last 21 years. The Board of Public Utilities should not allow Verizon to flagrantly disregard the stipulations which are the framework for the charges and tax breaks that Verizon has enjoyed for 21 years.

I am asking the Board of Public Utilities to be my advocate and investigate where our dollars were spent and to require Verizon to give me what I was originally promised under Opportunity New Jersey agreement of 1993.

Sincerely,

[Your Name, Address, Phone Number]