and Next Steps for
A) The FCC should establish a new workshop
entitled Follow the Broadband Money. To date, there
has been no serious discussion that customers are funding Verizon,
AT&T, and Qwests broadband deployments. Our research shows
these companies have collected over $300 billion in excess phone charges,
tax incentives, and depreciation perks for upgrades to the Public
Switched Telephone Networks, (which were never completed) granted
by the state commissions, and it continues today in rate increases
Implications: As the FCC examines ways to fund ubiquitous, open broadband, and before we give more money to the incumbents or increase the Universal Service Fund, shouldnt we first understand how state-based-intrastate funding is being used to fund an interstate information service and whether ratepayers are getting the benefits of being defacto investors?
See our Request: http://www.newnetworks.com/fccbroadbandworkshops.htm
B) The utility vs the deregulated monopoly Today, Verizon claims FiOS is a competitor to Verizons utility service, yet the deregulated business is now strip-mining the Public Switched Telephone Networks (PSTN) and cross-subsidizing the broadband/cable business i.e., not upgrading the utility, but draining its assets. In fact, Verizons FiOS removes the copper wire, thus, the utility property is harmed.
been a major shift from upgrading the utility to now creating a separate,
competitive company which does not have the obligations of the utility
but gets its perks. The PSTN was open to competition and is supposed
to be ubiquitous, wiring everyone. If
The other implication: Americas infrastructure is now in the hands of companies that not only failed to deploy previously, but do not have the obligations to do the entire state, nor open the networks, even though they receive most of the utility perks. AT&T now controls 22 states and Verizon controls 10 states, as well as the GTE and Alltel territories. However, combined they only have 4.1 million upgraded TV homes. Verizon has said that FIOS will only go to 70% of their properties, thus many areas of Verizons territories wont be upgraded, (even though customers are paying for it.). AT&Ts U-verse is worse as it is an inferior, copper-based product. This means that the infrastructure in AT&Ts 22 states is in jeopardy. If these companies dont build, who will build the infrastructure for the state?
And while many keep discussing wireless as bypass to the phone companies, wireless can never compete on speeds that the infrastructure should deploy.
C) A Competition Workshop The FCC has not had a serious discussion of competition. Should Congress open up FIOS, U-Verse, or even the cable companies for all competitors including ISPs, CLECs, and video programmers as was the intent of the Telecom Act? Should the FCC reverse previous decisions that block line sharing, (using the customers line for DSL) wholesale rates (UNE-P) or using the fiber-based networks which were closed to competition? Should there be a second divestiture, structural separation or other regulatory models to re-open the networks for competition?
Today, there is no competition. Local service could not rise 90% if competition existed.
Competition drives innovation, choice and even lowers
prices. It was competition and the Internet that drove the largest
growth in telecom in American history, not to mention a dramatic boost
in the economy, and it was the small independent companies,
not the incumbents, who brought
D) Failure of the small business regulations to protect small businesses. We just filed comments arguing that the previous FCC Administrations' failure to take the Regulatory Flexibility Act (RFA) (the laws protecting small businesses) obligations seriously since 1998, combined with an overwhelming disregard for accurate data, helped to remove America's broadband, telecommunications, Internet, wireless and even media competition, costing the economy trillions and harming customer choice. We believe that the previous rules should be reopened with new rulemakings.
See our Comments: http://www.newnetworks.com/TeletruthRFA.htm
Implication: This tool to be used to balance the incumbents power should be revamped to make it function properly and not be an afterthought using boilerplate materials.
E) Clean up the FCCs Data The FCCs data used in hundreds of FCC rulemakings is from 1992, 1993, 1997, and it is supposed to represent current wireless, Internet, broadband and telecom markets. It has created bad policy decisions, such as closing the networks to competitors, or, denying small wireless companies access to the networks.
F) Fix the FCCs phone bill charges data, Truth-in-billing violations, including broadband packages. The FCCs data on phone bills is essentially made up. Through Teletruths phone bill surveys and phone bill auditing, it is clear that the FCCs analysis has harmed low volume and even mid volume phone and wireless customers, not to mention created bad policies --- Did you know AT&Ts basic long distance rate is $.42 a minute and that based on a subscriber-analysis, wireless customers can pay $3.00 a minute? The FCC data claims that the average cost for a wireless one minute call is $.06. Packages, including broadband plans, can tie customers to local service and other services if they want reasonable prices, though the majority of customers do not benefit from packages. Packages also have gimme prices, where the actual price can be 35% more money, or the price is only a promotion; the real final total cost is not revealed.
Implications. The FCC has an open docket on truth-in-billing, but the problem is far more severe. The FCC has left out low and medium volume users, which happen to be the majority of users, and it never examines the actual data, such as actual phone bills, or even the advertisements and web pages that customers will actually see. By not having accurate data, the FCCs analysis has led to customers being gouged. Broadband services are tied directly to what is happening to phone packages.
G) Astroturf, corporate funded-non-profits and think
tanks still permeate the entire workshop process. In an era of transparency, we
still have many groups who are funded by AT&T, Verizon et al,
and who create reports, or are helping to create broadband policies,
or lobby for what are essentially their funders policies. This
practice is so prevalent that, while in
Advisory boards should be cleansed of all corporate-tied groups or individuals and the FCC should require ALL persons or organizations who it meets to disclose whether they receive monies from the companies that the FCC regulates. All reports, etc. that the FCC quotes should also have disclosure on the reports financial backers.
Bruce Kushnick, Executive director, New Networks Institute [email protected]