I thought that I had posted Bruce's release earlier in the day. Here it is (again?), although I can't be certain that it's the same one that Petere's referring to. Petere? Maybe Peter's referring to a blog discussion, in which case I'd stand corrected. In any event, the release below was posted today by Bruce Kushnick to both Cybertelecom.com and the Open Infrastructure Alliance discussion lists [apologies in advance for the character type screw-ups caused by document translation mismatch; best to go directly to the first link below]:
--
Teletruth News August 12, 2009
Teletruth Requests the FCC Create a New Broadband Workshop --- Investigate
Current and Past Public Funding of Broadband, Including Overcharging Utility
Customers.
To read the full comments:
teletruth.org
To read our previous FCC broadband comments,(or download 2 free ebooks)
newnetworks.com
The FCC has been creating a series of workshops as part of the National
Broadband Plan. We are requesting that the FCC create a new, investigative
workshop dedicated to --- Follow the Broadband Money.
In June, 2009 the State of New York Department of Public Service allowed
Verizon to raise local utility phone rates, claiming that Verizon needed
more money to pay for Verizon?s fiber optic upgrades, which are being
deployed for Verizon?s FiOS. In fact, since 2004 Verizon has increased local
phone rates with the State?s permission, 90% in New York.
The State wrote:
?We are always concerned about the impacts on ratepayers of any rate
increase, especially in times of economic stress,? said Commission Chairman
Garry Brown. ?Nevertheless, there are certain increases in Verizon?s costs
that have to be recognized. This is especially important given the magnitude
of the company's capital investment program, including its massive
deployment of fiber optics in New York. We encourage Verizon to make
appropriate investments in New York, and these minor rate increases will
allow those investments to continue.?
www3.dps.state.ny.us
5D900530827/$File/pr09054.pdf
These increases were not minor and have been continuous since 2004. Also,
the increases were not just for ?basic local service?, but for almost
all ancillary local services, from Call Waiting and inside wire
maintenance, to even toll calls and packages. Ironically, those being most
impacted by these increases are seniors, Lifeline customers, small
businesses and others who rely primarily on the utility local service. Local
service is supposed to be ?fair and reasonably? priced, yet, today, the
utility local service is becoming the highest-cost service.
We have written a separate report on this topic and are going to be filing a
complaint in New York state in the upcoming months.
teletruth.org
It is obvious there is a short circuit in the regulatory fabric. Verizon and
the State have made different claims for raising the rates. Besides funding
fiber optics, Verizon claims there is competition, they are losing lines and
that local service is not profitable. Based on free market economics,
however, if there was competition, then local phone prices should continue
to decline. Doesn't competition lower rates? In fact, local rates have been
increasing throughout the US. New Jersey had an 80% increase while
California has had a series of increases over the last few years on most
services.
Why is raising local phone rates to pay for fiber optics a national
broadband issue that needs investigation? And what is the actual status of
competition?
The FCC is supposed to be creating a national broadband strategy, and yet,
in no previous document, report, order, or opinion has the FCC actually
examined a primary fact ? Ratepayers of local service have been and continue
to be the primary funders of broadband in New York and throughout America.
It is not the shareholders; it is the utility customers. And because the FCC
redefined broadband as an ?interstate information service?, it has not
examined the state alternative regulations that are the primary source of
broadband investment in the US.
The new reality is --- Local service customers, which use the New York state
local phone utility, are now being squeezed through increases in
?intrastate? rates and that money is now being siphoned to pay for the
construction of FiOS, which we contend is illegal as it is cross-subsidizing
a competitive ?interstate information service? and cable service.
Verizon's FiOS and AT&T's U-Verse are essentially dismantling the utility,
and are instead shifting assets and services to a competitor, an interstate
information service. This switchover removes the basic obligations the
company had as a utility, such as making sure the products are offered
throughout the entire state, not some portion of it.
Instead, both the FCC and State are allowing these companies to strip-mine
the Public Switched Telephone Networks, including tearing out or
disconnecting the utility copper wiring, and they now control where they
will deploy and when, if at all. And to top it off, these companies get
ratepayers to pay for these service deployments, which they may never use or
even have available. It is not just raising phone rates, but the fact that
these other branches of Verizon get to use the networks, the mailing lists,
the advertising, and even the rights of way of the utility at little or no
cost, which is anti-competitive.
If building infrastructure that is ubiquitous, open and competitive,
affordable, and very fast are America?s goals, then shouldn't we know
exactly who is currently funding the networks and whether the customers are
getting a raw deal?
Instead, we have a situation where many municipalities are considering or
attempting workarounds from the very networks that are already in place.
Instead, there are continuous price increases because real competition
doesn?t exist to lower the cost. And now, the companies have merged and
vertically integrated Internet provisioning, broadband/DSL, and phone
service. They can now hold America hostage as regulators attempt to come up
with new ?financial incentives?, even though no regulator has held AT&T or
Verizon accountable for the monies they are already collecting. Yet, instead
of pointing out that AT&T and Verizon are strip-mining the utility, many
organizations are claiming we need to give more money to these companies; we
need to increase the Universal Service Fund to help fund broadband. We need
to give new tax breaks.
One of the stumbling blocks to this issue is the fact that broadband, until
2005, was a telecommunication service, and the actual wiring is part of the
local service networks. The Internet was an ?interstate information
service?, as it is NOT the conduit but another, separate application that
rides over the conduit. By tying the speed of the connection with the
application and renaming it all an ?Interstate Information Service? without
the obligations of the telecommunications service, this new paradigm is in
direct conflict with the artifact of the utility. Using this distinction,
the phone companies get to get rid of obligations and take ownership and
control, but retain the utility benefits and perks.
In the end, local phone customers, especially seniors, end up funding the
new networks, but get none of the benefits. Thus, the workshop we propose
examines state and federal overlapping broadband network and funding issues,
but also examines the chain of funding ? from local phone customer through
to how Verizon?s divisions, including FIOS, takes advantage of the utility
funding. --- Following the money trail.
$300 Billion and Counting. --- The Reason America is 15th in Broadband.
Ratepayer funding for broadband is not a new situation, though the FCC has
continuously failed to examine this issue. In our recent Comments filed
pertaining to the National Broadband plan, we have put an entire ebook into
testimony, where we outline, in detail, how Verizon and AT&T and Qwest (and
their previous incarnations) in almost every state, received changes in
state regulation known as ?alternative regulations?.
See: newnetworks.com
To read the Complete Comments:
teletruth.org
Bruce Kushnick, Teletruth
_______________________________________________
Open Infrastructure Alliance
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