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Verizon The Internet United States

Report: Verizon Claimed Public Utility Status To Get Government Perks 140

Posted by samzenpus
from the best-of-both-worlds dept.
An anonymous reader writes "Research for the Public Utility Law Project (PULP) has been released which details 'how Verizon deliberately moves back and forth between regulatory regimes, classifying its infrastructure either like a heavily regulated telephone network or a deregulated information service depending on its needs. The chicanery has allowed Verizon to raise telephone rates, all the while missing commitments for high-speed internet deployment' (PDF). In short, Verizon pushed for the government to give it common carrier privileges under Title II in order to build out its fiber network with tax-payer money. Result: increased service rates on telephone users to subsidize Verizon's 'infrastructure investment.' When it comes to regulations on Verizon's fiber network, however, Verizon has been pushing the government to classify its services as that of information only — i.e., beyond Title II. Verizon has made about $4.4 billion in additional revenue in New York City alone, 'money that's funneled directly from a Title II service to an array of services that currently lie beyond Title II's reach.' And it's all legal. An attorney at advocacy group Public Knowledge said it best: 'To expect that you can come in and use public infrastructure and funds to build a network and then be free of any regulation is absurd....When Verizon itself is describing these activities as a Title II common carrier, how can the FCC look at broadband internet and continue acting as though it's not a telecommunication network?'"
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Report: Verizon Claimed Public Utility Status To Get Government Perks

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  • Corruption (Score:5, Insightful)

    by Anonymous Coward on Thursday May 29, 2014 @05:44AM (#47117635)

    Really, all these articles assume that the US government isn't run solely for the benefit of a handful of corporations. If there's evidence that it's not then I'd like to see it.

    • Re: (Score:3, Interesting)

      by Karmashock (2415832)

      Its worse then corruption... its incompetence. Basically its all too complicated for the limited number of politicians to manage and most of them don't really care anyway. So its all left to bureaucrats that often don't really have authority to do anything unless its kept quiet... which means there is a "don't rock the boat" mentality which means they just take the path of least resistance in all cases.

      Now you could give them more authority... but then you wouldn't have even a fig leaf of democracy because

      • Re:Corruption (Score:5, Insightful)

        by The Rizz (1319) on Thursday May 29, 2014 @06:00AM (#47117669)

        Decentralization isn't the solution to this. If you think the system is a clusterfuck now, just think about how much worse it would be if instead of one law there were 50+ (states + DC + territories) - or, thousands (county/city level). It would keep small businesses from easily doing work outside of one area, while allowing mega-corps the ability to even more easily venue-shop for their headquarters.

        You want a solution that gives more authority to regional/etc. agencies? Simple: Allow each agency, at each level, to throw up a challenge to this type of shenanigans. Verizon pulled some bullshit costing NYC $4.4billion? Then NYC can turn around and enforce the Type II requirements, and send a ripple up the chain to have the feds declare it so nationally. However, you have to be able to stop some in-Verizon's-pocket federal agency from telling NYC, "no."

        • Re:Corruption (Score:5, Interesting)

          by postbigbang (761081) on Thursday May 29, 2014 @07:20AM (#47117867)

          You ignore the public utility regulatory agencies of the 43 states that have them. This entire morass came after the TCA of 1998 and subsequent revisions of the FCC rules and regs brought on in the post Judge Greene rulings that initially broke up the Bell System.

          Public utilities had to deal with all of these regulatory authorities, and then calculatedly lobbied to create US Federal control so that they'd only have to bribe-- I mean lobby and render campaign contributions-- to one target instead of so many. In-state vs Intrastate vs Interstate issues helped hold them to the floor.

          NYC is not a regulatory authority. NY State is, as is the FCC, and to a smaller extent, the NTIA.

          Decentralization was good for several reasons: rights of way and easements are local, even personal issues. These are last-mile issues. State issues concern everything from keeping infrastructure support fair and even (including low-profit/sparsely populated areas) to zoning policy, and so forth.

          The FCC has evolved what was once called "data communications" as a separate classification, away from telephony. Now these things are the same, but the public's needs have evolved. Decentralization isn't so much meaningless as it's the ability to tailor historical infrastructure to locally evolving needs, and is better democracy.

            It's time to conflate consumer communications into a single mandate, IMHO. It has to service we consumers, whether in urban, suburban, or rural areas. Whether it's a text, phone call via wire or cell, or a browser session, it ought to have to meet a set of basic standards, where consumers have well-known and flexible rights.

          • by Rich0 (548339)

            Public utilities had to deal with all of these regulatory authorities, and then calculatedly lobbied to create US Federal control so that they'd only have to bribe-- I mean lobby and render campaign contributions-- to one target instead of so many.

            So, I'm the first to agree that we need to rein in the telcos. However, one of the problems of local control is a lack of standardization. Look how hard it is to collect sales tax when every little town with 12 houses in the US can establish a local tax policy. Now, imagine this town wants everything to be charged by the kilobyte paid by the sender, another town wants the costs shared between sender and recipient, and another town wants everything to be flat-rate-unlimited. Some town wants usage for eac

            • You're talking about sales models, not the wholesale carriage that telcos, actually datacom providers, are supposed to render. I'm not talking about parochial harrassment of companies, rather that regulated utilities ought to be scrutinized at both state and federal levels. The for-profit model that most utilities have changed to was a mistake. Shareholder profit, rather than the basic needs of basic infrastructure to be a world-class connected republic, is the rule.

              We're almost a third-world-quality connec

        • Re:Corruption (Score:5, Interesting)

          by Karmashock (2415832) on Thursday May 29, 2014 @07:33AM (#47117909)

          This community is too smart not understand the virtues of decentralization in management systems.

          Understand... I'm not trying to patronize you or slight you... just express my opinion here and hope you at least give it a look before rendering a judgement.

          Here we go:

          Think back to the old city states in Europe. Look at them in your mind on a map. Notice how at the center of each is a large capital city from which everything is run. Okay, note the history where in each of those powers going into nation states continually tried to expand. They'd eat far flung islands and various powers all over europe only to lose them again if they were too far from their base of power.

          Note the continuing failure of those powers to hold on to anything that was more then about 500 miles from their capital city.

          Then consider the great exceptions in this pattern... the colonial empires of Spain and England. Note that they had to employ a decentralized power structure because employing a centralized power structure was obviously impossible at that range. Notice how powers that previously were unable to hold on to things at more then 500 miles suddenly can hold on to things thousands and thousands of miles away.

          Why? Decentralization. Limited autonomy.

          Now consider the United States. The US is one of the largest countries in the world both by geography and population. Yet it holds together better then many powers a great deal smaller. Why is that?

          There is a general lack of insurrection due to democratic and republican governmental forms. However, just as important is the state system where in local populations have a greater say in local administration then does the national system or people that don't actually live there. This ensures that government is more responsive to local issues, attentive to local sentiments, and that if there are conflicts of interest they tend to favor local interests rather then national interests. This helps bind the country together because there is less downside/cost to the union.

          What breaks apart big countries is ultimately that the people in those countries decide it is in their interest to break up rather then stay together.

          To help hold a union together, you want as much as possible for there to be few if any downsides to the union and as many upsides as possible. The instant it is more in the interest of a given portion of the country to break away then stay together you will have to hold a gun to their head to hold them there.

          Holding that gun there is both expensive and unstable because the instant the gun comes off they'll likely slit your throat or equivalent.

          Police states are very aware of this which is why they make a point of never putting the gun down. Examples of what happens when the gun gets put down would be the French revolution... bodies in the street, corpses hanging from rafters, and other fun stuff. A general explosion of violence against the authorities.

          I'm going through all this just to explain my understanding of the basic political forces that hold large numbers of people together.

          Now if you look at the US government, we have a federated system rather then a unitary government. That is, unlike France or England, the US has 50 states with limited autonomy as well as various territories that are afforded something of the same interdependence.

          This is a hierarchical command structure. With lower and more localized elements given authority to make certain types of decisions independently while other nominally higher authorities are given responsibility over different decisions.

          Ideally, you want the more localized systems to handle all problems that they reasonably can handle while those at the higher and more generalized level are left with either managing the interrelationships of these powers or dealing with miscellaneous problems that impact all the various states.

          In effect, you want the localized systems to handle nearly everything themselves... really as much as you can pos

          • Understand, I am not saying the feds are evil or bad. I am rather saying that they have information overload.

            Actually, it's worse than that. The Federal justice system is a complete mess and totally corrupt.

            Take the example of the Gibson Guitar raid [forbes.com], which according to the CEO was incited by Lumber Union protectionists. After years and hundreds of thousands spent in legal fees, the warrant is still sealed. Really. And this is the way the Federal Justice system has developed since the 1980's.

            Now I'm no Randian, or Objectivist, but I did read Atlas Shrugged in my youth, and this situation reminds me of the nati

            • The Gibson factory raid was a complete and unjust fiasco; another example (somewhat like the IRS scandal) where an entity is harassed and punished for contributing to the republican caucus, under pretentious bullshit justifications; in this case, "Illegal" use of Indian rosewood... which other companies like Fender (which contributes to the Democrat cause) used with no penalty.
              • by thaylin (555395)
                The IRS scandal was just another made up scandal. Reports show that Dems were harassed just as much if not more than the repubs. Just goes to show you that you can trust the repubs just as much if not less than the dems.
            • In regards to corruption, I didn't say it didn't exist. And I would agree in the Gibson case. That is clearly a break down in due process with the FBI.

              However, if we're honest we'll see that sort of thing at every level of government.

              • However, if we're honest we'll see that sort of thing at every level of government.

                I don't agree with that. That is, yes, there is corruption, but at the local and state level the system of checks and balances seem to be working well, even if it sometimes requires appeals to federal courts to correct (which sounds ironic, but it's not when you see how things are playing out). Those checks have broken down once you have federal enforcers. The bureaucracies are so powerful they have become impossible to fight. Even getting a court to hear your case is difficult and expensive, as the agen

                • It really depends. In many areas you're quite right but in others the corruption is deep and institutional. Chicago ad New Orleans are examples of cities that really need to be utterly wiped politically and institutionally to have a chance at being clean.

                  Detroit is also quite bad I've heard.

                  But then many other areas are very clean... at the federal level you'll see much of the same... some people and organizations are corrupt and others are not.

                  • Yea, you make a good point about the islands of tinpot dictatorships.

                    Detroit is also quite bad I've heard.

                    That's why I've taken to calling it Detroilet.

        • Re:Corruption (Score:4, Interesting)

          by Gr8Apes (679165) on Thursday May 29, 2014 @08:50AM (#47118287)
          Decentralization for wire ownership is the answer. The wires are owned by local municipalities, and ISPs provide services over those wires. With fiber, there's no excuse not to go this route. The feds can tax and provide service to disadvantaged areas much like the Universal Service Fund now, in fact, there would need be little to no change there. Just that the wires belong to the local municipalities, and they cannot sell the property, only maintain and improve it as necessary. Cities, counties, states, etc, can work to improve the infrastructure, but at it's core, it's still locally owned. What else matches this pattern? Roads, railroads, the electrical grid and various pipelines all at least started this way, as does the global internet. So there's no reason this particular component cannot be handled this way at a more local level and finally remove the evil specter of Ma Bell and its wanna be clones.
          • The wires and the content must not be owned by the same people. Those who own the last mile must not have a vested interest to favour themselves.
      • As bad as politicians are at the federal level, they're even worse at state and local levels. The state where I live has a problem that all the neighboring states have too so I can only assume that it's like this everywhere in the USA. Basically our state Senators and Representatives are grossly incompetent and spend most of their time debating things and passing bills that have little use to the average citizen. The only reason that anything useful gets done at all is because we've had a tradition of (m
        • Its the same thing at the federal level, they just have more power. That's the only difference.

          And in large part your state government is passing laws about nothing because 1A they meet too often and 2B they have less power then they use to because the fed has taken most of it over time.

          Education policy for example used to be exclusively a state issue. Now its increasingly a federal issue which means states have less and less control over their education policy.

          never mind that many states have never really

          • by dywolf (2673597)

            If specific states have a problem those specific states need to correct it. Don't drag every state into a giant federal clusterfuck simply because some states are run by halfwits.

            then dont assume all central regulation is bad just because one current chairman is a former lobbyist toadie without the stones to use existing regulations to what should be done and label ISPs under Title 2.

            two can play that game, and I'll win, because regardless of what you may think most government programs are actually successful and achieve the goals they set out to accomplish. and most actually go away once their mandate is met. several dozen come and go every year and you never hear of them, because

            • As to not assuming, you weren't paying attention.

              Allow me to repeat, indifferent to whether the federal regulation is bad for every single state, if it can be done at the state level then it is likely destructive to the independence of those states.

              While you can overrule badly run states with federal policy, keep in mind that you're also overruling well run states with the same policy which has the effect of constraining them to whatever the federal government wants to do. Lets say for example a given state

      • by dywolf (2673597)

        We already see some of that happening already with the EPA etc just doing what they want indifferent to law, court orders, or public opinion. But it could get a lot worse.

        you were doing well until this bit of BS.

        • Actually no. The EPA has repeatedly acted and regulated various things without congressional approval for it.

          I really have no patience for a moronic political "ya huh, nu uh" debate on the internet right now. We'll just agree to disagree and move on.

          • The EPA has repeatedly acted and regulated various things without congressional approval for it.

            Considering the level of scientific knowledge demonstrated by Congress lately, is that a bad thing?

            • Re: (Score:3, Interesting)

              by Karmashock (2415832)

              Its only bad if you want to live in rule of law or democracy.

              If you believe your various political causes are more important then freedom or rule of law then by all means... put a gun to the heads of your neighbors and threaten to shoot them all if they disagree... You're in the right after all... You know best... ... Right?

              • Its only bad if you want to live in rule of law or democracy.

                What does Congress have to do with this mythical "rule of law" you guys are so fond of bringing up?

                • They make laws... They belong to something called the "legislative" branch, you ignorant boob.

                  • You mean those things that are selectively applied based on money, connections, and political expedience? Your vaunted "rule of law" is either a delusion, or leaves much to be desired.

                    • Your cynicism as regards the honesty of the legislature leaves us with what?

                      Are you advocating for dictatorship or would you like to walk that back a bit?

                    • Neither, I'm just calling bullshit on your "rule of law" fappery.

                    • by dywolf (2673597)

                      he also apparently doesnt understand the concept of a independent national regulatory agency, an agency specifically empowered to enact regulations with the force of law in a specific "theater of operations" (so to speak). he somehow thinks they are required to run to mommy for permission for everything they do, thereby uncercutting the entire concept of "independent". the entire point in being indepent is to keep them insulated from the pressures and vagaries of political "discourse", ie, lobbying and brib

          • by dywolf (2673597)

            Bull.
            The EPA is an independent government agency.
            They are not required to run to mommy for permission for everything they do.
            FACT: The EPA Is Essentially Required To Regulate Carbon Emissions By Law.

            Same goes for water and everything else they do. After all, what is the point of creating a independent national agency otherwise?

            And "Agree to disagree" is the dodge of the ignorant who cannot support his position.

            Here ya go, from http://mediamatters.org/resear... [mediamatters.org]
            You've been show the path to edumication, but wi

      • by rpillala (583965)

        You're giving them too much credit by ascribing this kind of thing to incompetence. Politicians know what they're doing, or rather they know whom to trust to do what they want. And what they want is to get re-elected. It is impossible to ignore the constant state of re-election campaigning that goes on now. Fundraising and servicing lobbyists are the responsibilities we ought to lift. Not the actual work of government. I think Douglas McGregor described the administrative overhead that appears as an o

        • Some of them do... a lot of them don't.

          Consider further that a lot of nasty corruption is itself the result of incompetence because they think their actions are innocent or they don't hurt anyone.

          You see this a lot of with the bribes they'll take to give one company or another an advantage.

          From their perspective it doesn't matter so they might as well take the money.

          What they don't understand is that it does matter because it distorts the market and changes business strategies to be less about provi

    • Re: (Score:2, Troll)

      by Black Parrot (19622)

      You know the saying: the proper role of government is to help the rich get richer faster than they would without it.

  • by spiritplumber (1944222) on Thursday May 29, 2014 @05:53AM (#47117657) Homepage
    They should be hammered with this. Make it simple, so that staffers can relay the information. Make it a net neutrality issue. Make it a no-pork issue. This is great news because it's a simple message. Someone needs to ask, at the right moment, "So Mr. Verizon Guy, were you bullshitting last year, or are you bullshitting now?"
  • Law & Money (Score:5, Insightful)

    by Thanshin (1188877) on Thursday May 29, 2014 @05:56AM (#47117663)

    To expect that you can come in and use public infrastructure and funds to build a network and then be free of any regulation is absurd

    To expect a government to take decisions based on reason, morality or legality is naive. In what regards corporations, the only law is money, the only lawyers are lobbyists and the only judges are (corrupt) politicians.

    If Verizon has made about $4.4 billion in additional revenue in New York City alone, they clearly had enough to pay for a lot of campaigning, lobbying and bribery.

    • Re:Law & Money (Score:5, Interesting)

      by sumdumass (711423) on Thursday May 29, 2014 @06:12AM (#47117687) Journal

      Its not that simple.

      First, verizon actually is deveral businesses in one. The internet portion is and has been considered an information service while telecommunications portion is regulated. The problem arises when those portions of the businessvare not separate from each other. The internet should be spun off into a subsidiary that leases access to the infrastructure to make it clear. Of course that would lead to others getting lessvrestricted access and cause competition.

      It is the same problem with cable internet. Thecuse the regulated portion to build out infrastructure then ride the internet on top of it. It they were forced to separate and lease this out, there would be more competition for the internet all the way around.

      But looking at verizon or comcast as one entity with obe type of product isn't accurate. The separation just needs to be more separated.

      • by MrL0G1C (867445)

        Did you just type that with a 'smart' phone?

      • by Rich0 (548339)

        The internet should be spun off into a subsidiary that leases access to the infrastructure to make it clear. Of course that would lead to others getting less restricted access and cause competition.

        While I agree I'd go a step further. I'd completely split the last mile off of any kind of service provision. Have a utility provide a fiber/wire/whatever to each house from a central office. They would charge each house a flat rate if it is used at a rate based on cost - just like your water bill/etc.

        Within the central office the utility would maintain coloc facilities and would charge a basic fee structure for anybody who wanted to put equipment in there, and for the attachment of connections to indivi

      • by aaarrrgggh (9205)

        Well put. GTE became Verizon Global Networks and was a very separate division. As it became integrated and FIOS was rolled out things became very difficult. They obviously chose a favorable way to request treatment, which should be expected. If they didn't have that support, they would have pulled FTTN and limited how much they were willing to spend going to the home. In the end, it would have set things back more.

        But, the government should only allow a limited time monopoly for these services. Phase i

  • Block their cookies (Score:2, Interesting)

    by paiute (550198)
    If I leave a package of Oreos on the floor and a toddler with no impulse control and no reason to have impulse control at that age anyway gets into the package and eats them all, is it the toddler's fault for being a toddler or is it my fault for leaving the goddamn cookies on the floor?
    • by mimino (1440145)

      Now imagine that the toddler somehow was responsible for forcing you to put the cookies on the floor and then to leave them unattended. Using something like lobbying.

      • by jesseck (942036)

        By throwing a temper tantrum until you cave and leave the cookies on the floor? At that point, you didn't give the toddler the cookies... you just placed them where the toddler would be pacified. The toddler is the one who abused your "trust".

        That sounds a lot like politics... "I sponsored this bill, but I didn't realize it would be used for this."

        • Didn't the author of the Patriot Act say that recently. He was shocked, shocked! that his bill is being used/abused in the manner that detractors of the bill have been saying it would be for years.

        • by PPH (736903)

          By throwing a temper tantrum until you cave and leave the cookies on the floor?

          This toddler has enough money to see to it that his current parents are voted out and replaced by more compliant parents in the next term.

          End result: The cookies will be left on the floor. Either by you or your replacement.

  • by korbulon (2792438) on Thursday May 29, 2014 @06:39AM (#47117761)

    Who said the world was fair? Rules and laws only apply to those too meek to resist.

    Mark my words: the worst that happens to Verizon is a finger-wagging and maybe a slap-on-the-wrist fine.

  • by phamNewan (689644) on Thursday May 29, 2014 @06:45AM (#47117779) Journal
    Isn't running circles around government regulation the oldest pass time in America. Look back at how effectively the Stamp Act was circumvented, 250 years ago. The more complex the laws gets, the easier it is to get away with things like this, because even the government can't sort through the complexity of the laws.

    The solution is not more regulation, but simplifying it. If a corporation can make billions, by simply hiring 50 lawyers, or 500, to find a way to make billions, that is huge return on investment. Anyone who expects an efficient and responsive government is dreaming. The only effective solution is to make it so simple, that dodging becomes impractical.
    • The solution is not more regulation, but simplifying it. .

      Bingo! Simplify, apply equally, and enforce.

    • The only effective solution is to make [regulation] so simple, that dodging becomes unnecessary.

      FTFY.

      Regulation (and legalese in general) becomes complex because it has to deal with all the crazy ways that creative, highly motivated, self-interested entities will find to circumvent it.

      Don't get me wrong. I'm not saying that more complex regulation is better. Regulation should be as simple as possible. The key to that sentence and the problem in your understanding of this matter lies in the last part: 'as possible'. Everybody can yell 'Well, just have every x below parameter y be illegal! Problem solve

    • by PPH (736903)

      Simple regulation can still be quite onerous. That's why industries lobby for exemptions for special cases. Low profit, high cost markets could not be served were the providers held to the same requirements that higher revenue markets are. And then the corporations start gaming the system.

      What we need are less burdensome regulations with clear goals. You want more rural service? Relieve the providers of some of the urban regulations. But then watch them to make sure they aren't playing with definitions.* W

  • When Verizon itself is describing these activities as a Title II common carrier, how can the FCC look at broadband internet and continueacting as though it's not a telecommunication network?

    "Ha ha," he nelsoned.

    Reminds me of the WWE, who declared themselves "not a bona fide athletic competition" so they wouldn't have to pay for ambulances on standby*, officially answering once and for all the great debate.

    * For the athletes. I'm sure they have ambulances on standby for the dozen or so fat audience members

  • by Vinegar Joe (998110) on Thursday May 29, 2014 @07:07AM (#47117837)

    Verizon "as paid to Obama and legislative leaders, including House Speaker John Boehner, House Majority Leader Eric Cantor and his predecessor, former Rep. Roy Blunt (now a senator), and Senate Majority Leader Harry Reid, as well as to members of four congressional committees charged with developing the laws governing its business.

    The President’s re-election campaign and groups tied to it have been the largest single recipients of the company’s aid, the study found, taking in nearly $224,000. Obama has spoken repeatedly of his support for Net Neutrality but the issue received little attention during his successful re-election drive last year and he’s had little to say about it during his second term."

    http://www.commondreams.org/ne... [commondreams.org]

  • Quite easily ... (Score:5, Insightful)

    by gstoddart (321705) on Thursday May 29, 2014 @08:10AM (#47118075) Homepage

    When Verizon itself is describing these activities as a Title II common carrier, how can the FCC look at broadband internet and continue acting as though it's not a telecommunication network?'

    Because the head of the FCC is a former cable and wireless lobbyist.

    Wheeler knows all of the dirty tricks these companies use, likely because he was involved in them. Which means there is no way as the chief of the FCC he isn't aware of these shenanigans.

    Which means he's quietly happy to allow it, knowing that when he finished his term at the FCC there will be some big fat checks waiting for him for all of his help through the years.

    In other words, your regulatory system is broken when you start appointing lobbyists to be your regulators.

    It's the fox guarding the hen house. You might as well appoint Bernie Madoff as the head of the SEC.

    • I can't believe an avalanche of "Yea, but you have to appoint former industry bigwigs as regulators because they're the only ones who really understand industry" replies haven't shown up yet.

      It appears the lobbyist apologists are slipping here on slashdot...
  • by l0n3s0m3phr34k (2613107) on Thursday May 29, 2014 @08:15AM (#47118091)
    He has worked deep in telecom, and with Verizon. He already knows all of this, and is just playing a game with us. This is all a show, smoke and mirrors. Wheeler and gang decided this long ago, probably before he was ever appointed. I've watched the way the FCC treated anyone at their "public comments meeting" that stood up and spoke out - they where all escorted out of the room without even finishing what they were saying.

    This is all lip service. Every single American could march in the street, and threaten to burn down every FCC office, TV station and radio broadcast system, and net neutrality will still loose. However, the blow back from this could be intense. "fast lanes" for corps sounds like a very juicy target, thanks for separating all those packets for Anonymous.
  • So if they are a public utility they get to charge 10 x the amount shown on the dice

  • They classify themselves as either a "commodity" or as a "service" depending on what they want to take advantage of.
  • Well, if the PULP lawyers see this, why the fuck aren't they filing suit for the American People?

I'd rather just believe that it's done by little elves running around.

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