Bruce Kushnick, 212-777-5418 Bob Garnet, 201-218-7125 Web Site: http://www.teletruth.org To Read the Filed Comments and Other Material: http://www.teletruth.org/FCCbroadband.html FOR IMMEDIATE RELEASE: May 9th, 2002 TELETRUTH --- FCC IN VIOLATION OF THE SMALL BUSINESS REGULATORY FLEXIBILITY ACT---- TELETRUTH CALLS FOR HALT TO ALL PROCEEDINGS UNTIL THEY ARE IN COMPLIANCE. "SMALL TELECOM BUSINESS IMPACT STUDY" CONCLUDES FCC'S NEW PROPOSED RULES WILL HARM SMALL COMPETITORS AND SMALL BUSINESS CUSTOMERS. New York ----The Federal Communications Commission's (FCC) most current proposals to accelerate telephone company-sponsored broadband service deployment and investment by introducing a new round of concessions for the giant, Bell interests is seriously flawed. TeleTruth, the new national customer alliance, has filed Comments in six inter-related FCC broadband proceedings, arguing that the FCC has not complied with its legal obligation to examine the impact of its proposals on smaller telecom businesses and customers as required under the Regulatory Flexibility Act (RFA) of 1980 (as amended). TeleTruth has asked the Commission to suspend or invalidate its review and rule-making activities until the record of fact and the required impact studies are completed. Under the RFA, the Commission is required to create an "Initial Regulatory Flexibility Analysis" (IRFA) for each proposed action to examine the potential impact of its proposed policy or action on small businesses. The two classes of small businesses most affected by the Commission’s latest proposals are small Information Service Providers (ISPs) and (Competitive Local Exchange Companies (CLECs). Bruce Kushnick, Chairman of TeleTruth. "The FCC’s initial impact analyses, which are appended to the Federal Register, ALL fall short of their obligations to proactively seek out and obtain comments and commenters from affected small businesses. Having thus deprived itself of the small-business-specific information it would need to conduct the legally-required impact study, the Commission has, unfortunately, now offered little more than a boilerplate "analysis" on these issues. Its IRFAs do not even ask, much less answer, basic questions about the harms the adoption of its proposals would do to competitors, offers no viable alternatives, and leaves out the consideration of other important issues affected by these proposed rules." TeleTruth believes any real effort to calculate the impact of its proposed broadband rulings in accordance with the law and its intent would look more like the following data --- New Networks Institute, created for TeleTruth a "Small Telecom Business Impact Study" which is presented as an attachment to the TeleTruth filings. Over 1,500 ISP companies are in jeopardy if these rulings go through as considered. Small competitive telecom companies could lose approximately $8 billion in revenue as the number of customers, who cannot obtain broadband from competitive providers hobbled by RBOC intransigence, leave them and purchase whatever "broadband" offerings monopoly providers decide to roll out, or because the ISP can not grow due to these constraints of selling broadband. Approximately 10-15 million people could be forced to get another provider. As we point out, in the case of small businesses who depend on specific products, such as SDSL, web hosting and other services, this will cause serious problems. The potential harm to small businesses and small ISPs will further worsen as the entire CLEC industry may also collapse, taking with it Internet Providers as well as services to small businesses. "The bottom line is that the Commission has been persuaded by the Bell Companies that the best new regulatory framework for them and for advancing their broadband investment programs is one that permits telephone companies to limit competition. The Commission’s proposals in effect closes off entry and commercial opportunity in emerging broadband service markets to all but a handful of the biggest, facility-rich players--- the Bell monopolies" said TeleTruth’s Bruce Kushnick . "Unless the Commission expands the current focus of these proceedings to include the explicit consideration and development of a viable alternative to these proposed regulations, customers looking for faster, more advanced connections to the Internet will face an ever-shrinking pool of choices and will pay more to get them." TeleTruth and its members are asking for an immediate halt to these various proceedings before the FCC proceeds with these various inquiries. For more information, contact Bruce Kushnick at 212-777-5418 or bruce@teletruth.org or Bob Garnet, 201-218-7125, bob@teletruth.org