Book I

Book II

Book III

Book IV

Book V

Book VII

Can it be Fixed?

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What's In the Book:

The Info-Scandal Roadmap

The book in front of you is the culmination of the last seven years of research. Though it focuses on the Info Bahn's no-show, it was written with the hope of effecting change, by explaining what's broken in telecom and poising some long term solutions. Right now what's broken costs you money in the form of higher and unjustified prices. Fixing it, however, is another story.

And what's broken? Well almost everything. There's no Info Bahn, prices have risen over 275% since 1984, the Bells are still monopolies, there is no immediate local competition to drive down prices, and the laws do not work to adequately protect subscribers.

And there are scandals galore, which we will present, from "Digital Spew", "The Measured Service Scam ÷ The Pelican Brief of Telecom", the "$20 Billion Dollar Write-Off Scandal" or simple things, such as charging for services, such as Touchtone or Call Waiting, which cost virtually nothing to deliver.

To detail the problems and scandals, we've divided the book into seven sections, representing the seven original Bells, covering 48 chapters, representing the 48 states the Bells control. (Alaska and Hawaii were non-Bell)

We've also dedicated portions of the book to explain basic terms and concepts for the telecom-uninitiated. The sections include:

We also show that there never was any consumer interest, that the technology cost thousands more than stated, and that earlier technologies, specifically ISDN, which was promised in the mid-1980's, was also never adequately delivered.

Book II÷ Bell History and Strategies: Shareholders First, Customers Last demonstrates how the Bells' have shifted priorities, placing the shareholder and profits before local customer needs. From the excessive lobbying and a concentration on removal of all regulation, the massive staff cuts and lack of new construction, or the moving of funds for international and non-Bell investments, the Holding company has put the customer in the back seat.

In a special chapter titled "Liar, Liar: Baby Bell's Pants on Fire", we focus on the Bell statements and actions that were "deceitful", or "misleading". For example, while Bell Atlantic and NYNEX stated publicly that they were a "merger of equals", the fine print shows that it was not at all equal. Bell Atlantic purchased NYNEX for 75¢ on the dollar, thus avoiding Congressional scrutiny. SBC also used this tactic to purchase Pacific Telesis.

Book III ÷ Show Me The Money focuses on these $14 billion dollar babies, collectively about $100 billion annually. We show how the Bells have flourished with the removal of regulation. Profits are more than double most of the best companies in America, outperforming the S&P 500 and other business indicators. And this money was not from the new businesses and investments, but the increases in the pennies, nickels, dimes and quarters of phone subscribers.

In fact, prices should have dropped continually over the last 10 years because two major expenses, employees and construction, are continually dropping. For example, over 235,000 people have been laid-off from the local Bells (a 57% reduction in employees per-line). These massive staff cuts have lead to missed appointments and clogged customer services, causing an increase in customer dissatisfaction, not to mention state legal actions and fines.

Book IV÷ Regulation and Regulators shows that the telecommunications laws of the land have been built more through campaign financing than the Public Interest. For example, the Telecommunications Act of 1996 was supposed to lower telephone prices and pave the way for development of new network services, by bringing in competitors. But, according to Senator Pressler, it was "The most lobbied bill in history". It was a band-aid act which did not fix the basic problems.

How perverse is the situation? Well, we show how competition is now being used as a new means to raise local service prices. What's more, the Bells and State commissions have successfully sued the FCC, effectively stopping mass competition at lower prices.

There are also numerous questions about the ability of the FCC or the states to properly monitor and control telecommunications. In some states there has been a blatant disregard for the Public Interest, and collusion with the monopoly seems apparent. Other states are out-classed, out-flanked and out-funded and with 50 of everything, Swiss cheese coverage comes to mind. Meanwhile, the FCC's statistics for some areas are so far off track that they can not possibly make good laws, regardless of their intentions.

The Bells have also filed state and federal briefs asking for surcharges on Internet local use or Internet Telephony. And in many states, they have hindered school wiring by either not delivering on promises or by putting caveats on available funds, making them only usable with the local companies' internet services, at unreasonable prices, or not at all.

Our conviction, stated in this book, is that there should be immediate investigations and audits, and that prices should be lowered immediately. The basic questions:

ð Where is that 500 Channel Highway?

ð Why have the States and other regulators not monitored the Bells' failure to deliver on its promises of products and services?

ð Why haven't there been refunds?

ð Why are there charges for Touchtone and other no-expense services?

ð How did the Bells become some of the most profitable companies and still be regulated monopolies?

ð Were the Bell Mergers misrepresented to the General Public and are they in the public Interest? Should siblings marry?

And these questions should be asked, not just of the Bells, but all local phone companies, including GTE.

Also, it is time to pursue other alternatives. Numerous companies and individuals have proposed that the local phone companies be separated from the Holding companies. They have consistently blocked competition, not deployed advanced technologies, have drained the local bells of assets and staff, and have taken large dividends with little benefit to the subscribers. Also, the Bells should not be allowed into other businesses including long distance, until there is real, not imagined competition, and they have paid back their Info Bahn promises.

The Bells have been in control of local phone service for over 100 years, and they have, in many cases, hard-wired politicians, state public utility commissions and even the press. Why has there never been a full audit of a Bell, or a major investigation by the FCC or Congress? Why has there never been a major investigative story by a television network or newspaper? And why has there never been a book on the Bells?

It can't just be that most people look at the Babies as poor defenseless companies. Or is it that they have avoided public scrutiny by a slow conscious shaping of ideas, many times using millions of dollars of advertising, paid by subscribers, to fund customer and political complacency?

Another fundamental problem is that large, legal and regulatory walls have been put up which protect the Bells, blocking individuals from receiving adequate compensation or groups trying to accomplish change. For example, the Bells' prices are protected by something called a "Rate Doctrine", which states that "a rate is a rate", and even if there was fraud in creating that rate, it stands. And the rate is the published price that was set, most times by the PUC. Also, most Bells have to be challenged in front of Public Utility Commissions, which in and of itself is a stumbling block. And most commissions historically do not allow lawyers to recover fees, which can be millions of dollars, so taking Class Action suits facing the commission cannot be done on contingency. To create change in America it is going to require a rethinking of these fundamental stumbling blocks.

The irony, of course, is that the advertisements used to make the customer feel "warm and fuzzy", and the lawyers and lobbyists paid to keep the status quo to block customer initiatives benefiting subscribers, are almost all paid for by the very subscribers they are overcharging.

Finally, there is another fundamental problem ÷ having a conscience. While this tale might seem to be a discussion of money, power and deceit, it is really about corporate conscience, or in this case the lack thereof. The Bells were given a 'natural' monopoly, who's primary responsibility was the Public Interest, a loosely defined term ÷ until you see it corrupted. In almost every part of this tale there is a lack of regard for the customer, meaning telephone subscriber. This permeates almost all corporate Bell actions. The large shareholders, meaning those who run these companies, have put their interests over and above those they were supposed to take care of, and this has got to change.

And it was NOT the actions of the local telephone staff ÷ who answer the phones or who keep the network alive, that is the problem. With only 50% of the original staff left who now have to do almost double the work, downsizing should never have been so severe. Staff should be added to let the workers, who are conscientious, deliver better service.

I am for open markets that is full of competitive choices. The Bells are monopolists, and like the Communists, want to maintain control. May this book help to shift the balance of power ÷ to disconnect the Bells.

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