Teletruth News Alert: September 10th, 2008



(Contact info below)

Teletruth and New Networks Institute Data Quality Filings

FCC Ruling Strip-Mines the Requirements of Data Collection on AT&T, Verizon and Qwest.

Bad Data Creates Bad Public Policies - Decision Being Made Using 6 Year-Old Data.

Harms to Small Competitors: FCC "Consequently, we estimate that the majority of these firms are small entities that may be affected by our action."

We all know the consequence of bad data - Entering Iraq and the missing weapons-of-mass-destruction debacle should be an indicator just how bad it gets when data is flawed, intentionally misleading or missing.

While Congress and others have been holding meetings about the paucity of the FCC's data on broadband, on Monday, September 8th, the FCC decided to erase your ability to know the truth about AT&T, Verizon and Qwest's behavior and acts on multiple topics pertaining to America's telecom and broadband future. It is a slap to the face of everyone reading this. Now, even the analysts will not be given enough data to see just how badly we've been hosed.

The FCC today essentially granted "forbearance" meaning, AT&T, Verizon and Qwest no longer have to collect data on say, quality of service, the build out of the infrastructure, or other important issues.

"In this Order, we grant significant forbearance from carriers' obligation to file Automated Reporting Management Information System (ARMIS) Reports 43-05, 43-06, 43-07, and 43-08 (collectively, the "ARMIS service quality and infrastructure reports"). In particular, with certain limited exceptions, we find that the section 10 criteria are met for the ARMIS service quality and infrastructure reports, subject to certain conditions." -

To read the document

"ARMIS reports" are the basic data the phone companies should be supplying to the FCC; now strip-mined to nothing useful.

Dissenting in part, FCC Commissioner Copps wrote:

"The collection and analysis of solid communications-related data is a linchpin in the Commission's ability to make sound decisions and provide useful guidance and assistance to consumers, states, industry-participants and other stakeholders. That is why it has been so troubling to see in to many instances the Commission headed down the road of collecting less data."

Commissioner Adelstein wrote:

"I have long believed that the Commission has a responsibility to collect accurate and reliable data in order to develop effective policies and fulfill Congress's goals for the evolving telecommunications marketplace. Just as an airplane pilot would not land a plane with eyes closed and instruments off, the Commission must ensure that its decision-making is guided by sufficient data."

Eyes Wide Shut - The FCC's Data - Bad Data Continues to Make Bad Policies.

OK, the FCC's data is currently atrocious on almost all levels. We can substantiate this as Teletruth and New Networks Institute have filed multiple 'Data Quality Act' complaints outlining how the FCC doesn't really care about their "truth in billing" laws, their broadband information or even the actual cost of service, much less competition.

Here are some of our previous Data Quality Act Complaints, FIOAs and other attempts to warn the FCC that bad data was creating bad policies.

The current data the FCC used in this current forbearance document is no different. It is a legal-action-waiting-to-happen against the agency as it gives a totally distorted picture of the telecom and broadband marketplace.

How bad is it? This next excerpt is from the FCC's Sept. 8th, 2008 announcement. It discusses the number of Internet Providers in the year 2002 -data that is over 6 years old. It is the FCC's most current information on this subject and it is being used to say - We don't need data on AT&T, Verizon and Qwest.

"Internet Service Providers. The SBA has developed a small business size standard for Internet Service Providers (ISPs). ISPs "provide clients access to the Internet and generally provide related services such as web hosting, web page designing, and hardware or software consulting related to Internet connectivity." Under the SBA size standard, such a business is small if it has average annual receipts of $23 million or less. According to Census Bureau data for 2002, there were 2,529 firms in this category that operated for the entire year. "

But the kicker-the FCC actually writes

"Consequently, we estimate that the majority of these firms are small entities that may be affected by our action."

It knows it is harming 'small entities', but is not going to do anything about it.

Using data from the year 2002 is, well, absurd. Legacy-AT&T and MCI, the 2 largest competitors, were still competing, and the FCC hadn't ruled on removing independent ISPs from the networks (though they were not enforcing the law or previous merger conditions to defend competitors from predatory pricing and sub-standard services.).

Had the FCC examined the data, as we did, in a timely fashion, the FCC would have realized that 7000 independent Internet Providers were put out of business since 2000. Ironically, by 2005, the FCC created a series of bad decisions based on bad data. It removed the independent ISP's right to compete using the incumbents' DSL, cable modem and even new fiber optic services. (These changes in regulations were based on data from 1997!)

Net Neutrality concerns also were created by using inaccurate data. Had these independent, competitive companies created by the Telecom Act of 1996 been allowed to use the PSTN - the 'Public Switched Telephone Networks' ---as the law allows, then if a company, blocks, degrades, filters or even taps your phone or harms your internet, you simply change companies. With the total consolidation of the market, there are no choices and the companies control not only the pipe, but the internet services using the pipe.

How bad is it today?

  • The FCC didn't notice when the AT&T and MCI customers got hit with price increases and now can cost $.50-$1.00 a minute. The FCC doesn't track low volume users, who get harmed by excessive plan fees.
  • The FCC didn't notice that the 98 million homes that should have been rewired with fiber optic services by 2009 with speeds of 45mbps in both directions. The FCC's 200K speed-bump definition for broadband ignored the Telecom Act's definition of "high-quality video in both directions".
  • The FCC didn't notice that America is slipped to 15th in the world in broadband on their watch -- We were Number 1 when the Internet hit.
  • The FCC didn't notice that there is little wireline competition today and that Verizon and AT&T are able to continually raise rates in virtually every state.
  • The FCC didn't notice that every merger condition by AT&T-SBC-BellSouth-Verizon-GTE was never met and all that happened was to consolidate the market. AT&T now controls 22 states for local, long distance, DSL and the ISP service.

Yet, Chairman Martin wrote:

"Today, we take another step to remove unnecessary regulatory burdens and ensure a regulatory level playing field. We eliminate outdated reporting requirements that applied to a small class of carriers, retaining only those requirements that still serve a useful regulatory purpose. …And if the Commission does believe specific information is needed in today's competitive marketplace, then we should collect that information from all industry players rather than a handful of carriers."

The FCC does claim it is starting a new rulemaking on the topic, to provide "how the Commission should collect such data on an industry-wide basis." What a joke. There is a monopoly on wireline service, Duh, so what the FCC wants to do is to be able to fudge basic numbers for their political games. If AT&T controls 22 states, and Verizon controls 10+ states and what's left of the GTE's 28 territories, and Qwest controls the other states then industry-wide means - "let's not hold the utilities accountable for anything". (Cable has about 15% of the residential local and long distance market - and much less in the small business market. Most other competitors were put out of business.)

Tom Allibone of Teletruth believes that since the FCC knows its information is so bad, that it has concluded "why bother with collecting anything". I concur.

Let us hope that the next President requires accurate data and removes this chairman who will be known in history as the friend of AT&T, Verizon and Qwest, not the public interest. And in the meantime, Congress should step in and reverse this perverse decision to strip-mine the public's right for an accurate accounting and essential data required for sound public policies.

Bruce Kushnick, Chairman, Teletruth

Executive Director, New Networks Institute

[email protected]

Tom Allibone, Director of Audits, Teletruth

President, LTC Consulting LLP

[email protected]