Verizon selling off phone lines [telecom]

All of the states that they are selling, except for the Carolinas, are all GTE service areas. They are keeping California. I retired in

1996 from GTE and in 2000 when merged I know myself and others could never understand the merger since they operated very differently.

I do contract work for them at times and have seen many changes. With GTE almost everything was done in house and that included its own CO Construction forces which I was part of. Now they just have a few and those for the most part just make sure contractors don't burn the buildings down. I was sent to Washington state and my job was to train 18 year old CO Installers right out of school: they gave me 30 days to do it, [but] I explained it took 3 to 7 years. These were Verizon people, I got a couple of them up and running to the point that they could read what they needed, and went on my way.

When _I_ started I was not allowed near powered equipment for a year.

The news was on AP's web page, here is a link from Verizon.

Here's Verizon's Press release.

E. Tappert

I thought Bell Atlantic and GTE merged to form Verizon?

That is what was said, but in fact the company that came out of it was more Bell Atlantic than GTE, and from what I remember [of] the way they ran things it [was] more Bell that GTE. In some areas nothing has changed much because old GTE managers are in place like California, and that includes the Company President; but then the GTE company in California was always run differently. We had our own construction forces as well [for] just about anything we did, [and] very rarely did they contractp [outside companies] until we started converting to full Electronic, [and] then contractors were needed to remove the old offices: my last few years was making sure that it was done right.

My dad was former GTE (former as of 1991). He said the same thing. Technically it was a merger, but it was pretty much Bell Atlantic swallowing GTE.

It hurts my head to read this. What, I'm getting Frontier stock now? Geeze, I started with GTE, got Verizon, got Idearc, got some other deal, and now Frontier.

At least I don't have to get pitched about TV, landline, and cell all in one bill anymore :-)

Carl

Same here with the stock, but converted it all back to Verizon. Frontier stock is in the dumps worse then Verizon. Some of my stock was restricted since it was given to me as an employee. I learned early on not to keep my 401K in company stock.

Before the merger GTE stock was always high, also they had huge amounts of cash and the merged company wasted most of it. At least our old retirement is very well funded and any one still working for the company had theirs cashed out and moved to a 401K.

Although it's not directly relevant to the BEL-GTE merger, today, accounting rules require *all* transactions to be accounted for as one company buying another. Which one is which has an impact on the tax treatment for shareholders, and companies usually structure these deals to minimize investor tax liabilities. (There used to be another accounting treatment, called "merger of equals", in which the assets, liabilities, and equity of each company were effectively pooled. This caused some problems of inappropriate asset valuation during the Internet boom of the late '90s and so the rules were changed.)

-GAWollman

Yep, the lessons of "inappropriate" valuations on balance sheets were well learned back when the Dot-con boon went bust - not!

Feral capitalism will always do whatever it is allowed to do to benefit itself - at least until the music stops and reality finally arrives, and it's been pretty quiet around the planet in the last 10 or so months, ain't it?

If the Internet was the last technology bubble that went bust, what will be the next technology one awaiting us over the horizon (I'd like to get in - and out - early this time)?

-- Regards, David.

David Clayton Melbourne, Victoria, Australia. Knowledge is a measure of how many answers you have, intelligence is a measure of how many questions you have.

***** Moderator's Note *****

Ma Bell seems to have survived the storm fairly well. You've made me curious - what prevents a company like Verizon from investing in Ponzi schemes or derivatives?

Bill Horne Temporary Moderator

After the HellAtlantic merger, the combined company used millions of banked GTE dollars to pay off the costs of the merger.

I don't think Verizon would invest in those type of investments: they seem to invest in very high grade [corporate] and government bonds. They also hold a lot of land from buildings and empty lots that were going to be used for CO's, but have [never been needed] because of the new technology. One piece that GTE sold, in back of a CO in Huntington Beach, [went] for over 5 million dollars. They had paid about $10,000 in 1963, and sold it in 1979.

On Sat, 16 May 2009 15:12:15 -0400, Steven Lichter wrote: .......

Do US telcos get any "freebie" use of public space for their infrastructure, or do they have to pay market rates (like land for their COs)?

Regardless of the accounting treatment, in a 'merger' often one company dominates over the other.

If I recall, Bell Atlantic and Nynex merged and then took over GTE. In any event, I don't think it was any secret that GTE was an acquisition, not a 'merger'.

Keep in mind that GTE at that point was the product of many acquisitions, some over the years of small companies, and some more recently as trades to build contiguous service areas of territory among the Independents.

The Penn Central merger, now sadly forgotten, was supposed to be a merger, but it was often debated who took over who. Long afterwards ex-New York Central people blamed the Pennsylvania RR people for the failure and vice versa. Unfortunately, the Penn Central appeared to take on the worst conditions of both, rather than the best, and the merger itself was very badly executed.

I'm fairly sure telcos pay market rates for land (buying or leasing), except if it's in an area where the customer government owns all the land ([sites] that are so large the area needs a CO of its own), and then it becomes somewhat of an accounting fiction. The telco is charged for leasing the land and right of way for the wires, and charges it back (probably with some profit worked in) in phone service supplied to the government. I don't know whether these are broken out separately or netted out somehow.

The same applies to right-of-way for wiring. Normally cities charge telcos (and cable companies and power companies) for this. When you've got one big customer (government) and one supplier of each kind (telco, power, cable), the rate charged back and forth becomes somewhat of an accounting fiction.

For CO's they would wind up paying more then market; that is if they did not have someone else do the buying. Some years ago here in California GTE was looking for land to build a new CO in Moreno Valley, [but] word got out and the prices went up. The company shelved the plans for a year or so, then was able to get the land and a much better price, [although] the building just housed Subscriber Carrier for the next 4 years. They also built another one in Temecula and the building stayed empty for 6 years, since the building boom went bust. Now, for the most part, they build remotes on leased land with 20 year leases.

Isn't Verizon close to 50% owned by Vodaphone?

-- tlvp

Verizon Wireless is 49% owned by Vodaphone.

Buildings they own; but in MD, they get a free ride on property taxes.

The easements for outside plant are a different matter. AFAIK, they get such free. Fred Goldstein would know the details.