$200 Billion Broadband Scandal." AKA Where's the 45MB/s I
Already Paid for!
By Kelly Deegan
Monday, January 30, 2006
I was lucky enough to be able to look over an advance copy
of Bruce Kushnick’s new book, “The $200 Billion Broadband
Scandal” — it’s a powerful critique documenting the trail of
broken promises and misinformation perpetrated by many
broadband service providers in order to get favorable
treatment, special dispensation, and competition-free access
to residents across the United States. One of the most
damning indictments, that United States residents have
already paid for upgrades to our existing broadband
infrastructure — being charged for services never delivered
— and not a small amount either, but actually to the tune of
$200,000,000,000. When you break it down, that’s roughly a
$2,000 refund for every household that’s due for contractual
obligations never fulfilled.
Here’s more from today’s official release:
New investigative ebook offers micro-history of Verizon,
SBC, Qwest, and BellSouth’s (the Bell companies) fiber optic
broadband promises and the consequence harms to America’s
economic growth because they never delivered and kept most
of the money, about $200 billion.
New York: This is one of the largest scandals in American
history. America is 16th in the world in broadband and the
US DSL current offerings are 100 times slower than other
countries such has Japan and Korea. How did we go from
Number 1 in the web to 16th in broadband and falling?
But more importantly, are customers owed $2,000 for a fiber
optic service they paid for but never received? Did towns
and cities, libraries and schools, government agencies, and
every residential and business customer subsidize new
networks that never showed up?
And did America lose $5 trillion in economic growth, $500
billion annually, because of these missing networks?
Broadband Scandals is a well-documented expose, 406 pages
and 528 footnotes. Using the phone companies’ own words
(and well as other sources), the book outlines a massive
nationwide scandal that affects every aspect of state of the
Internet. Not only the web but broadband, municipalities
laying fiber or building wifi networks, not to mention
related issues such as such as VOIP, cable services, the
cost of local phone service, net neutrality, the new digital
divide, and even America’s economic growth.
The fiber optic infrastructure you paid for was never
Starting in the early 1990’s, with a push from the
Clinton-Gore Administration’s “Information Superhighway”,
every Bell company — SBC, Verizon, BellSouth and Qwest —
made commitments to rewire America, state by state. Fiber
optic wires would replace the 100-year old copper wiring.
The push caused techno-frenzy of major proportions. By
2006, 86 million households should have had a service
capable of 45 Mbps in both directions, (to and from the
customer) could handle over 500 channels of high quality
video and be deployed in rural, urban and suburban areas
equally. And these networks were open to ALL competition.
In order to pay for these upgrades, in state after state,
the public service commissions and state legislatures
acquiesced to the Bells’ promises by removing the
constraints on the Bells’ profits as well as gave other
financial perks. They were able to print money — billions
of dollars per state — all collected in the form of higher
phone rates and tax perks. (Note: each state is
- ADSL is not what was promised and paid for. It goes over
the old copper wiring, can’t achieve the speed, has problems
in rural areas and is mostly one-way.
- 0% of the Bell companies’ customers have 45 Mbps
Harms and Outcomes
This investigative book isn’t just a history, but a warning
— the Bell companies can not be trusted with our digital
future. Worse, what they have done has resulted in serious
repercussions to local, state and national economy.
- The public subsidies for infrastructure were pocketed.
The phone companies collected over $200 billion in higher
phone rates and tax perks, about $2,000 per household.
- The World is Laughing at US. Korea and Japan have 100
Mbps services as standard, and America could have been
Number One had the phone companies actually delivered.
Instead, we are 16th in broadband and falling in technology
- Harm to the economy. Five trillion dollars was lost
because new technologies and services that America would
have developed, happened in Korea.
- Municipalities around America are waking up to the fact
that the phone companies failed to deliver and are now doing
Wifi and fiber-based work-arounds.
Broadband Scandals delivers serious revelations. In fact,
the book has been designed as the data source for
Teletruth’s complaint to the FTC against SBC and Verizon.
- The promised networks couldn’t be built in 1993 and state
laws were changed based on “deceptive speech”. The
technology today still has problems delivering 500 channels.
- The phone companies pulled a bait and switch. In order
to offer DSL over copper, it was not necessary to have state
regulation changed. Their plan was to get rid of
regulations and enter long distance.
- The Bell mergers resulted in the death of the state plans
for fiber optic broadband. Over 26 states had fiber optic
projects closed when the mergers of SBC and Verizon were
completed. That affected almost 80% of all phone customers
in the US.
Broadband Scandal contains some additional special chapters.
- 20th Anniversary Summary of the Bells’ Financials. The
core of the book is a 20-year analysis of revenues, profits,
construction, etc.. Starting in1984, their own data shows
revenues up 128%, and concludes profits shot through the
roof on the promise of broadband. Meanwhile, compared to
revenues, employees are down 65%, construction down 60%.
Why did prices increase?
- Case Studies: New Jersey, California, Massachusetts, and
Pennsylvania. — State-by-state the book outlines the same
pattern of deception. By 2010, 100% of New Jersey is
supposed to have 45 Mbps service; by 2000, California
should have had 5.5 million homes completed, and each state
paid billions for services they never received.
- Verizon’s “FIASCO” and SBC’s’ “Dim-Speed” — Verizon and
SBC are rolling out new fiber optic services but want the
laws changed again. These services are crippled, closed
networks that do not fulfill the state obligations, like New
Jersey and can’t compete globally. FIOS’s top speed is only
35% of the Asian standard, and yet it cost $199 vs Korea,
$40 for 100 Mbps.
- Fake and co-opted consumer groups, biased non-profit
think tanks are now the major force in broadband regulation
and policy. The book goes into groups like Consumers for
Cable Choice, TRAC, APT, Issue Dynamics and New Millennium
Council and how these groups are attempting to block
municipalities from offering new services to harming new
services, like VOIP. These groups are sending out deceptive
messages that make the formulation of the policy that is in
the public interest impossible.
Broadband Scandal’s conclusion: Publicly paid for
infrastructure is being held hostage and needs to be freed.
Customers funded the fiber optic networks and the Public
Switched Telephone Networks (PSTN) should be opened to ALL
competition with strict rules of Net Neutrality. The Bells
have harmed America’s economic growth and our global
competitiveness. Investigations into all of the monies
collected in the name of fiber optic broadband in America
should start immediately. These investigations should
include how the Bells improperly funded their DSL and long
distance rollouts. The Bells should be forced into refunds
or giving the money to municipalities. This would be a
better solution than allowing the companies who have harmed
our digital future to control America’s digital destiny.
Author. According to Broadband Reports: “Bruce Kushnick has
been dubbed everything from the ‘Leading Visionary in the
Telecom Industry’ to a ‘Phone Bill Fanatic’; but what’s
certain is that nobody in the industry is ignoring him.”
Kushnick has been a telecom analyst for 24 years, and is one
of the founders of Teletruth, an independent customer
advocacy group focusing on broadband and telecom issues, as
well as executive director of New Networks Institute, a
market research firm.
Teletruth was a member of the FCC Consumer Advisory
Committee in 2003-2004 and has active cases with the IRS,
FCC and FTC pertaining to broadband and the cost of the
networks. Research through Teletruth’s phone bill auditing
services has led to class action suits and major refunds for
phone bill overcharging, Reporters and reviewers, email us
for a complimentary copy. For a Table of Contents, roadmap,
a chapter, the introduction, and more…
Read what the pundits and experts are saying, “talented,
persistent, honest”… “brilliantly documented this fraud” …
“stunning in its implications.” “Anyone who wants the U.S.
to thrive in this connected future should read Kushnick’s
Ebook only: $20 - 406 pages, 528 Footnotes, 72 Exhibits.
email@example.com Bruce Kushnick, firstname.lastname@example.org ,