Testimony in front of the New York City Council's
Broadband Advisory Committee,
May 22nd, 2007
BROOKLYN BROADBAND & AFFORDABLE, UBIQUITOUS INTERNET:
GET THE MONEY BACK.
To see the speech on U-Tube:
My name is Bruce Kushnick, chairman of Teletruth, an independent, nationwide
customer alliance focusing on telecom and broadband issues, and executive
director of New Networks Institute,
a market research and analysis company. Ive was born in Brooklyn
and have lived here most of my life.
Teletruth believes affordable broadband and Internet services are essential
for New York Citys economic growth. I assume everyone else in
this room would agree. And how do we make ubiquitous broadband affordable?
I'd like to focus on this. --- We believe New York City should get back
the estimated $5-6 billion from Verizon, $10-12 billion statewide.
New York City was Number One when the Internet hit and now America
is 15th in the world in broadband and we sit here wondering why?
Verizon has overcharged customers in multiple ways, as well as failed
to deploy fiber- based broadband after receiving massive financial incentives.
Through bad deregulatory policies, the PSTN, thats the Public
Switched Telephone Networks --- the utility --- which is supposed to
make sure that deployment of telecom services are competitive, ubiquitous
and affordable, has been hijacked by Verizon (and AT&T).
This has caused net neutrality issues, cable franchising
issues, and the Digital Divide, not to mention overcharging
customers and direct economic harms to New York City --- and
Verizon and AT&T claim they own the
pipes, even though they are still receiving the
benefits of a utility. We believe Get back the money
back and remove the perks.
In our original presentation to the NY City Council in 2002 we made
many of these points and there has been no investigation of our claims.
It is 5 years later and nothing has changed. Maybe it is time to take
action. See: http://www.newnetworks.com/NYCspeechfin.htm
Lets go through the facts: Direct from the sources:
Commitments and Promises:
1) Verizon claimed in 1993 it would be
rolling out fiber to the curb - NYNEX 1993
Annual Report. http://www.newnetworks.com/nynexfibercurb1993.htm
2) Verizon claimed it would have 1.5-2 million
lines installed by 1996 - NYNEX 1993 Annual Report
3) Verizon also snowed the Public and the
public service commissions. Here is the PSC Staff
Report Assessing Network Modernization Needs, based
on a NYNEX report Vision of the Future 1992.
4) NYNEXs was supposed to have about 16%
of the state finished by 2000. http://www.newnetworks.com/nypscfibernumbers.htm
5) Verizons other promises: Maryland The
PSC report shows that Maryland was supposed to have 100%
fiber to the home completed by 2010 http://www.newnetworks.com/nypscmarylandfiber.htm
6) Verizons other promises: New Jersey:
The PSC report shows that NJ should have 100% fiber to
the home Broadband completed by 2010
7) 45mbps: The definition used in the NJ state
report clearly shows that Broadband was
45mbps, capable of high definition video in both
directions. 1993 NJBPU Par 1 http://www.newnetworks.com/nj45mbpspar1.htm
8) Bell Atlantic claimed it would have 8.75 million homes wired by
2000, and its plan was to go to each state to get incentives
to invest in new technologies;-- 1993 Bell Atlantic Annual Report.
8a) In 1996, Bell Atlantic announced 12 million homes by 2000, including
Philadelphia and Pittsburgh. http://newscenter.verizon.com/press-releases/bell-atlantic/1996/page.jsp?itemID=29607541
8b) In Massachusetts, Verizon promised in 1994 to have have 330,000
households wired imediately, the entire NYNEX territory by 2010. http://www.newnetworks.com/Massachusettsdeceptivefiber.htm
8c) By 2000, Pacific Bell had made committments to rewire 5.5 million
homes in California. http://www.newnetworks.com/cabroadbandpacbell.htm
8d) Pac Bell closure: According to the San Diego Tribune, by 1997,
after the merger of Pac Bell and SBC, all of the plans were closed
8e) Ameritech claimed it would have 6 million homes rewired by 2000.
Outcome: Instead it rolled out vanilla cable competition, then SBC
sold off the properties in a fire-sale to WOW. http://www.newnetworks.com/ameritech1994annualreport.htm
Outcomes: Massive increases to local rates, long distance
rates, added questionable charges.
9) Aunt Ethels phone bill:
1980-2006 reveals an increase of 426% since the break up
of AT&T and deregulatory policies--- source: Brooklyn
Verizon phone bills. http://www.niemanwatchdog.org/index.cfm?fuseaction=ask_this.view&askthisid=00233
10) AT&T and MCI harvesting Customers
AT&T and MCI are now raising rates and attempting to
have customers discontinue services. http://www.newnetworks.com/attmciharvesting.htm
11) Dirty Little Secrets: Virtually every charge
on the phone bill has had unwarranted increases.
Get the Money Back:
12) $2.4 billion in Missing Equipment has
been added to rates: State PSC report: Review of
FCCs Audit of Continuing property records
13) The Report found $634 million in missing
equipment and that was only ¼ of the potential
audits that should have taken place. --- The NY AGs
office never got back to us. http://www.newnetworks.com/nypscaudit.htm
14) Cross Subsidization: A report by
NASCUA (National Association of State Utility Consumer
Advocates) found billions being cross-subsidized:
I.e., the phone company is charging local rates to fund
DSL, wireless and long distance services, and even FiOS.
15) Cross-subsidization, NYC: The phone bill insert is only one of
hundreds of items that customers are paying for while Verizon gets
a free ride. The 411 networks, free rights of way and other utility
perks should be removed. --- How much money is lost? http://www.newnetworks.com/verizoninsert.htm
16) $2.3 Billion tax deduction for fiber deployments. New York Tel
took a $2.3 billion tax deduction for fiber upgrades 1995 Annual Report.
Verizon took a $3.5 billion dollar deduction for poles and other items.
17) Ca. PUC found $1.94 billion in added fees
during an audit for cross-subsidization of executive
compensation, merger expenses, legal fees. DO THIS
18) Audit the phone bills: The District of Columbia audit of
telecom expenditures found $10.4 million in overcharging--- Audit
NYC's bills http://www.newnetworks.com/DCAuditRefundEstimate.htm
19) FCC Data wrong on broadband and phone bills:
We have filed multiple complaints against the FCCs
data. 200Kpbs is NOT the 45mbps standard of broadband as
told in 1992 or missing 1/3 of the US hit with major
phone bill increases went unnoticed. http://www.newnetworks.com/Teletruthdataqualityfilings.htm
Impacts on Net Neutrality, Digital Divide, Cable
Franchise Utility vs Deregulated monopoly.
1) Failure to deploy: Cable prices should
have declined. America spent $82 billion because the
phone companies failed to deploy a competitive broadband
service. NYC: $3.5 billion
2) Economic Harms to Growth: The Bell companies claim that there
would be a $500 billion increase to economic growth from broadband---
Thus, $5 trillion dollars was lost because Verizon-ATT failed to deploy.---
Over $215 billion for New York City.
3) Cable franchising: The phone utility had obligations toupgrade
ALL parts of the state, and was open to competition. FiOS
is a closed network and wants to pick and choose.
4) Net Neutrality: Theres no problem; Return the utility to
common carriage. http://pulverblog.pulver.com/archives/003680.html
5) If the companies want to own the
networks, take away all utility perks and do the wiring
or wifi-ing ourselves.
6) What is the actual cost of local service? What utility perks does
Verizon enjoy? How much extra money did Verizon garner from deregulatory
policies to promote broadband?
Conclusion: Get the money back and use it to give New York City the
premier affordable networks for ALL customers.