Verizon: The Biggest Crybaby in the World

Every evening on his Countdown show, Keith Olbermann designates someone as the "Worst Person in the World." With a nod to Mr. O., we hereby designate the Biggest Crybaby in the World. The initial selection: Verizon.

The biggest issue facing the Federal Communications Commission (FCC) over the summer was setting the rules for auctioning off a prime slice of the public's airwaves -- the channels that TV stations now use. The TV stations will switch to another part of the radio spectrum in February, when they go to all-digital broadcast over the air.

Imagine a field 60 yards long, as a visualization of the 60 MHz of spectrum for which the FCC is supposed to hold an auction in January next year. Now, rope off 40 of those yards. In spectrum terms, right off the bat 66.7 percent of the auction will be on terms that Verizon wants - i.e., none. That means for most of the spectrum at auction, Verizon can bid what it wants and do with the valuable ethereal real estate what it wants. (As can AT&T, the other big cellular company.)

The fight at the FCC was over the terms and conditions for the other 20 yards, or 20 MHz. A coalition of public-interest groups (including my day-job employer Public Knowledge), along with Google, Skype, a group of wireless innovators and others, suggested to the FCC that it do something more worthwhile with this last little slice than simply let the big current cellular companies get bigger.

We wanted the Commission to use this slice of spectrum to create more competition in wireless Internet services for the benefit of consumers by allowing smaller companies which couldn't afford to bid billions for spectrum to have a shot. So we proposed that whoever wins the auction be required to sell it at wholesale to the smaller, generally innovative companies. Wholesale has been, and remains, a staple type of business in the telecom world, so this wasn't totally radical.

We also asked that when consumers be given the advantages to use any "always on" wireless service, like GPS; be able to run any application, like a music download service; and use any device on any network.

In its own inimitable way, Verizon responded by intimidation, bullying and threats of litigation. They said that Google was trying to threaten the FCC and that if the FCC caved in to Google (the whipping boy at the time), then Verizon would sue. Any time Verizon uses the term "serious legal problems," you know the lawyers are warming up in the bullpen.

Verizon got most of what it wanted from the FCC back in August. In our example, they kept 15 of the remaining 20 yards as they wanted. There would be no wholesale requirement, no open service requirement. In short, the FCC did nothing to create new competition as a threat to Verizon. The FCC did throw consumers a couple of relative scraps, saying that cell phones in that little slice of spectrum should work with any network and run any applications.

If someone asked for a $10,000 raise and came away with $9,995, most people would consider that a good day. Verizon, one of the telecom giants that want to control the Internet, isn't most people.

For being a sore winner and filing a court challenge even when it won, Verizon is hereby designated the Biggest Crybaby in the World.

Comments

[NeoConDeath]

Wait till they get down building the 12 lane SuperHighway through the middle of the country. I hear this road is going to stretch from Central America to the Artic Circle.

[yellowdogSC]

God FORBID that Verizon NOT get everything it wants.

After turning over Americans phone records ILLEGALLY to the White House (along with AT&T), then getting protection FROM said White House for having done so, they clearly feel that they aren't getting nearly enough favors.

What do they think they are, OILMEN?

[Rrhain]

A little lesson in physics, shall we?

The radio spectrum is what allows communication to be sent through the air. Back before the days of cable, you got your television signal but sticking a piece of metal into the air. It would receive the electromagnetic signals broadcast by the stations and display them.

Those electromagnetic signals can vary based upon frequency. By setting your receiver to listen to a certain frequency in the electromagnetic spectrum, you can hear what is being broadcast on that frequency.

Now, what happens if two sources are broadcasting on the same frequency? At best, you'll hear both broadcasts simultaneously. However, they'll interfere with each other and you'll get neither broadcast very well. And if one is broadcasting very "loudly," then it will overwhelm any "quieter" broadcaster.

To prevent this, it was decided that the government will have control over the broadcast frequencies, apportioning them to various broadcasters so that they will not have to worry about somebody else setting up a tower and drowning them out. But rather than simply give them out, they decided to charge for them: The broadcaster gets exclusive rights to that frequency in exchange for payment.

*That* is why and what is meant by "sell the airwaves." It is done so that those who wish to broadcast something will actually be able to have the signal heard. Otherwise, I can block your ability to broadcast by simply buying a bigger, more powerful transmitter. Since we can't all use the same radio frequency, it necessarily must be regulated to be of any real use.

[sydfynch]

Not exactly. The "airwaves" only became a commodity after the government in the 1920s came to the conclusion that it was a "public resource" that needed to be regulated on behalf of the public. That included the content and the distribution of the spectrum. The system of regulation worked for 50 years until Republicans began to dismantle the public infrastructure and sell it off to the highest bidders under the delusional "de-regulation" policies of Ronald Reagan. Corporations realized how much bloody money there was to be made and how much political power there was in that money and that control of the airwaves if they could keep competition and diverse voices from competing for the airwaves through their buddies in Congress.

It's the same now. The auction is just another selloff so the giant media conglomerates can keep competition at bay. It's gonna be the same exact result as when they auctioned off the 700MGh spectrum a few years ago and all that happened was Sprint/Nextel bought up 90% of it and then sat on it, refusing to use it and refusing to sell it. No innovation. No competition. Works for them, but consumers lose.

[Rrhain]

You're confusing the method by which the spectrum is regulated with the need to regulate the spectrum in the first place.

The spectrum needs to be regulated in order for it to be of any use. We can (and should) discuss the methods by which it is regulated, but that doesn't change the laws of physics.

[Krackonis]

Selling off your country is what corporations want you to do. Then when there are only 5-6 corporations, and a bunch of meanless no-representation masses what will you have?


What is capitalism really? It's Giving away your public resources and you will be slaves in the land your grandfathers conquered.

Everything you do goes through a totalitarian corporation who answers to no one. your government is now sold to them. It's not you anymore... you don't matter.

You're just the "consumers". If a few of you die off from pollution, poisons or whatever, it doesn't matter to them. As long enough of you spawn and stay in families getting fat off the corporate spew that lands in your lap as food, then all's good.

[vipersdad]

I don't guess that your piece had any pretense of presenting Verizon's point of view on this matter. Since this is an opinion piece, I would encourage everyone to go see what the other opinions are before drawing conclusions and mindlessly throwing out tired axioms like "big corporation."

In Europe, they have been conducting spectrum auctions for years now and the winners are largely (you guessed it) big corporations, like T-Mobile, Vodafone,etc....So to posit that the service is "much better....in the rest of the industrialized world" is to embrace a process that is at least similar to what's in play here in the US. Where I do agree with you is that it should be the role of the Federal Government to be setting strategies and directions in these spaces, and to jump-start programs with incentives, tax breaks, targeted investments, etc.... THAT is where Europe created an advantage in the wireless space. While the Bush 1 Adminstration and the Clinton Administration were allowing lassiez-faire to be taking it's course, Europe and parts of Asia were making HUGE strides in wireless coverage and technology.

Bush II just continued the lack of leadership by the federal government. This did not start with him...he is a steward of a bad policy that goes back a long long way.

[Aunt Shecky]

Many of us scratch our heads over providers such as Verizon, and this blog gives us some answers.
I have a question about public utilities in general, the ones you don't find on a Monopoly game board. We are mostly satisfied with the company that supplies us with electricity locally, but a couple of years ago the power company was sold to a corporation that is based in the U.K. The service is still good, but I have some misgivings about a public utility in the U.S. whose owners are subjects of a foreign power. Even when the country is a staunch American ally, it doesn't make any difference (to me, at least--it still seems a little strange.) Similiar questions arose last year when some U.S. ports were going to be managed by a company from Dubai. ( Dubai, also is "friendly nation," I know. And it has good race horses, too. But still.)
Was the right of foreign companies to own public utilities ever approved by Congress? Or did it come under the general heading of NAFTA (which, I admit, was passed in the Bill Clinton era.) Or did it somehow sneak in under the radar? Or is ol' Auntie just plain paranoid?

[Woofer58]

makes me wonder when a big corporation whines about not getting what they want from the government.. oh, wait, silly me.. they probably will get what they want because they have the money. In the good ole USA everything has a price tag, especially things that "belong" to it's citizens, uh.. natural resources, park lands, and on and on.

[MaxundMoritz]

nothing,absolutely nothing of the peoples property should be auctioned off or sold!!(like our roads being sold to India right now,then made toll roads)
It's as bad as having a toll booth on the end of your driveway.
these criminals,that are involved need to be gathered with meat hooks and sold off as dog food.
where is congress to stop this thievery?
enough of that so called Privatisation,mergers and Aquisitions.NO toll roads;NO Nukes,is GOOD Nukes.NO Incumbents in 2008

[kellygrrrl]

Max, you're right. And they are criminals!

[sptatt]

okay I'll try this again. If the American people had the faintest notion how much better the service is in the rest of the industrialized world, maybe just maybe they'd raise enough hell that the paid off scumbags, er excuse me congress would have to do something. Nah ain't gonna happen fat, dumb, and happy.

[LeftRight]

Why do we even sell the airwaves? This is something that, like the oil and coal underground, belong the whole of the US, and therefore to the citizens. Plain and simple, we should have been able to challenge this one in court. Barring that, we need to all get together and challenge it in clowngress. I know that nothing will happen, but it might make us feel better when we fail...

[WalterB]

LeftRight and the rest of you who commented on Art's article: I agree with all of you. But to better understand HOW Verizon, AT&T, and others got so powerful, and WHY they're behaving so badly, go to:

http://mediaintell.blogspot.com

[kellygrrrl]

we sell franchises and airwaves and cable area because our little Social Experiment has gone awry.
In the early 80's I took Mayor Tom Bradley's deposition (remember him?) regarding the illegal sale of cable TV franchise areas. Every group that walked away with one of these prizes (in So. Cal.) has proven to be a criminal family.

[dennidus1680]

We sell the public airwaves because the government represents the big corporations rather than the people of this country. Remember when airwaves were publicly owned and corporations that used them were controlled? Thats privatization for you. These criminals we call politicians sell tax supported public assets to private corporations so we can be gouged even more than just the taxes.

[LeftRight]

Yeah, and in addition to selling our airwaves, they're selling our infrastucture, our lotteries, our schools, and our public safety jobs. Now I don't know about you, but if I had a choice to travel on a road that was run by the government (or at least a partial government agancy, e.g. USPS) or a road that was completely run by a private company, I'd choose the government road, cause I know that the costs would be less (tolls, taxes, etc.) and that the service would be slightly better. This is not through lack of trying on the repugs part, it's simply the fact that our selfless civil servants (most, anyway) actually give a damn about what their jobs mean, and therefore do it to the best of their ability.

[dadw5boys]

The MONTHLY RENT or MONTHLY ROYALITIES FOR USE OF THE AMERICAN AIRWAYS COULD PAY OFF THE NATIONAL DEBT IN FEW YEARS!
It will take TAX PAYERS a FEW CENTURIES to pay off the BU$H DEBT!