Does AT&T Really Not Stand Behind Their IP and Wireless Services? Don’t Read the Fine Print.

Does AT&T Really Not Stand Behind Their IP and Wireless Services? Don’t Read the Fine Print.

AT&T has filed in CA to remove the “carrier of last resort” obligations required as the state telecom public utility to make sure that everyone in their franchise area can at least get basic voice phone service. At last count there were over 2 million ‘wireline’ ‘residential’, ‘voice’, ‘switch-access’ customers on the aging copper wires; (As we point out, there are most likely an additional 4-8 million more lines that are hidden.)
https://lnkd.in/eG-4hJrT

AT&T claims that they should be able to shut off these wires because; “Fixed and mobile broadband services are not only reasonable alternatives to POTS; they are in fact technologically superior and available at comparable or lower prices.”

Our position: AT&T failed to upgrade the state utilities it controls over the last 3 decades and the copper wires should have been replaced with ‘infrastructure’ – i.e., a fiber optic wire, because state laws were changed to charge customers for these upgrades.

Phone and broadband services are not supposed to be play-toys of the phone company but supply essential services, with a quality, secure connection. And these conditions violate basic customer protections standards in state laws.

https://lnkd.in/epBmQTZJ

1) No Guarantee with IP Voice Service.   “Since voice over IP is dependent on the IP network, the availability of an adequate power supply, and correct Equipment configuration, AT&T does not guarantee that AT&T U-verse Voice service will be continuous or error-free.
“You acknowledge and understand that AT&T cannot guarantee that voice over IP communication is completely secure.”

2) 911 Calls May be interrupted or not go through. “AT&T MAKES NO WARRANTY THAT AT&T U-VERSE VOICE SERVICE FOR ACCESS TO 911 WILL BE UNINTERRUPTED, TIMELY, SECURE, OR ERROR-FREE…” (Their caps, not ours)

3) AT&T IP-no guarantee that your fire or burglar alarm, or medical monitoring device works. “YOU USE AT&T U-VERSE VOICE SERVICE AT YOUR OWN RISK AND WAIVE ANY CLAIM AGAINST AT&T FOR INTERFERENCE WITH OR DISRUPTION OF A MONITORED FIRE ALARM OR BURGLAR ALARM SYSTEM, A MEDICAL MONITORING DEVICE, OR….”

4) Zero Commitment to wireless AT&T Internet Air speed -“AT&T makes absolutely no commitment with respect to the speeds AT&T Internet Air will be able to achieve in a particular location. To maximize performance, every effort should be made to position the AT&T Equipment in the optimal position…”

4) You can’t take AT&T to court: “Please read this Agreement carefully. It requires you and AT&T to resolve disputes through arbitration on an individual basis rather than jury trials or class actions.”

Superior Services or violations of consumer protections guaranteed by quality of service requirements?

hashtagDigitaldivide hashtagAT&T hashtagwireless hashtagFCC hashtagCalifornia hashtagfiberoptic

FACT SHEET: Verizon Massachusetts Fiber Optic Failure

FACT SHEET:

Verizon Massachusetts Fiber Optic Failure, 1994-2020

1994: Verizon
Massachusetts
files with the Mass Department of Public Utilities to have fiber optic
services
, to replace the existing copper wires. The included colleges and
universities, hospitals, as well as 330,000 residence and businesses.

1994: This same plan
was also filed with the FCC known as “Video Dialtone”, and claimed
the majority of the entire state would be finished by 2010.

“NYNEX
proposes to deploy hybrid fiber optic and coaxial (HFC) broadband networks that
will provide advanced voice, data, and video services, including interactive
video entertainment, multimedia education and health care services… “NYNEX
plans to deploy this type of network to the majority of its customers by the
year 2010.”

1995:
Verizon filed and was granted “alternative regulations”, which gave the company

1999: In
New Networks institute filed a complaint in
Massachusetts
outlining how Verizon (then New England Telephone) convinced
regulators that they would rewire the state starting in 1995 if the company got
massive financial incentives – Deregulation — the removal of regulation that
examined and limited their profits. The Massachusetts Department of
Telecommunications and Energy, never acted on our complaint.

2005: Verizon announces FiOS and gets some municipality franchises
for cable TV

2007: We presented
testimony
in front of the Massachusetts Joint Committee on
Telecommunications Utilities and Energy.

2010: Verizon announces it is halting the fiber optic deployments
in all states.

2016:  Bait and Switch: Verizon announced it would
be upgrading 100% of Boston
and spend $300 million dollars.  Instead,
most of this has been a bait and switch to use the fiber optic wires that
should go to homes to instead roll out wireless, and 5G Wireless.

We
documented the story in articles in Huff Post and Medium.

IRREGULATORS Big WIN: We Freed the States from the FCC

Bruce Kushnick, Managing Director bruce at New Networks dot com

Scott McCollough, Esq. Counsel  wsmc at dotlaw dot biz

FOR IMMEDIATE RELEASE

IRREGULATORS BIG WIN: We Freed the States to Get the Money Back from AT&T, Verizon & CenturyLink

(This is similar to the DC Circuit decision that freed Net Neutrality from the FCC’s control to become a state issue.)

  • We got the decision that we wanted—billions of dollars per state can now be freed to solve the Digital Divide, lower prices and bring in competition.
  • All wireless cross-subsidies can be stopped — 5G is no longer profitable.

IRREGULATORS v FCC: DC Court of Appeals Opinion, March 13th, 2020

WE CAN NOW TAKE THE NEXT STEPS 

WHAT WE NEEDED TO FIX: Unknown to most, AT&T, Verizon and CenturyLink control America’s telecommunications utilities, and over the last decade they have used the FCC’s accounting rules and formulas to charge the majority of all company-wide expenses to the local wired state-based telecommunications utilities, while the other services that are also using the same wired copper and fiber utility facilities, like broadband, internet and wireless, do not pay their fair share.

This financial shell game has made the entire state-based utility infrastructure appear unprofitable and they have relied on these distorted financial results to argue that they cannot upgrade rural areas or even inner cities, and it has been used to justify local rate increases multiple times, as well as save billions in taxes. More importantly, it is also the excuse to “shut off” the wired networks and go wireless with 5G.

Over the last five years we filed more than 18 separate pleadings and reports to stop the continuing use of these obsolete and now deformed rules. The FCC refused to take action, claiming that the rules didn’t apply, even though the companies still use them and the state commissions still accept them to the detriment of utility customers.

We brought this case to expose one of the largest accounting scandals in American history and to get a decision by the U.S. Court of Appeals – D.C. Circuit—and we won. The Court made clear that the FCC does not have control over the state accounting and the states are free to adopt new regulations. This also allows the states to go after the billions in cross-subsidies and overcharging that has been costing America an estimated $50-60 billion annually.

This is one of the largest victories for consumers in recent years. The states now clearly have the authority to pick up the mantle and act to narrow the Digital Divide, promote Digital Inclusion, lower prices, bring in competition and end the cross subsidization of 5G by the public utility. And it provides a national broadband plan which is not funded by government subsidies but by dismantling this financial shell game.

This is a partial list of what this decision means going forward:

  • We help to take down the billions in Corporate Operations overcharging: In NY, Verizon Local Service was overcharged an estimated $1.5 billion dollars a year for the corporate jets, the executive pay, and the lawyers and lobbyists pushing anti-customer agendas. Now a state can now stop the billions of dollars in unrelated expenses that has been put into local service and caused rate increases.
  • We help to take down billions in tax losses: Today, the state utility pays the majority of expenses, even if it has nothing to do with Local Service. In NY, Verizon has been showing artificial losses of $2 billion annually. The states can stop the cross-subsidies and let these companies pay their fair share of taxes.
  • All subsidies to wireless can now be stopped by the states: The states are free to stop the cross subsidies where the fiber optic networks are being built for the benefit of the wireless company, instead of properly upgrading cities and towns, especially in more rural areas.
  • 5G Is Not Profitable Once We Do This.
  • We take down the 75-25% rule with this decision: Today, 75% of the costs of the wired network expenses (even for wireless, broadband and internet) are dumped into ‘local service’; wireless and these other services got a free ride — Not anymore. The states can come up with their own allocation factors.
  • We just lowered prices billions of dollars if the state decides to go after the money: After all of this shell game is exposed and removed, a state can make the price be ‘incremental’ — and it can decide that local service and the wired networks should only be based on the actual costs, and not made up expenses.
  • We now present billions in new found cash to solve the Digital Divide:  Removing this long standing shell game means billions can now be properly allocated to build out the wired state-utility infrastructure for broadband to EVERYONE in the state.
  • Cities can now build out their networks. NYC’s Master Internet Plan to solve the Digital Divide requires government funds and never held Verizon NY accountable. The City of New York, like all cities across America trying to get a digital future for every citizen, should have examined the financial cross-subsidies that were exposed in this case and the bait-and-switch funding for wireless. Now, NYC can go after the money and provide a fiber optic future to everyone.

NOTE: We lost this DC Court decision on standing: Since the rules don’t apply, we can’t be harmed.  We now have clarity about these cost accounting rules. The states are free to do what they want. Our strategy in bringing this case was to secure a definitive answer about the rights of states vs the control by the FCC over the financial accounting. The Court made it clear that the states are independent from the FCC and from the application of the federal accounting formulas known as “Part 36”.

“This means that any injuries the petitioners suffer through the application of outmoded Part 36 rules to price-cap carriers are traceable not to the Commission’s freeze order but to the states’ voluntary and independent decisions to use the rules of Part 36 for their own purposes.” (PAGE 9)

“Price Caps” Need Investigation and Repair: AT&T et al. and the states may say: “We are under price caps and the utility expenses are no longer examined.”

ANSWER: The States can now go back, do the audits, and stop the financial shell game. “Price caps” is a form of regulation that was supposed to keep prices capped and reasonable, which never worked. This was to increase the companies’ profits, which were supposed to be used to replace the existing copper wires with fiber optics—and that never happened. Instead, using the FCC’s corrupted formulas, it allowed for this massive overcharging.  Prices are no longer ‘just and reasonable’ when you can charge local phone customers to build the wireless networks or pay for the corporate jets.

FCC Accounting Rules Caused Verizon NY Cross-Subsidies

IRREGULATORS Take the FCC to Court Based on Verizon New York 2017 Annual Report. Billions Revealed in Cross-Subsidies Caused by the FCC’s Manipulated Accounting Rules. This is Happening Nationwide.

On June 3rd, 2019, the IRREGULATORS won Round 1, the right to take the FCC to court over their cost accounting rules. However, the case relies on the Verizon New York financial annual reports, the latest published May 30th, 2019. It is one of the largest accounting scandals in American history and it impacts all telecommunications in the United States – and all FCC decisions and proceedings, and almost all state decisions that relied on the FCC’s work.

PRESS: We created a by-the-numbers walk-through of the official Verizon New York 2017 Annual Report to spotlight some of the specific harms.

http://irregulators.org/verizonnywalkthrough/

The FCC’s rules were supposed to divide up the expenses that are to be paid by the different lines of business, such as Verizon Wireless or Verizon Online, for the use of the infrastructure and services of the state telecommunications utility – Verizon New York.

Unfortunately, the rules became corrupted and the expenses to be paid are set, “frozen”, to reflect the year 2000, 19 years ago. Using the Verizon New York annual reports, we prove that the rules are still in use and they now divert the majority of all expenses into Local Service, the basic POTS, phone service category. This has caused billions of dollars annually to be misallocated by charging phone customers excessive Corporate Operations expenses, everything from the corporate jets and golf tournaments to executive pay. It also diverted the construction budgets to pay for the wireless deployments. And Verizon was able to create losses that were used not only for rate increases, but to avoid paying billions in taxes. Ultimately, Verizon claims it is not profitable to upgrade rural or low income areas and is now planning a bait-and-switch, claiming 5G wireless will fix everything.

How crazy does it get?

  • Verizon NY 2017 Local Service was charged $1.8 billion, 61%, of Corporate Operations expense, making it unprofitable. Local Service had revenues of $1.1 billion. (“61%” is based entirely on the FCC’s FREEZE and it has been this way for 2 decades.)
  • Taxes: The Verizon NY 2017 Annual Report showed losses of $2.6 billion and a tax benefit of over $900 million. Verizon NY has shown losses of over $2 billion a year for almost the last decade, (with caveats).
  • Construction: Local Service paid the majority, $1.2 billion, in construction and maintenance, but only an estimated hundred million was attributed to the copper wires.
  • The NY Attorney General’s Office in 2012 found 75% of the utility construction budgets were being diverted to wireless or FiOS video services. This is instead of upgrading the NYC and NY State infrastructure.
  • Rates Increases of Over 100%: Since 2005, every wireline customer paid over $3,000 a line based on increases granted using artificial losses, through 2018.
  • It Created the Digital Divide by claiming areas of the state utility were unprofitable, when, in reality, there was enough money to have been doing continuous upgrades. In fact, rates should have been in steep decline.
  • This happened in every state because the FCC rules are federal. The last available data in 2007 matched in every state-based utility.
  • Customer overcharging, nationwide, is estimated to be $50-60 billion annually, based on what is happening in New York.

IRREGULATORS v FCC — In December, 2018, the FCC decided to extend the FREEZE rules for 6 more years. We could not let this stand and get worse. We have the actual financial books as well as the expertise to figure out what happened, but it has taken almost a decade of investigation to understand this accounting puzzle. No other state we know of still publishes financial reports; the FCC stopped publishing the financials in 2007. (boxmining.com)  We filed 18 separate reports and comments in this proceeding (Docket 80-286) to document our claims since 2015, which the FCC has mostly ignored. http://irregulators.org/our-work-reports-filings/

Settlement with Verizon NY and the NY Public Service Commission, July 2018: Our analysis and methodology was used in an investigation of Verizon New York that started in 2015 and was settled in July 2018. Estimated at $300-$500 million, 32,000 lines of fiber optics will be deployed in unserved areas and the existing networks will be maintained. But this settlement did not go far enough to fix the existing problems or deal with the FCC’s corrupted accounting.  https://bit.ly/2O25OqQ

The Bottom Line: No one knows or understands that the FCC’s rules have become corrupted over the last 2 decades, that they actually control the state-utility accounting and that they are still in use, nationwide. Stopping the Corporate Operations expenses, the cross-subsidies of the other Verizon lines of business with the state telecommunications utility, especially wireless, and making them pay market prices, will immediately lower rates on all services – not just basic phone service, and could bring billions back to do full upgrades of the telecommunication wired infrastructure. Cleaning up this long standing financial shell game also solves some of the Digital Divide concerns and could even create financial support as part of any settlement.

5G is not profitable once the cross-subsidies for wireless are removed. 5G is nothing more than another technology promise-them-anything bait-and-switch to get rid of state and federal regulations at the FCC and in state legislatures. (This is on top of the health concerns of putting a microwave antenna, always on, on a lamppost directly outside someone’s bedroom window.)

Nationwide Problem: These are federal rules that have been manipulated by the FCC, either by negligence or design.  Thus, all states, not only in the Verizon service area, but in the AT&T and CenturyLink territories, have the same financial issues that need to be fixed immediately. Taking the FCC to court is the first step in this direction.

IRREGULATORS is an independent consortium of retired and semi-retired senior telecom experts, analysts, forensic auditors, and lawyers who are former staffers from the FCC, state advocate and Attorneys General Office, as well as telecom auditors and consultants.

http://irregulators.org/who-we-are/

 

 

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

(https://www.etutorworld.com/)

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. (caldwell.edu)

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 Kushnick’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.

The California Fiber Optic Broadband Scandal

The following is an Excerpt from $200 Billion Dollar Broadband Scandal about the failed fiber optic history of California. What is now the post-merger AT&T (formerly Pacific Bell) had promised to deploy a fiber optic network that would reach 5.5 million homes by the year 2000 and spend $16 billion dollars.

To read the third book in this trilogy, see “The Book of Broken Promises”

Click to Read