Score: Verizon NY Settlement

FOR IMMEDIATE RELEASE: JULY 17th, 2018

New Networks Institute (NNI) & the IRREGULATORS— just helped to get Verizon to install 10,000 fiber optic lines in Verizon New York’s unserved areas as well as get the needed repairs for the copper networks. — We estimate this to be about $300 million to $1/2 billion dollars over time.

Our research and calls for an investigation started in 2010, and our reports, filings and analytical approach helped to initiate and was used in the investigation.

We are mentioned in the decision and will be taking next steps on this as we filed to block this settlement agreement —it left out billions in cross-subsidies and customer overcharging.

We congratulate Communications Workers of America (CWA) and PULP, Public Utility Law Project, for their dogged persistence and putting our research and analysis to good use.

Press release --  https://on.ny.gov/2L1NccN

"PSC Approves Verizon Service Quality Improvement Plan  — Telecommunications Company Agrees to Expand Broadband Service to 32,000 Customers, Helping to 
Fulfill Governor Cuomo’s Goal to Expand Broadband Service in  New York; Make Much-Needed Repairs to Existing Copper Service; Remove Unused Telephone Poles to Improve Safety —
Settlement  -- https://on.ny.gov/2mnE8QY

"The Commission declines to follow New Networks Institute’s  recommendations to reject the JP, continue investigating
Verizon’s financial practices, and require that wireline customers be reimbursed for the alleged improper cross-subsidization
of Verizon’s wireless affiliates.  The Commission’s primary objectives in this proceeding were to investigate and evaluate
the quality of service Verizon is providing to its customers (Core and non-Core).
   More particularly, this proceeding was commenced when changing circumstances called into question the Commission’s premise for
continuing Verizon’s service quality focus on Core customers. The Commission was concerned by Verizon’s announced plans to stop
expanding its fiber network beyond areas currently served.  The Commission also pointed to data indicating fewer customers  were leaving
Verizon’s networks.
    Given these indications, and the fact that more than 2 million of Verizon’s current customers remain reliant on an aging copper network,
the Commission decided to examine whether changes to Verizon’s service quality oversight are necessary.  The Commission recognized that this
investigation would inherently include an examination as to the state of the copper system and whether Verizon’s investment in its network has
been sufficient to provide adequate levels of service to consumers on regulated services.  But, the Commission did not state any intention to
revisit rate-of-return regulation.  The Commission did recognize an expectation that the Company will continue to invest in its New York regulated operations 
as the Public Service Law unequivocally requires Verizon to provide adequate service.  The Commission also made it clear
that it would take the necessary action under the Public Service Law to address shortcomings if the market fails
to provide Verizon an appropriate incentive to meet its statutory obligations.  That said, the Commission has broad authority under the
Public Service Law to initiate further investigations if the circumstances so warrant.
 
   The Commission focus has long been on ensuring compliance with minimum standards of service quality for customers lacking competitive
choice.  The Commission has previously investigated claims that Verizon has not been adequately investing in its copper network.  In that
context, the Commission has acknowledged that, in response to technological advances, the telecommunications landscape has changed
dramatically.  The Commission has also recognized that, in evaluating Verizon’s performance, it must consider the extent to which investment in the legacy 
copper network would be cost effective when that network is becoming competitively and technologically obsolete.

The terms of the JP will implement specific  improvements in Verizon’s system that will directly improve the
service quality deficiencies that led to the commencement of this proceeding.  In light of all this, we disagree with New
Network’s recommendation to reject the Joint Proposal.  The terms of the JP should result in service quality improvements
that promote the public interest. Moreover, with regard to other commenters’ complaints about Verizon’s maintenance of its copper network and being forced onto more expensive
wireless and fiber networks, the Commission notes that Verizon is required to offer its tariff services and tariffed-based rates regardless of the type of network delivering the telephone call.
Notwithstanding the foregoing, the Commission has long recognized the benefits and resiliency of the fiber network over the older vintage copper network a
nd we note here that the JP will further that goal.
    Finally, in the Commission’s Initiating Order, we raised the question of whether “Verizon’s service quality processes and programs pertaining 
to all the Company’s regulated customers” are sufficient “to determine if modification of Verizon’s revised SQIP is warranted.”
    In light of the JP’s terms and conditions being approved herein, the Commission does not believe any changes are required at this time.
However, as







Stop the FCC Proceedings and Investigate Verizon and AT&T

The FCC has proposed a series of harmful actions and regulations, all under the name “Accelerating Wireline Broadband Deployment by Removing Barriers to Infrastructure Investment”.

This proceeding is more accurately named: “Preempting state laws to allow shutting off of copper wire services so that the companies can get rid of any State Telecom Utility obligations, (and the unions) and only provide inferior wireless services (in place of a fiber optic wire to the home)— so Telecom companies can make more money”.

At the same time, the Telecom companies and the FCC will make outrageous claims about the future of “5G”, a wireless service that does not exist today and may never work as advertised. Ironically, “4G+1G HYPE” requires a fiber optic wire every block or two; these fiber optic wires could be extended to every home or business, but the Telecom companies don’t want to do that: they make more money for data-capped, unregulated Wireless services.

Once the FCC gets rid of Net Neutrality and privacy restrictions, the plan is to beef up the ad-tech to track you on all devices and sell the information. Keeping with their ‘say anything’ playbook, by using the magical terms ‘broadband’, ‘Internet’, ‘Digital Divide’, ‘revolution’ and ‘new tech’ as political carrots, the Telecom companies continue to get even more subsidies and help from the government.

This is what the FCC and the Telecom companies have planned. We are advocating for a very different future. We are asking every state, every city and every citizen to demand that the FCC stop the current series of proceedings to ‘shut off the copper’ and preempt state laws and — instead — request that the FCC start audits and investigations into the Agency’s own cost accounting rules and the massive financial cross-subsidies that its own rules have created.

At the same time, we are asking every state, every city and every citizen to request that the State Utility commissions, Attorneys General and Advocate offices start state-based audits and investigations, as has been going on at the NY Public Service Commission (NYPSC), which has been examining Verizon-NY’s quality of service issues and financial cross-subsidies: illegally transferring funds from Verizon-NY (the State Telecommunications Utility) to Verizon Wireless and other unregulated Verizon subsidiaries.

In fact, Verizon has recently started to discuss a settlement, which we will address in an upcoming post. We summarized our analysis in a new report: “Verizon New York 2016 Annual Report: Follow the Money: Financial Analysis and Implications” — which we filed in our comments at the FCC.

History shows that this tired strategy of reducing Telecom regulation has not worked to increase Wireline competition and none of the FCC, the State Utility Commissions, AT&T, Verizon and CenturyLink — or their co-opted groups, think tanks and experts — have ever publicly discussed this fact. We placed the entire book “The Book of Broken Promises” into the public record at the FCC to prove that the FCC et al. is clueless or in denial about

  • the history of Broadband and the Internet
  • the hundreds of billions of dollars in investment incentives that were given, over and over, to what is now AT&T, Verizon and CenturyLink to upgrade the copper wires to fiber optics.

The FCC should be asking:

  1. Why is most of America’s telecommunications infrastructure still based on the aging copper wires and not fiber optic wires?
  2. Where did all the money go?

The IRREGULATORS is convinced that the FCC needs to be taken to court over the decision they will make in this proceeding and we hope that commenters, organizations, cities and state organizations, and citizens will join us.

In fact, based on history, we file this knowing that this FCC will not take any action based on our filings, will ignore basic facts and documentation that refute their plans and has been doing this long before this proceeding. The FCC refuses to take seriously any of the data and facts we’ve presented in our previous filings, including the recent report submitted that used the Verizon New York 2016 Annual Report as the foundation of our analysis.

In short, the FCC has been working for the industry, not the public interest. The FCC’s goal is to remove basic consumer protections, free AT&T, Verizon et al. from any obligations of offering service, and erase the basic cost accounting rules instead of auditing the impacts of their rules.

Brendan Carr Omitted Critical Facts in His Testimony to Congress:

He Worked for AT&T, Verizon, CenturyLink, CTIA and the USTA.

In his written testimony to Congress, Brendan Carr, who has been nominated to be the third Republican FCC Commissioner, omitted the most important fact: He worked for AT&T, Verizon, Centurylink, as well as the CTIA, the wireless association, and the USTA, the telephone association. Moreover, much of this work has direct ties to his current work with FCC Chairman Ajit Pai (a former Verizon attorney). Together they have amassed a string of corporate-monopoly friendly, harmful consumer regulations that have passed or are percolating.   In the end, Carr and Pai clearly show that they are still working for the industry, not the public interest.

On top of this, there are even holes in Carr’s work timeline, as told by his own LinkedIn bio. His resume shows he clerked for a judge in the 2008-2009 timeframe, while his bio shows him also working from 2005-2012 for Wiley Rein and the telcos and their associations.

All of this should be a deal breaker. The Senate should not confirm Brendan Carr’s nomination as FCC Commissioner.

FACT: Carr Never Mentioned He Worked for AT&T Et Al. in His Testimony to Congress

The IRREGULATORS & New Networks Institute File FCC Comments in Settlement Case Against Verizon-NY

  • Comment 1: is a short overview as well as a bibliography of our research, which is directly tied to this proceeding It also gives a brief discussion of issues that have been overlooked or are missing and need to be part of the next steps the State should be implementing.
  • Comment 2: is a more detailed view of the current proceeding and Verizon settlement, as published in tbe Huffington Post: Verizon NY in Multi-Billion Dollar Settlement Tangle, Underway in NY State.
  • Comment 3: : is a full analysis of the Verizon NY’s 2016 Annual Report Verizon NY 2016 Annual Report: Follow the Money: Financial Analysis and Implications

Verizon New York 2016 Annual Report: Follow the Money: Financial Analysis and Implications

Verizon-NY is the state-based Telecommunications Utility serving the majority of New York State; it is a wholly owned subsidiary of the holding company, Verizon Communications. Verizon-NY is required to file an annual report with the NY State Public Service Commission (NYPSC) that suppli es data that were originally provided in state-based reports filed with the FCC, known as ARMIS. The FCC, for some reason, stopped requiring this information by-state in 2007.

Verizon Wireless, Verizon Online, Verizon Business, etc., are all separate subsidiaries of Verizon Communications and are “subsidiaries” of Verizon-NY. While they maintain separate financial accounting, there are clear cross-subsidies of these other lines of business from the state utility, Verizon-NY.

This report is part of and must be seen in light of what is happening throughout the US and at the FCC. The only thing unique about Verizon NY is that it is required to do an annual report by the NYPSC. We do not know of any other state that has publicly available financial information, though some states keep the info and require a FOIA request to obtain it.

Unfortunately, while the NYPSC collects the data, it has never acted on what we found and no other state we know of has audited the financial books. The FCC has never audited these financial books, even though they are making rules that directly impact customers in urban ad rural areas across the US.

Link to Follow the Money: Verizon New York 2016 Annual Report:Financial Analysis & Implications

IRREGULATORS Filed Comments with the FCC and the Joint Board

On May 24th, 2017, the IRREGULATORS filed comments with the FCC and the Federal State Joint Board on Jurisdictional Separations.

IRREGULATORS:

We recognize that the Commission has chosen to deregulate the so-called Price Cap Carriers such that to the limited extent that they are subject to rate regulation, it is via a price cap mechanism, not the traditional Uniform System of Accounts. Hence only the Rate of Return Carriers are directly subject to the separations mechanism for the computation of their interstate rates. However, even in the case of the Price Cap Carriers, Separations is a joint federal-state matter, and the freeze imposed by the Commission directly impacted state rates and, even more importantly, policies. Fictitious accounting leads to bad decision-making. Hence the costs of more accurate separations are not an undue burden. Rate of Return Carriers already are required to provide detailed regulatory accounting in order to determine their appropriate rate and subsidization levels. Price Cap Carriers, especially the Bells (including their successors-in-interest) are large companies with ample accounting resources. Thus, the issues we raise are not moot, even when dealing with the largest carriers.

The Federal State Joint Board has asked:

  •  Re: Federal State Joint Board on Jurisdictional Separations Seeks to Refresh Record on Issues Related to Jurisdictional Separations, FCC 17J-1
  •  Re: Federal State Joint Board on Separations Seeks Comment on Referral for Recommendations of Rule Changes to Part 36 as a Result of Commission Revisions to Part 32 Accounting Rules, FCC 17J-2

Reddit’s Reaction to the Book of Broken Promises

About “The Book of Broken Promises: $400 Billion Broadband Scandal & Free the Net”, by Bruce Kushnick
https://www.reddit.com/r/explainlikeimfive/comments/6c5e97/eli5_how_were_isps_able_to_pocket_the_200_billion/

explainlikeimfive:

I’ve seen this thread in multiple places across Reddit:

I’m usually skeptical of such dramatic claims, but I’ve only found one contradictory source online, and it’s a little dramatic itself:

So my question is: how were ISP’s able to receive so much money with zero accountability? Did the government really set up a handshake agreement over $200 billion?

Bruce Kushnik’s Response:

Maybe you should go to the source: I’ve written three books about this starting in 1998 — and all of these appear to be related to the same threads — over two decades.

Here’s a free copy of the latest book, “The Book of Broken Promises: $400 Billion Broadband Scandal & Free the Net”, which we put up a few
weeks ago because few, if anyone actually bothered to read how the calculations were done. They were based on the Telecom companies’ annual reports, state filings, etc.– and the data is based on 20 years of documentation.

I’ve been tracking the Telecom deployments of fiber optics since 1991 when they were announced as something called the Information Superhighway. The plan was to have America be the first fiber optic country — and each phone company went to their state commissions and legislatures and got tax breaks and rate increases to fund these ‘Utility network’ upgrades that were supposed to replace the existing copper wires with fiber optics — starting in 1992. It was all a con.

As a former senior telecom analyst (the Telecoms my clients) I realized that they had submitted fraudulent cost models, and fabricated the deployment plans. The first book, 1998, laid out some of the history “The Unauthorized Biography of the Baby Bells” with foreword by Dr. Bob Metcalfe (co-inventor of Ethernet networking). I then released “$200 Billion Broadband Scandal” in 2005, which gave the details as by then more than 1/2 of America should have been completed — but wasn’t. The mergers to make the Telecom companies larger were also supposed to bring broadband– but it didn’t. I updated the book in 2015 “The Book of Broken Promises $400 Billion broadband Scandal and Free the Net”, but realized that there were other scams along side this — like manipulating the accounting.

We paid about 9 times for upgrades to fiber for home or schools and we got nothing to show for it — about $4000-7000 per household (though it varies by state and telco). By 2017 it’s over 1/2 trillion.

Finally, I note. These are not “ISPs”; they are State Telecommunications Utility companies that were able to take over the other businesses (like ISPs) thanks to the FCC under Mike Powell, now the head of the cable association.

They got away with it because they could create a fake history that reporters and politicians kept repeating. No state has ever done a full audit of the monies collected in the name of broadband; no state ever went back and reduced rates or held the companies accountable. And no company ever ‘outed’ the other companies– i.e., Verizon NJ never said that AT&T California didn’t do the upgrades.

That’s because they are all guilty of the same scheme, more or less. I do note that Verizon at least rolled out some fiber. AT&T pulled a bait and switch and deployed U-Verse over the aging copper wires (with a ‘fiber node’ within a mile).

It’s time to take this to court. Period. We should go after the financial manipulations (cross-subsidies) where instead of doing the upgrades to fiber, they took the money and spent it everywhere else, like buying AOL or Time Warner (or overseas investments), etc. We should hold them accountable before this new FCC erases all of the laws and obligations.