Teletruth News Alert: April 26th, 2007

Dear Senator Kerry, Congressmen Markey, and Governor Patrick. Massachusetts Was Duped By Verizon About Previous Fiber Optic Deployments --- Investigate, then Get The Money Back.


According to the Boston Globe, Verizon has suspended applications for new cable licenses and Governor Patrick is proposing new telecom taxes while Senators Kerry and Rep. Markey are also asking to not delay upgrades.



Gentlemen, You and the Bay State were duped. America is 15th in broadband because Verizon and AT&T pulled a fast one on the American public, promising to rewire America and instead they took the money and ran.

Don't raise rates or increase or add taxes until you investigate and get the money back.

According to Verizon:

By 2010, the majority of Massachusetts was supposed to already been rewired with a fiber optic service capable of 400-800 channels, and 45mbps services in both directions. This service was to be open to all competition and deployed 'ubiquitously', in all areas of the state equally. Worse, customers already paid over $2000.00 a household for services they never received.

In 1999 we filed a complaint in Massachusetts outlining how Verizon (then New England Telephone) convinced regulators that they would rewire the state starting in 1995 if the company got massive financial incentives - Deregulation -- the removal of regulation that examined and limited their profits. The Massachusetts Department of Telecommunications and Energy, never acted on our complaint.


Verizon also claimed it would spend $1/2 a billion dollars on this rewiring plan, starting in 1995 with 330,000 homes. Instead, Verizon got massive financial tax perks of-over $800 million dollars, and we estimate that each customer was charged over $2000 in higher phone rates over the last decade.

Here are pages from Verizon's original filing:

This same plan was also filed with the FCC known as "Video Dialtone", which outlined in detail 330,000 homes in Massachusetts were to be rewired immediately, the majority of the entire state would be finished by 2010.

Don't believe us? Here's Verizon's own words:

"On July 8, 1994, NYNEX filed two (Section 214) provide video dialtone service in Massachusetts proposes a system that will pass approximately 334,000 homes and businesses."

[FCC 95-50 Order and Authorization, released 3/6/95]

"NYNEX proposes to deploy hybrid fiber optic and coaxial (HFC) broadband networks that will provide advanced voice, data, and video services, including interactive video entertainment, multimedia education and health care services. The allocation plan provides for the offering of 21 analog channels, all but one of which will be used for over-the-air broadcast programming services, and, depending on compression rates, between 400 an 800 digital channels."

"NYNEX plans to deploy this type of network to the majority of its customers by the year 2010."

In fact, Verizon systematically did this same exact scam throughout their territories, including in RI, PA, NJ, NY, MD, DE, and the District of Columbia. Not be outdone, AT&T did this same thing in most of its states.

Read our Harvard Nieman article on the failure of the phone companies to rewire their territories, even though they collected over $200 billion nationwide.

Where's that broadband fiber-optic access?, March 14, 2006

Was it legal for Verizon to sign a contract with the state based on the premise that it would build a new network, then pocket the money and run? The state never went back and got the added costs to customers, even though it was billions of dollars.

Meanwhile the current-Bell company flaks are now claiming these companies need more money and its costing customers billions to wait. The astroturf groups, Consumers for Cable Choice, APT and others, make the following statement to congress:

"We urge the Congress to make the passage of franchise reform legislation a top consumer priority this year. Consumers deserve, need and want real choice in video services as soon as possible. At the stunning rate of $260 every second nationwide, American consumers are seeing hard-earned dollars pour out of their pockets for a total of over $8.2 billion in annual savings that consumers are missing."

Using the AT&T and Verizon's numbers:

Cost of Failure to deploy:$82 billion and counting. America has had 10 years without upgrades, costing America over $82 billion dollars in cable competition excess.

$5 Trillion Dollars in economic harms: The phone companies claim that America would gain $500 billion annually with high speed broadband. That means America already lost $5 trillion dollars, Massachusetts alone lost $110 billion over the last decade in new business opportunity and economic growth

Investigate what happened in Massachusetts. Before you go and raise taxes or increase the already overstuffed Universal Service Fund, find out what happened to the failed deployments. How much money did the state (and other states) pay for networks they never received?

This is NOT historical, but current: Verizon and the other companies are cross-subsidizing all of their other lines of business, like long distance or DSL, which goes over the old copper wiring. And anything they build will be charged to customers in the form of higher rates.

Fix the FCC: It is clear that the FCC rewrote the entire history of broadband for political reasons. For example, why didn't the FCC investigate what happened state by state when the deployments weren't 'timely and reasonable"? Instead, the FCC erased the history of fiber optics: We filed a complaint about this issue.

Finally, FiOS and Lightspeed are crippled products. They are closed to competition, and right now the phone companies want to pick and choose who does and does not get wired -- the new digital divide.

Worse, history predicts these companies can not be trusted with America's digital future. Verizon only had 207,000 fiber optic IPTV customers at the end of 2006, while AT&T had 4,000. --- Where's the competition?

Congress should require that ALL networks be open to competition as promised in the state and in the Telecom Act, and that communities get properly served, not serviced when the phone companies deem it.

How many times are politicians going to charge customers for services they may never receive?

We stand ready to answer any questions you might have.

Bruce Kushnick, Teletruth

Tom Allibone, Teletruth

Teletruth web site