Contact Info at the End of Release

 

RELEASE DATE: May 1st, 2003

TeleTruth to FCC – The Current Telecom and DSL Laws are Not Being Adequately Enforced, Harming US Broadband and Internet Customers as well as ISPs and CLECs.

New Networks Institute’s 4th Annual ISP Survey Reveals an Industry in Crisis.

Teletruth Proposes That The FCC Adopt The "Broadband Bill Of Rights" As Part Of The Solution To Broadband Customer Service Issues.

New York --- Teletruth, a national customer alliance, joined by the Texas ISP Association, (TISPA), other ISP groups, and Internet customers, filed a Petition with the FCC to investigate and open for public comment claims that the current broadband/Internet/DSL laws and enforcement are not adequate to protect competitors or their customers. The Petition is based on the results of a recent, nationwide ISP survey conducted by New Networks Institute which shows an industry in crisis. Teletruth is also recommending that the FCC consider adopting the "Broadband Bill of Rights" as a solution to some of the current problems customers and their providers face in trying to get DSL from the incumbent Bell monopolies.

From customers:

  • A Customer orders DSL from an ISP in New York City and is told that there is NO available copper wiring in their building.
  • A Customer orders DSL from an ISP in Philadelphia and is told they must stop using their local competitive phone service, MCI, and return to Verizon, before they can get DSL.
  • A Customer in California waits home all day for an installer for DSL that never shows up.
  • A Customer is dropped from their DSL service because their ISP can’t make any money reselling it.
  • Customers across the US may lose the choice of Internet or DSL providers if the FCC’s current proposed rules about line sharing and next generation networks remain. (line sharing allows a competitor to use the same wire that provides local phone service.)

In the FCC’s rush to both promote broadband deployment and deregulate the local phone companies’ broadband activities, the American Internet and DSL customers have been left out in the cold. The installation issues above, taken directly from current customer problems, are but a few of the thousands of nightmares that are facing customers trying to get DSL today. Unfortunately, even while claiming to be trying to promote broadband deployment, the Commission has repeatedly failed to examine or enforce current laws and regulations protecting the true source of innovation and growth in this sector --- America’s competitive small Internet Service Providers..

The results of the New Networks Institute (NNI) 4th Annual ISP Survey revealed an industry in crisis.

"There is a dirty little industry secret --- The NNI ISP survey revealed that 1/3 of all DSL orders have problems caused by the local phone companies and the FCC has no mechanism for fixing these issues. Also, the FCC’s laws that protect the rights of ALL small telecom providers have not been enforced and in some cases, have been totally ignored" states Bruce Kushnick, Chairman of Teletruth and Executive Director of New Networks Institute.

"Imagine ordering a DSL circuit for a client only to be told there’s not enough copper wiring in the middle of Manhattan, New York in some skyscraper? Imagine what the customer says to us when we tell them they can’t get their DSL service because they already changed to MCI for voice service, and they have to switch back to Verizon for local service. These are just a few of the problems we have with every order. Hundreds of different things can go wrong just placing the order. It’s outrageous that they can get away with it" states Joe Plotkin of Bway.net.

According to our survey, over 60% of ISPs offer broadband, mostly through competitive local phone companies (CLECs). However, of the 40% of ISPs who do not offer DSL, the primary reason has been predatory pricing or harm caused through anti-competitive behaviors dealing with the installation and ordering issues.

Dave Roberston, President of STIC.Net in San Antonio Texas, and President of the Texas ISP Association states it will take almost 12 years to actually turn a profit on reselling DSL at the current prices.

  • "Presently, SBC Telephone is required to sell all Texas ISPs connections to the telephone network at equitable wholesale rates. Homes and businesses can choose from ISPs competing to serve them, whether the ISP is owned locally or by a national corporation. The SBC wholesale rate is $36 a month for a DSL phone line, plus $6.00 a month for the ISPs connection to the Bell cloud, plus $99 for the install kit. SBC has created a their own subsidiary ISP however, which charges a retail customer only $34.95 for a DSL line, including Internet access, e-mail, web pages, technical support, installation kit, and a free modem. So Texas ISPs not owned by Bell pay more for a "wholesale" DSL telephone line alone than the Bell subsidiary charges retail customers for all services. This means the ISP will break even and start making a profit after 142 months of service."
  • Recently, Peak-To-Peak Internet filed an informal complaint to the FCC, claiming that Qwest was able to take their customer by switching the client to Qwest’s own Internet provider. "We filed an informal complaint, which took months. The FCC never gave us the Qwest response to our complaint, and all the FCC said was that if you don’t like our response, file a formal complaint. This costs tens of thousands of dollars for a lawyer, and it will take years. No wonder most ISPs think that the FCC is a waste of time" states Chris Magnuson of Peak-To-Peak Internet, offering Internet and DSL services in Colorado, Wyoming, Oregon, Washington

    The FCC has not fulfilled its own obligations under the Regulatory Flexibility Act (RFA). Under the FCC agency is required to do an impact study on how their rulings will impact small telecom businesses. The Small Business Administration’s Office of Advocacy has also found that this ruling would be harmful to the ISP markets. The SBA’s analysis is available at: http://www.sba.gov/advo/laws/comments/fcc02_0827.html

    ISPs are being closed out of the broadband future. The ISP industry is under multiple regulatory attacks. "The Commission’s decision to eliminate line sharing, which allows competitors to use the same phoneline as a regular voice call, will most likely cause a second telecom crash and a deepening of the telecom recession because it blocks the use of broadband networks to both ISPs and CLECs." adds Kushnick "At the same time, the FCC has closed the cable markets to ISPs as well, effectively closing out an entire industry’s future. Our impact study showed that 1500 companies are at risk if these rules become law, and this will affect 10-15 million customers as well."

    The preempting of state broadband laws is a "Customer Takings". In many states, billions of dollars have been collected in the name of broadband. For example, Teletruth has filed a Complaint in Pennsylvania to investigate the estimated $785 per household that has been collected under the current state Alternate Regulation plans. The Pennsylvania Public Utilities Commission is currently holding Verizon-PA accountable for their promises to rewire half the state with fiber-optic services by 2004, that would be delivered to both rural and urban areas, and capable of speeds of 45 Mps in both directions. To read our complaint see: http://www.newnetworks.com/prpenncomplaint.htm

    "The FCC has continually ignored the thousands of documents which show that the local monopolies collected large sums of money from customers for new networks that were never deployed. In some states, such as Louisiana or Oregon, the monopoly was able to use customer funds to roll out DSL. If this is true, how can the FCC block these state laws, and the customers’ contributions, and give the monopoly private use of these networks, closing these networks to competition?" states Kushnick.

    Adoption of the Broadband Bill of Rights. In 2001, Teletruth members created the Broadband Bill of Rights to enforce and strengthen current "Quality of Service" problems encountered by customers ordering DSL. This Petition requests that the FCC adopts an updated version of the Broadband Bill of Rights as part of the solution. It includes a provision that would require the Bell to deliver quality service or compensate the customer and ISP who have been harmed.

    "It is time for the Commission to do its job and enforce the laws before any more companies go bankrupt and the country’s telecom problems take down the economy. It is also time for the FCC to take into account the ISPs’ role in the Digital Future before it regulates these businesses out of business. In order to do so, the FCC should open a docket that examines the seriousness of our claims and allows a record to be presented that includes ISPs and their customers" adds Dannie Gregiore, Iglou.net, offering Internet and broadband services in Kentucky.

    To Read the Petition (Includes the Updated Broadband Bill of Rights)
    http://www.teletruth.org/docs/ISPPETITIONTeletruth.doc

    To Read the NNI 4th Annual ISP Survey
    http://www.teletruth.org/docs/ISPsurvey2003.doc

    To Read the Comments about the Regulatory Flexibility Act http://www.teletruth.org/FCCbroadband.html

    Contacts:

    Bruce Kushnick, Teletruth, bruce@teletruth.org 212-777-5418
    Scott McCollough, legal issues, SCM&P, 512-485-7920
    Dave Robertson, STIC.Net, TISPA, (Texas, phone co. SBC) 210-389-DAVE
    Joe Plotkin, Kate Lynch, Bway.net, (New York, phone co. Verizon) 212-982-9800
    Dannie Gregiore, Iglou.net, (Kentucky, phone co. BellSouth)
    dannie@iglou.com,
    Chris Magnuson, Peak-to-Peak, (Colorado, Wyoming, Oregon, Washington, phone co. Qwest)
    support@peakpeak.com