In a news cycle entirely free of historical data and analysis, the phone companies can promise the same thing over and over again, win concessions, and fail to deliver. Here's the documentation of the scandal.

by Alex Goldman ISP-Planet Managing Editor [March 16, 2006]

People should read the e-book $200 Billion Broadband Scandal, especially if they pay any money at all to the phone company. We knew some of the tricks the RBOCs use and used to use to raise rates.

But Bruce Kushnick knows more. Kushnick runs both TeleTruth, advocating for everyone who pays phone bills, and his older organization, the New Networks Institute. At TeleTruth, his advisors include professionals from several independent ISPs: Joe Plotkin of Bway.net, Steve Mossbrook of Wyoming.com, and Alexis Rosen of PANIX (originally Public Access UNIX and perhaps the oldest ISP in the world, founded in 1989).

When they were regulated monopolies, the Bells charged according to their costs, so they inflated their costs in various ways, such as buying the most expensive real estate and building windowless phone switches in it.

Kushnick has been dogging the Bells since 1992, and keeps finding more tricks. In his latest book, for example, he reports that Bells not only added the costs of software development, DSL deployment, and failed R&D into phone rates—they also added lobbying costs.

So people should read this book. Bruce Kushnick is at his best when he is concise, as in this powerful graphic showing how the phone company pads the bills. Unfortunately, in volume 1 of his e-book, $200 Billion Broadband Scandal (with blog), Kushnick provides 406 pages of content. It has a grammar or spelling error on almost every page, courtesy, we suspect, of the text to speech software employed to produce the work. Several sections repeat information and even entire paragraphs from other sections, and from Kushnick's previous work. So will anyone read the book?

The lies are recorded in press releases
Whether you're a neophyte to Bell scandals or a veteran victim, as most ISPs are, the story of how the Bells promised the same thing over and over again, failed to deliver, and earned billions by raising prices while reducing performance, will be a surprise. Maybe you know about the Spanish American War Tax, maybe you know that the "FCC Line Charge" is actually Bell revenue, maybe you remember Rep. Ed Markey's history lesson to the FCC Commissioners, but however much you know, the breadth and consistency of the PR lies revealed in this book will nevertheless surprise you when it is presented with in depth coverage over the period from 1992 to 2006.

Kushnick cites numerous valuable sources of information, the most important of which is Gordon Cook's The Cook Report On Internet. Kushnick also cites Dave Burstein of DSL Prime, especially his devastating and insightful coverage of SBC over the years.

The book contains 406 pages, 525 footnotes, and, towards the end, 12 important data graphs. This is the first volume. "This first volume is dedicated to the story of fiber optic broadband in America, or the lack thereof," Kushnick writes (p. 22).

More volumes planned
Volume 2, scheduled for release this summer, will cover the Bells' extensive use of fake grassroots organizations (called "Astroturf" or "skunkworks" organizations by Kushnick). His earlier coverage of this topic is available on the TeleTruth site in the article Bell SkunkWorks 101.

Volume 3, planned for the future, is supposed to cover both the Bells' activities in fighting municipal wireless and also the story of the ISPs and CLECs. We believe, however, that Kushnick will end up producing separate volumes for the two stories because there's so much material for both.

We wrote about one fight against municipal fiber in Voices for Choices Wins Two vs. SBC and noted that the case's judge was so appalled by SBC's anti-free speech tactics that he wrote:

"What SBC requests (and what we must deny) is an order enjoining Voices from carrying out a public lobbying campaign in opposition to a bill pending in the Illinois state legislature. While the public has an interest in honest public debate, we believe silencing one side of a public debate is a drastic measure that would severely harm the public interest in freedom of speech and the legislative process."

As to the story of the ISPs and CLECs, most of the more than 10,000 files on this website, compiled since 1999, cover that story. We've also reviewed a book about the CLEC experience in our article, Book Review: CLEC.

Kushnick book covers good material, and the story told is devastating. The Bells promised fiber optics, an open network with 45 Mbps to every home, collected hundreds of billions of dollars, and failed to deploy. In some cases, they even built advanced networks before the passage of favorable legislation and then ripped them out after the laws had passed.

The $200 billion ripoff is a conservative estimate. Everybody should know about this. And this is just volume 1 of the Bell slime story. We look forward to reading volume 2. If volume 1 were issued by one of the telecom research firms that serve the Bells, it would cost thousands of dollars. Volume 1 is available now from TeleTruth for $20.

Coda: FiOS FIASCO?
Kushnick even asserts that FiOS is a deception, barely deployed, and that IPTV is just not part of Verizon's plan. Time will tell. If so, it would be just another case where the regulators gave the Bells everything and got nothing (for details on the FCC's fiber giveaway, see Triennial Review Part II: FCC's Fiber Failure, and the Rep Markey quote above).

Some believe that this time will be different, because the Bells and cable companies are, in theory, competing, but only time will tell how real the competition is.

— End