The
Government and America have been Punked by
AT&T, Verizon, et al.
Why is the Government Rewarding
the Companies that Created the Digital
Divide and Overcharged America?
=========
“Moneyball”,
is a movie starring Brad Pitt and Jonas Hall
that exposed a secret in America’s most
cherished game, baseball. It is a story of
how the Oakland “A”, was able to win 20
games in one season, setting the all-time
record, by removing the corrupted analysis
and mathematics that had been used to build
baseball teams.
“There is an epidemic
failure within the game to understand what
is really happening. This leaves people who
run major league baseball team to misjudge
their players to mismanage their
teams — -baseball is medieval; they are
asking all of the wrong questions.”
To
paraphrase:
There is an epidemic
failure within the telecommunications,
internet, broadband, wireless, Digital
Divide world to understand what has been
really happening. The Government has been
asking all the wrong questions and the phone
and cable companies used this to not upgrade
America and overcharge us, multiple times.
The
NTIA
has been tasked with giving out over
$50 billion dollars in the name of broadband
and closing the Digital Divide.
“With its new programs
authorized by the Consolidated
Appropriations Act of 2021 and the
Infrastructure Investment and Jobs Act
(IIJA), NTIA will oversee broadband funding
efforts, providing more than $50 billion to
bring affordable, universal broadband to
communities across America.”
Moreover,
it is supposed to be coordinating state,
local and tribal entities, interagencies and
even the private sector.
“Facilitate Interagency, State,
Tribal, and Private Sector Coordination
OICG collaborates with stakeholders across
federal agencies, states, tribes, and
industry to work toward the collective goal
of closing the digital divide. Through these
efforts, OICG enhances coordination among
federal and state broadband programs,
provides support and expertise, and convenes
leaders working to advance broadband in
communities across the United States.”
Unfortunately, there are structural
flaws in every aspect of this.
Where
is the analysis of the state
telecommunications public utilities
broadband upgrade commitments, with the
monies collected, or the fact that their
financial books show massive cross-subsidies
that created the Digital Divide? This is not
a state issue but rather a federal issue
combined as billions of dollars in
cross-subsidies went to illegally fund
interstate services, like wireless or the
fiber used for FIOS to deliver broadband,
but were instead charged to basic intrastate
phone service customers.
I.e.,
giving AT&T, Verizon et al. billions per
state to upgrade their state public telecom
utilities over the last 3 decades, did not
work — Why is the government now repeating
the same mistakes?
The
NTIA must grow up and actually work for the
public and give the best advice possible to
the White House on broadband and to close
the Digital Divide. Thus, the NTIA and the
FCC, and even the state utility commissions
have all been misled to the point that we
sit here giving out over $100 billion in
government subsidies that will mostly end up
being given to the very few
telecommunications and cable companies that
created the Digital Divide, rewarding
AT&T, Verizon and CenturyLink (now
Lumen) — the “Bell companies” that still
control most of America’s broadband
infrastructure — which is all part of state
telecommunications public utilities — and
got away with it for decades.
That’s
right.
First,
there are still state-based public
telecommunications utilities; they are not
just the copper wires but the fiber optic
wires as well.
Second,
starting in the 1990’s these state telecom
utilities were supposed to be upgraded to
fiber optics, and state laws were changed to
fund these deployments, not just once, circa
1992–2000, known as the information
superhighway, but also in 2004–2007, when
Verizon announced FiOS and AT&T
announced U-verse.
Third,
by 2010, the construction budgets of the
state utilities have been illegally
transferred to wireless over the last
decade, and this left the entire state
territory to deteriorate — causing the
digital divide; the cablecos just went along
for the ride.
Fourth,
circa, 2000, Verizon and AT&T started to
manipulate the accounting of expenses in the
state utilities so that the major allocation
of costs were put into one service category,
the local phone service, while the other
lines of business using these networks have
gotten a free ride. Worse, billions in
corporate operations expenses were added to
the state utilities to make them appear
unprofitable so they did NOT upgrade the
rural areas with fiber, even though they had
been paid to do so by the continuous rate
increases.
In the
end, they control the wires and
infrastructure, they control the prices and
who gets upgraded — and they conned America;
there was plenty of money to upgrade
America — they manipulated the
accounting — cooked the books — and you, the
NTIA, FCC, Congress, et al were all
played — you bought the hype.
And
this is not new. The government agencies,
including
the NTIA, failed to investigate our
claims for 20 years.
What
must happen next is to understand that the
NTIA et al has been complicit in this
massive accounting scandal and broadband
failure.
- The
Government must create an investigative
enforcement unit to halt the AT&T et
al. massive cross-subsidies still underway
in 2022.— Get the Money Back.
- There
must be No spotty wireless or satellite
broadband substitutes for universal,
symmetrical wireline fiber to the premises
infrastructure. — Get the Money Back.
- Not one cent should be given out
to the incumbent phone and cable
companies (or their subsidiaries or
affiliates) until the audits are done
and the cross-subsidies redirected to
upgrade the state telecom utility.
This
plan
stops the $60–80 billion dollars in
customer overcharging annually and could
save America taxpayers an estimated $30–80
billion dollars in wasted government
spending. Moreover, these new revenues
should fund the entire US upgrade to fiber
as well as lower rates, by bringing in
competitive providers and choices.
The
NTIA
claims it is going to be using actual
data to build tools for investment
decisions.
“LEVERAGE DATA FOR
DECISION MAKING Build tools to inform
targeted investment decisions at the
federal, state, and local levels Develop
capabilities to deepen stakeholder
understanding of the digital divide.”
We
don’t believe you. Our work is based on
facts we’ve presented for 2 decades that
have been ignored because of the power of
what has become a cartel based on mergers.
AT&T et al were actually able to rewrite
the history of broadband of America and hide
multi-billion dollar utilities in plain
sight — with no audits or investigations,
but with the outcome being the creation of
the Digital Divide — by design.
We were right.
20
years ago, literally, on
December
19th, 2001, New Networks Institute
filed comments with the NTIA pertaining to
the deployment of broadband, then called
“advanced telecommunications”. We pointed
out, based on research, that most of America
had not been upgraded to fiber optics, even
though America paid for these upgrades,
state-after-state, of the state
telecommunications utilities, such as now
Verizon York or Rhode Island or AT&T
California — and this included the rural
areas as well. We pointed out that none of
the ‘commitments’ had been completed, and,
in fact, we detailed that a Digital Divide
was being created and quoted others,
including the New Jersey Ratepayer Advocate.
“…low income and
residential customers have paid for the
fiber-optic lines every month but have not
yet benefited.”
“Bell Atlantic-New Jersey
has over-earned, underspent and inequitably
deployed advanced telecommunications
technology to business customers, while
largely neglecting schools and libraries,
low-income and residential ratepayers and
consumers in Urban Enterprise Zones as well
as urban and rural areas.”
How
much money did Verizon New Jersey, New York,
Massachusetts, Maryland, and even Rhode
Island charge customers, divert the funds to
other lines of business and obtain tax
benefits for the claims of replacing the
existing copper wires with fiber optics?
Here’s the rub. There were multiple waves of
fiber optic commitments in the states; The
Verizon New Jersey commitment was to have
100% of the State upgraded with fiber by
2010 — and it started in 1993. This was a
decade before FiOS, which was announced in
2004. But, like the other states, Verizon
started to do fiber to the home and
stopped — moving the construction budgets to
wireless around 2010 — and leaving most
rural areas unserved.
What we
have are the Holding Company parents of the
incumbent phone companies letting their
state-based utility networks illegally
deteriorate when they should have been
upgraded — over a thirty year period.
Moreover,
our 2001 filing documented that there were
plans by the incumbent telco providers to
kill off the ISP competitors that had shown
up since the Telecom Act of 1996,
Ironically, the term “ISP” as used today did
NOT refer to AT&T and Comcast but to the
9,500 small, independent Internet Service
Providers that brought America to the
Internet, which is also known as the World
Wide Web (WWW).
We, in
fact, filed
in 2006
with the NTIA a full book documenting
that there were state-by-state plans to do
upgrades of the existing state utilities,
that it was never done but customers were
charged for it. Ironically, the book and our
group (then called Teletruth) were featured
on Bill Moyers’ Emmy-Nominated PBS Special,
the
“Net at
Risk”, in 2006 and our segment was
titled “The New Digital Divide”, and it was
the first major broadcast to discuss the
rise of Net Neutrality.
But
this is not simply about the history of how
we got here but the abuses that must be
halted going forward.
We file
these comments because the NTIA and the rest
of the government are asking all of the
wrong questions.
How did
we end up with large portions of America not
being properly upgraded to fiber optics and
why the price of America’s broadband
,
internet and wireless services are 5–20
times more expensive than Europe? Or
worse, America was promised a fiber optic
future to all parts of America, and the
companies have pulled a bait and switch
claiming wireless, including 5G is a
substitute — when everyone knows it is not
and these services still require a fiber
optic wire for backhaul services.
At the
core, this is one of the largest accounting
scandals in American history — and for some
reason our government wants to reward these
companies with more government subsidies for
work they already got paid to do multiple
times but never did.
But
this is where the NTIA must act.
In June
2021, the Verizon New York 2020 financial
Annual Report was released and the new 2021
Annual Report will be released in May 2022.
Our new consortium, the IRREGULATORS,
previously filed at the FCC and with various
states. Based on a decade of research and
using a decade of published annual reports,
as well as examining the other states, we
detailed that
- America
is based on state telecommunications
public utilities — and
- These
include the fiber optic wires of FIOS or
what was used for U-Verse as part of this
utility.
- There
is a massive cross-subsidy scheme in place
where the construction budgets to upgrade
that state was diverted, illegally, to
fund the wireless build outs.
- The
corporate expenses were dumped into the
utility to make it look unprofitable.
The
Verizon
NY 2020 Annual Report, published June
2021, detailed how the entire
telecommunications utility networks are
being dismantled; that they have been made
artificially unprofitable through a massive
financial cross-subsidy scheme.(The link
goes to a summary article, as well as a
report written by the Irregulators, as well
as links to the actual Verizon NY 2020
Annual Report.)
The
Verizon NY Annual Report is based on using
the “USOA” accounting formulas — that are
used in almost identical in every
state — i.e., Verizon NY, the largest state
public telecommunications utility, filed an
annual report with the NY Public Service
Commission, and it is based on the FCC
accounting rules that have become corrupted
over time. And these exact same rules and
formulas appear to be in use in every state
major telecom public utility, from AT&T
California to Verizon Pennsylvania.
This
shows that the construction budgets were put
mostly into the copper-based local phone
service, and the corporate operations
expenses were also put mostly into local
service — making it artificially
unprofitable.
How
does $833 million in Corporate Operations
get put into Local Service, or that it is
charged over $1 billion in
construction — when there is no copper-based
construction?
Most
importantly, there is no institutional
memory so America will continue to be
captured by a few companies that have taken
control over all communications in
America — and now figured out how to get the
government to reward them for not building
out fiber optic networks to all areas of
America.
In the
end, the government may be well meaning and
actually care about the Digital Divide, but
it has failed to collect and examine
fundamental data — the billions in
cross-subsidies that created the Digital
Divide and made prices unaffordable for
many.
