Wednesday, December 19, 2007

Verizon angles to keep state business

Published in the Portland Phoenix

Democratic governor John Baldacci had a private sit-down with Ivan Seidenberg, the president and CEO of Verizon, November 30. The meeting wasn’t publicized in advance and got only a small amount of coverage after the fact.

None of that coverage mentioned the roughly $6 million Verizon earns from providing state agencies with telephone services (that total doesn’t include in-state and out-of-state long-distance calls, which, according to state technology chief Dick Thompson, are also provided by Verizon at a rate of 2.98 cents per minute).

The meeting came just days after the staff of the Public Utilities Commission issued a devastating report recommending that regulators reject the proposed buyout of Verizon’s telephone landlines by FairPoint Communications (see “No Raises for Seven Years,” November 16, and “No Raises — It Gets Better,” online November 20, both by Jeff Inglis).

Neither Verizon nor Baldacci’s folks will say specifically what was discussed, but Verizon Maine spokesman Peter Reilly says the meeting was intended “to discuss Verizon’s role in the state in the future,” specifically the fact that “Verizon is going to be continuing to invest in businesses in the state.”

It’s fair to ask what business, given that PUC analyses of Verizon’s investment in landlines and consumer services such as Internet access suggest the company has done little, if any at all, in recent years (see “Internet Disconnect,” by Jeff Inglis, 24).

The answer may explain why Seidenberg wanted to talk to the business-friendly Baldacci: Verizon will continue to invest in wireless service in Maine, as well as “enterprise services,” Reilly says. He wouldn’t explain what “enterprise services” are, but the company’s Web site does — telephone service and high-speed Internet communications for large businesses.

The meeting between Seidenberg and Baldacci was first reported on VerizonVsFairPoint.com, a blog closely monitoring the merger’s progress, where speculation ran rampant about whether Verizon was trying to cut a deal with Baldacci. All sides deny that.

Asked if Seidenberg was trying to make nice with Maine officials after the PUC staff’s report repeatedly accused Verizon of hurting Mainers by spending too little on service quality and upgrades, Reilly's answer was short: “All I can confirm is that Mr. Seidenberg met with Governor Baldacci.”

But if Verizon was trying to hang onto its revenue from public coffers, Thompson (who heads the state agency that arranges phone service for state offices) may have killed it: if the sale goes through, he says, the state’s phone provider would become FairPoint. Unless the gov says otherwise, of course.

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