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At&t/SBC, Verizon, BellSouth owe you $2000
- 2006-02-01

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At&t/SBC, Verizon, BellSouth owe you $2000

One of my favorite people and fellow Bell opponent, Bruce Kushnick released a new report today entitled "$200 Billion Broadband Scandal" which purports to document the 'the largest fraud case in American history.'

If you currently don't have 45 Mbps, bi-directional service to your home, for around $40 per month and don't have 500+ television channels and the ability to choose any competitive service, then the Telco monopolies owe you $2000. Here's what the report says are the reasons why.

Beginning in the early 1990's, the Clinton Administration launched its "National Infrastructure Initiative" in which it sought to replace the 100 year old copper wires that currently power the Telco network with fiber optics. In exchange for various financial incentives, the Bell companies (At&t/SBC, Verizon, BellSouth, and Qwest) agreed to rewire every home, school, library, government agency, business, and hospital in the country.

The report breaks down the commitments made by these Bell companies:

"By 2006, 86 million households should have already been wired with a fiber (and coax), wire, capable of at least 45 Mbps in both directions, and could handle 500+ channels.

Universal Broadband: This wiring was to be done in rich and poor neighborhoods, in rural, urban and suburban areas equally.

Open to ALL Competition: These networks were to be open to ALL competitors, not a closed-in network or deployed only where the phone company desired.

Each State: By 2006, 75% of the state of New Jersey was to be wired, Pennsylvania was to have 50% of households by 2004, California to have 5 million households by 2000, Texas claimed all schools, libraries, hospitals.�Virtually every state had commitments.

Massive Financial Incentives: In exchange for building these networks, the Bell companies ALL received changes in state laws that gave these them excessive profits, tax savings, and other perks to be used in building these networks.

This was not DSL, which travels over the old copper wiring and did not require new regulations.

This is not Verizon's FIOS or SBC�s Lightspeed fiber optics, which are slower, can't handle 500 channels, are not open to competition, and are not being deployed equitably.

This was NOT fiber somewhere in the network ether, but directly to homes."

In exchange for these commitments, the Bells were given tax incentives, allowed to increase local phone rates, and add various 'FCC charges' to customers phone bills.

The report estimates that $206 billion dollars in excess profits and tax deductions were collected, over $2000 per household. This money was then improperly used to subsidize the Bell companies' entry into the long distance and wireless markets, and their DSL deployments.

Aside from the identifiable costs, the report also points out that as a result of the Bell companies' failures to live up to their commitments the U.S. has fallen from first to 16th world-wide in broadband deployment, a new digital divide has been created where wealthy neighborhoods are cherry picked over lower-income and rural areas for high-speed access, and the Bell companies have taken stances that they control usage of the network and at what price effectively limiting competition to those companies willing to pay their newly proposed two-tiered access fees.

The report alleges fraud on the part of the Bell companies by their agreements to meet commitments with technology not available even today, let alone 10+ years ago. They used this technology myths to push through the 1996 Telecommunications Act that effectively opened the door for them to enter the Long Distance market, which today they control over 80% of.

The effects of this fraud are broad. The baby bell companies were allowed to remerge. At which point they quickly became the number 1 providers of long distance, wireless communications, and DSL services.

You can read the complete report here:
http://www.teletruth.org/docs/ShortSCANDALSummary.pdf

Have fun,
j

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