I was sitting here about to explain how we got into this telecom mess and why things will get worse unless we stop it, and throw in why you should read my new book. But then I started to reflect on how I ended up in the mess -- this personal journey about my love and obsession with, well, telecommunications (though you may call it broadband, Internet, cable, wireless, etc).
For me, it started with a gang of my friends from Brooklyn Technical High School, taking the train to the New York City World's Fair, circa 1965, and running around like maniacs, trying then-AT&T's fiber optic-based video-conferencing system, where you could go into an egg-shaped 'phone room', and like magic, see you other friends in other eggs spread throughout the Fair. And it was everywhere. Star Trek, the original TV series, had large screens to talk to the other space ships and aliens, and even in the 1968 movie, 2001: a Space Odyssey, you could talk and see your loved ones, even if you were on the way to the moon.
And having a technical bent, and my other obsession, 'sound', (been playing the piano for 59 years), and then finding myself working in the psychoacoustics labs at MIT (sound and technology) in the 1970s, to being a senior telecom analyst for International Data Corp's Link Resources in the '80s, I would, over the next few decades, help to shape the Interactive Age, rolling out new products and services, like the first three-digit information service, "511", with Cox Newspapers, way back in 1992.
And by the 1990s I was expecting to see my friend's children, my god-children, cousins and nephews grow up, watching them on the TV set, even though they were spread across the US (and in far off lands) and me and my clients, the phone companies, would make this happen.
In 1992, however, three things happened that sometimes I wish I just didn't have a conscience, or ethics, or could have looked the other way. I have to blame my mom and dad (resting in peace) for this. My mom was feisty, and when she didn't like something she would try to fix it. I'll never forget that canned ham that was 1/3 of the size of the can and she was so annoyed she wrote the company and got a new one... with an apology. Or my dad's belief was that at your core you are an ethical person; you don't lie, you don't cheat someone, and you do your best, always, even if it was harder to do.
And, foolish me, of course, I bought into that line for the original Superman TV show, 'Truth, justice and the American way'.
So, by 1992, I'm somewhat rich, almost famous, (was on the front page of the NY Times in 1988, for example) and traveling around the world talking up about how my clients, now AT&T, Verizon and Centurylink were going to change the way we communicate with this thing called the "Information Superhighway". It was a plan laid out by the Clinton-Gore campaign to have America completely rewired with fiber optics, replacing the existing copper wires, which were going to be built and managed by the telecommunications utilities, and it would be all done by some far off date... the year 2010.
But it was those three, damn things that just got in way.
First, I looked at my own phone bill and saw a call from Montauk to New York, 50 miles away, was 37 cents a minute. I had just done a large study showing that a call to California from New York was only 21 cents. (In the 1990s, my research was used to roll out the first 'flat rate' long distance service with Sprint -- The "10 cents a minute" plan was launched with a commercial featuring Candice Bergen.)
Today, while everyone is so enamored with cell phones, there is a tax on the long distance portion of your phone bill -- so don't get so uppity and say "but the Internet". And if you have a pre-paid card for $20 bucks but only make 10 minutes of calls, you are paying $2.00 a minute.
I soon learned that the local phone companies had a monopoly on something called 'access' fees and for 'in-state' calling they appeared to be able to just charge what they wanted. Remember the words 'access' and 'monopoly'. I'll get back to that.
Second, my clients, now the companies known as AT&T, Verizon and Centurylink, decided that they would help build this fabulous Information Superhighway. And they ALL went state-to-state and said (I paraphrase) Gee, we want this state to have fabulous fiber optic services, replacing those aging copper wires, so that everyone could have that 'video conferencing' to see your friends and family, or watch cable TV at all times.
But, there was a catch. The companies added-- (I paraphrase) We're going to need more money for this new construction. So, you, the state commission, should help us achieve this fabulous new fiber optic future by just increasing rates a wee bit, and let us take some tax write offs, (and speed up the process, known as accelerated depreciation).
Now my, naïve 'king-consultant-to-the-telcos side, never dealt with this side of the business. I just rolled out services and did the projections and trends about new services. For example, my 1987 report on something called "Automatic Number Identification" would help roll out a common service called "Caller ID". (Maybe you heard of it?)
State laws, politics, and infrastructure were not my thing. Nor did I realize that the companies just wanted more money, wanted to get rid of regulations that controlled them and they were greedy and would say anything to get what they wanted.
Then wham. Starting in 1992, imagine my surprise when I found that the cost models being submitted by my clients to states were bordering on fraudulent. They claimed that they could roll out this fabulous fiber optic future -- in 1992, with speeds of 45Mbps in both directions, for less money than it costs in 2015.
In 1992, the home computers had 80 Meg hard-drives and the set-top box to provide the services for broadband and video would cost over $4000.00-$5000.00 alone -- forget about the actual wiring. (1000 Megs equals 1 Gig).
Didn't matter. Every company had been lying to the public as a mob, as a cartel, as a 'trust' and none would break ranks to say -- The emperor has no clothes. This crap can't work, especially not at these cost models.
Decades later, I can say -- and I documented, that no state would go back and rewrite the laws to stop the overcharging of customers in the entire state for services that were never going to be delivered in the near future. It's built into the current rates in 2015, including multiple other rate increases over the last two decades for 'fiber optics' or broadband.
Some did try. In 1997, for example, in New Jersey, where Verizon NJ's territory covers 96% of the State, the state law-- a written contract -- requires Verizon to have 100% completed with 45Mbps in both directions by 2010. The NJ Ratepayer Advocate wrote a scathing review of how much money had been collected. They stated that "low income and residential customers have paid for the fiber optic lines every month but have not yet benefited." But, the State did nothing and just added the requirement to wire all the schools and libraries -- which also never happened. By 2014, over $15 billion had been pocketed -- I mean overcharged, and it continues today.
It took me a few years to understand this, and I tried to explain that the models were a bit 'off', but -- around the same time, the World Wide Web showed up and just getting 'online' to surf mostly text-based websites (without videos) became so novel and exciting that the actual wiring of the infrastructure to get high speeds -- i.e., broadband, capable of video, was erased from discussion.
By the end of 2014, we all paid about $400 billion extra for America to be upgraded to fiber optics -- (and I got stuck documenting this for the last two decades...)
But third, it was my Aunt Ethel, then legally blind, 87 years old, who walked with a walker, that put all this over the top for me.
I go to her apartment in Brooklyn one day and her caretaker asked me to look at her bills. I never examined an actual phone bill for all of the charges before. Though that one 37 cent call to Montauk caught my eye, I was one of those, like most of you, who just read what they owe and paid it. And since I was doing well financially, who cared?
My Aunt had two rotary telephones, and two 'inside wire maintenance' charges, the wires in the home to connect to those phones.
(I must note that my fascination with the phone networks was also because they were (and probably still are) the largest audio networks in the world, delivering not only voice conversations, but the entire network was controlled by actual tones. For example, the rotary phone had an actual dial that rotated and made clicks so that the number 9 would have 9 clicks. And a touchtone phone allows you to just press a button for the number, but each button played two tones -- actual audible tones.
(And for a real piece of trivia of networks and sound -- there was one tone, at a frequency of 2600, that was used by phone hackers to get free calls. That tone would disconnect the operator and give the user the ability to make their own calls anywhere in the world. -- My MIT days trained me on the nuances of the phone networks.)
Returning to my story, I look at my Aunt Ethel's bills and I'm appalled at what I find. After getting a few shoe boxes of bills, and, of course, typing the charges into a spreadsheet to analyze, I found she had paid over $1000.00 for each rotary telephone and $360.00 each for that inside wiring, which she claimed she never ordered.
How could this be? The phone cost $22 to manufacture; she had them installed in 1966 and I knew that they had already been written off, a decade before. And the wiring broke once every 17 years or so, and she only needed to pay for one line, if at all.
She had been "rammed", (like "crammed") where the company's own subsidiaries had charged her for a service she didn't order, want or even need.
Now, before 1982, the phone and inside wire were part of local service, and it even came with six free directory calls, all for about $8 bucks. By 1984, these items were 'spun' off and 'deregulated'; you could buy your own phone and didn't have to pay for the wiring.
So, I ripped the phones off the wall and replaced them with others and cancelled the inside wiring.
But I was pissed. I had done a consumer survey which found that 25% of seniors were still renting phones and about ½ of the entire public that was paying for inside wiring probably didn't order it -- with seniors, it had come with service before 1982 and they never removed it.
So, what would you do? I had an extended family of senior telecom analysts, all of us working at president/senior VP level consulting and a few were working on the info-highway projects. I told them I wanted to fix all of this. After pitchers of margaritas, they made sure I knew that this was a stupid idea and that the companies would stop hiring me and would stomp on me like a bug.
Foolish me. In 1992, I stood up at the National Press Club and called for a second divestiture -- i.e., separating the companies from the wires they controlled, and calling for reforms of the regulatory system that had allowed these abuses to continue.
The bottom line was that the companies that control the wires control America's communications, even wireless, as almost all wireless calls and video end up back on a wire. And they control 'Access', not just price but who could use the networks or even control who would get upgraded. They had a monopoly on that wire and unless we separated the companies from that control, and brought in real competition and 'market forces', America's customers and economic growth would be impeded.
I remember my Aunt Ethel's words when I told her about what happened. She was still sharp as a needle and waved her cane in the air. "Go get those bastards."
I wrote this new book to tell you how we got into this mess and what we should do about it, finally.
If my Aunt was alive, she would have been priced out of most of the services, including even basic phone service. The companies aren't simply evil. It has become standard procedure to continually lie to the public. And considering that they have been able to consolidate so now we have a few companies that control phone, cable, Internet, broadband, wireless and even satellite, and that many of the regulators have either worked for the companies or want to, there is no balance in the force. There are no 'market forces'.
A few years back I was just going to stop and go play music. Even last month I had a breach of faith, that I was wasting my time and when I had that pitcher of margaritas back in 1992, should have listened to my gang of cynical friends and stayed a high paid senior telecom analyst.
My book is a testament to just how these few companies, AT&T, Verizon, CenturyLink, and the cable companies, had taken over our communications and don't care about you, me or the Aunt Ethels of America. They don't give a damn about the infrastructure, making sure America is the best in the world in communications, or about the customers they serve -- and it is going to get worse.
And the regulators? It's a shame we can't reinstitute flogging and public humiliation as they seem to forget that these companies are supposed to be working for us and the regulators, state commissions and even the FCC, are supposed to be the balance when there is no competition or market forces in play.
But this is only a part of the problem. There are now thousands upon thousands of shills, sycophants and whores who take the money from the companies and just screw ethics, or in the case of politicians, screw their constituents, or in the case of lots of non-profits, screw those they claim they represent or are protecting.
As I know, when someone pays your $10,000, $20,000 or $100,000 fee for services rendered, it colors your views; you don't look behind the curtain, you don't do the 'smell test'; you ignore the signs of a corrupt, dishonest transaction - you don't bite the hands that feeds you.
A few hours ago, after my coffee and waking up rituals, I open my email to see my new Time Warner Triple Play bill.
I had cancelled my Verizon phone service a few years ago, thinking I was going to save some money because the price was over $60.00 for basic phone service and a few calling features (features I know cost less than a penny to offer). Prices should have been in steep decline as the old copper wires that make up our telecommunication infrastructure were written off a decade ago.
And with much of America cutting coupons, living month to month, paycheck to paycheck, or not being able to afford taking the kids out for dinner once a week, this nickel, diming and quartering us at every turn, has its consequences. I should know. If it wasn't for Saint Arnkush, my brother, bailing me out some months, I'd be sitting in the dark without electricity. (You think this job pays well?)
My basic, basic, Time Warner Triple Play, advertised at $89.99, is now almost $200.00 a month as they raised my rates again. And there were two mistakes on the taxes, which, of course, only a select few in the US would even know how to calculate (my curse).
I can hear my mom saying -- Go write them and demand they fix it. I can hear my dad saying, Why are they so unethical?, and I can hear my Aunt Ethel saying -- "Go get the bastards!"
Sometimes I feel like I got stuck holding the bag, like playing that game, Hot Potato. Sometimes I feel like I'm one of the Blues Brothers in that movie where they're on a mission to save the church.
And some days... In the next few weeks a group of us are going to be releasing some new things to fix what's broken -- finally... and I'm going to ask for your help -- if not for me, do it for Aunt Ethel.
Read it at your own peril.
And here's a picture of (from right to left) my Aunt Ethel, Aunt Cecil, and some of their friends in Brooklyn in their younger days. Ain't she a peach?