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American Telecom Users Will Be the Real Losers
The Great Sandy Shell Game
by DAVID ROSEN

On July 2nd, New York Attorney General Eric Schneiderman filed a petition with the state Public Service Commission (PSC) requesting that it replace Verizon as the telecom carrier for Fire Island.  Fire Island is a 32-mile barrier island on the southern shore of eastern Long Island.  It is home to only 300 year-round residents but welcomes many thousands during the summer, long a haven for gays and other up-market vacationers.

Hurricane Sandy devastated Fire Island along with many other seaside communities on the New York and New Jersey coastlines.  Verizon’s phone lines, the traditional cooper-wire PSTN (public-switched-telephone-network), took a big hit.  Verizon received temporary permission to use a wireless voice service, Voice Link, as a stopgap measure to provide local customers with phone services.  Facing the expenses related to replacing the traditional cooper-wire POTS (plane-old-telephone-service) network or upgrading to a state-of-the-art fiber optic network (e.g., its FiOS), Verizon decided to offer its customers a choice they couldn’t refuse – Voice Link or nothing.

Schneiderman action comes in the wake of Verizon’s shell game to permanently replace the older but more reliable and better performing copper telephone network with Voice Link.  As the petition states:  “Replacing wireline networks with a wireless Voice Link service would deprive customers the ability to continue using wireline-dependent services such as fax machines, alarm systems, medical alert devices, and Digital Subscriber Line Internet access that serve essential security and commercial needs as well as enable participation in 21st century digital communications on the Internet.”

Verizon’s shell game is part of a campaign by it and AT&T, the nation’s largest telecom, to end traditional phone service.  Verizon’s effort will not only force customers to adopt poorer-performing wireless voice service, but require them to pay significantly more for Internet and other services if they so choose.

If the FCC approves the plans by Verizon and AT&T to end traditional phone service, it will have profound and long-term consequences for poorer — and especially small town and rural – communities throughout the country.  At the heart of the debate over the future of phone services on Fire Island is whether telecommunication services will remain in any way a public utility.  The answer to this questions points to the more fundamental question facing the nation’s telecom system: Will the U.S. ever-again be anything more than a 2nd- rate communications country?

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In the wake of Schneiderman’s petition, Verizon issued a reply, “Setting the Record Straight on Fire Island and Voice Link,” from Tom Maguire, Senior Vice President, National Operations Support.  “After Sandy, the western portion of Fire Island was almost like a greenfield development, with little to no infrastructure remaining,” Maguire notes.  “Under those circumstances, building what amounts to a new network based on old 19th century technology was not a choice that made sense for our company or our customers,” he adds.  In conclusion, he insists: “The alternatives were not acceptable.”  (What they are and why they were rejected, he never discusses.)

Voice Link is a fixed wireless service that operates through a small box-like transmission device with a short antenna.  It is fixed to an interior wall of a customer’s house or business and connects to an in-place phone jack and phone and is powered by a conventional 110-watt connection.

In his missive, Maguire identified some of Voice Link features: enhanced 911 services (i.e., it provides a live 911 call taker); 36 hours of backup power using rechargeable batteries; unlimited nationwide calling as well as Caller ID, Call Waiting, Call Forwarding and Voice Mail; and it offers separate plans for international calling, pre-paid calling and 1-800 number.  However, he artfully avoided identifying what services Voice Link does not support — and this is where the rubber meets the road.

Voice Link doesn’t support fax machines, medical devices, alarm systems or broadband Internet.  To gain broadband Internet access, customers have to buy or lease what Verizon calls an uplink service, it JetPack 4G Wi-Fi “hotspot.”  Verizon licenses the JetPack for $19.99 with a two-year contract; it includes a $50 rebate.  Various versions of the device are sold through any number of retailers and run from $159.99 to over $499.99, plus activation and data-usage fees.

Industry reviewers of the JetPack solution are quick to point out its downsides.  For simple emails, it might be fine and not too expensive.  But for everything else, good luck.  Alex Colon, writing at pcmag.com, didn’t pull his punch:  “I’d never buy one of my own, for one simple reason: Data is insanely expensive.”

Eric Bangeman, writing in Ars Technica, was even more telling. “[The JetPack] LTE is fast. Well, at least it is when you’re on a network relatively uncluttered with other LTE users.”  Going further he notes, “the biggest drawback to the Jetpack: Verizon’s bandwidth caps.”  He reminds readers that “Verizon charges $20 per month for monthly line access; data is extra.”

And then Bangeman tells the real story, his story.  “I went with 4GB of shared data (although this is my only Verizon device) for $30 per month. 6GB is $40 per month, while 8GB costs $50.”  The charges stated to addup: “You can add data in 2GB increments up to 20GB for $110, and if you go over your allotment, you’ll pay $10 per GB.”  So, if you’re stuck on Fire Island on a rainy weekend, don’t plan on download movies.

In the face of genuine weakness of Verizon’s Voice Link solution, 134 New York local officials, including country executives, legislators, mayors, supervisors, councilors and others, representing 68 municipalities, sent a follow-up letter to the PSC in support of Schneiderman’s petition.  These officials want to block Verizon’s proposal to make Voice Link permanent.  They argued that substituting Voice Link for landline service “would hamper municipalities’ ability to fulfill their public safety and economic development responsibilities.”

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There is an old political adage that says, never let a crisis go to waste.  Verizon’s took full advantage of the Sandy crisis to not simply push Voice Link on customers on Fire Island, but used the storm and the crisis aftermath as part of its larger campaign to dismantle the PSTN.   In addition to Fire Island, it has implemented the Voice Link “temporary” solution in Mantoloking, NJ, and is expected to deploy it not only in Monticello, NY, but also parts of Florida, Virginia and New Jersey later this summer.

Verizon’s effort – along with that of AT&T — to end the PSTN is part of a larger, more strategic plan.  First, they want to switch customers from what has historically been known as “POTS” (plane-old-telephone-service), an analog service, to “VoIP” (voice-over-Internet-protocol), a digital service.  On face value, this seems simple enough, a switch from old to new technology.  But such an assessment misses the deeper factors driving the remaking of the telecom industry.

First, if you’ve ever made a phone call over the Internet you know that VoIP is an inferior service; signals often breakup.  Second, over the last few years, both Verizon and AT&T have made much of their commitments to upgrading their networks with enhanced optical-fiber services.  Verizon’s FiOS and AT&T’s U-Verse were loudly championed as state-of-the-art networks, performing at rates at or above that offered by cable companies.  However, it became clean that when Verizon stopped building-out its FiOS network in 2011, the company was simply employing a “cherry picking” strategy to upgrade high-value territories and walk away from any obligation to serve poorer or rural territories.  AT&T has adopted a similar go-slow build-out strategy.

The telecoms’ decisions to not build-out high performance optical fiber networks throughout the country is part of a well-planned strategy involving more than a mere migration from analog to digital technologies.  This strategy signals a long-term corporate agenda to change the industry’s business models from a “landline” to “wireless” service provider.  By doing so, they are slowly but steadily evolve telecom from a regulated to an unregulated service.

New York AG Schneiderman, along with the other 134 state local officials, are asking if telecommunications – especially American’s connectivity to the 24/7-365 digital world – should remain a public utility?  The answer to this question doesn’t look good, especially in light of Pres. Obama’s pick to become the new head of the FCC.

David Rosen writes the “Media Current” column for Filmmaker and regularly contributes to AlterNet, Huffington Post and the Brooklyn Rail. Check out www.DavidRosenWrites.com; he can be reached at drosennyc@verizon.net