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Home Broadband

Net Neutrality is a Phony Issue

by Dana Blankenhorn
February 8, 2006
in Broadband, Communications Policy, Competitive Broadband Fiber, politics, regulation, Scandal
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From the author of $200 Billion Broadband Scandal, Bruce Kushnick:


Bruceatpiano_2This entire series of scare tactics should simply be another indication
that the Bells will come up with more ways to screw the
public.

Instead of allowing them to ‘please sir may I have another’, why
is anyone taking these new demands as if they have any
validity.

What should be on everyone’s mind is — Investigate the Bell
companies
for their  failure to deploy fiber optic networks over the last
decade and for charging customers about $200 billion in excessive phone
charges and tax perks for networks they never received!

  1. Customers funded OPEN fiber optic networks. The fact  is that it took
    a
    decade for any Bell fiber service  to show up and still isn’t here in
    any
    meaninful way. However:
  2. The Bells companies collected money
    for these networks over the last
    decade —It could be argued that they
    should be required to sell off their
    other assets to pay for these networks
    that didn’t show up
  3. $200 billion is the low number. This entire
    issue is a customer-takings. Customers, not the Bell companies have become
    defacto investors.For example the audits of the continuing property
    records showed that 20% of the equipment in the networks was missing.
    –over $80 billion in equipment that is missing was added to phone rates,
    starting the 1980’s.– We have an  active IRS investigation going. The
    fact that every service was based on inflated expenses, including our current
    fees, is what should have been investigated. We estimate this alone cost
    customers $600 per household!
  4. Why are we not investigating all
    of the money collected and never put into the ground
    , as well as the
    cross-subisization of the DSL, Long disrtance and wireless roll outs,
    which inadvertently was charged to customers. Customers have been
    illegally funding the rollouts of these services. In California alone the
    Bells got over $190 million out of customers. (Based on California audits.)
  5. This argument has nothing to do with the actual cost of service. The
    real issue — examine the Bell’s capital expenditures.

Since Ivan
Seidenberg feels so strongly that Verizon needs relief, let’s look at the
record.  In 2000,  Verizon’s domestic telecom expenditures were
$12.1 billion NOW, in 2005, Verizon is claiming to be spending all of this
money on FIOS, its latest fiber to the home plan.  Yet its total domestic
telecom expenditure in 2005 was $8.3
billion.

                                    2000           2005         
2004
Revenue                   $64,707        $ 75,112     $71,283
Cap
spending  total   (17,633)      15,324 $      
$13,259
Telecom                    $12,100        $ 8,267     $
7,118
Depreciation     `                           $ 8,801

And they
wrote off more than they put into the ground. In fact, overall, the Bell
companies spent
$18 billion in 1984, and in 2004 spent $17 billion, even
though revenues went up 128%.

Teletruth_1Who’s paying for this stuff? We are. We
are being overcharged for networks that we may never get.

We PAID FOR
THE NETWORKS!
That’s the real bait-and-switch. AT&T (SBC) now says that whatever they built, the money is coming out of the budgets for local
phone service.

"SBC now expects that three-year deployment costs for
Project Lightspeed
will be approximately $4 billion, at the low end of its
previously announced
range of $4 billion to $6 billion. In addition, there
will be customer-activation capital expenditures of approximately $1 billion
spread over 2006 and 2007. Because a significant portion of capital
expenditures for Project Lightspeed will replace and refocus ongoing spending
for its current network, SBC expects incremental capital investment for this
project to be relatively small.
"

Since when is it legal to charge
customers for services they may never get? As we argue, the changes in state
laws that gave these companies more money was based on promises they didn’t
keep.

The Big, Deep Dark Secret —-FRAUD AND COLLUSION —
INVESTIGATE.

Teletruth filed a complaint with the Federal Trade
Commission to investigate
this fraud case…

 

Fraud? 
The Bell companies made committments to have over 50 million households wired
with fiber by 2000. Virtually none of it was ever done. and

THE BIG SECRET?
— It couldn’t be built when these companies signed the deal even though they
collected billions per state. Collusion? We tracked that the same promise was
played  in the majority of the US, by ALL of the phone companies.— Promise
to rewire in exchange for more money — then pocket the subsidies.

Is
it legal for companies to make false and misleading statements to the public
so that laws will be changed? And we are not talking about a few statements
in a few states. We are talking about a campaign that lasted until the phone
companies got the Telecom Act passed and the mergers to go
through. We
documented how SBC and Verizon, after every merger, closed down the fiber
optic deployments in every state that they controlled.

Check out the
timelines of SBC yourself and the promises made, then broken
:

Net Neutrality should be the tipping point to get everyone pissed off and call for
an investigation into the failed fiber optic deployments. Teletruth believes
this is one of the largest scandals in American history. The Bells have O
rights to have exclusive use of the networks —  the only reason they can
claim everything is the sweetheart deal the FCC made to give them exclusive
rights. These exclusives need to be overturned because:

  • The
    Telecom Act of 1996 opened these very networks.
  • Every state law
    demanded open, competitive network
  • Every merger was based on open
    competitive networks.

But most importantly — customers have been funding
open networks
, and anything the Bells build, even a decade late, is being
funded out of excessive rates.

Net Neutrality?

Forget that.
Investigate and get the billions back and require every networks customers
fund to remain OPEN on all levels — We paid for the networks. We have
rights.

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Dana Blankenhorn

Dana Blankenhorn

Dana Blankenhorn began his career as a financial journalist in 1978, began covering technology in 1982, and the Internet in 1985. He started one of the first Internet daily newsletters, the Interactive Age Daily, in 1994. He recently retired from InvestorPlace and lives in Atlanta, GA, preparing for his next great adventure. He's a graduate of Rice University (1977) and Northwestern's Medill School of Journalism (MSJ 1978). He's a native of Massapequa, NY.

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