|
In 1993, Ameritech, the phone company for Ohio, Michigan, Illinois, Indiana and Wisconsin, announced that it would be upgrading their networks in most of its regions, replacing the old copper wiring with fiber optics and coaxial cables. By 2000, over 6 million homes should have been enjoying these services --- the company would have spent over $29 billion in 15 years. "Ameritech is launching a digital video network upgrade that by the end of the decade will connect 6 million customers in its region to interactive information and entertainment services, as well as traditional cable TV service, from their homes, schools, offices, libraries and hospitals. The video network upgrade will increase Ameritech capital spending by $4.4 billion, to a total of approximately $29 billion in 15 years." This was high-quality broadband fiber optic-based services, capable of delivering high definition television in both directions. (over 45mbps). "Ameritech will employ mix of broadband switches, video servers, and fiber optic and coaxial cable to deliver switched video and video dialtone services from multiple providers, including Ameritech." Ohio Bell claimed it would spend $1.6 billion on these new services. "Our Advantage Ohio proposal is a $1.6 billion commitment to help jump start the Information Age in Ohio, bringing expanded economic development and job opportunities, advancements in education and improvements in the quality of life for all Ohioans'" In Ohio, the pitch was a panavision on new services and economic growth: Advantage Ohio would benefit jobs, education, and healthcare. "Consumer benefits will range from in-home access to specialized medical technology to home-based shopping, banking and security services, New Information services will provide consumer access to educational facilities, libraries and databases". For example, according to FCC filed documents, Ohio Bell was supposed to have 262,000 video dialtone customers in Columbus and Cleveland. Besides these new entertainment services, Ohio Bell would be wiring schools, hospitals, and libraries. - Ohio alternative regulation plan, September 20, 1994: "21. INFRASTRUCTURE COMMITMENTS The Company's infrastructure commitment in this Plan shall consist of the commitment to deploy, within five years of the effective date of the Plan and within the Company's existing service territory, broadband two-way fully interactive high quality distance learning capabilities to all state chartered high schools including vocational, technical schools, colleges and universities; deploy broadband facilities to all hospitals, libraries, county jails and state, county and federal court buildings…." Outcome, major increases to profits, tax perks: In 1994, Ameritech's Investment Alert stated that the company no longer had any regulatory controls by the states in terms of earnings. "Ameritech has led the industry in achieving regulation that removes regulatory earnings caps…. All of Ameritech's intrastate operations are off of return-on-asset regulation resulting in freedom from regulatory caps on earnings and no earnings sharing." From 1988 through 1992, Ameritech's average was 15.6% "return on equity", the standard measurement of business returns, the "dividend" paid to its shareholders was $1.16, and the "net income" was about $2.2 billion. By 1993, the numbers start climbing and by 1998 the dividend increased 187% to $3.27, the return on equity was now 36.2%, an increase of 129%, and the net income was $4.2 billion, an increase of 97%. We estimate the Ohio/Ameritech/SBC/AT&T was able to garner $7-$9 billion in excess phone rates and tax perks for a fiber optic service customers never received. Without audits it is impossible to know the exact amount. Bruce Kushnick, Teletruth bruce@teletruth.org
To read more about the Ameritech story see: http://www.newnetworks.com/broadbandscandals.htm To read more about the failure of the SBC-Ameritech merger: http://www.teletruth.org/docs/SBCMergerharms.pdf More about Teletruth Harvard's Nieman Watchdog "Where's that broadband fiber-optic access?", March 14, 2006 http://www.niemanwatchdog.org/index.cfm?fuseaction=Ask_this.view&askthisid=186 ===================================================================
|