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706 Data Quality Act Challenge 1

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of

)

)

Inquiry Concerning the Deployment of Advanced

)

Telecommunications Capability to All Americans in a

)

Reasonable and Timely Fashion, and Possible Steps to

)

GN Docket No. 04-54

Accelerate Such Deployment Pursuant to Section 706 of )

the Telecommunications Act of 1996

)

)

Fourth Notice of Inquiry

)

________________________________________________)

REPLY COMMENTS OF TELETRUTH & NEW NETWORKS INSTITUTE

Bruce Kushnick, Chairman, Teletruth

Executive Director, New Networks Institute

826 Broadway, Suite 900

New York, NY 10003

212-777-5418

http://www.teletruth.org

PLEASE NOTE: This document is also being filed as a Complaint

under the Data Quality Act.

May 24th, 2004

706 Data Quality Act Challenge 2

May 24th, 2004

Federal Communications Commission

445 12th Street SW

Washington, DC 20554

Infrastructure Held Hostage

Re: Request for Correction of Information:

Petition to Investigate and Correct All Advanced Network Broadband

Reports and Analyses, Pursuant to the Federal Data Quality Act

Since 1998, the FCC has been required under Section 706 of the Telecommunications

Act to investigate the status of broadband (advanced services) and whether it is being

deployed in a “reasonable and timely” manner.1 Also, Section 706 was designed to

encourage the roll out of broadband through various forms of regulation (or forbearance)

and promote competition.2

Teletruth petitions the Federal Communications Commission (FCC) to redo sections of

every broadband report presented to the public since 1998 in relationship to Section 706

of the Telecom Act, and to correct flaws in both the data and the analysis of broadband

deployment in the United States.

This challenge under Federal Data Quality Act is based on TeleTruth’s conclusions that

seriously flawed, unduly selective and biased statistical analysis has been presented to

Congress, regulators, and the public. It has distorted ALL public policies in the United

States toward broadband deployment, as well as harmed the entire financial health of

the economy.

In short, Teletruth believes that the FCC’s data and analysis fails the Federal Data

Quality Act’s basic tenets of quality, transparency, utility, reliability, objectivity, integrity,

reproducibility, among other problems.

As we will demonstrate, the data and conclusions in the FCC’s Advanced Network

Broadband reports starting in 1998 have continuously failed to include the state

obligations made by the Bell companies to deploy fiber-based broadband services in

exchange for massive financial incentives, tax write-offs and other perks. The FCC has

continuously ignored and did not include thousands of documents, including the majority

of state Alternate Regulation plans (including all data, testimony, orders, opinions,

related media coverage, etc.) that were dedicated to broadband or the billions of dollars

706 Data Quality Act Challenge 3

per state where customers have already been charged for fiber-optic networks that were

never delivered. In fact, to suit its own political needs, the FCC even dummied down the

definition of broadband to show that deployment was continuing at a “reasonable and

timely” pace when it does not have the authority to support that claim.

To make matters worse, the FCC’s broadband report has completely eliminated the role

of the Internet Service Provider, ISP, in the story of broadband and has done nothing to

focus on how the Bell companies have harmed the ISPs ability to offer DSL. To add

insult to injury, the FCC has not sought to examine its own regulatory harm imposed on

the obligation in Section 706 to “promote competition in the local telecommunications

market.”

Teletruth’s record on this data-failing of the FCC has been well documented with multiple

filings, comments, complaints and petitions --- all ignored by the FCC, even though we

presented sound primary data from numerous sources.

Appendix A is a bibliography and links to Teletruth, New Networks Institute and other

important related documents.

What’s missing?

By 2000, virtually half of American households should have been enjoying a fiber-optic-

to-the-home broadband connection at speeds of over 45mps in both directions. The Bell

companies (and GTE) promised regulators and the public that they would start to rewire

the state if they were given new financial incentives, known as “price caps”. We estimate

that over $120 billion dollars has been collected since 1993 in the form of excess phone

rates, tax write-offs and other perks – and virtually none of these services were

delivered.

By the time of the first FCC 706 Report initiative in 1998, the majority of states were

supposed to have already been doing the rewiring, since they were collecting the extra

profits from increased rates. In most states, new broadband alternate regulations were

implemented during the 1993-1995 timeframe and last for 3-15 years. The FCC

mentioned none of this or in any report, even though there are literally thousands of

documents that tell this story --- we just reported the findings, not created them.

For example, in 1997, the New Jersey Ratepayer Advocate released a report on the

status of fiber-optic based broadband commitments. The Advocate stated: (see

bibliography)

"...low income and residential customers have paid for the fiber-optic lines

every month but have not yet benefited."

706 Data Quality Act Challenge 4

The report continues:

"Bell Atlantic-New Jersey (BA-NJ) has over-earned, underspent and

inequitably deployed advanced telecommunications technology to

business customers, while largely neglecting schools and libraries, low-

income and residential ratepayers and consumers in Urban Enterprise

Zones as well as urban and rural areas."

Though neither reasonable or timely, the FCC’s 1998 Advanced Network report, (and all

others) do not mention this or any state deployments, especially whether these

deployments were being done on a “reasonable or timely” basis. And clear proof that the

phone companies weren’t deploying services as advertised can be found in hundreds of

documents. This also brought into the question whether “price cap” regulation, where the

companies received financial incentives for network upgrades --- read higher phone

rates and tax-write-offs for fiber upgrades --- was effective or working. The New Jersey

Ratepayer Advocates report clearly indicated that price caps had a benefit ---- mainly for

the phone companies, and not the customers or new network construction.

By ignoring the reality of what was promised, what it cost customers, and what was

actually delivered by the Bell companies, the FCC in one fell swoop has been able to

rewrite history and turn America into a 3rd rate broadband-ready country. Instead of

planning for a fiber-optic future, the country was told that inferior products over 100 year

old copper networks were to be our future. And by NOT including valuable data, (not to

mention a severe lack of enforcement), the FCC even harmed our economy and helped

to cause the Telecom Crash and ensuing problems with the economy.

In short, it is “Infrastructure Held Hostage”. By not holding these large corporations

accountable for the deployments of fiber-based, true-broadband, and allowing these

companies to essentially wipe out competitors through lack of enforcement, what we

have are a group of oligopolies that control the future and will deliver inferior, 3rd rate

products at high prices. And because of the distorted vision of the future and competition

by the FCC, we find that the FCC is regulating competition out of business, and has put

innovation on the back seat to corporate profits ---all through faulty data.

Faster Web packages over 100 year old copper wiring is not true-broadband. We were

promised a Ferrari on the Info-Bahn, and we’ve ended up with a skate board on a dirt

road – and the FCC’s data just covers over this bait-and-switch.

706 Data Quality Act Challenge 5

Summary Violations of the Data Quality Act

The FCC’s 706 Broadband reports violates the Data Quality Act’s basic tenets of

‘objective”, “utility”, ” reliable”, “quality” information dissemination products, which

includes both the data and the analysis and conclusions.

Specifically

The FCC has failed in presenting reliable, objective, quality data about:

1) the fiber-to-the-home broadband deployments that were standard in the majority of

states back in 1990’s. This is as opposed to inferior products, such as DSL, that only

go over the already existing copper networks. We request all references in ALL

reports to be upgraded to give what was the promised technologies to be deployed

as stated in state law, and all other sources, including state alternate regulation

plans, Annual Reports, statements to shareholders, the press and media.

2) the deployment of fiber-optic broadband that was supposed to be happening in the

majority of states during 1998. We request all references in ALL reports to be

upgraded to give the deployment schedules that were part of virtually every state law

including whether these were rural, urban or suburban deployments or a combination

thereof.

3) the FCC has failed in presenting reliable, objective, quality data about the deployment

of network upgrades for schools and libraries, and many other non-residential,

government agencies, We request all references in ALL reports to be upgraded to

give the deployment schedules that were part of virtually every state law.

4) the speed of broadband that was standard in the majority of states back in 1992-

2000, which was 45mps. This is as compared to the FCC’s standard of 200K.. We

request all references in ALL reports to be upgraded to give what was the standard of

'broadband' as stated in state law, since the FCC reports neglected this information in

previous reports.

5) the role of the customer as investor and the role of the Alternate Regulation as a

method of funding broadband deployments. We request all references in ALL reports

to be upgraded to examine there issues as stated in state law.

6) the role of the ISPs, both in the history of broadband but also in a situational analysis

of their current important role and the harm being caused by bad regulatory policy

and lack of enforcement. We request all references in ALL reports to be upgraded to

examine these issues.

Therefore, all analyses should include this data and then question the issues of whether

“Reasonable and Timely” deployments were true.

706 Data Quality Act Challenge 6

The Harms of Having Bad Data are Evident

If the FCC had actually collected and disseminated the proper data, the Bells’ failed

deployments, as told in virtually every state, the harm to competitors, including ISPs, as

well as the costs to customers, would have been known by the public. We believe with

accurate data and analysis, actions would have been taken that would have changed the

course of events.

• The Country would never have settled on allowing the phone companies to control

their digital future because it would have been shown that they had little interest in

investing in the networks when they got financial incentives---billions of dollars per

state.

• The Country would have led the world in a fiber-based future, had the states held the

companies accountable for their statements about fiber-optic based broadband

deployments. ---- This could have saved the economy from collapsing, which was led

by many of the fiber-optic and hardware companies preparing for fiber-based

services that were never deployed.

• The Country would have questioned why our current inferior broadband products

were still being offered over 100 year old copper networks.

• The Country would never had allowed the phone companies to harm competitors,

such as ISPs and CLECs, who were bringing innovation.

• Customers would not have already paid approximately $120 billion for networks they

will never receive.

• The Triennial Review would not have closed the new networks to competitors

because it would have been found that customers, not the Bell companies, were the

major investors in the phone networks.

The FCC’s analysis of broadband has failed to deliver to the country an accurate

assessment of broadband because it has used biased data and decided that the true

history did not suit their own political needs.

As we will demonstrate, each incorrect data point, missing data point and therefore

distorted analysis should be corrected, to not only make the mistakes of the past

revealed, but also to secure potential refunds as well as change the course of America’s

broadband future. Also, if customers, and not the Bell companies are proven to be the

funders of the local phone networks, then keeping the networks ‘common carrier’ (open

to competitors) and the treatment of competitors will be essential next steps, based on

the data. It will also allow for regulators and the public to have a better understanding

how the Bell companies gamed the regulatory system and essentially harmed the

economy and America’s digital future.

706 Data Quality Act Challenge 7

The Data Quality Act and This Complaint

The FY 2001 Consolidated Appropriations Act (Public Law 106-554) contained a new

piece of legislation, known as the Federal Data Quality Act. (Public Law 106-554 Section

515).

The Office of Management and Budget (OMB) was assigned the task of creating

“Guidelines for ensuring and maximizing the quality, objectivity, utility, and integrity of

information disseminated by federal agencies”3. These guidelines were then to be used

by the various agencies, including the FCC,4 to create their own set of guidelines, which

were released October 8, 2002.

As we will demonstrate, the FCC has failed in multiple ways to comply with this law.

A Short Discussion of the Data Quality Act’s Tenets

“…ensuring and maximizing the quality, objectivity, utility, and integrity of

information disseminated by federal agencies”5.

There are a series of definitions that we would like to detail before we proceed with our

findings.

Teletruth and Its Members are “Affected Persons” and We Seek a Correction in the

Information and Analysis Supplied by The FCC.

The OMB guidelines state:

“…agencies are to establish administrative mechanisms allowing affected

persons to seek and obtain, where appropriate, correction of information

disseminated by the agency that does not comply with the OMB or agency

guidelines.”

While the FCC guidelines states:

“Affected persons are people who may benefit from or be harmed by the

dissemination or use of a specific information dissemination product.”

Teletruth and its members, not to mention every US phone and broadband customer, are

“affected persons” who have been harmed through the use of specific information

products. Teletruth and our members separately, have been active participants at the

FCC pertaining to phone bill and broadband issues. Besides being a member of the FCC

Consumer Advisory Committee, therein demonstrating our standing, New Networks

706 Data Quality Act Challenge 8

Institute, (NNI) a Teletruth board member, has been filing complaints, petitions,

comments, etc. since 1993. NNI and other Teletruth members have been filing on

broadband topics since 1998. See Appendix A for a list of our various filings.

Lack of Objective and Therefore Reliable Data

It is clear from the 706 reports that all the FCC wanted to do with these reports was to

prove that advanced network services were being deployed on a reasonable and timely

manner, and to such an extent that they violated various laws.

Former Commissioner Gloria Tristani’s statement6 clearly points out that the information

in the first Report lacked enough detail to make the case that the deployment was

“reasonable and timely.”

“In order to fulfill our obligation under Section 706, we need a full and

accurate picture of the state of deployment of advanced

telecommunications services. We need to know what advanced services

are being offered and specifically where they are being deployed. As the

Report acknowledges, for the most part we simply do not have that

information. Instead, the Report largely relies on other types of evidence --

e.g., analogies, anecdotes and evidence of investment -- in order to

conclude that deployment of advanced services appears reasonable and

timely. While I appreciate the effort in the Report to compensate for the

lack of direct evidence in the record, I write separately to underscore my

belief that the lack of such evidence makes drawing any conclusions

about the state of deployment a tentative and inexact undertaking.”

Unfortunately, none of the proceeding reports ever fixed the problems of the basic state-

related issues pertaining the companies’ deployment of fiber, or the contributions of the

customers.

One of the concerns in the second report, Tristani noted,7 was that there was a problem

with leaving market forces to serve rural and even inner cities from having advanced

services.

“I am troubled about the factors and data that suggest certain populations

– those living in rural areas, the U.S. territories, inner cites, and tribal

areas, as well as low income consumers and minorities -- are at

heightened risk of not having access to advanced services if left to market

forces alone.”

706 Data Quality Act Challenge 9

Had the FCC bothered to examine the record of state actions, they would have found

that some states, such as Pennsylvania, had already mandated network upgrades for

broadband that was supposed to reach urban, suburban and rural areas equally.

The Pennsylvania Public Utility Commission wrote:

"Verizon PA has committed to making 20% of its access lines in each of rural,

suburban, and urban rate centers broadband capable within five days from the

customer request date by end of year 1998; 50% by 2004; and 100% by 2015."

Other states, including Texas, Ohio, New Jersey, California, were also committed to

equality of deployments – paid for by customers through higher phone rates.

The FCC DQA Guidelines for a “Complaint” and What are “Data”.

According to the FCC a “Complaint”:

“3. Complaint refers to a written communication to the Commission that

includes enough information so that the Commission can readily determine

the specific information dissemination product the complaining party

believes needs correcting, how the complaining party is affected by the

information dissemination product sought to be corrected, the sections of

these guidelines or the OMB Guidelines the complaining party believes

have not been followed, what resolution the complaining party would like,

and how to get in contact with the comment writer.”

“Data” are defined as:

“4. Data are the basic or underlying elements of information. All information

dissemination products covered by these guidelines are based upon data.

Additionally, covered information dissemination products may contain

analysis of the data and conclusions drawn from this analysis.”

Another important definition is “influential”

“6. Influential, when used in the phrase “influential scientific, financial, or

statistical information,” means that the Commission can reasonably

determine that dissemination of the information will have or does have a

clear and substantial impact on important public policies or important

private sector decisions.”

The OMB Guidelines also discuss ‘quality”,. “utility” and “objectivity” and “integrity”

“In the guidelines, OMB defines ``quality'' as the encompassing term, of

which ``utility,'' ``objectivity,'' and ``integrity'' are the constituents. ``Utility''

706 Data Quality Act Challenge 10

refers to the usefulness of the information to the intended users.

``Objectivity'' focuses on whether the disseminated information is being

presented in an accurate, clear, complete, and unbiased manner, and as a

matter of substance, is accurate, reliable, and unbiased. ``Integrity'' refers

to security--the protection of information from unauthorized access or

revision, to ensure that the information is not compromised through

corruption or falsification.”

As we will show, the reports lack objectivity, utility and therefore lack quality.

The country has been given a distorted, picture of the entire future of broadband, and as

we will discuss, it has cost the public billions in higher fees, not to mention, allowing the

US to not only fall behind in a technological future, but has harmed the economy in

numerous ways. This was accomplished with unreliable data and analysis that removed

from view important facts and information that could have dramatically changed the

entire broadband future of the US.

A Contradiction of Between the FCC Guidelines and OMB Guidelines.

We believe the FCC guidelines are in error because they seem to preclude any filing that

finds fault with the FCC to not be legally “enforceable”.

“4. This document provides guidance to Commission staff and informs the

public of the Commission’s policies and procedures. These guidelines are

not rules or regulations. They are not legally enforceable and do not

create any legal rights or impose any legally binding requirements or

obligations on the Commission or the public. Nothing in these guidelines

affects any otherwise available judicial review of Commission action.

Factors such as imminent threats to public health or homeland security, or

statutory or court-ordered deadlines may cause these guidelines to be

temporarily waived.”

There is nothing in the Data Quality Act or the OMB guidelines that refers to the FCC’s

ability to ignore the law and decide what it feels is or is not ‘enforceable’.

706 Data Quality Act Challenge 11

Infrastructure Held Hostage.... Redo The Broadband Analysis

Our data is taken directly from primary sources. We have included a full bibliography of

filings and related other missing data points. Note: There are thousands upon thousands

of documents, state filings, comments, new articles, testimony in Congress at the FCC,

etc. This is only a smattering of what we have found and have been filing since 1998.

1)

Reasonable and Timely Deployments ---- Not a Chance.

By 2000, virtually 44 million households should have been rewired with fiber-optics to the

home. That's right --- to the home. For example, the Pennsylvania Commission wrote

about the schedule to have 20% of the state wired by 1998 to rural, urban, and suburban

areas, 50% by 2004.

"Verizon PA has committed to making 20% of its access lines in each of rural,

suburban, and urban rate centers broadband capable within five days from the

customer request date by end of year 1998; 50% by 2004; and 100% by 2015."

California was to have 6 million lines by 2000, Ameritech promised 6 million households

by 2000, Bell Atlantic was supposed to have 8.75 million households by 2000. Though it

varies by state law, Massachusetts was supposed to have 330,000 lines by 1995.

The New Jersey Bell plan called for 60 megabit services by now and the entire state is

supposed to be completed by 2010 with fiber-optic broadband. ("Opportunity NJ", 3/92)

• · Wideband 95% by 1999

• · Broadband 100% by 2010

• · Fiber to the feeder 45% by 2000

• · Fiber to the curb 30% by 2000

And of the actual deployment of broadband in the state of New Jersey, the Ratepayer

Advocate stated in 1997 it certainly wasn’t happening:

"...low income and residential customers have paid for the fiber-optic lines

every month but have not yet benefited."

"Bell Atlantic-New Jersey (BA-NJ) has over-earned, underspent and inequitably

deployed advanced telecommunications technology to business customers,

while largely neglecting schools and libraries, low-income and residential

ratepayers and consumers in Urban Enterprise Zones as well as urban and

rural areas."

Timely and Reasonable? In the 1998 “Comments” period, we quoted some of this

material, and it is clear the FCC didn’t want to include it. Had the FCC done the right

thing, it would have looked at these two state’s plans and noticed that 20% of the state of

706 Data Quality Act Challenge 12

Pennsylvania should be wired in 1998 --- did that happen? (No) and was 30% to the curb

in New Jersey by 2000 going to happen? (No) Also, notice that these state commitments

were for decades, clearly running through the time the FCC reports were being created.

How bad does it get? This blow by blow of Pac Bell and SBC’s California failed

broadband network, was published in San Diego Tribune in Feb. 1998. It included state

concessions, an Alternate Regulation plan (and more money). It was never covered in

the FCC reports.

A Timeline of Pacific Bell's California First Plan: A Plan that Failed8

• November 1993: Pacific Bell (PB) unveils plans to spend $16 billion over seven

years to upgrade its California network to handle interactive services like home

shopping and compete against cable companies with video channels and movies-

on-demand.

• May 1994: (NNI NOTE: by 2000, 6 million households.) PacBell begins network

construction in Pacific Beach and Mira Mesa in San Diego. Construction also begins

in San Jose and in Orange and Los Angeles counties.

• October 1994: City of San Diego considers proposal to require that Pacific Bell pay

franchise fees and abide by other requirements imposed on cable companies if it

gets into the video business.

• October 1994: Pacific Telesis, Bell Atlantic Corp. and Nynex Corp. form Tele-TV, a

joint venture to provide the companies with video programming, entertainment and

information to sell to residents.

• January 1995: PB and city of San Diego sign "landmark" agreement, with PB

pledging to give the city 5 percent of gross revenues from voice, video and data

services sold over new network. City agrees not to regulate PB as a cable company.

• April 1995: PacBell buys Cross Country Wireless Inc. and announces plans to offer

"wireless cable" service to 5 million-customer service area covering San Diego,

Riverside, Los Angeles and Orange counties.

• NNI UPDATE: September 1995: Alternate Regulation is granted to Pacific Bell.

• Sept. 1995: PB slows network construction to save $1 billion in capital costs over

five years for statewide project, but accelerates network construction in the SF Bay

Area.

• January 1996: PB halts fiber/coaxial network construction in Los Angeles County.

Network projects continue in San Diego, San Jose and Orange County (briefly).

• April 1996: SBC Communications of Texas signs deal to buy Pacific Telesis.

• May 1996: Network construction halted in Orange County.

• June 1996: San Jose City Council awards PacBell a cable franchise, giving the

company official standing as cable operator.

• Sept. 1996: PB begins selling video service in San Jose over its new network.

• April 1997: SBC's purchase of Pacific Telesis becomes final.

706 Data Quality Act Challenge 13

• April 1997: Tele-TV, jointly owned by Bell Atlantic Corp., Nynex Corp. and Pacific

Telesis Group, cuts staff in half and abandons all joint video projects in favor of

individual company efforts.

• May 1997: PB launches 'wireless cable' service in Los Angeles and Orange

counties.

• June 1997: SBC abandons almost all attempts to compete with cable, announcing

immediate ends to Pac Bell's video network project as well as a smaller test in

Texas. The decision halts construction in San Diego and pulls the plug on 8,000 PB

cable customers in San Jose. SBC writes off $500 million investment in both

ventures.

• Nov.1997: PacBell sends out requests for bids on various components of the partially

built video network.

• NNI UPDATE: July 2001: The California ISP Association files formal complaint

about discriminatory behavior.

Therefore, the FCC has failed in presenting reliable, utility, objective, quality data about

the deployment of broadband that was supposed to be happening in the majority of

states during 1998. We request all references in ALL reports to be upgraded to give the

deployment schedules that were part of virtually every state law.

Schools and Libraries?

Of course the FCC paints a picture that deployment of “broadband” is spreading rapidly

in schools and libraries.

“The U.S. Department of Education publishes on an annual basis various

statistics relating to Internet access in U.S. public schools and classrooms.

Among other things, the most recent study documents the steady increase

in number of schools with Internet access, and the number of instructional

classrooms with Internet access.41 For instance, in 2002, 99% of public

schools had access to the Internet, compared to 14% in 1996.42 Moreover,

in 2002, 92% of public school classrooms had access to the Internet,

compared to 14% in 1996. In 2002, 94% of public schools reported using

broadband connections for Internet access, compared to 80% in 2000 and

85% in 2001.43

But here too, the word broadband can mean anything faster than dialup. What was

promised in many states for changes in state regulations was “fiber-optic” upgrades for

schools, libraries, etc. For example, Ohio was supposed to have all high-schools,

colleges, universities, not to mention all hospitals, libraries and even jail and federal

building fiber-opticlly upgraded.

706 Data Quality Act Challenge 14

Ohio Alternate Regulation Plan, September 20, 1994

"21. INFRASTRUCTURE COMMITMENTS The Company's infrastructure

commitment in this Plan shall consist of the commitment to deploy, within

five years of the effective date of the Plan and within the Company's

existing service territory, broadband two-way fully interactive high quality

distance learning capabilities to all state chartered high schools including

vocational, technical schools, colleges and universities; deploy broadband

facilities to all hospitals, libraries, county jails and state, county and federal

court buildings…"

Are we supposed to be proud of getting inferior services at expensive prices?

The fact that no FCC broadband report has quoted the hundreds of state laws done from

1993-2000 on the fiber-optic upgrade promises to schools, libraries, etc. is also a serious

Data Quality Act violation. Therefore, the FCC has failed in presenting reliable, objective,

quality data about the deployment of network upgrades for schools and libraries and

many other non-residential, government agencies, We request all references in ALL

reports to be upgraded to give the deployment schedules that were part of virtually every

state law.

The implications of this are of course staggering. The entire “Universal Service” fund

charges are now being requested throughout the states, even though many states

already had funds for broadband upgrades built into phone rates. Are customers paying

twice or more for items that were not delivered but were funded?

Or to make matters more interesting, the Bell companies also receive the most amount

of money from the “Schools and Libraries” fund. In 2001 it was almost ½ billion dollars.

Are these companies getting paid twice, first from the excess in current rates from

missing deployment, then from being the largest recipient of the USF Fund?

2)

Fiber-To-The-Curb Was Promised. What We Are Now Talking About Is

Faster Web Pages, Not New Applications.

On Wednesday, May 19, 2004 9:53 AM, Verizon made a “Historic First”:

“Verizon, in Historic First, Begins Large-Scale Rollout of Advanced

Fiber-Optic Technology With Keller, Texas, Deployment; Announces

Plans for Offering New Services”

"FTTP is moving from field trials and the lab to the real world, and it's

happening in Keller first," Verizon Network Services Group President Paul

706 Data Quality Act Challenge 15

Lacouture said at a news conference with city officials here today. "This

technology will transform our network and the products we will be able to

offer to consumers and businesses. Once deployed, for example, the

slowest broadband connection we'll offer customers will be three times as

fast as broadband speeds commonly available today. In short, we are

building a new network that will make us the broadband leader in the 21st

century."

“Bob Ingalls, president of Verizon's Retail Marketing Group, said some

of the new broadband access products will feature download speeds of 5

megabits per second, 15 megabits per second and 30 megabits per

second.

With this statement, it is now clear that Verizon has continually lied to every state they do

business in and had no plans to offer “fiber-optic” services or could not deliver before

2004.

How embarrassing does it get?

By 2000, Bell Atlantic had claimed it would have 8.75 million households rewired in its

territory. Both NYNEX and GTE also had various plans of millions of lines.

Bell Atlantic Annual Report, 1993

“We expect Bell Atlantic's enhanced network will be ready to serve 8.75

million homes by the end of the year 2000. By the end of 1998, we plan to

wire the top 20 markets... These investments will help establish Bell

Atlantic as a world leader in what is clearly the high growth opportunity for

the 1990's and beyond."

For the sense of déjà vu, in 1996, Verizon cut a 6 and 1/2 year deal with Lucent (good

through 2003) to build fiber-optic based equipment. (Bell Atlantic press release, July

1996)

"Later this year, Bell Atlantic will begin installing fiber-optic facilities and

electronics to replace the predominantly copper cables between its telephone

switching offices and customers…. The company plans to add digital video

broadcast capabilities to this "fiber-to-the-curb," switched broadband network

by the third quarter of 1997, and broadband Internet access, data

communications and interactive multimedia capabilities in late 1997 or early

1998."

In fact, according to the release, the entire Bell Atlantic region would be rewired.

706 Data Quality Act Challenge 16

"Bell Atlantic plans to begin its network upgrade in Philadelphia and

southeastern Pennsylvania later this year. The company plans to expand this

Full Service Network deployment to other key markets over the next three

years. Ultimately, Bell Atlantic expects to serve most of the 12 million homes

and small businesses across the mid-Atlantic region with switched broadband

networks."

Had the FCC explained to the public that networks that were supposed to be deployed in

1993-2000 were fiber based and not copper, and not ‘high-speed’, but true-broadband,

would the country haven’t been on a different track?

By not explaining this to the public in ANY of its broadband reports, the FCC has failed in

presenting reliable, objective, quality data about the fiber-to-the-home broadband

deployments that were standard in the majority of states back in 1990’s. We request all

references in ALL reports to be upgraded to give what was the promised technologies to

be deployed as stated in state law, and all other sources, including Annual Reports,

statements to shareholders, the press and media announcements, etc.

3)

Broadband Speeds Were Defined In 1992-1995 As "45mps In Both

Directions" As The Minimal Speed.

That's right. When the FCC decided that in order to show that the deployment of

broadband was 'timely-and-reasonable”, it lowered the standard of broadband speed to

200K. It also created a new term "high-speed', for anything else that was faster than a

dial-up connection.

"Since 1999, the Commission has used the terms "advanced

telecommunications capability" as "high-speed, switched, broadband

telecommunications capability," but did not specify what speed should be

encompassed within these terms.10 In the past, the Commission used the

terms "advanced telecommunications capability" and "advanced services"

to describe services and facilities with an upstream (customer-to-provider)

and downstream (provider-to-customer) transmission speed of more than

200 kilobits per second (kbps).11 The Commission also used the term

"high-speed" to describe services and facilities with over 200 kbps

capability in at least one direction. 12"

We can make this claim because the FCC neglected to mention, in any of its reports,

that the majority of states in the US had determined that broadband was a minimum of

45MPS and this was on the books in most states in 1998 when the FCC started their

analysis.

706 Data Quality Act Challenge 17

According to the Pennsylvania Public Utility Commission in 2003.

"In view of Bell's commitment to providing 45 Mbps for digital video transmission

both upstream and downstream, we look forward to Bell's providing this two-way

digital video transmission at 45 Mbps."

Therefore, the FCC has failed in presenting reliable, objective, quality data about the

speed of broadband that was standard in the majority of states back in 1992-2000. We

request all references in ALL reports to be upgraded to give what was the standard of

'broadband' as stated in state law.

Why? Because it is now clear that what happened was a ‘bait-and-switch’ – the promise

of a fiber-optic world has now gone to a mostly 100 year old copper world. More

importantly, had the companies been required to deliver the speeds they had contractual

agreements to deliver, then today, over half of the US would already be rewired – at

45mps or faster.

Also, had the FCC bothered to even quote this material, everyone would have

questioned whether the future was going to be web-pages or true-broadband. --- It’s

clear that in redefining broadband and not explaining the other facts, the FCC made a

serious educational mistake, but also allowed the companies to not be held accountable

for true-broadband.

How would that have helped the economy grow, had there been a new, much faster

collection of networks? Even today, we are just starting to understand the limitations of

what the FCC has done to the country’s broadband future through this one lowering of

the bar. While the FCC has discussed how they came up with their analysis of 200K as

standard, by NOT first discussing what was promised on the state level, and quoted the

arguments of why the 45MPS was the standard, they did a serious disservice to the

American public.

4) The Customer as Investor --- Follow the Money and State Alternate Regulations.

Did America need to spend $120 billion dollars on copper wire deployments?

The FCC new 706 NOI requests comments on how investment trends, including ‘access

to sufficient levels of capital to fund infrastructure build-out’.

“21. We seek comment on current investment trends and the extent to

which they may reflect the availability of high-speed and advanced

services. We seek comment on the relationship between the pace of

investment, consumer demand, and general market expectations. We also

seek comment on whether providers of high-speed and advanced services

706 Data Quality Act Challenge 18

have access to sufficient levels of capital to fund infrastructure build-out

and whether additional steps should be taken to accelerate deployment.”

As the Bells cry they need more financial incentives to invest in broadband, anyone who

has read the various outcomes of the Bells’ state alternate regulation bait-and-switch

strategies should realize that the FCC totally ignored over the decade these issues.

a) What was promised in the state?

b) The schedule it would be deployed?

c) The financial incentives the phone companies received?

d) The total failure of the Bell companies to deliver on those promises with little, if any,

request to refund the monies or lower rates.

The scam was simple. In exchange for getting massive financial incentives, the phone

companies made commitments to deploy broadband. Using large lobbying budgets and

expensive customized market research reports, the phone companies were able change

state laws that removed the older “rate-of-return” regulation, that examined the

company’s profits, to Alternate Regulations, known as “price caps”, where the price of a

service was capped for a few years, but the profits are not examined on most services.

In this model, the phone companies were able to not only hide profits from regulators,

but also could increase profit by cutting staff and construction budgets, as well as

received major tax write-offs.

In most states, this excess is still being charged to customers as a defacto “broadband

tax”. As we documented in numerous states and presented to the FCC, the majority of

states were able to gain billions of excess profits.

Our case study of Pennsylvania found that the phone company was able to garner over

$4 billion dollars in excess profits, tax incentives and other perks. Other analysts have

also found similar customer overcharging.

Meanwhile, some states, such as the case in Louisiana and Oregon, allowed the phone

companies to use the extra profits from rates to fund DSL service.

Not once did the FCC examine the entire price cap process, either the revenues or

profits or how these changes in state laws made customers defacto investors.

While the Bells keep crying they need more money, it is ironic that the FCC never

bothered to examine what they were making from unkept broadband promises. Even

more amusing, since the FCC doesn’t examine the Bells’ profits, whenever the

companies need more money they simply ask for state rate increases. The FCC never

examines this data either. There is no tie-to investment, tie-to-deployment.

706 Data Quality Act Challenge 19

Data Quality Violations.

The FCC has never examined the state broadband alternate regulations and how

customers, not investors, have been funding the deployments of broadband. It is clear

that the misguided “Triennial Review”, where the FCC gives the phone companies carte-

blanche to own upgraded networks and close out competitors is a result of the lack of

substantial data that was provided and ignored, or never examined. It is a bias of the

worst kind because policies are being set on incomplete bad data.

Had the FCC taken into account, on a state by state basis, the contributions of the

customers in virtually all Bell build outs of broadband, then it would have also been clear

that these same networks would have remained “Common Carrier”, because the public,

not the Bell companies, were the funders of essential, new fiber-based facilities.

Therefore, the FCC has failed in presenting reliable, objective, reliable, utility, quality

data about the role of the customer as investor and the role of the alternate regulation

and price caps as a method of funding broadband deployments. We request all

references in ALL reports to be upgraded to examine this issue as stated in state law.

Profits of the Bell Companies and Tracking Where They Lead?

Related to this data quality challenge, there are some very important trend models of

investments that the public needs to have included in this calculation.

First, the Bell profits from local phone service rose to new heights because of the various

alternate regulation plans, inspired and put into place because of Bell promises to deploy

new networks.

Second, the profits were not put back into the networks but were a) spent on overseas

investments and losses, b) the creation of their long distance services, c) the creation of

the wireless businesses, and d) excessive executive pay and perks.

In fact, the Bell companies cut employees-per-line 65%, while in the last four years cut

new construction over 50%.

And while the Bells are complaining about opening their networks to competitors, the

FCC has not done a full audit of the equipment in the networks to be able to even know

what the network actually costs. It is also forgotten that the Bells are allowed into long

distance services in exchange for opening their networks. However, the Bells just

continually are able to request state increases in local phone service prices to offset any

loss of large profits.

706 Data Quality Act Challenge 20

As part of this examination, the FCC has not in any way, examined the ‘cross-

subsidization’ of local phone service rates that helped to fund various lines of business,

including DSL, which were earmarked for new construction of a fiber-based services.

4)

Harm To The ISPs And CLECs Because Of Lack Of Enforcement Has Been

Horrendous. Lack Of Data About The ISP’s And CLECs’ Contribution To The

Deployment Of Advanced Network Services Has Been Worse.

How did most customers get on the Internet? Well, it wasn’t the local telcos or the cable

companies. It was the independent, entrepreneurial ISPs throughout the US. In 1998 it

was estimated that over 7000 companies existed. Today, estimates are less than 1000

and worse, it is clear that the FCC’s plans are to put them out of business on multiple

levels.

It is ironic, that the FCC in the second report quotes numerous commentors that these

small independent ISPs are a driving force in bringing broadband to the public.

20. Internet Service Providers. The ventures mentioned above include

what could be referred to as facilities-based broadband ISPs (i.e., one

company offering both Internet service and the broadband facility over

which that service is accessed). There is a significant number of other

ISPs who are pursuing non-facility based business plans, gaining access

to their users over the facilities of third parties. These ISPs, in the view of

some, are a driving force in the deployment of broadband.(66)

(66) A recent Cahners In-Stat Group Report reportedly indicates that ISPs

are rushing to provide DSL service, that one-third of ISPs are providing

high-speed service based on DSL, and that ISPs are largely partnering

with Regional BOCs in order to provide this service. ISP Rush To DSL "A

Stampede," Report Says, CNNfn (Dec. 2, 1999) (visited Dec. 7, 1999)

<http://www.cnnfn.com/news/technology/newsbytes/140201.html>.

And yet, there is little, if any, mention of ISPs in the next FCC 706 report. Worse,

because of numerous bad decisions, the FCC has not enforced laws that allow the ISPs

to get wholesale DSL at a price that has any profit. Also, currently, the FCC has sat on

its hands while current laws block ISPs from selling cable DSL.

The FCC’s Triennial Review closes down Line-Sharing, which is the only way the ISP

can offer DSL. Meanwhile, the ISPs and CLECs are not going to be allowed to use these

new fiber-optic networks if they ever show up.

To top it off, Teletruth, New Networks Institute and others have filed numerous

comments, petitions and complaints about the harm the Bells are doing to the ISPs

706 Data Quality Act Challenge 21

during the ordering and installation of new services, and the FCC has been totally

useless to fix these problems.

Data Quality Act Violations: Lack Of Objective And Reliable Data About ISPs, Their

Role In Broadband and The Problems They Face.

Of the Data Quality Act aspects, a report on broadband must include the entire collection

of issues that was just highlighted, not just from Teletruth, but from all of the other

contributors. And not only that, but the FCC current report forgets that the ISPs exist.

One has only to do a search for the term “ISP” to see its relegated to footnotes.

In fact, the FCC’s entire treatment of ISPs has been so embarrassing that the FCC’s

Triennial Review claims that the FCC rules only ‘indirectly’ impact ISPs. Putting them out

of business by controlling every aspect of their environment is not indirect.

Therefore, the FCC has failed in presenting reliable, objective, utility, reliable, quality

data about the role of the ISPs both in the history of broadband but also in a situational

analysis of their current important role, as well as the harm being caused by bad

regulatory policy. We request all references in ALL reports to be upgraded to examine

these issues.

And need we remind the FCC that they also had an obligation under Section 706 to

determine negative impacts on deployment and to ‘promote competition’.

“If the Commission's determination is negative, it shall take immediate

action to accelerate deployment of such capability by removing barriers to

infrastructure investment and by promoting competition in the

telecommunications market.”

In other reports we have clearly shown that the FCC is at fault in the deterioration and

bankruptcies of thousands of ISPs who were in business but are closed out of

broadband.

In fact, it is also clear that by the omission in every instance of the Internet Service

Providers and their role in broadband, the FCC has also not only violated the basic

tenets of the Data Quality Act, but also the Small Business Regulatory Flexibility Act, and

even Section 257 of the Telecom Act, which required the elimination of barriers of entry

for small telecom businesses.

706 Data Quality Act Challenge 22

“SEC. 257. [47 U.S.C. 257] MARKET ENTRY BARRIERS

PROCEEDING.

(a) ELIMINATION OF BARRIERS.--Within 15 months after the date of

enactment of the Telecommunications Act of 1996, the Commission shall

complete a proceeding for the purpose of identifying and eliminating, by

regulations pursuant to its authority under this Act (other than this section),

market entry barriers for entrepreneurs and other small businesses in the

provision and ownership of telecommunications services and information

services, or in the provision of parts or services to providers of

telecommunications services and information services.

(b) NATIONAL POLICY.--In carrying out subsection (a), the Commission shall

seek to promote the policies and purposes of this Act favoring diversity of

media voices, vigorous economic competition, technological

advancement, and promotion of the public interest, convenience, and

necessity.

Ignoring the ISPs has been a series of multiple violations that extends throughout every

FCC report and decision. It has given the public a warped view of the broadband and

has helped to reshape public policy in harmful ways. And it needs to be addressed now.

Had the ISPs been allowed to offer DSL and cable modem services, which the FCC has

continually helped to restrict, the innovation of America’s broadband would have been

increased, and the deployment of services would have been increased, since these firms

handled the majority of dial-up customers and would have migrated their customers to

broadband. Also, ISPs helped the Internet and broadband to be implemented in small

business, since broadband by itself is not a stand alone product but can include web

services, etc.

706 Data Quality Act Challenge 23

APPENDIX A

Additional Information:

New Networks Institute has been tracking the Regional Bell companies’ broadband

commitments since 1992. As the name suggests, we have been committed to the

deployment of “new networks”.

Unfortunately, New Networks Institute has not had the resources to independently track

the details state-by-state, the various promises made in each state, or the outcome.

However, over the decade, the research we have done on this topic is the most

extensive that exists to date, though we still consider it incomplete.

In 1994, with the publication of a research report, “The Information Superhighway: Get a

Grip”, we clearly demonstrated that the Bells could not deliver the networks they were

promising to the public in 1994.

The rest of this document highlights the various reports, complaints, filings, comments,

as well as independent research that has been done on this topic.

Documenting the Bells’ Failed Deployments

The Bells Greatest Broadband Failures, 1991-2003

http://www.newnetworks.com/bellbroadbandfailures.html

To start, here is a collection of statements made by the Bell companies about their

deployments, as well as some findings by other independent sources.

Summary Report: How the Bell Stole America’s Digital Future

http://www.netaction.org/broadband/bells/

This report, published in 2000 by NetAction, lays out the basics of the promises in key

states — California, New Jersey, Ohio, Texas, and shows the promises and failed

outcomes.

The Unauthorized Bio of the Baby Bells, published, 1999.

http://www.newnetworks.com/downloadbook.html

This detailed discussion of broadband Alternate Regulation plans gives a blow by blow of

what happened to the proposed fiber optic based promises, originally known as the

“information superhighway”. A free download of book or the various sections is available.

706 Data Quality Act Challenge 24

FCC Comments and Complaints

New Networks Institute and other members of Teletruth have previously filed numerous

comments and complaints with the FCC on the Bells’ failed deployments and the costs to

customers.

FCC Comments #1 — September 1998

Inquiry Concerning the Deployment of Advanced Telecommunications Capability CC

Docket 98-146 to All Americans in a Reasonable and Timely Fashion, and Possible

Steps to Accelerate Such Deployment Pursuant to Section 706 of the

Telecommunications Act of 1996.

http://www.newnetworks.com/NNI_FCC_9-98.txt

“NNI believes that the history of state-level incentive regulation plans shows that it would

be unwise for the Commission to adopt any form of regulatory policy that gives the

RBOCs regulatory benefits, such as relaxed regulation or lessened oversight, in

exchange for the hope or promise that increased RBOC deployment of advanced

network capabilities will be the result.”

FCC Comments # 2 — September 1998

Advanced Telecommunications Notice Of Proposed Rulemaking, FCC 98-188, CC

Docket No. 98-147

http://www.newnetworks.com/NRPM_98-147_NNI.txt

“The FCC Should Not Grant The Bells Any New Financial Incentives And Should

Investigate The Bells Failure To Deliver On Promised Advanced Networks Despite

Previous Incentives. — Our record is clear. The FCC’s is broken.”

FCC White Paper #3 — March 17th, 1999

Baby Bell Expose Refutes FCC Advanced Network Report and Calls for an Investigation

of "Info-Scandal".

http://www.newnetworks.com/alonefccrefute4.html

“As we will demonstrate, the FCC's Report is a white-washing, attempting to show

that the Telecom Act worked and has delivered on its promises to give Americans

new services. Unfortunately, the Report is filled with numerous serious flaw.

…However, there is an abundance of evidence the FCC has ignored or not

considered —literally hundreds of documents that detail the failure of the Bells to

deliver broadband to the public in a ‘timely and reasonable’ manner.”

FCC Comments # 4 —September 24, 2001

Inquiry Concerning the Deployment of Advanced, Telecommunications Capability CC

Docket 98-146 to All Americans in a Reasonable and Timely Fashion, and Possible

Steps to Accelerate Such Deployment Pursuant to Section 706 of the

Telecommunications Act of 1996.

706 Data Quality Act Challenge 25

http://www.newnetworks.com/nni706noi2001.htm

Questions Asked:

• Is America really going to have the inferior ADSL product over the 100 year-old-

copper wire as its broadband future?

• Did the American public pay in excess of $58 billion dollars for a fiber-optic

network they will never receive? And are they still paying for it in the form of

excessive phonerates? (doesn’t include tax write-offs.)

• Why hasn't the FCC investigated the issues of the Bells' failed broadband

deployment?

• Why hasn't the FCC investigated and enforced the laws to protect competitors?

FCC Complaint –Ignored #5 February 19th, 2003

How Much Money Did the Bell Companies Collect From Customers for Broadband

Networks They Will Never Receive? http://www.newnetworks.com/prpenncomplaint.htm

Teletruth Files Complaint Against the FCC: The FCC's Broadband Analyses are

Seriously Flawed and Calls for a "Broadband True-Up", Not a ‘Customer Takings’.“

This Complaint outlines the fact that the FCC data on broadband is completely lacking all

information about the state deployments.

FCC – Other Broadband Items Filed

Petition Ignored #6 —Petition to FCC Over ISP and Customer Broadband Issues, May

2003 http://www.newnetworks.com/PRISPPETITIONS.html

This Petition, filed with the Texas ISP Association, outlines multiple problems created by

the Bell companies currently facing the Internet Service Providers in supplying

broadband. This includes DSL predatory pricing, and sub-standard customer services,

among other issues.

Analysis of FCC Triennial Review Decision, 2003

http://www.newnetworks.com/idiotsdelight.htm

Comment #7 — Comment on the FCC’s Triennial Review to Block Competition,

2003 http://www.newnetworks.com/triennialfin.htm

Comments-#8-13— 6 FCC Comments/Reply Comments over Broadband, 2002

http://www.newnetworks.com/teletruthrfacomments.html

Teletruth filed: The FCC’s Triennial Review is in violation of the Regulatory Flexibility

Act’s mandate to include small businesses in the decision making process. The Triennial

Review helps to put Internet Providers out of business.

Analysis of Internet Broadband— "Small Telecom Business Impact Study", 2002

http://www.newnetworks.com/smallbusinessimpactstudy.html

706 Data Quality Act Challenge 26

Other Broadband Filings and Activities:

Proposed Congressional Bill -- "The Broadband Bill of Rights", 2001-2002

http://www.newnetworks.com/broadbandbill.htm

In 2001, Teletruth worked with Congressmen Nadler to create a broadband bill to protect

the rights of customers and small businesses who receive sub-standard customer

services.

NTIA Comments— December 19h, 2001

Notice, Request for Comments on Deployment of Broadband Networks and Advanced

Telecommunications Docket No. 011109273-1273-01] RIN 0660-XX13

http://newnetworks.com/FINALNTIAfiling.htm

“New Networks Institute believes that allowing the Bells into any new services or giving

them any new incentives is tantamount to rewarding the Bell monopolies for fraudulent

behavior. . History clearly shows that the new incentives will in no way bring advanced

networks sooner or cheaper….If the NTIA is really concerned about the future of

American telecommunications, it must take a clear, fresh look at the data -- and not use

data supplied by the Bell companies, through it myriad of Bell funded reports, lobbying

groups, and other spin doctors.”

Overall Impacts on the Economy

The Tell-The-Truth Broadband Challenge to Verizon vs "The Verizon 100 Megabit

Challenge" May 28th, 2003

http://www.newnetworks.com/tellthetruthverizon.htm

This essay outlines how Verizon has failed to deliver broadband in multiple states and

yet keeps telling everyone they should be trusted for their new deployments.

SPECIAL REPORT: The Bells Caused The Current Financial Recession: The Fiber-

Optic Fiasco and America's Copper Dirt Road. August 2001

http://www.newnetworks.com/fiberopitcfiasco.htm

New Networks contends that the Bells failure to roll out it’s fiber optic networks helped to

cause the collapse of the Telecom markets and the economy, and killed an entire

generation of innovation and growth, costing the US $300-500 billion annually.

State Filings and Info

Pennsylvania: Filed January 12th, 2004

Updated Complaint Requesting An Investigation Into Fraud And Collusion —

Verizon Couldn’t Build The Fiber Optic Networks When They Signed The

Commitments With The State A Decade Ago. Customers paid an estimated $1135

per household for non-existent networks they will never receive.

http://www.teletruth.org/PennBroadbandfraud.html

706 Data Quality Act Challenge 27

“By the end of 2003, Teletruth estimates that every household in Pennsylvania has paid

in excess of $1,135.00 for a fiber optic service they will never get. Teletruth estimates

that the total overcharging to be $3.9 billion or more in excess profits, tax deductions,

and other financial perks, including funding other business ventures through cross-

subsidization.”

Liberty, Bell (Verizon) Stolen,

http://www.newnetworks.com/Libertybellstolen.htm

An essay about the Pennsylvania broadband story.

Pennsylvania Broadband Scam

http://www.teletruth.org/PennBroadbandfraud.html

A collection of materials about Broadband in Pennsylvania.

New York, Teletruth Presentation, December, 2002

The Two Broadbands… How NYC Got Conned and What We Should Do for the City’s

Broadband and Economic Health,

http://www.newnetworks.com/NYCspeechfin.htm

Presentation to the New York City Council, December 10th, 2002. In this speech we point

out that Verizon New York not only had plans for fiber-optic upgrades to customers’

homes and offices, but that the price of service to competitors was based on 100% fiber

optic upgrades as a given. These upgrades never happened and inflated all rates.

Complaint Filed NY state Attorney General -1999

Bell Atlantic is Using Predatory Pricing for DSL that is Designed to Eliminate Internet

Service Providers.

http://newnetworks.com/baadslscrewisp.htm

This complaint outlines the predatory pricing Verizon charges the ISP resellers of DSL.

Complaint – Filed NY State Attorney General —1999

Request to Investigate Bell Atlantic's Sub-Standard Customer Services, Predatory

Pricing, and Monopoly/Anti-Competitive Behavior to Internet Service Providers and

Competitive Local Exchange Companies, Request to Help Customers and Internet

Providers Receive Compensation for Bell Atlantic's Failures.

http://newnetworks.com/nyispcomplaint.htm

This complaint demonstrated that customers who use competitive companies for DSL

were receiving sub-standard customer services.

Massachusetts: Filed October 1999

On the Need to Investigate Bell Atlantic's Failed Deployment of Advanced Networks and

the Impacts on Customers.

http://newnetworks.com/Masscomplaint.html

706 Data Quality Act Challenge 28

In 1999, New Networks Institute et al filed a Complaint with the Massachusetts

Department of Telecommunications and Energy (DTE) claiming that the Verizon failed to

deliver to the state on its promises to deploy 330,000 fiber optic upgraded lines by 1995

and it cost customers over $1 billion in excessive profits.

Other Important Sources of Data.

New Jersey – Analysis of Ratepayer Advocate on Verizon’s failed broadband

deployment and the costs to customers.

Initial Brief of the Division of The Ratepayer Advocate Regarding Opportunity New

Jersey In the Matter of the Board's Inquiry into Bell Atlantic-New Jersey's Progress and

Compliance with Opportunity New Jersey, its Network Modernization Program, DOCKET

NO. TX96100707, March, 1997

http://www.rpa.state.nj.us/onj.htm

This is a review of Verizon New Jersey’s compliance with the Alternate Regulations,

where the Advocate demonstrates that through Alternate Regulation, the company made

excessive profits, while not delivering fiber-optic services to customers. It is one of the

only Advocate’s Offices to attempt to the hold the phone company accountable for their

lack of upgrades and excess profits.

California:

“A Timeline of Pacific Bell's California Broadband Plans”, published by San Diego

Union, Tribune, 1998 (updated by NNI)

http://www.newnetworks.com/californiabroadband.html

Pennsylvania and New Jersey – Reports by Economics & Technology.

Economics and Technology, a respected market research and consulting firm, has

written a number or reports on the Verizon’s failure to deploy advanced networks and the

costs to customers. To read their reports go to http://www.econtech.com (registration

required.)

Pennsylvania Testimony, Lee Selywn, Economics & Technology,

http://www.teletruth.org/docs/LLS%20PA%20Senate%20Testimony%20Sept%2010%20

2002.pdf

"Verizon Pennsylvania has realized financial gains in excess of $4-billion as a direct

result of Chapter 30 'alternate regulation'."

Other Bell Data: (to be updated, June 2004): A 20th Anniversary Examination.

• BellSouth, Qwest, SBC and Verizon's Revenues, Expenditures and Profits.

• "Executive Summary Report", 2002

• Bell Executive Compensation: A Primer in Corporate Greed.— "SPECIAL

REPORT" -- How much is too much? $1-2 billion in Stock Options? 2002

706 Data Quality Act Challenge 29

• Bell Write-offs and Foreign Investment Losses. —

"SPECIAL REPORT" — $31 billion since 1999, 2002

ENDNOTES

1 Sec. 706. Advanced Telecommunications Incentives.

“…initiate a notice of inquiry concerning the availability of advanced telecommunications

capability to all Americans (including, in particular, elementary and secondary schools

and classrooms)…In the inquiry, the Commission shall determine whether advanced

telecommunications capability is being deployed to all Americans in a reasonable and

timely fashion.

2 “The Commission and each State commission with regulatory jurisdiction over

telecommunications services shall encourage the deployment on a reasonable and

timely basis of advanced telecommunications capability to all by utilizing, in a manner

consistent with the public interest, convenience, and necessity, price cap regulation,

regulatory forbearance, measures that promote competition in the local

telecommunications market, or other regulating methods that remove barriers to

infrastructure investment.”

3 Federal Register: September 28, 2001 (Volume 66, Number 189)] [Notices] [Page

49718-49725]

4 Implementation of Guidelines for Ensuring and Maximizing the Quality, Objectivity,

Utility, and

Integrity of Information Pursuant to Section 515 of, Public Law No. 105-554, Information

Quality Guidelines, Adopted: October 4, 2002 Released: October 8, 2002

5 Federal Register: September 28, 2001 (Volume 66, Number 189)] [Notices] [Page

49718-49725]

6 Separate Statement Of Commissioner Gloria Tristani In the Matter of Inquiry

Concerning the Deployment of Advanced Telecommunications Capability to All

Americans in a Reasonable and Timely Fashion, Etc., CC Docket 98-146

7 Separate Statement of Commissioner Gloria Tristani

Re: Inquiry Concerning the Deployment of Advanced Telecommunications

Capability to All Americans in a Reasonable and Timely Fashion, and Possible

Steps to Accelerate Such Deployment Pursuant to Section 706 of the

Telecommunications Act of 1996 (CC Docket No. 98-146)

706 Data Quality Act Challenge 30

8 Source: "PacBell's video bid proving more costly," Elizabeth Douglass, San Diego

Union Tribune, Feb. 1, 1998, Page I-1.