New Networks Institute Contact: Bruce Kushnick, 212-777-5418 Bruce@newnetworks.com To read this filing, the original FCC audits, or related material see: http://www.newnetworks.com/fccaudittonyag.htm FOR IMMEDIATE RELEASE March 21, 2001   IS VERIZON CHARGING NEW YORKERS FOR "VAPORWARE" COSTING $2.5 BILLION? New Networks Institute asks NY Officials to Review FCC Audit Data on Missing Equipment NEW YORK CITY -- New Networks Institute filed a series of complaints with the New York State Attorney General's Office and the New York Public Service Commission requesting that these regulators audit the Bell Companies for "vaporware" -- billions of dollars of phone company equipment that is either missing or was never purchased. Evidence for this complaint has been taken directly from audits conducted by the Federal Communications Commission. In 1998, the FCC conducted a series of audits of the Bell phone companies and GTE's Commercial Property records. They found $5 billion worth of missing equipment and an additional $14 billion in "unverifiable assets." These audits represented one-fourth of the possible potential audits. The FCC has decided not to act on the information, but they did not preclude the states from continuing these audits. "The original comments by the New York AG's offices concluded that the FCC's audits were valid and that the missing equipment could cost New Yorkers $631 million in phone rates, based on total equipment of $1.2 billion dollars," said Bruce Kushnick, Executive Director, New Networks Institute (NNI). "These figures only represent one-fourth of the potential audits. New Networks Institute believes that the state should not only take Verizon to task for its original findings, but should pursue the entire audit. In New York alone, we estimate that over $2.5 billion dollars of phone rates could be affected." "This truly is the story of Ma Bell gone bad," said Kushnick. "This problem is nationwide, and we believe that the seven Baby Bell companies, using phantom equipment and technology - 'vaporware' - have been able to increase their rates for phone service." Over the next six months, NNI will file identical requests in other Bell states. NNI has also filed similar complaints with the Internal Revenue Service (IRS) to explore the tax liabilities of "vaporware." To read this filing, the original FCC audits, or related material see: http://www.newnetworks.com/fccaudittonyag.htm For more information, contact Bruce Kushnick at 212-777-5418, or by email at action@newnetworks.com go to http://www.newnetworks.com # # #