Teletruth News Analysis, August 16th, 2010


On the web:



Google and Verizon: Be afraid. Be very afraid.


Verizon and Google recently created an "understanding" over the Internet and

net neutrality titled: "Verizon-Google Legislative Framework Proposal".    


The details don't really matter at this point. What matters is --- Google is

not going to be a force that will protect the public interest from the

controllers of the wires, who are now engaged in serious anti-trust games.

Comcast, AT&T and Verizon are now lobbying, funding astroturf groups, (fake

consumer groups), a horde of paid-off minority groups, not to mention

corporate-funded think tanks, state and federal Congressmen and Senators

--- all to make sure that the wires are private property for their use, with

walled-in ghettos of influence and control.


And because of their massive 'foundation' booty, (who do you think is paying

for this largesse?) and their advertising dollars on broadcast and other

media, opposition, much less media scrutiny, has been the sound of one hand



Instead of questioning any of this, Google is essentially going to bed with

them. Instead of calling to re-open the networks to all forms of

competition, from allowing different Internet Service Providers (ISP), or

programming providers on the cable network, Google is making nice-nice.

First, they already have an agreement with Verizon Wireless for their phone

Droid, and now they want to have favored-status for wireline service,

focusing on net neutrality - a non-starter issue, a cover-up issue.


Why is Net Neutrality not the issue? Because if there was serious

competition, when someone was blocked, degraded or had other problems, the

customer could simply take their business elsewhere. Instead, through

consolidation and mergers (and more mergers to come, such as

Comcast-GE-NBC), AT&T, Verizon, and Comcast's money and power --- working

together --- is creating a climate where the owners of the wires are now

allowed to take over the entire wire for all services, including phone,

broadband, Internet and cable, as if it was their own property for

personal use.


So what if America paid for these wires and upgrades including wireline,

cable and even wireless services. (told in an upcoming story). So what if the phone companies have stolen the utilities, the "Public Switched

Telephone Networks", or that the cable companies now forget there's

something called a 'franchise'.


They will say "regulation blocks investment". What planet are they on? Since the 1990's deregulation has given AT&T and Verizon over $320 billion to do upgrades of the Public Switched Telephone Networks, the utilities. They took the money and ran. We're 15th in the world in broadband, proving that point.


All of this is a serious problem as it means that the public interest has no

counterbalance. Congress? One has only to look at the monies collected by

Congressmen and Senators from Comcast, AT&T and Verizon. We documented how

many politicians on both sides of the aisle are now campaign-financed by

these companies, their associations and PACs, and are taking actions to harm

the public and back their fenders.   


The other DC-advocacy groups? They are underfunded at best and without

actual clout, but good for soundbytes.


And talk about anti-trust? If both wires are asking for the same thing, to

be walled-in ghettos who control all services, and both collude through

major price increases, blocking competition and controlling the deployment

of broadband throughout the US ---acting as essentially one lobbying group

--- isn't that a cartel? The only connections into the home are controlled

By one group of companies?


Where are the trust-busters? From Wikipedia:   


"Around the world, what U.S. lawmakers and attorneys call "Antitrust" is

more commonly known as "competition law." The purpose of the act was to

oppose the combination of entities that could potentially harm competition,

such as monopolies or cartels."


No, the 'force' is going to the dark side. Be afraid. Be very afraid.


Before for I discuss 'the Google Factor", let me back track a bit and be very specific.


Essentially, the local phone networks were opened to competition by the

Telecommunications Act of 1996. By 2010, they are closed. Back in the year

2000, the old-AT&T and the unmerged-MCI (MCI is now owned by Verizon) were

the two largest US competitors. AT&T and MCI had the majority of all US

households for long distance and they had over 7 million local phone customers; competitors overall had about 20% of all local service (by 2004). There were also active, independent Internet Service Providers. In 2000, there were over 9,500 companies, such as AOL, and thousands of small companies in the market. The irony is the fact that the phone companies weren't in the Top 10 of US Internet Providers in 2000.


And in terms of US economic growth, fueled by these mostly small companies

delivering Internet service to new customers, America's telecommunications

had the largest growth in history --- hypergrowth, to be exact, in the

number of lines, minutes, revenues, and even profits. It was the small

competitors, not now-AT&T, Verizon et al who brought America's customers to

in the Internet --- a fact regulators seem to ignore.


Then, starting in 2004, the FCC rewrote the Telecom Act of 1996 and closed

the networks to competition, putting AT&T and MCI up for sale as well as

putting 7000 Internet providers out of business. The telcos and cablecos

simply took away the business from the Internet providers who had built the

business but were prohibited from migrating their dial-up customers to

faster speeds (broadband).


The companies also shifted monies that were supposed to be used for

upgrading the wireline networks to their wireless divisions --- so that by

now-AT&T and Verizon controlled 80% of the wireless market.


Since that time, the only competition in most of America has been a duopoly

at best. The cable companies --- the other wire into the home --- only have

20% of the local phone residential market. The local telcos, Verizon et al,

can still raise rates whenever they want because there is no competition to

drive down prices. And cable competition? AT&T and Verizon have about 5

million upgraded-fiber-cable households out of over 120 million; there is no

serious direct cable competition in most markets.


Another irony? Some of the cable networks were supposed to be opened to

competition. For example, the Federal Trade Commission (FTC) agreed to the

AOL-Time Warner merger because the company was not only providing net

neutrality but also the networks were to be open to Internet Service

Provider competition:   


"Under the terms of the order, AOL Time Warner would be: required to open

its cable system to competitor ISPs; prohibited from interfering with

content passed along the bandwidth contracted for by non-affiliated ISPs and

from interfering with the ability of non-affiliated providers of interactive

TV services to interact with interactive signals, triggers or content that

AOL Time Warner has agreed to carry; prevented from discriminating on the

basis of affiliation in the transmission of content, or from entering into

exclusive arrangements with other cable companies with respect to ISP

services or interactive TV services."


Brain dead (that's a technical term) regulators seem to have forgotten this

requirement, much less reviewed just how wrong that merger and the other

AT&T and Verizon mergers went. AT&T and Verizon failed to upgrade the Public

Utilities as required by state agreements, raised rates, and increased their

market controls, never fulfilling the major 'commitments'. See: 


Bring in Google.


Google could ask for the networks to be re-opened to competition, thus

solving net neutrality. But I believe Google woke up and said --- Heck, we

need to have access to the wires; if we don't then we can't control our



Google first decided to be a provocateur. They decided to light a fire

pertaining to wiring communities with fiber as a bypass to the phone and

cable companies and to bring in high speeds. The problem is-these are only

for 'tests', not serious nationwide deployments.   


So, after the exercise --- it was a feign --- they most likely came to the

decision that this side of the business would not supply enough bandwidth to

enough people and the only way to get into markets is to cut deals. The

phone and cable companies would also take local actions to block any

building out, as they have been able to get laws passed in some states to

block municipalities from upgrading the networks Verizon or AT&T failed to



Voila --- Google made a deal with Verizon for Droid which brought them the

wireless market. And it now seems that Deal Two was underway - wireline

connectivity for their services, giving them favorable status on the

networks over the other search engines, or other services Google offers.


Forget all the rhetoric, press releases, statements, etc. Google needs wires

and doesn't have them, so instead of confronting the network providers they

will simply go to bed with them.


But here's the problem: The Public Interest. Google was one of the few

companies left standing who could be a counter-balance to the 'force'. Since

the wire companies are in cahoots and are now lobbying, campaign-financing,

minority-co-opting, astroturfing together, who's going to be the balance in

the force?


But the most important --- the corporate controls will be so overwhelming

that the story will not be told on TV or other major media. That's right.

Today, Verizon and AT&T spend enormous sums of money on advertising. Do you

think any station who receives the money will do a feature on the corporate

controls, much less other indiscretions?


And when the Comcast and NBC merger goes through, it eliminates major

networks, from NBC and CNBC to Telemundo, from doing investigative stories

about the cable companies, much less their buddies who spend so much money

on advertising.


So, Google and Verizon?  This does not bode well dear reader.


Be afraid. Be very afraid. (Paraphrased from Yoda to Luke Skywalker in Star


I note: Google's motto in their 'code of conduct' "Don't be evil". Let's see what happens next.


PS: Verizon has always had a relationship with the dark side. James Earl

Jones, Verizon's spokesperson for years, was also the voice of Darth Vader.