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The Bells' Accounting Scandal
The Vaporware Scandals

Forget about Enron, MCI or Global Crossing's accounting problems. Those companies are small time compared to the Bell companies.

Teletruth Files Complaint With SEC Against Verizon This letter seeks an investigation into New York Telephone's (Verizon - NYSE: VZ) accounting for equipment expenses and the value of assets reported to the SEC and other regulators.

Teletruth received a tip from a person with direct knowledge of a Federal Communications Commission audit that revealed discrepancies between equipment lists used for cost accounting purposes and the actual inventory of equipment.

TeleTruth filed Complaints in New York, New Jersey and Massachusetts requesting the Public
Service Commissions and state Attorney Generals' Offices to investigate Verizon's alleged multi-billion dollar accounting discrepancies that has thus far been ignored by regulators.

In 1999, the FCC released audits of the Bell companies, which found $19 billion dollars of missing or unverifiable phone network equipment.... and this represented only 1/4 of the potential audit areas to be investigated.

To date, nothing has been done --- And this missing equipment has inflated the price of your local phone service. To read the rest of this story: "Accounting Scandals: Enron, Worldcom, and now.Verizon?"

What Happened?
1. FCC Released the Audits in 1999



Believe it or not, in 1994 the FCC conducted audits of the Bell companies and found serious accounting problems. Then, again,the FCC conducted another series of audits and they were released in 1999.

2. Politicians Friendly to the Bell Companies and Big Business Helped to Block Audits. In 1999, Congressmen Tauzin and Dingell wrote a letter to stop the audits from being release. To read their Letter to the FCC.
3. The FCC Sweeps Audits under the Rug.

In 2002, the FCC closed its "Accounting Safeguard Division. Though the FCC is now questioning, the FCC's Chairman Powell fiddles while the Telecom and Broadband sector are in hell.

4. State Commissions Haven't Done a Thing.

New York is the only state that has to date, done any work on these audits. A Staff Report found

  • They agreed with most of the FCC's findings.
  • $633 million in "undetailed" investment missing.
  • Unfortunately, they did not finish the audit or give refunds.
Meanwhile, the New York Attorney General filed Comments with the FCC that the missing equipment directly affects customer rates.
5. TeleTruth's and New Networks Institute's History on this Topic.

Starting in 1999, New Networks Institute (NNI) and members of TeleTruth have been attempting to get the FCC and states to complete these audits.

6. Break Up the Bells:.Is it time to take further steps -- including breaking up the local monopolies


Actual Photograph of Bell Books (Click to View)


(Click to View)

FCC Chair Fiddles While Telecom Broadband are in Hell

(Click to View)

Take Action

Call: (click to find your state)


Talking Points:

  1. Ask them to do their job and continue these audits.
  2. You want a refund and lower prices now.
  3. Send them a copy of our Complaint or the link. ---
  4. Let us know what happens..

Call Your Local Media

  1. Ask them to call the PSC and the State AG office to answer the question ---why they haven't done their part of the audits?
  2. Send them a copy of our Complaint or the link. ---
  3. Let us know what happens..

Contact the Commissioners via E-mail --- Tell Them you want them to Continue the Audits other three areas and Lower prices now.

4. Talk to others with similar problems
  TeleTruth Forum
5. Join TeleTruth
TeleTruth Initiatives

Press Release --: "Accounting Scandals: Enron, Worldcom, and now.Verizon?" August 22nd, 2002

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