Teletruth News Alert: January 5th, 2010
To read the full analysis:
http://www.newnetworks.com/attharms.htm
* AT&T Declares War on Consumers. AT&T Wants
to Murder Ma
Declares
Death to Landlines.
* AT&T has manipulated the data about losing
phone lines.
* Are you owed $2,500.00 for a fiber optic service
you never received?
* Is AT&T and Verizon Illegally Strip-mining
"Public
Switched Telephone Networks"?
No matter how you say it, AT&T and Verizon have
declared war on customers.
You've been a prisoner so long you have "Stockholm
Syndrome" (when you
believe your captors are your friends) and don't
even know that you, your
family, friends and the country have been had.
And there is a battle over the future of America's
critical infrastructure and economy, not to mention raising prices and
taxes – and America is about to lose.
What's going on? AT&T has submitted a proposal
to the FCC, claiming that
AT&T is a poor company losing phone lines and
they want to get rid of the
old landlines, the utilities, the Public Switched
Telephone Networks (PSTN).
Gigacom writes: http://gigaom.com/2009/12/30/att-to-fcc-let-my-landlines-go/
"Ma Bell asked the FCC to eliminate regulatory
requirements that it support
a landline network and to provide a deadline for
phasing it out.... The
(almost) one in five Americans relying exclusively
on a plain old telephone
line should prepare to kiss that wall jack goodbye
as the major wireline
telephone providers back away from that dying (and
expensive business.”
The writer adds: "However, AT&T in its
filing doesn't offer a way to bridge
the gap for that 20 percent of Americans relying
only on landlines, nor does
it address what an all-IP future means for the 33
percent of Americans who
have access to broadband but do not subscribe (although
those broadband
laggards might be paying for a digital voice product
from a cable
provider)."
And we need to make something clear: AT&T now
claims there are really 2
networks: AT&T and AT&T = AT&T. They
write:
"Congress's goal of universal access to broadband
will not be met in a
timely or efficient manner if providers are forced
to continue to invest in
and to maintain two networks."
AT&T's entire point is that the "PSTN"
or "POTS", ("plain old telephone
service"), is from a `by-gone era' that they
are forced to support, as
opposed to the new, bright and shiny broadband networks.
To read the AT&T filing: http://www.newnetworks.com/attharms.pdf
Time to take off the blindfolds.
There is only one network, the utility, which was
never upgraded, even though the companies collected billions and the
'new' second network is simply a regulatory slight to give AT&T
and Verizon more control and more of
your money. Price increases, less competition, slow
broadband, net
neutrality problems, and harm to the economy are
just some of the outcomes.
Let me give you a example of what has transpired
and where we are today ---
a new highway system.
Your state wants an upgraded highway system. There
is only one contractor
allowed to bid and who is given the job. They are
paid billions, but after a
decade, they only build some on-off ramps and fix
the shrubs; the old
highway is still there. The contractor now goes
back to the regulators who
now say that the contractor can not only own what
they build, but they will
control it. Finally, the contractor now wants to
tear down the old highway,
may or may not replace it with their own, exclusive
highway - a highway that
can block different brands of cars on the roads,
or put up tolls or both.
And, the kicker is that the company has continued
to get paid and now wants
more money, either through taxes or higher tolls
or both.
The first highway is the old highway, the one that
was supposed to be
upgraded. The new highway is the one controlled
by the contractor, even
though the state never got the money back nor took
legal actions against the
company for breach of contract, but still gave up
control to the contractor.
As we will discuss, the old highway, the first network,
are the current
state utilities, the essential, ubiquitous infrastructure
of
and data networks (telecommunications) but 'broadband'
networks, which are
'interstate information services', without the same
obligations, and they
are in control of this "second" network.
Now, AT&T is saying it wants to get
rid of the original obligations that the utility
had, even though AT&T
received billions per state to upgrade the Public
Switched Telephone
Networks - the wiring to every home, office, school,
library and hospital.
They also want more money and tax incentives as
they claim they will
build out the 'second network'.
The research shows that:
• There has been a serious manipulation of the data
being presented by AT&T
and Verizon, on everything from the number of lines
to the supposed impacts
from competition.
• Are you owed $2,500.00 from AT&T and Verizon?
estimated $320 billion for fiber optic networks
AT&T, Verizon and Qwest
never deployed and this payment is in the form of
overcharging customers,
tax breaks and other financial incentives. This money continues to be
collected in many states.
• By 2010, almost all of
fiber-optic services, including rural and suburban,
rich or poor
communities, not to mention schools, libraries,
hospitals and government
agencies.
didn't upgrade the networks to fiber optics.
• Prices have increased 90% since 2004 in
states and those impacted the hardest by these increases
are low-income, low
volume users, such as seniors, Lifeline customers,
small businesses; a long
list.
• There is no serious competition in
actual competition, prices couldn't continue to
rise.
• Right now there is a 'hijacking' and a 'strip-mining'
of
utilities, and these '2' networks are really a failure
to properly upgrade
the first network — the Public Switched Telephone
Networks.
• Local rate increases are being used to illegally
fund the current
broadband buildouts, like Verizon's FIOS and AT&T's
U-Verse.
• Reality Check --- AT&T, right now has 1.7
million total U-Verse,
broadband-TV capable households (AT&T 3rd/q2009).
That’s it! They claimed
they would have 18 million by 2007 (not counting
BellSouth). AT&T now
controls 22 states. If AT&T is going to walk
away from the utility networks
and we leave it up to AT&T to build out their
'broadband networks' ---one-half of the
Let's be specific.
a) Data Manipulation
There's been a serious manipulation of the data
being presented by AT&T and Verizon on everything from the number
of lines to the supposed impacts from competition. An example: AT&T
writes "From 2000 to 2008, the number of residential switched access
lines has fallen by almost half, from 139 million to 75 million. Non-primary
residential lines have 62% fallen by 62 over the same period.
Sounds terrible until you realize at the numbers are all made up; they don't include ALL of the other services that go over the copper wiring or all of their lines. And there are hundreds of millions lines not counted by AT&T and Verizon called "special access" lines. These include alarm circuits or business Centrex, not to mention or DSL or U- Verse. (There is also a detail; the statement says ‘switched’ vs special access, which are ‘non-switched’, but still access lines.)
The FCC last published report in 2007 showed that "special access" lines since 2000 have gone up a whopping 37%. Meanwhile, according to AT&T's 3rd Quarter 2009 report, AT&T had 15.6 million broadband connections, meaning mostly ADSL, a product that can only travel over the old copper wiring. And over 40% of the drop in 'non-primary' residential lines, meaning second lines', are directly attributed to customers dropping their second lines when they can have Internet and broadband over the same wire as phone service.
We've written about this manipulation.
http://www.newnetworks.com/Accesslines.htm
There is also no recognition in these numbers that
since 1996, AT&T (formerly SBC) is now offering multiple services
over the copper wire --- including local, long distance, and DSL/U-Verse/Broadband, as well as Internet
Service --- multiple revenue streams over the same wire.
AT&T also claims “Today, less than 20% of Americans
rely exclusively on POTS for voice service". (POTs being plain-old-usability-based
telephone service.
AT&T obviously is not talking about their own
customers. (NOTE: AT&T is not quoting their own statistics, but
using the FCC and other third party sources.)
In our surveys of customers’ bills in San Diego
California, where we collected actual phone, cable, wireless, broadband
bills, the only serious competitor to AT&T was the cable company,
which had only 20% of the local phone market. The other 80% of those
surveyed had either AT&T or some other small competitor (*less than
10%) that still used the AT&T wires to deliver their calls. It's
clear that the 20% is simply a shell game leaving out categories of
services. If, not, AT&T should supply the information about the
80% of the lines in use.
AT&T also states that they are being hit by
wireless calling. Doesn't AT&T remember that AT&T and Verizon
are the largest wireless providers as well, so even if the customer
uses the cell phone, they still get the customers.
See our
b) Are You Owed $2,500 from AT&T and Verizon?
In December, 2009 New Networks released a report
"The History, Financial Commitments and Outcomes of Fiber Optic
Broadband Deployment in
http://www.newnetworks.com/FCCCITIbroadband.htm
The FCC requested
to state filings, etc.
The Report: http://www.newnetworks.com/FCCCITIbroadband.htm
Complimenting that report, In our report, "25th Anniversary Analysis of Key Financial Indicators of AT&T, Verizon and Qwest", published March 2009, we estimated(*based on tracking for 25 years) that America already paid about $320 billion for fiber optic networks AT&T and Verizon never deployed, and this payment is in the form of overcharging customers, tax breaks and other financial incentives—and it continues to be collected in many states.
But let's get back to the real issue --Are you owed
$2,500.00 by AT&T or Verizon for a fiber optic service capable of
45mbps in both directions? Though it varies by state, each state cut
a deal with the phone company --- in exchange for removing the caps
on profits, the new profits were to be used to upgrade the existing
networks. Also, the companies' commitments were to spend billions. Pacific
Bell (now part of AT&T) in
In our now free ebook “$300 Billion Broadband Scandal",
which was the basis of our recent reports, we go through all of the
information pertaining to the monies collected through 2005.
To read the book: http://www.newnetworks.com/broadbandscandals.htm
If you had service from Verizon or AT&T, you
were charged a defacto- broadband tax. The low estimate is about $2500
a household.
The networks weren't upgraded yet billions of dollars
and tax perks accrued –and the money is still being collected. In
There is one irony. The FCC claims that it would
cost about $350 billion to give everyone 100 mbps services.
By 2010 everyone was supposed to have 45mbps services in both directions
-- and that speed was the 'minimum’speed as of 1992. According to speedmatters.org,
the average broadband speed in the
If they already collected $320 billion, maybe the FCC should follow our repeated requests to investigate the customer-broadband funding monies being collected.
Just to drive home what we didn’t get and why AT&T
and Verizon harmed
c) There is no competition in
AT&T and Verizon now control the majority of
According to the cable association, NCTA, there
are only 21 million cable-phone customers, out of 123 million homes.
Verizon and AT&T combined only have 4+ million
homes that have been upgraded and handle cable-etc. services. Wireless-only
households is estimated at 15%-20%, but AT&T and Verizon are also
the largest cell phone providers. Thus, the cablecos are still a monopoly,
telephone is still a monopoly, and the phone and cable companies split
broadband and Internet --- by blocking the other competitors from using
their networks with the he1p of the previous FCC. And, because
of bundling, AT&T and Verizon are still the
largest providers of long distance services.
While others quote information about VOIP, using
the Internet for phone service, like Skype and Vonage -- all VOIP today
still requires a broadband connection. A customer buys a package to
get the lower prices, so VOIP is usually an addition to, not a substitution
of the packaged local and long distance
D) Are AT&T and Verizon Illegally Strip-mining
While AT&T would like
However, over the last decade there's been a shifting of money out of the utility to fund Verizon's and AT&T's other projects, including what they are currently building, Verizon's FIOS and AT&T's U-Verse. If the 'broadband networks' are separate companies, then why hasn't the 'cross-subsidization' of the broadband networks been stopped to make sure that the utility networks were being properly upgraded?
And let us be clear, the original changes in state
laws were for the utility, the PSTN, to be upgraded:
"D. NJ BELL'S PLAN FOR AN ALTERNATIVE FORM
OF REGULATION MAY 21, 1992 --- NJ Bell's plan declares that its approval
by the Board would provide the foundation for NJ Bell's acceleration
of an information age network in Now Jersey and referred to by NJ Bell
as 'Opportunity New Jersey' Opportunity New Jersey would accelerate
the deployment of key network technologies to make available advanced
intelligent network, narrowband digital, wideband digital, and broadband
digital service capabilities in the public switched network, and thereby
accelerate the transformation of NJ Bell's public switched network,
which today transports voiceband services (voice,
facsimile and low speed data), to a public switched
network, which transports video and high speed data services in addition
to voiceband services."
The clearest example of this transfer - When Verizon
puts in its FIOS product, it cuts the utility copper wiring (which is
counted as a loss of a line) and the customer is then transferred to
this new broadband product --- stripping away utility property for the
new ‘second' network.
Today, almost 60% of wireline capital expenditures is supposedly going to pay for broadband upgrades. Yet, it is being funded by increasing local rates. And we note that the 'total expenditures' for network construction as a percentage of revenue has been dropping - i.e., they spent more in the 1980's when they were forced to use the excess profits for construction or to 'give it back' and lower rates.
Who's actually, then paying for these upgrades?
It is seniors, Lifeline customers, small businesses, residential customers,
who may never get or want these new broadband networks. And it's worth
repeating --- Rural residents should be particularly annoyed when they
learn that their areas are not going to be upgraded as Verizon said
it would only upgrade 70% of its networks.
The other issue should be --- if there is a second network, why isn’t Verizon and AT&T’s other network and services not considered competitors who should be paying for the network services they use? When a competitor uses the networks, they must pay expensive wholesale charges. AT&T and Verizon have also given their ‘broadband’ network a free ride – for example, when the utility sends out it’s monthly insert, it includes advertising for these other products. From staffing, advertising, construction budgets, the list goes on and on of how AT&T and Verizon have taken advantage of the utility customers, and directly harmed the network infrastructure.
What should happen next: Get the Money Back or Upgrade
the First Network, the PSTN, or give the public the back the utility.
We need to be clear that AT&T's filing is focused on arcane issues and definitions over broadband and "VOIP", but the bottom line is this is about throwing the utilities under the steamroller and customers with it. AT&T wants to control the Internet, control broadband, control wireless, and views customers as marks to be taken advantage of. They are focused on stock prices over public interest. And no wonder, the 2 top AT&T executives for 2007-2008 made $69 million in executive compensation, including stock options.
The situation today needs to be fixed, not the coddling
AT&T and Verizon. Examine the actual phone bills of customers and
it is clear that AT&T's goal is to 'harvest' all customers who don't
go on more expensive packages. Harvesting
meaning raising rates until the customer leaves or is getting gouged.
AT&T's basic one minute long distance rate is currently $.42 a minute.
Since customers' don't read their phone bills and most just pay them,
this intentional way to rip off customers is just one of the many ways
AT&T cares about its customers.
And now AT&T wants to get rid of the 22 state utilities so that they can own and control what they build, if anything?
We repeatedly called on the FCC to investigate the
customer-funding of the broadband networks. Maybe before they give away
and destroy
See our request to have a workshop dedicated to customer-broadband-funding. http://www.newnetworks.com/fccbroadbandworkshops.htm
Bruce Kushnick, chairman, Teletruth
Executive Director, New Networks Institute