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FOIA TO FCC: OPEN UP THE BELLS' ACCOUNTING BOOKS --------------------------------------------------------------------------------- July 10th, 2003 FCC Common Carrier Bureau 445 12th Street SW Rm 6-C463 Washington, DC 20554 Teletruth, a national customer alliance, and a board member of the FCC Consumer Advisory Committee, requests under the Freedom of Information Act that the entire, complete Continuing Property Records for all of the Bell companies be made immediately available to ourselves, as well as any other party wishing to view these books. Cooked books are not protected by any proprietariness because of the potential and real harms to the entire US phone and broadband customer and competitor base. We have attached links to excerpts from the Verizon/ NYNEX Continuing Property Records which shows thousands of accounting violations. These records are the basis for all phone rates in the Verizon (NYNEX) territories, from residential to business services, and even the price of competitor rates. This is because every rate, from those set through ‘rate-of-return’ which examined the Bells’ profits, to rates that and under ‘deregulated-price caps’, (which sets the price of a service, not the profits) required a calculation of how much equipment was in the network as a starting point. We also note that these records contain thousands of mistakes-fraudulent entries that are decades old. I call your attention to such things as "Dummy" account for $2.1 million dollars, millions of dollars with a description of "************ " (no description), and 55,920 records equaling $415 million dollars of "Unallocated Other Costs", which are all accounting violations based on the USOA (Uniform System of Accounts). Since this corrupt information is in the Verizon Continuing Property Records, it is clear that these types of fraudulent entries plague the other Bell companies as well, as your own audits found identical accounting problems throughout the Bell system. Not only do the records themselves have serious holes, but when matching these records to the actual equipment in the current network, another scandal arises --- Vaporware. According to a recent Forbes article, over $10 billion dollars was found to be missing on approximately $47 billion worth of equipment. However, this is only ¼ of the potential audits. See: http://www.newnetworks.com/ForbesShortchanged.htm
Therefore, the size of violations and calculations based on fraudulent entries and Vaporware needs to be immediately determined to see the extent of customer overcharging, not to mention the current price of ALL phone services. This information also points to the Bell companies potentially cheating on Federal and state taxes by writing off equipment that doesn’t exist. Teletruth estimates the undisclosed liability for inflating assets over the last 20 years at $600 per telephone line or $80 billion. (See attached links to a Letter to Verizon’s Chairman Audit and Finance Committee, Verizon Board of Directors for a request for investigation of accounting fraud at Nynex/Verizon North) We also believe that this accounting fraud goes back two decades or more. This is not a new problem, just one that has been ignored for too long. Teletruth has updated our current complaints with the IRS, the SEC and three state commissions using these Highlights, and we will be sending along the entire collection of records directly to these agencies for investigations. We also do not understand why the FCC has ignored the Petition filed by Daniel Berninger, December 23, 2002, requesting a reopening of the FCC CPR audits, and take the steps necessary to assure the public that its rules and procedures are being followed consistently. The evidence presented in these excerpts more than substantiates the need to see how illegal and fraudulent accounting entries have affected ALL phone rates. To read the Excerpts, as well as a summary, Q&A, and the other documents quoted, please go to: http://www.teletruth.org/auditupdartefin.html Should you have any questions concerning our request, feel free to contact us. Sincerely, Thomas Allibone, President, LTC Consulting, FCC Consumer Advisory Committee and Teletruth Board of Advisors tallibone@ltcconsulting.com, Bruce Kushnick, Chairman, Teletruth, Alternate, Alternate, FCC Consumer Advisory Committee bruce@newnetworks.com, 212.777.5418 Daniel Berninger, Director, TeleTruth, dan@danielberninger.com, |