Break-Up the Bells

The Customer Costs of the Bell Monopoly
  • Overcharging: We estimate that the Bell companies overcharged $17 billion dollars in 2000 because of a lack of competition. ---- That's about $200 a household for 2000.
  • Failed Broadband By 2000, over half of America was supposed to have fiber-optic wiring to their homes. Today, virtually none exxsts even though customers paid over $58 billion in added charges.
  • Competitive Harm Competition in America is on life support and the major problem has been the Bell companies, not Competitor business plans.
  • Higher Prices: We estimate that prices have gone up over 300% since the Bell companies came into being and that is primarily because there has been no competition to lower rates.
  • Missing Essential Services: Today, you can't even take your phone number with you when you move, while Bell customer-services are usually still closer to banking hours than customer hours,
  • DSL Chain of Pain: The entire DSL roll-out has been a nightmare --- delivering an inferior product over 75 year old copper not fiber phone lines.
  • Phonebill Mess: Why are there all those charges on your phonebill--- and why do they keep going up for the same service, when the Bell's profits are 250% higher than most American companies.
  • Hidden Phonebill Charges -- Today, 50% of all bills have hidden charges.
  • Failed Deployment and Competitor Harm caused the Tech sector crash.

In short, today, you're owed money, and the situation is not going to change unless something is done to fix the problems.

America has ended up with an aging, 75 year old copper plant, has paid for a fiber-optic future that will not ever be delivered, and on every phonebill, the Bell companies are making excess profits --- off of the billions of pennies, nickels, dimes and quarters on customer's phonebills.

The Solution:

Proposed Bill By Senator Hollings:

The Story Starts in 1992---- Divestiture II 

Almost a decade ago, New Networks Institute presented the findings from one of the largest research projects ever undertaken to explore how the break up of AT&T in 1984 and the creation of the Baby Bells impacted customers. Our conclusion was that the Bell companies should be 'broken up", separating the Bell companies from the local phone networks. The Bells' monopoly controlled the phone networks --- the wires to everyone's home and offices. This control would caused a stranglehold over all local competition and all broadband deploiyment, and it caused prices to dramatically increase. The problems would not be simply solved so we proposed "Divestiture II".

To read our original 1992 analysis, see: 

A decade later there is a proposed bill by Senator Hollings and Stevens, to create what is now called a "structural separation", and there have been a few brave state public service commissions to examine the issues.

Other analysts and companies have presented similar plans including Dr. Bob Metcalfe's "Coppertone Decision" or Probe Research's work.

Dr. Bob Metcalfe's "Coppertone" Plan.