NNI Reports DSL Deployment Hampered
By Local Phone Companies

Watchdog organization finds that LECs discriminate against independent ISPs, provide substandard service, stifle efforts to launch broadband.

by Patricia Fusco ISP-Planet Managing Editor [April 12, 2000]

New Networks Institute Wednesday released the results of its survey on U.S. Internet service providers relationships with the local phone companies.

According to Bruce Kushnick, NNI executive director, local phone companies including Bell Atlantic Corp. (BEL), BellSouth (BLS), SBC Communications Inc. (SBC) and subsidiaries Ameritech, PacBell, Southwestern Bell, as well as US West (USW), and GTE Service Corp. (GTE), are stifling competition and the growth of broadband services in the U.S. and under-serving independent ISPs.

"Small and mid-sized ISPs represent almost 46 percent of all online customers," Kushnick said. "Based on the findings of the survey, local Bell companies and GTE are causing serious harm to Internet Providers and their customers."

"This includes not only a loss of revenues for ISPs, but the Bells are also stifling competition and the growth of America's digital future," Kushnick said.

Substandard standards
Kushnick alleges that independent, small ISPs are receiving substandard service from local phone companies across the board.

The survey indicates that only 8 percent of the participating ISPs gave their local phone company a passing grade on services provided. On a scale of one-to-ten, ISPs gave local phone companies an average score of just 3.7 percent, representing a failing grade on service.

Maryland-based service provider Brainwave Computer Services is familiar with poor service from their local phone company. Cliff Shockley, Brainwave Computer Services operations manager, said sub-standard service from Bell Atlantic is business as usual at his ISP business.

"We have lost several hundred customers and at least 1,000 man-hours combating BA connectivity problems," Shockley added. "We were repeatedly told that it must be problems with our equipment, even though the same equipment works flawlessly at our other POPs. We purchased 3 brands of equipment to test the circuits to prove our point, but it did not do any good. BA said all of these pieces of equipment must be defective as well."

"We have had over 100 trouble reports filed with BA in the course of 16 months. The problems were finally cleared up 3-weeks ago after it was discovered that their smartjack cabinet was defective," Shockley said. "I was told by several BA technicians that they've had lots of problems with this particular model of cabinet, and that they have had to repeatedly replace them."

Sixty-two percent of the ISPs reported phone line problems with their local phone company, while 57 percent said that they experienced fulfillment delays on orders placed for advanced services. Just less than half of the ISPs reported that their local phone company takes several days to repair disrupted services.

Ubiquitous maltreatment
Kushnick said the problems are not geographically isolated or company specific.

"There is a clear pattern of abuse throughout the entire Bell system and GTE," Kushnick said. "From Texas to California, New York to Florida the problems encountered are happening throughout the system and DSL deployment is being stifled by the local phone companies."

Of the participating ISPs, 71 percent reported that local phone companies had lost orders for services. Just less than 60 percent reported that local phone companies had "slammed" ISP customers into their services, an illegal method of operation whereby phone companies switch services without customer's permission.

According to the ISPs polled, 53 percent had their customers told by local phone companies that if they switched their services to the phone company product, they would not experience the line problems they were having.

A small Southwest Texas independent ISP that did not participate in the survey, but concurs with the report findinga. The ISP owner did not want to be named for fear of retribution from his local phone company.

Who's on first?
"The local phone company has missed installation dates and placed 90-day moratoriums for PRIs, T1s and other circuits for us while they rolled out the same services for their company," the ISP owner said. "They have added new services like DSL access in advance of their promised dates, while failing to provide DSL services to competitors."

The NNI report concluded that local phone companies have frozen independent ISPs out of the DSL market by offering their high-speed services for less that they charge the ISP for DSL connections, or they simply don't provide the DSL service to ISPs at all.

ISPs that connect to Competitive Local Exchange Companies reported that the CLECs delivered better services but that they too, were hampered by local phone companies' sub-standard services. CLECs received a better than 7 percent satisfaction rate from the ISPs surveyed.

PUCs are unresponsive
Kushnick said that the majority of ISPs that turned to their local Public Service Commission for relief from local phone company abuse receive no results from their complaints filed.

"Almost 75 percent of ISPs have attempted to get help from their state Commissions regarding their problems with the local phone company," Kushnick said. "However, 63 percent of those ISPs who approached Public Service Commissions to get help, got no results."

Kushnick is calling on the Federal Communications Commission and state authorities to investigate local phone company operations as it relates to serving independent ISPs.

"With 89 percent of ISPs believing and documenting that they are being harmed, NNI believes that the FCC and the states should immediately investigate the ISP's claims of inadequate customer services and anti-competitive practices by the Bells and GTE, " Kushnick said.

Self-serving survey?
NNI acknowledges the ISP survey was conducted using a random mailing to U.S. Internet access providers by the United States Internet Service Providers Alliance (USISPA). [Ed. note: The survey was reported on this ISP-Planet in the following article. Advocacy Group Polls ISPs on Telco Sins.]

Kushnick said the report may be self-serving, however findings by the FCC and the Department of Justice corroborates the serious problems facing ISPs when it comes to deploying advanced Internet services through their local phone companies.

NNI was founded in 1992 to independently investigate how the break-up of AT&T Corp. (T) and the creation of "Baby Bells" would the impact the public. NNI has completed several comprehensive research projects and has initiated Class Action suits in several states against the local phone companies.

Kushnick is the author of The Unauthorized Bio of the Baby Bells & Info-Scandal, an expose written about Bell business practices.

—End