Six Basic Quotes:

Verizon and AT&T’s Wired-Wireless Busineses and Data.

We’d like to supply to the DOJ and the FCC with some exact quotes from the companies themselves or the regulators to make some of our points clear.


1)               AT&T Is Goosing Its Wireless Profits & Depressing the Wireline Profits

2)               The PSTN is NOT POTS, Plain Old Telephone Networks

3)               The PSTN Was All One Network, Not Two

4)               Access Lines were Broadband, Not POTs Only

5)               Verizon has been Manipulating Access Line Accounting.

6)               AT&T has been Manipulating Access Line Accounting.



1)         AT&T Is Goosing Its Wireless Profits and Depressing the Wireline Profits


AT&T’s 2010 Annual Report had a disturbing “Management’s Discussion”, which stated that the wireless division’s  profit margins increased based on what looks like dumping expenses into the wireline division.


“Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations-Continued Dollars in millions except per share amounts …”Historically, intersegment activity had been reported as revenue in the billing segment and operating expense in the purchasing segment. Upon consolidation, the intersegment revenue and expense were eliminated with the consolidated results reflecting the cash operating and depreciation expense of providing the intersegment service. As part of AT&T’s ongoing initiatives to manage its business from an external customer perspective, we no longer report intersegment revenue and report the cash operating and depreciation expense related to intersegment activity in the purchasing segment, which provided services to the external customer. While this change did not impact AT&T’s total consolidated results, the impact to each operating segment varied. In particular, the Wireless segment, as a purchaser of network, IT and other services from the Wireline segment, experienced a reduction in cash operating expense partially offset by increased depreciation expense with the net result being increased operating margins.”


2)         The PSTN is NOT POTS, Plain Old Telephone Networks


In the state of New Jersey there is a current open docket where the New Jersey Board of Public Utilities has issued a 'show cause order’ to Verizon to explain why they had failed to upgrade the state -- by 2010.  100% of Verizon's New Jersey should have been fully-fibered with a service capable of 45 Mbps in both directions. It is in  current state law. And New Jersey  is typical in that Verizon and AT&T went state-to-state to change state laws to have not only entire state but also all schools libraries and hospitals completed by 2010.

This law was passed in 1993 and it states that the PSTN is broadband, video, and that these services were to be part of the Public switch networks. – It’s law. (In the Matter of the Application of New Jersey Bell Telephone Company For  Approval of its Plan for an Alternate Regulation, Decision Docket Number  T092030358, 4/14/03)


"D. NJ BELL'S PLAN FOR AN ALTERNATIVE FORM OF REGULATION MAY 21, 1992 --- NJ Bell's plan declares that its approval by the Board would provide the foundation for NJ Bell's acceleration of an information age network in Now Jersey and referred to by NJ Bell as ‘Opportunity New Jersey’. Opportunity New Jersey would accelerate the deployment of key network technologies to make available advanced intelligent network, narrowband digital, wideband digital, and broadband digital service capabilities in the public switched network, and thereby accelerate the transformation of NJ Bell's public switched network, which today transports voiceband services (voice, facsimile and low speed data), to a public switched network, which transports video and high speed data services in addition to voiceband services." (emphasis added).


3)         The PSTN Was All 1 Network, Not 2 or Separated by Multiple Affiliates


And let us be very clear; what is described is a single public network. In its 2001 “New Jersey Infrastructure Report,” Verizon, New Jersey made clear that it operates one network, not separate networks for “communications” and “information”; one public switched common carrier network.


“By integrating a number of services on a single network, Verizon NJ will continue to make optimum use of our service delivery capabilities. The evolution to the full service ATM [Asynchronous Transfer Mode] based switched broadband network will increase significantly the efficiency of serving New Jersey through automated provisioning and activation processes, increase capacity availability, and result in an even more flexible delivery platform. Verizon NJ’s integrated network of switches, transmission facilities and operating systems provides New Jersey’s residential and business communities with a technologically advanced telecommunications infrastructure that is ready, willing and able to act as the on-ramp to the Information Highway.”


4)         Access Lines were Broadband,  not POTs Only


Verizon, Pennsylvania has a current commitment to rewire the entire state of Pennsylvania by 2015. The law specifically stated that this was to provide ‘broadband’ services and capability over ‘access lines’.


Bell has committed itself to construct this network and deliver broadband services to its customers within only a few years…Under the Network Plan, as modified, Bell committed to provide a broadband network to at least 20% of all access lines in its urban, suburban and rural areas by 1998. On this network, Bell stated its customers will have "45 Mbps necessary for upstream digital video transmission and the 45 Mbps necessary for downstream digital video transmission." Thus, Bell pledged to construct a two-way video network - a network with much greater capacity than now exists - and deliver this network to at least 20% of its access lines within a few years.”


5)         Verizon Has Been Manipulating Access Line Accounting.


This exhibit shows that of the total lines, Verizon only is counting around 21% of lines in service as of 2006. The FCC has failed to have the companies supply basic data on ALL lines.


FCC Statistics of Common Carriers, Verizon NY and NJ, 2006.



Verizon NJ

Verizon, NY

Total Switched Access Lines



Total Access Lines

(Switched and Special)








6)         AT&T Has Been Manipulating Access Line Accounting.


This is AT&T’s information for first quarter 2012. AT&T claims that they lost over 5.2 million ‘switched access lines’ in 1 year or over 12%.


“At March 31, 2012, our total switched access lines were 35.4 million compared with 40.6 million at March 31, 2011…. Our total broadband connections were 16.5 million at March 31, 2012 and 2011. U-verse High Speed Internet subscribers totaled 5.9 million at March 31, 2012, a 60.9 percent increase over the year-earlier quarter. At March 31, 2012, the number of U-verse video subscribers totaled 4.0 million, with a net gain of 200,000 subscribers in the first quarter of 2012. …The number of U-verse voice connections (which use VoIP technology and therefore are not included in the access line total) increased by 164,000 in the quarter to reach 2.4 million.”


But then,  reading the rest of the information,  AT&T doesn’t count its other ‘voice phone calling’, which uses “VOIP” technology for “U-Verse” so it is not counting 2.4 million lines; these services go over the identical PSTN wires that were already in place. Nor does it go into the additional 60% increase of ‘high-speed subscribers’, which also goes over the same wire and which would add 5.9 million lines, or the 4 million ‘video subscribers’, which also goes over the exact same PSTN wire.