New Networks Institute To read the recent Comments (PDF) Bruce Kushnick bruce@newnetworks.com Phone 212-777-5418   ========== FOR IMMEDIATE RELEASE==========   Do Not Let the Vaporware Scandals Go Unchallenged. New Networks Institute asks FCC to Require the Bells to Refund Monies and Lower Prices Immediately, Based on Their "Vaporware". Dateline --- May 1st, 2000 New Networks Institute filed Comments with the FCC that requests the FCC take all necessary steps to protect America's phone customers from the Bell Companies' "Vaporware" by refunding money and lowering prices immediately. In 1999 the FCC released a series of audits which showed that the Bells couldn't account for some $5 billion in missing equipment --- Vaporware. And this was only the tip of the iceberg. The Reports indicated that there was an additional $13.6 billion dollars of questionable, unverifiable charges. In short, 19% of the Bells' total network surveyed was missing or couldn't be verified, accounting for almost $18.6 billion dollars. However, the price for All services are based on the supposed costs of these phone networks.   Total Money Potentially Owed, Not Counting Penalties and Interest (Source: FCC, 1999) Ameritech $2,145,610 Bell Atlantic $3,317,018 BellSouth $1,920,761 NYNEX $2,558,057 Pac Bell $2,925,505 SBC $2,216,603 US West $3,527,468 TOTAL $18,611,022 A group representing the Bell phone company interests, "CALLS" (The Coalition for Affordable Local and Long Distance Service) has submitted a proposal to the FCC that would allow the Bells to "achieve freedom from depreciation requirements". Though complicated, the plan would allow the Bells to adjust their books with no major penalties, fines, and no benefit to the phone customers. "Imagine the following --- a company's accounting books contain massive amounts of non-existent equipment --- Vaporware. The company not only, year after year, continues to depreciate this phantom phone technology, said phone company uses the phantom equipment as expenses to inflate the rate of every phone service, since phone service is supposed to be based on the network costs. And when said phone company books are revealed, the powers that be are considering to absolve the companies of all sin. No penalties, no charges of tax evasion, and no recompense to those who have been harmed through higher prices," stated Bruce Kushnick, Executive Director of New Networks Institute. "We respond to this filing on behalf of the Public Interest, since proposals by the Bell companies (and other related groups) serve only to sanction flagrant abuse of the law by the monopoly and maintain the current overcharging of ALL phone customers, from business and residential services, to even schools and libraries," added Kushnick. Our concern is that: The FCC will ignore their obligations, and not hold the Bells liable for the multiple billions of dollars that effect the cost of ALL phone services. Secondly, this problem did not occur overnight and it is clear that the missing equipment has been outstanding for a long time, most likely over the last decade. Therefore, all of the past inflated prices will not be readjusted and monies will not be refunded. Thirdly, we are worried that the other related audits will not be done. It is a fact that these audits only accounted for ¼ of the investments in the phone infrastructure and it is likely that the exact same problem has occurred in the other ¾ of equipment and wiring.   "We hope that the FCC will do the right thing and make the Bells be accountable for their Vaporware Scandals. If All the other audits are done, we expect that $20 billion dollars of equipment will be missing and over $80 billion of equipment will be unverifiable, " added Bruce Kushnick.   A copy of our Reply Comments can be found at http://www/newnetworks.com For more information, contact Bruce Kushnick at bruce@newnetworks.com or 212-777-5418.