Verizon Wireless 2012 Annual Report Download - page 49

47
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS continued
Video
Companies that provide cable service over a cable system are typically
subject to state and/or local cable television rules and regulations. As
noted above, cable operators generally must obtain a local cable fran-
chise from each local unit of government prior to providing cable service
in that local area. Some states have enacted legislation that enables
cable operators to apply for, and obtain, a single cable franchise at the
state, rather than local, level. To date, Verizon has applied for and received
state-issuedfranchisesinCalifornia,Florida,NewJersey,Texasandthe
unincorporated areas of Delaware. We also have obtained authoriza-
tionfromthestatecommissioninRhodeIslandtoprovidecableservice
in certain areas in that state, have obtained required state commission
approvals for our local franchises in New York, and will need to obtain
additional state commission approvals in these states to provide cable
service in additional areas. Virginia law provides us the option of entering
a given franchise area using state standards if local franchise negotiations
are unsuccessful.
Wireless Services
The rapid growth of the wireless industry has led to efforts by some state
legislatures and state public utility commissions to regulate the industry
in ways that may impose additional costs on Verizon Wireless. The
Communications Act generally preempts regulation by state and local
governments of the entry of, or the rates charged by, wireless carriers, but
doesnotprohibitstatesfromregulatingtheother“termsandconditions”
of wireless service. While numerous state commissions do not currently
have jurisdiction over wireless services, state legislatures may decide to
grant them such jurisdiction, and those commissions that already have
authority to impose regulations on wireless carriers may adopt new rules.
State efforts to regulate wireless services have included proposals to
regulate customer billing, termination of service, trial periods for service,
advertising, the use of handsets while driving, reporting requirements
for system outages and the availability of broadband wireless services.
Wireless tower and antenna facilities are also subject to state and local
zoning and land use regulation, and securing approvals for new or modi-
fied tower or antenna sites is often a lengthy and expensive process.
Verizon Wireless (as well as AT&T and Sprint-Nextel) is a party to an
Assurance of Voluntary Compliance (AVC) with 33 State Attorneys
General.TheAVC,whichgenerallyreflectedVerizonWireless’practicesat
thetimeitwasenteredintoinJuly2004,obligatesthecompanytodis-
close certain rates and terms during a sales transaction, to provide maps
depicting coverage, and to comply with various requirements regarding
advertising, billing, and other practices.
Environmental Matters
During 2003, under a government-approved plan, remediation com-
menced at the site of a former Sylvania facility in Hicksville, New York
thatprocessednuclearfuelrodsinthe1950sand1960s.Remediation
beyond original expectations proved to be necessary and a reassessment
of the anticipated remediation costs was conducted. A reassessment of
costs related to remediation efforts at several other former facilities was
also undertaken. In September 2005, the Army Corps of Engineers (ACE)
acceptedtheHicksvillesiteintotheFormerlyUtilizedSitesRemedial
Action Program. This may result in the ACE performing some or all of the
remediation effort for the Hicksville site with a corresponding decrease
in costs to Verizon. To the extent that the ACE assumes responsibility
for remedial work at the Hicksville site, an adjustment to a reserve pre-
viously established for the remediation may be made. Adjustments to
the reserve may also be made based upon actual conditions discovered
during the remediation at this or any other site requiring remediation.
CautiOnary statement COnCerning
fOrward-lOOking statements
In this report we have made forward-looking statements. These state-
ments are based on our estimates and assumptions and are subject to
risksanduncertainties.Forward-lookingstatementsincludetheinforma-
tion concerning our possible or assumed future results of operations.
Forward-lookingstatementsalsoincludethose precededor followed
bythewords“anticipates,”“believes,”“estimates,”“hopes”orsimilarexpres-
sions.Forthosestatements,weclaimtheprotectionofthesafeharborfor
forward-looking statements contained in the Private Securities Litigation
ReformActof1995.
The following important factors, along with those discussed elsewhere
in this report could affect future results and could cause those results to
differ materially from those expressed in the forward-looking statements:
• adverseconditionsintheU.S.andinternationaleconomies;
• competition in our markets;
• material changes in available technology or technology substitution;
• disruptionofourkeysuppliers’provisioningofproductsorservices;
• changes in the regulatory environments in which we operate, including
any increase in restrictions on our ability to operate our networks;
• breaches of network or information technology security, natural disas-
ters, terrorist attacks or significant litigation and any resulting financial
impact not covered by insurance;
• an adverse change in the ratings afforded our debt securities by
nationally accredited ratings organizations or adverse conditions in
the credit markets impacting the cost, including interest rates, and/or
availability of financing;
• changes in our accounting assumptions that regulatory agencies,
including the SEC, may require or that result from changes in the
accounting rules or their application, which could result in an impact
on earnings;
• material adverse changes in labor matters, including labor negotia-
tions, and any resulting financial and/or operational impact;
• significant increases in benefit plan costs or lower investments returns
on plan assets; and
• the inability to implement our business strategies.