Part 1 of a new series based on the new report: "It's all Interconnected."

From the Verizon New Jersey's FiOS cable TV franchise agreement, renewed this year, 2014.



"Verizon NJ has been upgrading its telecommunications facilities in large portions of its telecommunications service territory so that cable television services may be provided over these facilities. This upgrade consists of deploying fiber optic facilities directly to the subscriber premises. The construction of Verizon NJ's fiber-to-the-premises FTTP network (the FTTP network) is being performed under the authority of Title II of the Communications Act of 1934 and under the appropriate state telecommunications authority granted to Verizon NJ by the Board and under chapters 3 and 17 of the Department of Public Utilities Act of 1948. The FTTP network uses fiber optic cable and optical electronics to directly link homes to the Verizon NJ networks.



"Pursuant to the NJSA 45:5A-15, telecommunication service providers currently authorized to provide service in New Jersey do not require approval to upgrade their facilities for the provision of cable television service.



"As such any construction being performed in the public rights of way is being undertaken pursuant to Verizon NJ authority as a telecommunication service provider."

The next series of articles outlines the findings from a new report by the Public Utility Law Project, authored by New Networks, with the assistance of David Bergmann, and it features never before examined financial information about Verizon NY and the FiOS deployment in New York State and America. This report and analysis is based almost exclusively on Verizon NY's own financial statements -- including multiple financial books filed with the NY State Public Service Commission (NYPSC), the SEC, the FCC, as well as FiOS cable franchises and 'transcripts' from Verizon executives to the investment community.

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On May 15, 2014, the FCC announced that it would open up a three month period for public comments on something called 'Net Neutrality'. America's major media outlets, from The New York Times and The Washington Post, to CBS, ABC TV and Time Magazine -- all started using the term "Title II".

MSNBC writes that a possible solution to Net Neutrality -- commonly known as an 'open Internet' is to reclassify broadband as a "Title II" service, which was changed by the FCC to an 'information' service, commonly known as 'Title I".



"Net neutrality advocates believe that their preferred solution is simple -- simply reclassify broadband services as 'common carriers', which, loosely defined, are services that are legally bound to cater to all, without discrimination, upon reasonable demand. Common carriage is a subtle but crucial pillar of the modern economy; it applies to anything from taxicabs to telephones. The 1934 Telecommunications Act gave the FCC broad powers to regulate telephone companies as common carriers. In 2002, however, the FCC categorized broadband services as 'information services', a category created in 1996 with fewer limitations."

On May 13th, 2014, a letter signed by Verizon, AT&T, Time Warner, and Comcast, among other phone and cable companies, claims that 'reclassifying' the networks as Title II would stop investment and slow the development of broadband networks.

"Not only is it questionable that the Commission could defensibly reclassify broadband service under Title II, but also such an action would greatly distort the future development of, and investment in, tomorrow's broadband networks and services. America's economic future, as envisioned by President Obama and congressional leaders on both sides of the aisle, critically depends on continued investment and innovation in our broadband infrastructure and app economy to drive improvements in health care, education and energy. Under Title II, new service offerings, options, and features would be delayed or altogether foregone. Consumers would face less choice, and a less adaptive and responsive Internet."

And yet, Verizon's FiOS is riding over a Fiber-to-the-Premises (FTTP), using the Title II classification today as it appears in most, if not all of the Verizon FiOS cable franchises. In fact, we found in a Verizon filing in the Verizon District of Columbia (DC) franchise application, that by 2007 Verizon had franchises in 835 different locations in 12 states, and in the application Verizon again repeats that the DC deployment is a Title II service.

The fact that these are public records means that the FCC under Tom Wheeler didn't do their homework and neither did the media.

This revelation also brings into question whether Verizon is speaking out of both sides of its mouth; on the one hand, they have been leading the charge to stop Net Neutrality, suing the FCC over the Open Internet Order and fighting to keep the broadband networks and the Internet Service as a bundle that together is classified as 'Title I', while at the same time, Verizon has decided to use "Title II' in their state and municipality cable franchises.

Why? We will come back to this issue in the next article in this series.

Verizon's FiOS and Title II.

Let us be clear: "FiOS" is not the wires but is a brand name for Verizon's cable, Internet-based phone, broadband and Internet service. And it is not the Fiber-to-the-Premises, FTTP network. The cable service is classified as "Title VI" under the Telecommunication Act of 1996 while broadband and Internet are now classified as "Title I", an information service.

The reason the phone companies want everything to be classified as an Internet-Protocol ("IP")-based, 'Information Service' is because Title I has no obligations to allow for the free use of the networks. In fact, when the phone and cable companies tell everyone that they want to 'free the Internet from regulation' what the really mean is that they, the phone and cable companies, want to be free from regulation -- while the subscribers' rights are removed with the play this of words.

What does this all mean? If Verizon's FiOS is already using Title II for their primary FTTP networks-- then Net Neutrality is solved. The FCC only has to acknowledge that the networks are Title II and go from there.

But there are a host of questions:

Why did Verizon base the FiOS cable franchises on an FTTP, Title II service?

If the networks are Title II, common carriage, and using the utility rights of way, then aren't these networks part of the State utility?

And if so, why shouldn't they be opened to all forms of competition?

And why shouldn't every customer be entitled to this FTTP network?

And what about the cable, broadband and Internet service? Are they paying 'market prices' to use this network or do they have sweetheart deal?

Answer: As discuss in Part II, Verizon New York used Title II for the FTTP networks so that they can use the utility-based public-rights-of-way but more importantly charge POTS, Plain Old Telephone Service, customers multiple rate increases to fund the FiOS deployment, even though these services are part of the un-upgraded copper-based, utility wires commonly known as the Public Switched Telephone Networks, (PSTN).

Read the report or wait till the next installment.

Coda:

I leave you with this fact: 'Common Carriage' issues in telecommunications have been around for more than a century. In writing the report we uncovered the laws that apply to Verizon New York's original telephone franchise from 1896. And it, too, 118 years ago, believed in the principle of 'common carriage'. It is, in fact, in the New York state law.

"Every such corporation shall receive dispatches from and for other telegraph or telephone lines or corporations, and from and for any person, and on payment of the usual charges for transmitting dispatches as established by the rules and regulations of such corporation, transmit the same with impartiality and good faith and in the order in which they are received, and if it neglects or refuses so to do, it shall pay one hundred dollars for every such refusal or neglect to the person sending or desiring to send any such dispatch and entitled to have it so transmitted, but arrangements may be made with the proprietors or publishers or newspapers for the transmission for publication of intelligence of general and public interest out of its regular order." "The provisions of this article shall apply to corporations owning, leasing, maintaining or operating or organized for the purpose of owning, leasing, maintaining or operating, a radio or wireless plant, equipment or system as a part of, or in conjunction with, a station or stations engaged in or designed to engage in public commercial intercourse by wireless telegraphy or telephony, and also corporations for the generation and distribution of music electrically; and such corporations shall possess the powers and be subject to all the duties granted to or imposed upon telegraph or telephone corporations thereby except that such corporations organized solely for the generation and distribution of music electrically shall not have or exercise the right of condemnation."