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Verizon Communications

Verizon Communications Inc. (, [1]) (branded as Verizon) is a global broadband and telecommunications company and a component of the Dow Jones Industrial Average. It started in 1983 as Bell Atlantic (based in Philadelphia) with a footprint covering New Jersey to Virginia and emerged as part of the 1984 AT&T breakup into seven "Baby Bells." In 1997, Bell Atlantic merged with another Regional Bell Operating Company, NYNEX, based in New York City with a footprint spanning from New York to Maine. The combined company kept the Bell Atlantic name. In 2000, Bell Atlantic acquired former independent phone company GTE, and adopted the name "Verizon", a portmanteau of veritas and horizon.[2] The company's headquarters are located in the Verizon Building at 140 West Street in Lower Manhattan, New York City.[3]

Contents


History

AT&T breakup and NYNEX acquisition

Bell Atlantic logo, 1984-1997
Bell Atlantic logo, 1984-1997
Verizon was founded as Bell Atlantic Corporation. It was one of the seven "Baby Bells" that were formed as a result of the anti-trust judgment against the American Telephone & Telegraph Company. Bell Atlantic then inherited seven of the Bell Operating Companies from AT&T (later known as AT&T Corporation) following its breakup. Bell Atlantic's original roster of operating companies included:

Bell Atlantic originally operated in the U.S. states of New Jersey, Pennsylvania, Delaware, Maryland, West Virginia, and Virginia, as well as Washington, D.C.

In 1994, Bell Atlantic became the first Regional Bell Operating Company to entirely drop the original names of its original operating companies. Operating company titles were simplified to "Bell Atlantic - state name".

In 1996, CEO and Chairman Raymond W. Smith orchestrated Bell Atlantic's merger with NYNEX CEO Ivan G. Seidenberg. When it merged, it moved its corporate headquarters from Philadelphia to New York City where CEO's Smith and Seidenberg shared Co-CEO duties. NYNEX was consolidated into this name by 1997.

Prior to its merger with GTE, Bell Atlantic traded on the New York Stock Exchange (NYSE) under the "BEL" symbol.

Verizon Wireless formation and GTE merger

On September 21, 1999, Bell Atlantic and UK-based Vodafone AirTouch Plc (now Vodafone Group Plc) announced that they had agreed to create a new wireless business with a national footprint, a single brand and a common digital technology  composed of Bell Atlantic's and Vodafone's U.S. wireless assets (Bell Atlantic Mobile (which was previously called Bell Atlantic-NYNEX Mobile by 1997), AirTouch Cellular, PrimeCo Personal Communications, and AirTouch Paging). This wireless joint venture received regulatory approval in six months, and began operations as Verizon Wireless on April 4, 2000, kicking off the new "Verizon" brand name.

The final GTE logo prior to its merger with Bell Atlantic to form Verizon.
The final GTE logo prior to its merger with Bell Atlantic to form Verizon.
Bell Atlantic acquired GTE on June 30, 2000 and changed its name to Verizon Communications Inc. It was among the largest mergers in United States business history. It was the result of a definitive merger agreement, dated July 27, 1998, between Bell Atlantic, based in New York City since the merger with NYNEX in 1996, and GTE, which was in the process of moving its headquarters from Stamford, Connecticut, to Irving, Texas.

The Bell Atlantic GTE merger, priced at more than $52 billion at the time of the announcement, closed nearly two years later, following analysis and approvals by Bell Atlantic and GTE shareowners, 27 state regulatory commissions and the Federal Communications Commission (FCC), and clearance from the United States Department of Justice and various international agencies.

The merger of Bell Atlantic and GTE, to form Verizon Communications, became effective on June 30, 2000. Verizon began trading on the NYSE under its new "VZ" symbol on Monday, July 3, 2000. GTE's wireless operations became part of Verizon Wireless  creating what was initially the nation's largest wireless company before Cingular Wireless acquired AT&T Wireless in 2004  when the Bell Atlantic GTE merger closed nearly three months later. Verizon then became the majority owner (55%) of Verizon Wireless.

Bell Atlantic's CEO Ivan Seidenberg and GTE's Charles Lee were co-CEO's from 2000 to 2002 when Seidenberg became sole CEO, a position he held until July 2011 when he was succeeded by Lowell McAdam.[4]

Verizon shares were made a component of the Dow Jones Industrial Average on April 8, 2004.[5] Verizon currently has 140.3 million land lines in service. With the MCI merger, it has more than 250,000 employees. Verizon serves customers throughout much of the United States.

In late 2004, Verizon sold its 20.5% stake in Telus, a Canadian telecom. This was so that they could focus more on its own services. The stake came from GTE, which held stocks in BCTel, a Telus predecessor.[6]

MCI acquisition

On February 14, 2005, Verizon agreed to acquire MCI Inc., formerly WorldCom, after fellow "Baby Bell" SBC Communications agreed to acquire former parent AT&T Corporation just a few weeks earlier. (That combined company took the AT&T name.)

Media coverage has focused on several ways in which that acquisition, once completed, would benefit Verizon, including economies of scale derived from a potential productivity boost to be achieved via the elimination of thousands of jobs at the combined company, and access to the large base of business customers currently served by MCI. The real benefit to Verizon was the acquisition of long-haul lines. The bulk of Verizon's business is concentrated in the eastern United States. This not only renders the company, effectively, a regional phone company, but also forced it to pay usage fees to long-haul carriers, such as the former MCI and AT&T, to complete calls for its customers whenever those calls go outside the Verizon "footprint". That need is obviated by the MCI acquisition and was key in the long term market position strategy. By January 6, 2006, MCI was incorporated into Verizon with the name Verizon Business.

Verizon, with MCI, was the largest telecommunications company in the United States based on sales of $75.11 billion, profits of $7.4 billion and assets of $168.13 billion. After its acquisition of BellSouth, AT&T became the largest telecommunications company in the world in terms of assets and profits.[7]

Divestitures

Due to the rigorous climate and high costs, GTE Alaska was sold to Alaska Power and Telephone Company rather than be included in the Verizon merger.

In 2002, Verizon sold GTE's former telephone operations in 3 states: Missouri and Alabama operations were sold to CenturyTel, which acquired Embarq in 2009 and became CenturyLink, and Kentucky operations were sold to Alltel, which later spun off its landline operations as Windstream. In 2005, Verizon sold off GTE's former telephone operations in Hawaii to The Carlyle Group, This operation is now known as Hawaiian Telcom.

On April 3, 2006 Verizon agreed to sell its stakes in Verizon Dominicana (operating in the Dominican Republic), CANTV of Venezuela, and Puerto Rico Telephone Company, Inc. (PRT) in Puerto Rico to Telmex and Am rica M vil for $3.7 billion.[8]

On January 16, 2007, Verizon New England operations in Maine, New Hampshire, and Vermont were spun off, and merged with FairPoint Communications, a deal which was finalized on April 1, 2008.

On May 13, 2009, Verizon announced it was selling all of Verizon's wireline assets in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin as well as some assets in California to Frontier Communications. These assets include Contel of the South, Verizon North, Verizon Northwest, Verizon West Coast, Verizon West Virginia, and two new companies created for spinoff, New Communications of the Carolinas and New Communications of the Southwest.[9] On July 1, 2010, the transfer of these assets to Frontier took place.[10]

Impact of changes in telephony

The transition from land wire-based telephony to wireless communications has been a major change driver for all vendors in the telephony space, including Verizon. , the profitability of the company's "wireline" business had slipped substantially below that of its mobile division and continued to degrade, a situation reflected in and used to directly support downward revisions to "wireline" worker compensation, potentially impacting on the order of 45,000 workers in the United States.[11]

Operations

South face of the Verizon Building, the headquarters of Verizon, in 2005, with 7 World Trade Center to the right.
South face of the Verizon Building, the headquarters of Verizon, in 2005, with 7 World Trade Center to the right.
As a result of the various mergers and spin-offs, as of 2011, Verizon provides local landline services in 11 states and the District of Columbia through the following operating companies:

Products and services

Verizon service van
Verizon service van

Fixed-line Voice

Verizon provides several different types of land line telephone services  standard POTS (Plain Old Telephone Service) service as well as VoIP (Voice Over Internet Protocol) and optical fiber line services. In addition, Verizon offers long distance services. Verizon also offers a product that is a joint venture with Microsoft called "Verizon Web Calling", a type of VoIP service used within Windows Live Messenger. See also Iobi.

Voice Messaging service is included.

Fixed-line Data

Verizon provides High Speed Internet DSL Internet service in many areas where it offers phone service. DSL is offered in various speeds ranging from 768 kbit/s to 15 Mbit/s download, depending on what the local infrastructure can support.

The Verizon FiOS logo.
The Verizon FiOS logo.
Verizon began offering FTTP (Fiber to the Premises, or Fiber to the Home) to some subscribers in 2006. Verizon markets this service under the name "FiOS".[12] It supports speeds up to 150/35 Mbit/s.[13]

Verizon VoiceWing

Verizon VoiceWing is a Voice over IP (VoIP) service offered by Deltathree and resold by Verizon[14] that offers phone service over a broadband Internet connection. A DSL, cable, or Verizon FiOS Internet connection, a regular telephone, a router, and a telephone adaptor are required for service. On March 31, 2009, Verizon terminated VoiceWing service for all existing subscribers.

Fixed-line Television

Verizon launched its FiOS Video service in Keller, Texas on September 22, 2005. FiOS TV[15] uses an optical fiber network to deliver more than 500 total channels, more than 180 digital music channels, more than 95 high-definition channels, and 10,000 video-on-demand titles. Verizon also partners with DirecTV service as well to offer pay-TV services.

It was reported that on February 6th Verizon Communications formed a joint venture with Coinstar Inc., to offer a video streaming service. It will be available to anyone in the U.S with a broadband-Internet connection. [16]

Wireless Voice & Data

Verizon Wireless is, as of September 2011, the largest wireless carrier in the United States based on number of subscribers. It is a joint venture of Verizon Communications which owns 55 percent of the venture, and British-based Vodafone plc which owns 45 percent.

Directory operations

The Yellow Pages business of Verizon is known as SuperPages, and is a Texas-based sales, publishing and related services with 1,200 directory titles and a circulation of about 121 million copies in 41 states. The web site receives approximately 17 million visitors a month. It had an operating revenue of $3.6 billion in 2004 and employs 7,300 nationwide.[17] In a move to leverage against higher traffic sites, Superpages linked up with Google to provide search advertising services to its millions of listed businesses. SuperPages will offer its advertisers the ability to bid for Google search terms.[18]

With an estimated $17 billion in assets, Verizon has spun off the business unit to finance its expansion in wireless and high-speed Internet services.[19] Verizon is not the first Baby Bell to rid itself of its directory publishing operations; Qwest sold off its QwestDex directory services to become Dex Media, and Illinois Bell, now known as AT&T, sold its directory operations to R. H. Donnelley in 1990 ("AT&T Yellow Pages published by R. H. Donnelley").

Corporate governance

Current members of the board of directors are: Richard L. Carri n, M. Frances Keeth, Robert W. Lane, Lowell C. McAdam (President and CEO), Sandra O. Moose, Joseph Neubauer, Donald T. Nicolaisen, Thomas H. O'Brien, Clarence Otis, Jr., Hugh B. Price, Ivan G. Seidenberg, Rodney E. Slater, John W. Snow and John R. Stafford.

Sponsorships and naming rights

Verizon Center Chinatown, Washington, D.C.

Controversies

Verizon has been involved in several public controversies.

Tax dodging and lobbying

In December 2011, the non-partisan organization Public Campaign criticized Verizon for spending $52.34 million on lobbying and not paying any taxes during 2008-2010, instead getting $951 million in tax rebates, despite making a profit of $32.5 billion, having laid off 21,308 workers since 2008 and increasing executive pay by 167% to $20.3 million in 2010 for its top 5 executives.[20] However, on February 24, 2012, in its Form 10-K filed with the SEC[21], Verizon reported having paid more than $11.1 billion in taxes (including income, employment and property taxes) in 2009-2011. In addition, the company reported in the 10-K that most of the drop in employment since 2008 was due to a voluntary retirement offer.

Political

On December 22, 2004, mail servers at Verizon.net were configured not to accept connections from Europe, by default, in an attempt to reduce spam email. Individual domains would only be unblocked upon request.[22]

On May 11, 2006, controversy arose when USA Today revealed that Verizon, along with AT&T Inc. and BellSouth, had turned over the call records of millions of U.S. citizens to the National Security Agency. Verizon flatly denied turning over records to the government, but did not comment on whether MCI, which it had acquired in January, had done so.[23] On October 12, 2007, the company admitted in a letter to the United States House Committee on Energy and Commerce that it had turned over customer information to the FBI and other federal agencies of the U.S. government approximately 94,000 times from January 2005 to September 2007, providing such information 720 times without being presented with a court order or warrant.[24]

In September 2007, Verizon Wireless initially refused to make their mobile phone network available to NARAL Pro-Choice America for a program which allows people to sign up for pro-choice text messages, on the grounds that they had the right to block "controversial or unsavory" messages. They subsequently reversed the decision:

"It was an incorrect interpretation of a dusty internal policy, that ... was designed to ward against communications such as anonymous hate messaging and adult materials sent to children. ... [Verizon has] great respect for this free flow of ideas."[25]

Internet

On February 4, 2010, 4chan started receiving reports from Verizon Wireless customers that they were having difficulties accessing the site's image boards. 4chan administrators found that only traffic on port 80 to the boards.4chan.org domain was affected, leading them to believe that the block was intentional. On February 7, 2010, Verizon Wireless confirmed that 4chan.org was "explicitly blocked".[26]

In August 2010, the chairmen of Verizon and Google agreed that Network Neutrality should be defined and limited.[27][28]

In December 2010 Verizon continued moderating its network by removing access to some IRC servers related to Wikileaks "Operation Payback".[29]

2011 union worker strikes

In August 2011, 45,000 Verizon workers went on strike for two weeks over management efforts to reduce their benefits. Management was asking union workers to accept a freeze in pension contributions concurrent with a switch to a 401K plan used by other non-union Verizon workers. Other changes disputed by the unions included making contributions to health insurance premiums.[30] In October 2011 the workers' union, the Communications Workers of America, joined the Occupy Wall Street to protest the benefit cuts after Verizon announced its profits had doubled from the previous quarter.[31]

FCC Ruling Appeal

At the end of September 2011, Verizon Communication appealed the FCC s ruling regarding net neutrality.[32][33]

DNS Redirection

Verizon turns on DNS redirection option for its paying broadband customers by default. When customers accidentally type and enter a non-existent Web address they are redirected to the Verizon search screen. Verizon calls this option "Domain Assistance" and gives customers instructions on how to disable it.[34]

Heartland Institute Donation

Verizon revealed to have donated $10,000 in 2012 to the Heartland Institute in the Deniergate scandal's revelation of Heartland 2012 Budget document, in support of Heartland's publication IT&T News. [35]

See also

References

External links

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