Tag Archives: Verizon

A Brief for Mr. Kleisterlee

Last week, Vodafone Group announced that Gerard Kleisterlee would replace outgoing Chairman of the Board Sir John Bond. This should be welcome news for shareholders. The Ontario Teacher’s Pension Plan, which led a vote against Bond at last year’s Annual General Meeting, protested that the telecommunications firm currently suffers from “significant structural and strategic weaknesses,” and complained publicly of Vodafone’s “long history of poor capital allocation and disastrous M & A.” The board, they averred, was in need of “rejuvenation” and the company in need of restructuring.

From all appearances, Mr. Kleisterlee is the man for the job.

Kleisterlee gained his reputation at Philips, where as CEO he performed a masterful and unsentimental overhaul of the ungainly conglomerate, getting Philips out of the semi-conductor, component and television business, introducing new licensing agreements, and simplifying Philips’ business operations from eight to three units. Not known as a “gung-ho dealmaker,” Kleisterlee nevertheless demonstrated an intelligent approach to M & A. He is rightly credited with saving Philips from itself and returning the company to growth. Analyst Will Draper sees him as a strong ally for Vodafone’s current CEO, Vittorio Colao, who is trying to reposition the firm around core geographies, revamp the Vodafone brand, and make headway in emerging markets.

When it comes to emerging markets, Kleisterlee will have his work cut out for him. India has been an especially troublesome spot, where Vodafone has fought a pitched battle over taxes from a 2007 acquisition, dealt with some unscrupulous regulators, and is now contending with the ugly unraveling of Vodafone Essar, a joint venture. But for Vodafone’s new chairman getting things squared away in India will be only one aspect of a much bigger emerging markets story. Eventually Kleisterlee is going to have to come to terms with other aspects of that story, and notably with Vodafone’s actions during the uprising in Egypt.

That is, I suspect, where Mr. Kleisterlee will find one of his most difficult briefs. The company’s human rights record in Egypt has come in for some strong and well-deserved criticism. (The two are not necessarily the same.) Officially, Vodafone claims to have had no choice but to comply with Egyptian authorities in shutting down its mobile network and allowing the government to send SMS messages that precipitated a violent crackdown.

Vodafone Group has protested to the authorities that the current situation regarding these messages is unacceptable. We have made clear that all messages should be transparent and clearly attributable to the originator.

The company has consistently taken refuge in the government’s “technical capability” to override and shut down their network. There was nothing they could do, they explained, without putting their own employees’ lives in danger.

But they have not yet answered some serious allegations, like those made by Hossam Bahgat of the Egyptian Initiative for Personal Rights. Bahgat claims that Vodafone “selectively severed phone access for human rights defenders, lawyers, and political activists starting on Tuesday,” January 25th, blocking SIM cards and rendering human rights workers’ phones useless when they most needed them.

Others have asked whether Vodafone did more than merely comply: were they in some way complicit? That was the tenor of the discussion on a Facebook page in the run up to a demonstration at Vodafone headquarters in London; and it continues to be the tenor of the “Vodafail” Global Boycott and Protest. There were even rumors online of secret police running the Vodafone Egypt core room in Cairo, but nothing that could be verified. Access Now rebuked the company for silently tolerating – assenting to — emergency rule in the first place: “decades of emergency law suited Vodafone when they were making billions of profit in Egypt,” reads a strident email promoting one of several online petitions. But as I noted in a previous post, it is not at all clear the people gathered in Tahrir Square would be better off now had Vodafone and other mobile providers never done business with Mubarak’s regime.

Much harder to quarrel with is Salil Tripathi at the Institute For Human Rights and Business in London. He asks, very sensibly, whether Vodafone could have done more to create transparency – to alert customers of impending shutdowns or government interference with the network – and, more importantly, whether they gave any serious thought to developing a “human rights framework” before entering into business with the Mubarak regime.

On this front, Kleisterlee has to fight more than a public relations battle. To be sure, Vodafone’s public response to events in Egypt will send a strong signal to mobile customers in Egypt or Vodafone customers around the world. (Americans rushing out to buy Verizon iPhones might pause to consider that Verizon Wireless is a joint venture with Vodafone – though I have no illusions that that will slow the stampede.) Egypt will also factor into any effort to re-brand the company, and if Mr. Kleisterlee and Mr. Colao intend to make the Vodafone brand synonymous with “mobile data and network quality,” it would make good sense to look closely and seriously at how data and networks played into events in Egypt. One message from Tahrir Square is that data doesn’t just move through networks: a network always touches and is embedded in human situations; and data alters and is altered by its situation. The quality of a network should not be measured simply in terms of signal strength; the privacy and security afforded users of the network also matters, in Egypt and elsewhere. How do these basic rights figure into Vodafone’s promise of “quality”? How is Vodafone going to respect and protect these rights?

Dodging the question won’t do. Blaming bad governance on Bond’s part only begs the question what good governance will look like under Chairman Kleisterlee. Pace Martin Sorrell, who wrote an apology for Vodafone in the London Times, there is no avoiding the “de facto editorial and political judgments” that Google, Twitter and Facebook have made in providing technologies and services to organizers in Tahrir. Denying service in compliance with the Mubarak regime also involves a political judgment, and trying to avoid what Sorrell calls “unintended consequences” is itself an act –a cowardly evasion – with social and political consequences. Limiting exposure to risk is not simply a matter of seeing no evil; and taking intelligent risks, with an eye to the future, and a nuanced understanding of how the world is changing, is the very essence of good judgment.

No business operates in a neutral zone, on a holiday from history. If Vodafone wants to compete in emerging markets, then the company has to earn and keep the trust of people in those markets, prove that they share their aspirations for a better life, and acknowledge that they have a stake in whether people living in those societies suffer or thrive. At this year’s Annual General Meeting, shareholders deserve to hear whether Vodafone is a relic of Egypt’s past, or invested in its future.

The grid in my garden

When I moved house at the end of August, I decided to forgo the land line and rely entirely on wireless for my telephone service.

Even the most basic land package from Verizon seems overpriced, the legacy of a bygone era when telephone customers didn’t have many options. Besides, I already do most of my telephone work on my blackberry; the signal in the new place is strong; and I use cable for my internet connection (because it’s faster than DSL, not because I like the cable companies any more than I like Verizon).

Verizon’s wires still run through the place, previous residents and tenants over the past half century having installed a telephone in nearly every room. I’ve traced the wires from their origin on a pole just on the other side of the fence at the far end of our garden. The wires run the length of the garden, through the branches of trees, winding together in some places with creeping vines, weighed down in others by the heavy summer growth. They reach the house at a central hub or switch box, at which point they creep up and across the brick walls, where they find entry, through the brick and into the house. Once inside, the lines follow the trim and molding, angle to mimic a corner, and master the contours of every room’s interior, until they reach a jack.

The lines are held in place with staples. I have already spent some time removing these staples and pulling telephone wires out from the walls, cutting them close to the little holes where they emerge, and generally trying to rid the place of them. (I’ll need to do the same with all the television cables running into the house, with the exception of the one carrying my internet connection.)

We’ve gotten so accustomed to having all these lines and cables and cords creep through our homes that we no longer realize just how intrusive all this old wire technology is. The wires are unsightly. They ruin the molding and get in the way of painting. And now they’re dead: they no longer carry a signal or a voice. In certain moods I see them as reminders of absence, of lost connections, of loss.

I get a certain satisfaction from removing the wires inside the house, but now I’m wondering what it would take to get Verizon to clean up its equipment, take down the line that runs to the house from the pole in the back of the garden, pull down the lines that run up the back of the house, remove the switch box, and get all its gear off the property.

So far as I have been able to determine, Verizon’s ownership of the telephone wires is not really in question, even though regulatory changes from the 1960s through the 1990s have required the telephone companies to “behave neutrally” and to allow other service providers (like ISPs) to access their wires. Yet it also appears that the law of trespass is not entirely settled when it comes to telephone lines.

Airplanes and telephone lines once tested the law of trespass; they required exceptions and accommodations. But things change. A previous property owner allowed Verizon to string lines across and above my property. What if I now deem them a nuisance? And imagine what might happen to those easements and allowances if hundreds or thousands or even millions of property owners were to ask the telephone companies to take down their lines.

Most people probably consider the lines and cables and wires on their property none of their concern. In exchange for services, we’ve allowed the phone and power and cable companies to encroach and build on our property; and we’ve grown used to seeing the stuff everywhere we go.

That is not likely to change. New technologies (like fiber optic) and bundled services will most likely allow the phone companies to convert and upgrade rather than tear down the infrastructure they have in place. But I’m not interested. I want the grid out of my garden.