Verizon Turns Down Millions in Broadband Expansion Funds Unlike CenturyLink and AT&T, Verizon has turned down millions in federal funding to help expand the company's fixed-line broadband network. A Verizon notice to the FCC (pdf) states that Verizon will be accepting $48.5 million in FCC CAF Phase II funding, but that this money will effectively be set aside for Frontier, who recently acquired all of Verizon's fixed-line assets in California, Florida and Texas.

Verizon was offered a total of $144 million per year for six years to expand its broadband footprint. For years now Verizon has been looking to exit the fixed-line broadband business to focus almost entirely on wireless. The company has been either selling unwanted DSL customers, or hitting them with a one-two punch of apathy of rate hikes in the hopes they'll migrate to cable or wireless. I've been hearing fresh employee rumors that yet another major territory sale is in the works, and could be announced as soon as early next year. The Communications Workers of America (CWA), currently in the middle of fighting Verizon over a new contract, was quick to highlight Verizon's lack of interest in broadband expansion. “Verizon’s track record is clear,” said Bob Master, Assistant to the Vice President of District One of the Communications Workers of America. “Even while raking in a billion dollars per month in profits, Verizon is turning its back on underserved communities by refusing federal subsidies to expand high-speed internet access. Instead, its top priority is slashing job and retirement security for its employees and eliminating benefits for workers injured on the job.” And whereas AT&T is using a chunk of its subsidies to And whereas AT&T is using a chunk of its subsidies to fund wireless and fixed-wireless access , Verizon turned down funding for its own services entirely. Of course Verizon has a long and proud history of taking broadband subsidies and tax hikes in exchange for broadband expansion, and in turn failing to meet those commitments -- so perhaps yet more taxpayer financing for big red isn't a bad idea.







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Most recommended from 96 comments



buzz_4_20

join:2003-09-20

Biddeford, ME (Software) Sophos UTM Home Edition

Ruckus R310

18 recommendations buzz_4_20 Member What's the deal? People everywhere have been BEGGING to get a hold of FIOS.

How can the not see the profit potential that is there, AND the FCC is allowing companies to replace copper with fiber which cuts down MAJORLY on maintenance costs.



What happened to INVESTING in your product and infrastructure for FUTURE profits?

Zenit

The system is the solution

Premium Member

join:2012-05-07

Purcellville, VA 14 recommendations Zenit Premium Member :( VZ just wont throw the copper footprint a bone.

VZ complains about the cost of providing service, and then balks at accepting grants designed for broadband expansion.

We all know they want to sell LTE, that's the real reason they turned down the money.

TIGERON

join:2008-03-11

Boston, MA 10 recommendations TIGERON Member And here you have it : Verizon's remaining wireline will all be sold to Frontier.

caster

@sysvana.com 6 recommendations caster Anon they will make it in FIXED LTE overages they will make it in FIXED LTE overages at $10 GIG it will not take long.

get_a_dollar

@verizon.net 5 recommendations get_a_dollar Anon This lack of 10-K examination



Verizon is a publicly traded company, meaning they are required to provide investors (and prospective investors) detailed information about, put simply, how exactly they're making (or losing) money. Let's take a look at Verizon's 10-K filing for 2014, filed with SEC on Feb 23, 2015 (which can be found



Locate the Wireline "Operating Revenues" and "Operating Expenses" sections. Note how Verizon "raked in" ~$38.4 billion dollars in REVENUE specifically from their wireline services in 2014. Seems like a lot, doesn't it? That number is roughly 20% of their market cap!! But, don't forget what comes next: EXPENSES! Operating Revenue is simply the money they RECEIVE from customers. Scrolling down a bit further in the 10-K and you'll see that Verizon has ~$37.4 billion dollars of OPERATING EXPENSES specifically attributed to their wireline services. This only leaves $1 billion of OPERATING INCOME, again, specifically from their wireline services.



This is far less than the "billion dollars per month" Mr. Master claims, isn't it? But wait, they's more! Operating expenses are expenses that directly relate to the service... but what about the expenses that are attributed to the corporate office(s) that oversee(s) wireless, wireline, and everything thing else Verizon? Well, these expenses get allocated to cost objects (wireless, wireline, ect) within the company! These allocations further deplete that $1 billion of income we computed above. When you look at the big picture, Verizon really isn't pulling in a lot of income from their wireline services (if any at all once other costs get allocated to wireline), which is why their managers are pushing for these changes.



Take the time and preform the same computations wireless, you'll see that is definitely where the money is for them and their not lying. It's unfortunate, but Verizon's wireline network is expensive to maintain. You have to see the full picture, though!



I'm a very happy Verizon FiOS customer, but I also understand how costly it is to actually run the operation they're running. I'd be sad to see FiOS sold off, but it wouldn't surprise me. It isn't rocket science: Verizon exists to make money, if they can make more money focusing on wireless, they'll happily ditch FiOS! "Even while raking in a billion dollars per month in profits..." Bob Master sure isn't the "master" of researching before making claims, or at least doesn't understand basic business.Verizon is a publicly traded company, meaning they are required to provide investors (and prospective investors) detailed information about, put simply, how exactly they're making (or losing) money. Let's take a look at Verizon's 10-K filing for 2014, filed with SEC on Feb 23, 2015 (which can be found here ):Locate the Wireline "Operating Revenues" and "Operating Expenses" sections. Note how Verizon "raked in" ~$38.4 billion dollars inin 2014. Seems like a lot, doesn't it? That number is roughlyof their market cap!! But, don't forget what comes next:! Operating Revenue is simply the money theyfrom customers. Scrolling down a bit further in the 10-K and you'll see that Verizon has ~$37.4 billion dollars of. This only leaves $1 billion of, again, specifically from their wireline services.This is far less than the "billion dollars per month" Mr. Master claims, isn't it? But wait, they's more! Operating expenses are expenses that directly relate to the service... but what about the expenses that are attributed to the corporate office(s) that oversee(s) wireless, wireline, and everything thing else Verizon? Well, these expenses get allocated to cost objects (wireless, wireline, ect) within the company! These allocations further deplete that $1 billion of income we computed above. When you look at the big picture, Verizon really isn't pulling in a lot of income from their wireline services (if any at all once other costs get allocated to wireline), which is why their managers are pushing for these changes.Take the time and preform the same computations wireless, you'll see that is definitely where the money is for them and their not lying. It's unfortunate, but Verizon's wireline network is expensive to maintain. You have to see the full picture, though!I'm a very happy Verizon FiOS customer, but I also understand how costly it is to actually run the operation they're running. I'd be sad to see FiOS sold off, but it wouldn't surprise me. It isn't rocket science: Verizon exists to make money, if they can make more money focusing on wireless, they'll happily ditch FiOS!

javiern

@rr.com 4 recommendations javiern Anon Verizon wants to be like sprint? Why does Verizon want to have a similar structure like sprint(wireless+ backbone operations)? It seems to me like that would be bad in the long term for them.