$200 Billion Broadband Scandal
micro-history of Verizon, SBC, Qwest, and
BellSouth’s (the Bell companies)
fiber optic broadband promises and the
consequence harms to America’s
economic growth because they never delivered
and kept most of the money,
about $200 billion.
New York: This is one of the largest scandals in
American history. America
is 16th in the world in broadband and the US DSL
current offerings are 100
times slower than other countries such has Japan
and Korea. How did we go
from Number 1 in the web to 16th in broadband and
falling?
- Are customers owed $2000 for a fiber optic service they paid for but
never received? Did towns and cities, libraries and schools, government agencies, and every residential and business customer subsidize new networks that
never showed up? - Did America lose $5 trillion in economic growth, $500
billion annually, because of these missing networks?
Broadband Scandals is a well-documented expose, 406 pages and 528
footnotes.Using the phone companies’ own words (and well as other sources),
the book outlines a massive nationwide scandal that affects every aspect of
state of the Internet. Not only the web but broadband, municipalities laying
fiber or building wifi networks, not to mention related issues such as such
as VOIP, cable services, the cost of local phone service, net neutrality, the
new digital divide, and even America’s economic growth.
Starting in the early 1990’s, with a push from the
Clinton-Gore Administration’s "Information Superhighway", every Bell company
– SBC, Verizon, BellSouth and Qwest – made commitments to rewire America,
state by state. Fiber optic wires would replace the 100-year old copper
wiring. The push caused techno-frenzy of major proportions. By 2006, 86
million households should have had a service capable of 45 Mbps in both
directions, (to and from the customer) could handle over 500 channels of high
quality video and be deployed in rural, urban and suburban areas equally. And
these networks were open to ALL competition.
service commissions and state legislatures acquiesced to the Bells’ promises
by removing the constraints on the Bells’ profits as well as gave
other financial perks. They were able to print money – billions of dollars
per
state – all collected in the form of higher phone rates and tax
perks.
(Note: each state is different.)
- ADSL is not what was promised and paid for. It goes over the old
copper wiring, can’t achieve the speed, has problems in rural areas and is
mostly one-way. - 0% of the Bell companies’ customers have 45 Mbps
residential services.
Harms and Outcomes
This investigative book isn’t just a history, but a warning – the
Bell
companies can not be trusted with our digital future. Worse, what they
have
done has resulted in serious repercussions to local, state and
national
economy.
- * The public subsidies for infrastructure were pocketed. The phone
companies - collected over $200 billion in higher phone rates and tax perks,
about $2000 - per household.
- * The World is Laughing at US. Korea and Japan have 100 Mbps services
as - standard, and America could have been Number One had the phone
companies - actually delivered. Instead, we are 16th in broadband and falling
in - technology dominance.
Harm to the economy. Five trillion dollars was lost because new
technologies
and services that America would have developed, happened in
Korea.
Municipalities around America are waking up to the fact that the
phone
companies failed to deliver and are now doing Wifi and
fiber-based
work-arounds.
been
designed as the data source for Teletruth’s complaint to the FTC against
SBC
and Verizon.
- The promised networks couldn’t be built in 1993 and state laws
were changed based on "deceptive speech". The technology today still has
problems delivering 500 channels. - The phone companies pulled a bait and switch. In order to offer
DSL over copper, it was not necessary to have state regulation changed. Their
plan was to get rid of regulations and enter long distance. - The Bell mergers resulted in the death of the state plans for fiber
optic broadband. Over 26 states had fiber optic projects closed when the
mergers of SBC and Verizon were completed. That affected almost 80% of all
phone customers in the US.
Broadband Scandal contains some additional special chapters.
- 20th Anniversary Summary of the Bells’ Financials. The core of the
book is a 20-year analysis of revenues, profits, construction, etc.. Starting
in1984, their own data shows revenues up 128%, and concludes profits shot
through the roof on the promise of broadband. Meanwhile, compared to
revenues, employees are down 65%, construction down 60%. Why did prices
increase? - Case Studies: New Jersey, California, Massachusetts, and Pennsylvania. State-by-state the book outlines the same pattern of deception. By
2010, 100% of New Jersey is supposed to have 45 Mbps service; by 2000,
California should have had 5.5 million homes completed, and each state paid
billions for services they never received. - Verizon’s "FIASCO" and SBC’s’ "Dim-Speed" – Verizon and SBC are
rolling out new fiber optic services but want the laws changed again. These
services are crippled, closed networks that do not fulfill the state
obligations, like New Jersey and can’t compete globally. FIOS’s top speed is
only 35% of the Asian standard, and yet it cost $199 vs Korea, $40 for 100
Mbps.
Fake and co-opted consumer groups, biased non-profit think tanks are
now the major force in broadband regulation and policy. The book goes into
groups like Consumers for Cable Choice, TRAC, APT, Issue Dynamics and
New Millennium Council and how these groups are attempting to
block municipalities from offering new services to harming new services,
like
- VOIP. These groups are sending out deceptive messages that make
the formulation of the policy that is in the public interest
impossible.
being held hostage and needs to be freed. Customers funded the fiber
optic networks and the Public Switched Telephone Networks (PSTN) should be
opened to ALL competition with strict rules of Net Neutrality. The Bells
have harmed America’s economic growth and our global
competitiveness.
optic broadband in America should start immediately. These investigations
should include how the Bells improperly funded their DSL and long
distance rollouts. The Bells should be forced into refunds or giving the
money to municipalities. This would be a better solution than allowing the
companies who have harmed our digital future to control America’s digital
destiny.
According to Broadband Reports: "Bruce Kushnick has been
dubbed everything from the ‘Leading Visionary in the Telecom Industry’ to a
‘Phone Bill Fanatic’; but what’s certain is that nobody in the industry is
ignoring him."
Kushnick has been a telecom analyst for 24 years, and is one
of the founders of Teletruth, an independent customer advocacy group focusing
on broadband and telecom issues, as well as executive director of New
Networks Institute, a market research firm.
2003-2004 and has active cases with the IRS, FCC and FTC pertaining to
broadband and the cost of the networks. Research through Teletruth’s phone
bill auditing services has led to class action suits and major refunds for
phone bill overcharging,
Reporters and reviewers, write for your complimentary copy.
honest"…
Kushnick’s book."
Contact: Kelly Deegan, Bruce Kushnick
