Issues & Actions

It is Time to Take the FCC to Court

Former President John Fitzgerald Kennedy, during his acceptance speech of the Democratic Party’s nomination for president, July 15, 1960, made one statement that seems appropriate—again.

“…Blight has descended on our regulatory agencies–and a dry rot, beginning in Washington, is seeping into every corner of America—in the payola mentality, the expense account way of life, the confusion between what is legal and what is right. Too many Americans have lost their way, their will and their sense of historic purpose.”

We are now at the end game in communications as confirmed by Randall Stephenson, CEO of AT&T, who told investors at the 4th Quarter 2017 earnings presentation—it’s been a remarkable year because of the “major policy achievements”.

“I just want to take a moment and reflect on 2017 because by any measure, 2017 was a remarkable year. It’s remarkable for our country, for our industry where we operate, and for AT&T. And it’s been a long time since we’ve seen so many, what I would call, major public policy achievements compressed into a single year like we saw last year.”

These ‘major achievements’ could only happen because of the regulatory capture of the FCC. This, of course, includes recent decision to get rid of something called Net Neutrality, the FCC’s attack on privacy, the removal of regulations and other consumer protections, not to mention the preemption of the states’ rights for oversight and regulations of most telecommunications services. We call this collection of regulatory mayhem “The Wheel of Misfortune”.

NOTE:  Over the last few months, New Networks with  our new group, the IRREGULATORS,  have started the process to take the FCC to court. We are part of an appeal of the FCC’s ‘Business Data Services’ order that blocks competition and raises rate of basic networks that are used by every

But this is the first of the legal actions that we need to take against the FCC.  And we have uncovered a major flaw in every FCC proceeding that can be used, combined with a decade of research and our expertise to  appeal the FCC’s Net Neutrality decision and other upcoming decisions.

The book provides the details of how all of the FCC’s proceedings have failed to accurately tell the story of state-based broadband deployments, but more importantly that customers have become ‘defacto’ investors’ –i.e.; phone customers have been charged billions extra per state to build out the companies’ other businesses, like wireless, instead of replacing the existing copper wires with fiber optics to all cities.

Part II: It is Time to Take the FCC to Court

Background

Since the beginning of 2017, the FCC has been a path of destruction with the overarching theme to erase all laws, regulations and consumer protections and to let a few very large monopolies/duopolies (or oligopoly)—Verizon, AT&T, Centurylink, and the cable companies—do what they want at your expense.

And this FCC can follow this path because there are only three current commissioners (out of a full complement of five), where the FCC Chairman, Ajit Pai, a former Verizon attorney, controls the agenda with the second Republican Commissioner, Michael O’Rielly. This means that the only Democrat, Mignon Clyburn, (who has always taken a pro-consumer position), will lose every vote, but rather it means that the American Public loses as well.

Much of the FCC’s destructive path is well known to most:

  • Block Privacy Rules: The FCC (with Congress) has blocked the implementation of the previous FCC administration’s new privacy rules from going forward. Blocking this new rule allows the phone and cable companies to sell the customer’s information to advertisers and give their own affiliate companies the ability to spy and track customers’ purchases, friends, contacts, etc., on multiple devices.
  • Erasing the Net Neutrality rules is next and there will be a flurry of activities to stop the new FCC’s plans to neuter customer protections.

But there are other areas that have gotten little or no attention and they are at the core of your communications.

  • Erase Basic Accounting Rules: The very first official FCC meeting was used to erase some of the basic accounting rules, including Part 32, which is known as the “Uniform System of Accounts”, and recently they announced a continuation of this path to erase Part 36. Way too insider-telecom to explain, the FCC is protecting the companies by removing any of the financial accounting requirements and manipulations that have occurred, or especially will be occurring going forward.
  • Shutting Off the Copper: The FCC has announced it will streamline the ability to take working phone lines out of service without a serious substitute or even supplying customers proper notification.
  • Deregulating the Monopoly Wires, Known as “Business Data Services” (BDS) or (“Special Access” or “backhaul”): The FCC has decided that there’s plenty of competition for business data services. These are basic phone lines which are used for ATM machines or are the wires to the cell sites and hot spots or are used by wireline and wireless competitors, and it will let prices on essentially monopoly services increase at will – raising all prices on all services.
  • Last year New Networks Institute filed comments jointly with Consumer Federation of America showing massive overcharging of customers already for BDS—about $20 billion annually in both actual charges to business customers, as well as overcharges passed through to the consumer and harms to the economy.

More importantly, your wireless phone service requires a fiber optic wire. Your cell phone call or selfie or streaming video goes from your phone and tablet to a wireless antenna or cell site, which are attached to the wired networks. Thus, 5G requires a wire, 4G requires a wire, 3G requires a wire; even WiFi requires a wire. It does not go into the sky to a satellite, or into the ether, but travels over a physical wire. And this wire is also paid for mainly by the customers of the state utility (which also includes the inflated rates of BDS services), another fact that has been ignored or denied, and which we documented.

In all of these FCC decisions, Chairman Pai has created a ‘fake history’ of communications in the US. The FCC has neglected to mention that the copper wires are part of a state utility and that the BDS services use the exact same wires that are used for phone services.  But it is also the rewriting of the history of broadband and the networks that is really appalling.

Free Download: The Book of Broken Promises

We have released a free (PDF) download of “The Book of Broken Promises: $400 Billion Broadband Scandal & Free the Net. The 3rd book in a trilogy that started in 1998, “The Book of Broken Promises” by Bruce Kushnick proves that few have a clue about the factual history of broadband, much less fiber optic deployments in America that customers paid for, especially the FCC.

Primary Findings: (Click to see Part 1: A Summary)

America’s households and businesses have been overcharged at least nine times for broadband/fiber optic services, including the wiring of schools, libraries, and hospitals—about $4000-$7000 per household, and the total is way over ½ trillion dollars by 2016. You can thank just a few companies: AT&T, Verizon and Centurylink, who control the state-based utilities, along with the cable companies, Comcast and now-Spectrum et al. And this is the low number.

More importantly, Verizon, AT&T and CenturyLink control the state communications utilities, such as Verizon NY or AT&T-California, a fact that has been erased. And the copper wires, as well as most of the fiber optic wires, are part of these state utilities, including those used for FiOS or the wires to the cell sites, or all of the other ‘business data services’.

And The Book of Promises also relates to Net Neutrality and many other FCC proceedings. While the FCC, ISPs, wireless, cable and phone companies, and their minions, claim that Title II harms investment, the book details that the companies have been able to use Title II to have phone customers improperly fund the network investments for wireless, cable and all of the other services, over and over.

Meet the New Networks and IRREGULATORS

New Networks has expanded our resources adding IRREGULATORS.  At the core are retired and semi-retired communications experts, lawyers, and forensic auditors who are former senior staffers from the FCC, state advocate and Attorneys General Office, as well as x-telco employees and consultants.

In short, there is no longer a serious need to file comments at the FCC or do petitions as the agency has been hijacked. Like the immigration law challenges, the courts are the only venue left to stop the onslaught of customer harms.

We can not let this fake history create harmful policies. Read the book.

Here are Some Basic Facts that Cut Across the FCC’s Plans

  • Since the 1930’s and earlier, there have been state telecommunications utilities that delivered phone service using copper wires. These wires are still mostly copper.
  • AT&T, Verizon and CenturyLink control most of the state utilities, though they have been selling off territories or whole states.
  • Starting in the 1990’s, these copper wires were supposed to be replaced multiple times with fiber optics wires.
  • Customers have paid at least 9 times for these upgrades, including multiple rate increases, added taxes or fees, loss of tax revenues to the state through financial manipulations,  not to mention giving added funding from the state or the federal government through USF, E-Rate or Connect America funds,  state-based broadband funds, and even though failed merger agreements.
  • At least ½ of the US was never upgraded to fiber  and most of AT&T’s entire U-Verse is still based on the existing copper wires that can be 50-90 years in the ground.
  • Schools, libraries and hospitals should have had fiber optic services 10-20 years ago as well.

But instead,

  • The majority of the wires that are being put in for the wireless companies were not paid for by the wireless companies, even though the wires are part of the state utility.
  • Almost all of the BDS wires, fiber optic or copper are also part of the state utility,
  • Local phone customers have paid the bulk of all expenses for these other service offerings.
  • These wires are all Title II, as told by the Communications Act of 1934—and it is the investment mechanism used by the phone companies to pay for the construction, not ‘shareholder’ funding.
  • The FCC’s own cost accounting rules caused the massive financial shell game and the FCC has filed an extension in one new proceeding to cover over this fact. The FCC is also erasing the accounting rules to hide the billions per state in customer overcharging.
  • The FCC never mentions the word “utility’ pertaining to BDS or even in the proceeding to ‘shut off of the copper”. The FCC is either in denial or belligerent by design.
  • The term PSTN, Public Switched Telephone Networks, is also missing, even though it is term used for the state utility’s infrastructure.
  • The FCC has failed to examine the state-based fiber optic plans and the role of customers as defacto investors, by design.
  • Net Neutrality? Worth repeating, the networks are already Title II for time and memorial and it did not ‘harm investment’; it is the investment.

What are needed are audits and investigations. Instead, the FCC is covering over one of the largest accounting scandals in American history to protect the incumbent phone companies, as well as hide the fact that their own negligence to examine their own accounting rules for literally 16 years has helped the companies at the expense of getting America cities and rural areas upgraded and even maintained, but also how it help to overcharge customers billions per state.

Click to download the book, or place a bet to see if the IRREGULATORS can stop the FCC’s anti-customer actions.