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Verizon Communications Inc. (NYSE: VZ, NASDAQ: VZ) 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,[3] which rhymes with horizon. The company’s headquarters are located in the Verizon Building at 140 West Street in Lower Manhattan, New York City.[4]
Contents [hide]
1 History
1.1 GTE merger
1.2 MCI acquisition
1.3 Divestitures
1.4 Impact of changes in telephony
2 Operating companies
3 Controversies
4 Verizon services
4.1 Voice
4.2 Voicemail
4.3 Wireless
4.4 Verizon VoiceWing
4.5 Video
4.6 Data
4.7 Directory operations
5 Sponsorships and naming rights
6 Corporate governance
7 See also
8 References
9 External links
[edit]History
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:
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 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.
[edit]GTE merger
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.
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.[5]
Meanwhile, 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. 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.
Verizoshe shares were made a component of the Dow Jones Industrial Average on April 8, 2004.[6] 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.
[edit]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]
[edit]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 merged with Embarq in 2009 to become CenturyLink, and Kentucky operations were sold to Alltel, which later spun off its landline operations as Windstream Communications. 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.[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.[9] On July 1, 2010, the transfer of these assets to Frontier took place.[10]
[edit]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. As of August 2011, 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]
[edit]Operating companies
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:
Verizon California, Inc.
Verizon Delaware LLC
Verizon Florida LLC
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, Inc.
Verizon South, Inc. – Operations in Virginia inherited from GTE
Verizon Virginia, Inc.
Verizon Washington, D.C., Inc.
GTE Southwest, Inc. – Operations in Texas
[edit]Controversies
Verizon has been involved in several public controversies.
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.[12]
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.[13] 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.[14]
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.”[15]
The 2008 sale of land line operations in Northern New England to FairPoint Communications raised questions. The parties had to work with the governments of Maine, New Hampshire and Vermont to ensure the sale went forward.[citation needed]
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”.[16]
In August 2010, the chairmen of Verizon and Google agreed that Network Neutrality should be defined and limited.[17][18]
In December 2010 Verizon continued moderating its network by removing access to some IRC servers related to Wikileaks “Operation Payback”.[19]
[edit]Verizon services
Verizon service van
[edit]Voice
Verizon provides several different types of land line 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.
[edit]Voicemail
Verizon provides Verizon Voice Messaging — voicemail service for residences and businesses.
[edit]Wireless
For Verizon’s wireless division, see Verizon Wireless.
[edit]Verizon VoiceWing
Verizon VoiceWing is a Voice over IP (VoIP) service offered by Deltathree and resold by Verizon[20] 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.
[edit]Video
Verizon launched its FiOS Video service in Keller, Texas on September 22, 2005. FiOS TV[21] 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 provides DirecTV service as well.
[edit]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 kbps to 15 mbps download, depending on what the local infrastructure can support.
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”.[22] It supports speeds up to 150/35 Mbps.[23]
[edit]Directory operations
Main article: SuperMedia
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.[24] 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.[25]
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.[26] 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”).
[edit]Sponsorships and naming rights
Verizon Center Chinatown, Washington, D.C.
The Verizon Center in Washington, DC
The Verizon corner at the New Meadowlands 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
[edit]Corporate governance
Current members of the board of directors are: Richard L. Carrión, M. Frances Keeth, Robert W. Lane, Lowell C. McAdam, 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.
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