The iconic specter of Darth Vader was bound to rise in the final
days of Pennsylvania's telecommunications battle between Verizon and
AT&T, a fight the state's publicutilities regulator capped on March 22
by ruling against splitting Verizon Pennsylvania into retail and
Defending its local empire against AT&T, Verizon used spokesman James
Earl Jones in advertising that warned of job losses and a dollars 1
billion cost to consumers should the 'structural separation' be imposed.
As AP reported following the ruling, 'His was the voice of impending
doom, punctuated by heavy breathing.'
'As I spoke with people, they would say, 'What is this all about?''
remembers Ed McGovern, director of administration for Citizens for
Pennsylvania's Future. 'They would ask, 'Why is Darth Vader working for
But Jones' haunting voice was just one of several PR weapons in the most
heated and expensive legal battle in recent telecom history - one in
which lobbyists often took a backseat to grassroots campaigns by PR
front groups, letter-writing campaigns, extensive issues advertising and
a media relations program national in its scope.
It all began in 1996 - long before Verizon was even Verizon - with the
passing of the Telecommunications Act. While the legislation paved the
way for local phone competition, the emergence of real competition has
been gradual in Pennsylvania. So in 1999, the Pennsylvania Public
Utility Commission (PUC), wanting to jump-start competition, issued an
order that local provider Bell Atlantic (which became Verizon in an
August 2000 merger with GTE) split its wholesale and retail operations
into two companies.
Verizon objected and so began the legal wrangling that culminated in the
PUC's March 22 ruling requiring Verizon to undertake 'functional
structural separation,' with an insistence that it adhere to a strict
code of conduct for allowing competition to flourish in the state.
Some observers see the decision as a victory for Verizon since the
company is not - at least for now - being required to split in two.
According to a report by AP, 'When Darth Vader spoke, everyone in the
galaxy quivered and took heed. Here in PA, the 'folks in Harrisburg'
evidently did the same.'
'Folks in Harrisburg' - wording Verizon used in its advertising - is
thought to be a derogatory reference to the PUC, which could be one
reason the company has been the target of the commission's criticism. 'A
lot of the attacks Verizon made were attacks on the commission and the
commission process,' says Sonny Popowski, Pennsylvania's consumer
advocate. 'If I were a commissioner, I would take some umbrage at
On the day of its ruling, outgoing PUC chairman John Quain took the
opportunity to excoriate the company for its public campaign against
'Verizon has pursued an extensive, systematic campaign of misinformation
in connection with the structural separation case,' Quain said in a
He called for an investigation into Verizon's actions, with the
possibility of a penalty 'equal to the full amount spent on the campaign
AT&T believes Verizon was guilty of using scare tactics, and,
ironically, that it was the company's 21,000 employees who were the main
target. 'They scared the living daylights out of them,' says Lenora
Vesio, director of PR for AT&T Pennsylvania. 'Their public rhetoric was
about job losses and higher phone bills - all-out scare tactics.'
Verizon counters that AT&T is ultimately trying to keep Verizon out of
the long-distance market. 'I think it is fair to characterize what we
were doing as truth-squad activity,' says Eric Rabe, Verizon's VP of
In the PR battle, Verizon's truth squad has encountered plenty of
obstacles of its own. One such barrier was a coalition group formed by
AT&T. 'We started to see vicious and dishonest activities from
Pennsylvanians for Local Competition (PLC),' says Rabe, 'a group no one
had ever heard from before.'
AT&T founded the group in 1997, according to Donna Irons, its current
executive director. Verizon was warning members of the news media back
in 1999 that PLC was a front group interested only in smearing the
incumbent local provider. AP reported that Verizon spent dollars 8.6
million on lobbying and advertising between July 1999 and December 2000,
while AT&T spent dollars 5.2 million, a figure Verizon says is
misleading because it does not include the amount spent by PLC.
Vesio says AT&T's support of PLC enabled consumers who were dissatisfied
with lack of choice in their local provider to have a voice in the
'We've made no bones about supporting PLC,' she says. 'To characterize
PLC as merely a front group for AT&T is an insult to the consumers that
coalition represents. Whether AT&T is providing funding to give that
coalition a voice should not take away from the genuine concerns the
The Competitive Telecommunications Association (CompTel) also supported
AT&T's view on structural separation through ads and lobbying on behalf
of other company members who might enter the market. 'We were responding
to Verizon's misinformation,' says Terry Monroe, VP of industry and
Verizon has used front groups of its own, too. It set up Pennsylvanians
for Total Competition (PTC), which mounted a grassroots opposition to
separation. The company even had the support of one of its regular
opponents, the Communication Workers of America. Verizon employs 11,000
CWA members, compared with AT&T's 2,000.
CWA staged a letter-writing campaign and held rallies against
'This is the first time I have been on Verizon's side in 20 years or
so,' says Vincent Maisano, a CWA VP.
And the winner is
Each side is claiming victory in PUC's final decision. AT&T calls it a
'good order' because it places Verizon 'on final warning to open its
monopoly.' In other words, if PUC does not see Verizon opening the
market to competition, the separation issue could return. 'PA still
holds structural separation over Verizon's head like a guillotine,' says
However, Verizon says the ruling 'rejects the concept' of
To support its openness to competition, Verizon estimates that it has
lost 40,000 local customers a month since the legal battle over
separation began. 'It certainly is an odd PR tactic to brag about loss,'
Meanwhile, structural separation of the baby Bells is an idea that may
be gaining momentum in states such as Colorado, New Jersey and
Thus, Pennsylvania's PR dispute may be only the blueprint for future
public wrangling over local phone service. It's enough to make a Jedi