[kushnick]

The Urban legend speaks – I wrote 3 books on this topic, which outline, in detail how New Networks generated the numbers.

In the 1990s, all of the phone companies in the US applied for and received alternative regulations which was based on their commitment to replace the copper utility wire, known as the PSTN, Public Switched Telephone Networks, with a fiber optic wire. This was based on then Al Gore’s call for America to be completely upgraded by 2010, called the information superhighway.

And the state laws were changed to give the companies billions of dollars per state and this was done by multiple financial incentives—where the phone companies’ services were no longer examined for profits, even though there was no competition at the time – so ‘call waiting’ cost less than a penny, and the companies charged $4.00 – and this included almost all services, such as non-published numbers. Their profift jumped from 12-14% to 35-40%; they had major increases in dividends, they took massive tax write-offs for the networks, among other things.

And the companies lied about their deployments but continued to keep the excess profits. – So, all rate increases were tied to these financial perks, where the state never went back and changed the laws or got refunds when the companies failed to deploy.

While states, like New Jersey, where they collected about $15 billion, were supposed to be upgraded by 2010 with a fiber optic service capable of 45 Mbps in both directions. http://newnetworks.com/verizonnjbroadbandresources/

And it continues today with more rate increases. Our new report shows that regular POTS, plain old telephone service, customers were charged about $4 billion in New York State for ‘massive deployment of fiber optics’, even though the majority will never get any upgraded service.

http://newnetworks.com/verizonfiostitle2/

I wrote 3 books on this. The first is about 1980-1998, with Foreword by Dr. Bob Metcalfe, second was in 2005 and the third book is coming out next month. Book 2: http://www.newnetworks.com/broadbandscandals.htm

And we filed in multiples states over this since 1999, we have separate reports about the revenues and profits that’s been published.

If you got specific questions after you read the books, -contact me. I’ve been a telecom analyst for 32 years—and used to work for those who are now called Verizon, AT&T and Centurylink as a senior analyst at multiple telecom consulting firms. [e-mail]

[maxerickson]

Do you know of a convenient table showing the numbers you use to get those profit figures? I'm mostly interested in a clear understanding of what you are saying, and it is easy to end up talking about different things when discussing corporate earnings.

The profit margin for Verizon today is less than 12%:

http://finance.yahoo.com/q/ks?s=VZ+Key+Statistics

[kushnick]

short answer..one table, only giving the 'corporate earnings' doesn't tell the story-- but I'll think about a few to post.. highlights.

First, the link is to 2014 financials; the tracking to charge for broadband by changing state laws started in 1993. Also, the numbers in Verizon's overall business reports are a garbage pail of revenues, etc. as the company has over 365 different investments and companies in over 150 countries.

On the earnings, my books use a standard EBITDA, earnings before income tax and depreciation and amoritization, and Return on Equity, among other indicators.

And we used the SEC-filed state-based annual reports, like a report for Verizon New York, but that data stopped in 2010; the FCC data stopped in 2007.

Worse, if you read our new report about Verizon New York you'll see that the numbers can't be ascertained easily anymore because of all of the cross-subsidies for all of the other businesses.

In fact, a previous report we wrote last year about Verizon NY is now part of FOIA challenge in court. It was used by Common Cause, Consumer Union, CWA in a proceeding calling for audits.

The overcharging is also different than just the 'corporate earnings'-- for example, In new york, Verizon got multiple rate increases on regular phone customers for 'massive deployment of fiber optics'; the additions come to about $4. billion from 2006-2013.

It's not legal to charge regular copper-based phone customers for a cable service, for example, or have expenses for the construction of the wireless cell tower wires.

However, at the same time, the company claims to have lost $11 billion in just New York for the last 5 years... the losses caused by the various affiliates (like Verizon Wireless is an affiliate of Verizon NY).. adding expenses.

[maxerickson]

Okay, how about a simple table of the salient numbers for one state?

Or is that a 'buy the book' sort of thing?