Verizon Communications (NYSE: VZ, NASDAQ: VZ), branded as Verizon (pronounced // və-RY-zən), is an American broadband and telecommunications company and a corporate component of the Dow Jones Industrial Average. The company is based in New York City at 1095 Avenue of the Americas.
What eventually became Verizon was founded as Bell Atlantic, which was one of the seven Baby Bells that were formed after AT&T Corporation was forced to relinquish its control of the Bell System by order of the Justice Department of the United States. Bell Atlantic came into existence in 1984 with a footprint from New Jersey to Virginia, with each area having a separate operating company (consisting of New Jersey Bell, Bell of Pennsylvania, Diamond State Telephone, and C&P Telephone).
As part of the rebranding that the Baby Bells took in the mid-1990s, all of the operating companies assumed the Bell Atlantic name. In 1997, Bell Atlantic expanded into New York and the New England states by merging with fellow Baby Bell NYNEX. In addition, Bell Atlantic moved their headquarters from Philadelphia into the old NYNEX headquarters and rebranded the entire company as Bell Atlantic.
In 2000 Bell Atlantic merged with GTE, which operated telecommunications companies across most of the rest of the country that was not already in Bell Atlantic's footprint. The combined company elected to change its name to "Verizon", a portmanteau of veritas (Latin for "truth") and horizon. The company's headquarters, while always having been located in New York City, were originally at 1095 Avenue of the Americas until the Bell Atlantic-GTE merger, when its headquarters were moved Verizon Building at 140 West Street in Lower Manhattan before returning to the 1095 space in 2013.
- 1 History
- 2 Lines of Business
- 3 Sponsorships and naming rights
- 4 Controversies
- 5 See also
- 6 References
- 7 External links
AT&T breakup and NYNEX acquisition
Verizon was founded as Bell Atlantic Corporation as one of the "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:
- The Bell Telephone Company of Pennsylvania
- New Jersey Bell Telephone Company
- The Diamond State Telephone Company
- The Chesapeake and Potomac Telephone Company
- The Chesapeake and Potomac Telephone Company of Maryland
- The Chesapeake and Potomac Telephone Company of Virginia
- The Chesapeake and Potomac Telephone Company of West Virginia
Bell Atlantic originally operated in the US 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.
Bell Atlantic merged with 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.
Verizon shares were made a component of the Dow Jones Industrial Average on April 8, 2004. In 2013 Verizon reported 21.8 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.
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.
In July 2008 the major phone companies, including Verizon, formed Movearoo.com. The website is designed to help customers with the process of moving by finding the home service providers available in their area.
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 América Móvil for $3.7 billion.
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. On July 1, 2010, the transfer of these assets to Frontier took place.
The former Yellow Pages business of Verizon is known as SuperPages, and is a Texas-based sales, publishing and related service 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. 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.
With an estimated $17 billion in assets, Verizon spun off the business unit to finance its expansion in wireless and high-speed Internet services. 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").
Effects 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. As of August 2011[update], 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.
Lines of Business
Verizon Communications' operations are divided into three business units: wireless, residential and small business services, and enterprise services.
Verizon Wireless provides mobile phone, text message, and data services for phones, tablets, and computers, as well as wireless hotspot devices. As of September 2013, Verizon Wireless had 101.2 million wireless connections, and its 4G LTE network covered over 303 million people. In a September 2013 survey conducted by J.D. Power and Associates, Verizon Wireless was rated as having the highest network quality amongst national providers across all six geographic regions of the U.S., marking the first time any provider has come in first in all regions since the study switched to a regional format in 2004.
Also in September 2013, it was announced that Verizon would buy the remaining stake that Vodafone owned in Verizon Wireless, which had been a joint venture between the two companies, for $130 billion. Upon the closing of the deal in the first quarter of 2014, it will be the third largest corporate deal ever signed. Soon after the deal was announced, a shareholder sued Verizon, claiming that they overpaid for Vodafone's share of the venture.
Residential and small business
Verizon's FiOS service, launched in 2005, provides Internet, television, and phone service using fiber optic cable instead of copper wire. FiOS cable passes near 18 million homes, of which 14.6 million are completely ready for service; the other 3.4 million homes would require some additional wiring to support FiOS. As of September 2013, Verizon had a total of 5.9 million FiOS Internet subscribers and 5.2 million FiOS TV customers, with FiOS accounting for 75% of Verizon's revenues from fixed-line consumer retail. In September 2013, Verizon announced that FiOS TV subscribers would be able to watch some television channels live on their mobile devices.
In areas where Verizon has installed FiOS service, the copper wires, which are more expensive to maintain, are removed. This prevents a customer who has switched to FiOS from switching back to services provided by copper wires, such as DSL service.
Verizon operates landline services in 12 states (Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, Florida, Texas, California) and Washington, D.C. through the following operating companies:
- GTE Southwest, Inc. – Operations in Texas inherited from GTE
- Verizon California, Inc. – Operations inherited from GTE
- Verizon Delaware LLC
- Verizon Florida LLC – Operations inherited from GTE
- Verizon Maryland, Inc.
- Verizon New England, Inc. – Operations in Massachusetts and Rhode Island
- Verizon New Jersey, Inc.
- Verizon New York, Inc. – Also serves a portion of southwestern Connecticut
- Verizon North LLC – Operations in Pennsylvania inherited from GTE
- Verizon Pennsylvania LLC
- Verizon South, Inc. – Operations in Virginia inherited from GTE
- Verizon Virginia LLC
- Verizon Washington, D.C., Inc.
Verizon Enterprise Solutions, known as Verizon Business from 2006 to 2011, provides services for wholesale, corporate, and government clients. Enterprise Solutions provides a cloud-based platform to deliver IT, security, mobility, and collaboration solutions to customers. It supports service in 75 countries, and has a global IP network that reaches more than 150 countries, with 99 percent of Fortune 500 companies using Verizon Enterprise Solutions.
In October 2013, Verizon announced Verizon Cloud, a platform as a service offering that allows for the fast deployment of virtual machines for customers, as well as control of the configuration of those virtual machines.
Verizon Partner Program
On February 28, 2013, Verizon launched the Verizon Partner Program (VPP), which offers medium-sized preferred access to its businesses' cloud, mobility, communications, and networking solutions. There are four levels to VPP membership: Platinum, Gold, Silver, and Member. Each offers a different level of benefits and requirements. VPP also offers three business models: Agent, Resale, and Sell With. Each represents a different relationship with Verizon. Some Partner Program companies include General Datatech, SOVA, and OEM Data Delivery.
Sponsorships and naming rights
- The Verizon Center in Washington, DC
- The Verizon corner at Met Life Stadium in East Rutherford, New Jersey
- Verizon Championship Racing, a sponsorship partnership with Team Penske in the IRL's IndyCar Series and NASCAR Nationwide Series
- Verizon Heritage (2006–2010) PGA Tour event in Hilton Head Island, South Carolina
- Verizon IMAX 3D theater inside Jordan's Furniture stores in Natick and Reading, Massachusetts (formerly called Motion Odyssey Movie, M.O.M.)
- The Verizon Sports Complex in Lake Placid, New York where the bobsled, luge, and skeleton track is located
- Verizon Wireless Amphitheatre/Verizon Wireless Music Center in various cities across the U.S., including: Atlanta; Irvine, California; Noblesville, Indiana; St. Louis; Charlotte; Pelham, Alabama; and Virginia Beach
- The Verizon Wireless Arena in Manchester, New Hampshire
- The Verizon Arena in North Little Rock, Arkansas
- The Verizon Wireless Center in Mankato, Minnesota
- The Verizon Tower in Prudential Center Newark, NJ
- The Verizon Theater at Grand Prairie Dallas, TX
- The McLaren F1 Team starting at the 2011 Canadian Grand Prix
- The McLaren F1 Team starting at the 2012 United States Grand Prix
Verizon Communications 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. However, on February 24, 2012, in its Form 10-K filed with the SEC, 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.
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.
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. But 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.
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."
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" after Verizon's security and external experts detected sweep attacks coming from an IP address associated with the 4chan network. Traffic was restored several days later.
In December 2010 Verizon continued censoring its network by blocking access to some IRC servers related to Wikileaks "Operation Payback".
Verizon E-911 service in several northern Virginia suburbs of Washington, D.C. failed in the aftermath of the June 2012 derecho storm, with some problems lasting several days. The FCC conducted an investigation and in January 2013 released a report detailing the problems that led to the failure. Verizon reported that it had already addressed or was addressing a number of the issues related to the FCC report, including the causes of generator failures, conducting audits of backup systems, and making its monitoring systems less centralized, although the FCC indicated that Verizon still needed to make additional improvements.
FCC Ruling Appeal
In areas where Verizon has installed FIOS service, the copper lines are disabled. A customer that has switched to FIOS no longer has the option to switch back to regular copper service. In addition, because the FCC does not require Verizon to allow competitors to use the fiber lines, a customer with FIOS service will have limited options with regards to switching service providers for voice and internet service.
NSA Collection of Phone Records
|Court Order, The Guardian|
On June 5, 2013, The Guardian reported that it had obtained an order by the Federal Bureau of Investigation (FBI) and approved by the United States Foreign Intelligence Surveillance Court that required Verizon to provide the National Security Agency (NSA) with telephone metadata for all calls between the US and abroad, and all domestic calls. The order falls under section 215 of the PATRIOT Act. The order was issued on April 15, 2013 and expires on July 19, 2013. There had previously been speculation that telecom providers were engaging in dragnet surveillance authorized by the PATRIOT Act. Government officials claim they are collecting "metadata" regarding phone serial numbers, times of calls, numbers called, and locations at which the calls were made—but not the content of the call itself. The officials claimed that such metadata would not require a warrant to collect.
In an interview with reporters on June 6, Senator Dianne Feinstein, who is the chairman of the United States Senate Select Committee on Intelligence, and Senator Saxby Chambliss, who is the ranking member, have stated that the three month renewal has been the case for the past seven years.
On November 18, 2013 the U.S. Supreme Court denied without stating any reason a “writ of mandamus or prohibition” filed by the Electronic Privacy Information Center seeking to vacate the FISC order requiring Verizon to turn over to the NSA telephone metadata for all calls between the US and abroad, and all domestic calls.
On January 23, 2014 the Wall Street Journal reported that Verizon Communications Inc. received more than 1,000 requests for information about its subscribers on national security grounds last year which do not require approval from a judge or grand jury as long as the information is relevant to national security. In total Verizon received 321,545 requests from federal, state and local law enforcement for U.S. customer information.
- Airfone—Air-ground radiotelephone service offered by Verizon
- MCI Communications
- Verizon SmartPark—Advanced Telecommunications Services
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|Wikimedia Commons has media related to Verizon.|
- Official website
- Verizon at the Wayback Machine (archived June 20, 2000)