Reference & Free Download: “The Book of Broken Promises: $400 Billion Broadband Scandal & Free the Net”
Let’s solve Net Neutrality, privacy concerns, bring back real competition and lower prices, while getting America wired for high-speed broadband – all in one, simple next step. It also stops the collusion and cross-subsidies of the wireline and wireless businesses, and requires less regulation as the market forces are returned, not the heavy handed FCC ideology to ‘preempt’ public consumer protections and help AT&T, Verizon and CenturyLink over the public interest.
Simply put, it is time to separate Verizon and AT&T’s state utilities’ wires from the other ‘subsidiaries’, like Verizon Wireless, Verizon Online, or Verizon Business—and make them pay the same market prices as competitors. And we want open networks so that you get to choose who supplies your wireline, wireless, cable, phone or Internet, broadband, and ISP service.
As we documented, Verizon’s subsidiaries are NOT paying market rates to use the networks and they have been dumping billions of expenses, per state, into the wired company. They have even been able to charge customers, including low income families or rural customers extra to build out the wireless networks and pay for the other lines of business. And it is also clear that AT&T is doing the same financial chicanery.
Why now? Verizon and AT&T’s plan is to ‘shut off’ the retail copper wired networks and force customers onto wireless (instead of upgrading to fiber), and use ‘per gig’ pricing with data caps—i.e., it makes them more money. And because it’s all one big family of companies, they can then allow their ‘subsidiaries’ to track you and then sell the information.
Known in the industry as “structural separation”, in 1984, the original AT&T was ‘broken up’ because of its monopoly controls over telecommunications. Unfortunately, through mergers, flawed deregulatory policies and with regulators who are working for the companies instead of the public interest, we now have only a few companies that collude more than they compete. Enough is enough.
(Note: Part II: We also need to break up the cable companies.)
Separating the affiliate companies from the wires and opening these utility, Title II networks to direct competition has a lot of benefits.
- Fixes Net Neutrality — NN was caused when the FCC and the phone companies worked together to close down competition in America – and Net Neutrality was created as a band-aid so that the companies would ‘behave’ when there was no competition.
- Competition and Choice: Open Networks, Now — Opening the networks to all forms of competition, and getting rid of the same company owning internet, broadband, cable, phone and ad-tracking you – will let you decide who provides you service over the utility wires. If some company blocks or degrades your service – you have a choice, and you just leave.
- Lower Prices — Competition is supposed to ‘lower’ prices, and thus competition from the wired services doesn’t exist today.
- Restore full privacy that lets you control your info online — The idea that we let the companies abuse their monopoly position by requiring us to give away our rights – is ludicrous. The utility wires are “Title II” and you should be able to choose your ISP and get control over your info.
- Rip Up Heinous Contracts — The idea that the companies have been allowed to add crap that says – If you use the service, you lose your right to take the company to court or do a class action. They are holding us hostage. According to CBS news, only 18 out of 150 million wireless customers went through arbitration in the last few years, as it is the only option.
- You paid for upgrades: Upgrade the networks to fiber; maintain the copper until that happens — The networks have been allowed to deteriorate and we’ve been told they are ‘unprofitable’ to maintain. Yet customers paid thousands of dollars to do this work over the last 2 decades and it was not done. Moreover, the local networks are profitable; they have been able to manipulate the accounting.
- No Government Funding: Stop the Cross-subsidies and Expense Dumping — Getting the companies’ subsidiaries to pay market prices, and stopping all of the cross-subsidies and expense dumping of these subsidiaries—brings back billions per state.
- Less Political Controls, Expense Dumping, Manipulation of the Accounting — Currently, the system is designed to have one company take over multiple lines of business, “vertically integrated”, while the mergers gave them political clout and the ability to manipulate the accounting but also have ALL forms of competition, wireline, wireless, cable, internet, broadband – be controlled by just a few companies.
What is Next?
- Separate the Utility Wires from the Subsidiary Companies — I.e., separate Verizon New York or AT&T California from the wireless, online, advertising tech, and entertainment companies—now. This would mean that Verizon Wireless, Verizon Online, Verizon’s entertainment companies, (AOL) or Fleetmatics or every other company, like the cable company, FiOS, – would all be treated just like all of the other companies that use or want to use the state utilities wires.
- Make All of these Companies Pay Market Prices for the Use of these Networks — This would bring in billions of new dollars immediately as the companies’ subsidiaries currently have been able to use these wired networks at seriously reduced rates, or not paying at all.
- Stop the Dumping of Expenses into the State Utility — This will stop the abuse of the local wired networks paying the majority of all expenses, like the billions paid in Corporate Operations expense (paying for the lawyers and lobbyists).
- Use the New Funds to Build Out the Networks — Moreover, it would stop the flows of money to build these other lines of business, which have diverted billions to say, build the wireless cell sites – instead of building out the cities with fiber.
- Open the Utility Networks to All Forms of Competition. Now. — The Telecom Act of 1996 opened the networks to direct competition and the government (the FCC) with the help of AT&T, Verizon and Centurylink – closed them again.
- Make All of the Subsidiaries Pay Back Billions Per State for Charging Local Phone Customers. — The companies will claim that that this is a ‘takings’, and they are right. These few companies have ‘taken’ from their customers, charging customers for upgrades where the money went to fund ‘non-regulated’ businesses.
- Refund the Monies Overcharged Local Phone Customers— The idea that low income families were forced to pay for non-regulated wireless construction expenses or that rural areas have been paying for a fiber optic service they will never get — is ludicrous.
- Sue the FCC for Its Corrupted Cost Accounting Rules, Among Other Issues. — The FCC’s rules created massive cross-subsidies over the last decade that made Local Service pay the majority of all expenses; this is unjust and unreasonable. The FCC’s cost accounting rules are set so that the expenses are allocated based on the year 2000 – 17 years ago. The FCC has never audited the impacts of these rules, ever, and now wants to erase them, without fixing them.
“The Book of Broken Promises”, published in 2015, is the third book of a trilogy that started in 1998. It supplies the details of why America needs to break up AT&T and Verizon… again.