Bruce Kushnick, [email protected]
Read this as a PDF file
$200 Billion Broadband
This book documents the largest fraud case in American
The case is simple: Do you have a 45 Mbps,
bi-directional service to your home, paying around $40? Do
you have 500+ channels and can choose any competitive
service? You paid an estimated $2000 for this product even
though you did not receive it and it may never be available.
Do you want your money back and the companies held
Background: Starting in the early 1990's, the
Clinton-Gore Administration had aggressive plans to create
the "National Infrastructure Initiative" to rewire ALL of
America with fiber optic wiring, replacing the 100 year old
copper wire. The Bell companies SBC,
Verizon, BellSouth and Qwest, claimed that they would step
up to the plate and rewire homes, schools, libraries,
government agencies, businesses and hospitals, etc. if they
received financial incentives.
- By 2006, 86 million households
should have already been wired with a fiber (and coax),
wire, capable of at least 45 Mbps in both directions, and
could handle 500+ channels.
- Universal Broadband: This wiring was
to be done in rich and poor neighborhoods, in rural,
urban and suburban areas equally.
- Open to ALL Competition: These
networks were to be open to ALL competitors, not a
closed-in network or deployed only where the phone
- Each State: By 2006, 75% of the
state of New Jersey was to be wired, Pennsylvania was to
have 50% of households by 2004, California to have 5
million households by 2000, Texas claimed all schools,
Virtually every state had
- Massive Financial Incentives: In
exchange for building these networks, the Bell companies
ALL received changes in state laws that gave these them
excessive profits, tax savings, and other perks to be
used in building these networks.
- This was not DSL, which travels over
the old copper wiring and did not require new
- This is not Verizon's FIOS or
SBCs Lightspeed fiber optics,
which are slower, can't handle 500 channels, are not open
to competition, and are not being deployed
- This was NOT fiber somewhere in the network
ether, but directly to homes.
The Harms and Outcome
- Costs to Customers We
estimate that $206 billion dollars in excess profits and
tax deductions were collected
over $2000 per household. (This is the low
- Cost to the Country About $5 trillion
dollars to the economy. America lost a decade of
technological innovation and economic growth, about $500
- Cost to the Country America is now
16th in the world in broadband. While Korea and
Japan have 40-100 Mbps at cheap prices, America is still
at kilobyte speeds.
- The New Digital Divide
The phone companies current plans
are to pick and choose where and when they want to deploy
fiber services, if at all.
- Competitor Close Out
SBC, BellSouth and
Verizon now claim that they can control who uses the
networks and at what price, impacting everything from
VOIP and municipality roll outs to new services from Ebay
The Truth: This is a Fraud Case
- Fraud: There is a dark secret
the networks couldn't be built at the time the
commitments were made and are still not available. If
someone pays thousands of dollars for a service and
doesn't get it, isn't that fraud?
- Collusion and Cover-up: TELE-TV and
Americast, the Bell companies' fiber optic front groups,
spent about $1 billion and were designed to make America
believe these deployments were real in order to pass the
Telecom Act of 1996 and enter long distance. How did
every major phone company in America not know that these
fiber-based services couldn't be built and were able to
defraud over 40 states?
- The mergers killed fiber optic deployments in
over 26 states and harmed competition. With
every merger, the phone companies simply dropped all
state commitments and harmed every state they merged
with. Case in point: Verizon cut deployments to 13 states
during the NYNEX-Bell Atlantic merger, not to mention
GTE's 28 state deployments. SBC did the same in all 13 of
its states, from California to Illinois. Worse, the
mergers were based on the companies competing with each
other and there is NO evidence they ever did any serious
wireline residential competition.
- The Regulators Killed Competition and
Broadband. Over the last 4 years, instead of
continuing competition as ordered by the Telecom Act of
1996, the FCC has rewritten the laws close down Internet
Service Providers (ISPs) that brought America to the
Internet, as well as virtually all local competition.
AT&T and MCI couldn't compete because they were
regulated out of business and thus were sold off.
- Distortion of the Truth by the FCC.
Virtually every piece of documentation presented in this
work is missing from the FCC's Advanced Network Reports.
The FCC defines broadband as 200 kilobytes per second in
one direction 225 times slower than what was
promised in 1992.
- Cross-Subsidization Instead
of spending the money on these networks, the Bell
companies used the money to enter long distance, rollout
wireless and the inferior DSL services. The Bells also
lost over $20 billion overseas and paid executives over a
billion in stock options during the mergers.
- Bait and Switch Customers
paid for a fiber optic wire and got DSL over the old
copper wiring it's like ordering a Ferrari and
getting a bicycle.
20 Year Analysis of Revenues, Profits,
Expenditures: This book is based on a 20 year
analysis of Bell-supplied data, Census Data and Business
Week. Since 1984::
- Revenues are up 128%.
- Employees are down 65%, Construction is down
- $92.5 billion is missing in network upgrades.
- Profits based on failed fiber plans up 188% as
compared to other utilities.
Teletruth has filed a complaint with the Federal Trade
Commission, (FTC) to investigate the claims presented; the
book is the data for our complaint.