New “Quick-Read” Books Expose Telecom Overcharging and How the Industry Created the Never-ending U.S. “Digital Divide”

By B.N. Frank

The Federal Communications Commission (FCC) is supposed to protect Americans from the telecom industry. Over the years, the agency has been heavily criticized as well as sued for NOT doing so including by a group of telecom experts who call themselves “The Irregulators.” The Irregulators’ lawsuit revealed that all Americans have already paid for telecom services that many are still not getting, which has led to “The Digital Divide.” Thanks to Irregulator Bruce Kushnick and others for continuing to expose how Americans continue to be ripped off courtesy of the FCC, current and former legislators, and of course, “Big Telecom.”

From Medium:

Bruce Kushnick

DISS-CONNECTED

2 New Books Exposing Massive Customer Overcharging and How Big Telecom Created the Digital Divide.

Paraphrasing a conversation between authors David Rosen and Bruce Kushnick.

“I didn’t order that Verizon service, Techsure, (which is an in-home maintenance service). I have no idea how it ended up on my broadband-internet bill. And it’s $15 a month. Then you tell me that it is also bombarded with taxes, and surcharges that are hidden it this mess of additional charges, some of which are not government mandated? At $15 a month for at least 5 years, plus an additional 20% or more in added taxes and fees, that’s an overcharge of $220 a year. For 5 years, I’m owed about $1,100? And to add insult to injury, after spending hours on the phone with Verizon, they will tell me I ordered it and/or claim I can’t get a full refund?”

Two New Books:

DISS-CONNECTED: Table of Contents, Paperback and Kindle
Violations & Egregious Acts; Table of Contents, Paperback and Kindle

In July, 2020, before something called the pandemic hit America, David Rosen invited his old friend, Bruce Kushnick, for a casual dinner, and after handing the recent Verizon NY broadband and phone bill to Kushnick, by the second glass of Merlot, 2 new books were born.

DISS-CONNECTED is designed as a quick-read-general public, short and cheaper book to explain how America — i.e.; you, your family, friends, businesses, and the government — has been punked by Big Telecom — what is now AT&T, Verizon and CenturyLink (Lumen Technologies). They were assisted with the help of their friends, (the cable companies), and add to this the paid off (or clueless), regulators, politicians, pundits, and nonprofits. DISS-CONNECTED also offers a roadmap — what America must do to fix the damage caused by this telecom/cable cartel that has taken over our communications and let the entire US critical wired infrastructure deteriorate, even though your family paid to upgrade the copper wires to fiber optics. But, this is just one among the many other scandals. (And note: Wireless service requires a fiber optic wire. Thus, controlling the wires controls communications prices as well as whether you and your family are one of the Digital Divide have or have nots.)

DISS-CONNECTED is the ‘cliff notes’ of book 2, “Violations & Egregious Acts”, which is more technical and summarizes 30 years of research by New Networks Institute (NNI), and the IRREGULATORS, (an independent, consortium of senior telecom experts, analysts, forensic auditors, and lawyers who are former senior staffers from the FCC, state advocate and Attorneys General Office experts and lawyers, as well as former telco consultants).

“Violations & Egregious Acts”, is the 4th book of an overstuffed trilogy, “The Book of Broken Promises” which included “$200 Billion Broadband Scandal” (as well as different editions, including $300 and $400 and $500 Billion Broadband Scandal), all of which started in 1992.

Customer Overcharging: Let Us Count the Ways.

NNI research over the last 3 decades shows that virtually no one can read and understand the charges on their wireline, wireless, broadband, Internet, cable TV and even phone bills that are loaded with made up, unmandated fees — and no way to calculate this since we have given these companies a license to nickel, dime, quarter and half dollar us.

At least 20% of all communications bills have one or more overcharging issues, and if we add the made-up fees, like ‘Cost Recovery’ or ‘Admin’ or the cable fees, like ‘Broadcast and Sports fees’, all of America is paying extra on all services. We must ask: Where are the state and federal regulators that are suppose to protect us?

Call for Action Over US Prices vs Overseas.

Based on respected research from the European Union and other research groups, Rosen’s Verizon New York double play of broadband and phone service, not only has a charge he didn’t order, with a total of over $116.00, but according to the latest EU study, the average price for the ‘double play’ is about $28.00 and you can get it for as cheap as $15.00 in some countries.

Looking at the cell phone prices, overseas you can get a 100GB 5G wireless service for under $10.00. In the US, you have to pay $70–90 for a service with a package of gigs. There are few extended plans with 100GB, but they come with caveats galore, and certainly not for $10.00 — that’s less than $.10 a gig. Worse, unlike Europe, the term ‘unlimited’ means- We were just kidding; of course there are caps on service. Compare these offers to Spectrum Cable’s wireless offering (who, by the way, is reselling Verizon Wireless) that on the low end they charge $14.00 a gig.

Remove All Taxes, Fees and Surcharges that are NOT Mandated.

Why hasn’t the government stepped in to investigate this discrepancy? And how did this massive overcharging for services occur since the price of these services is one of the major reasons there is a Digital Divide? Many families simply can’t afford the monthly charges. And considering that every service now has egregious added charges on the bills — which is how the total amounts balloon over time, to add insult on top of insult, the real irony is that many of these charges are also taxed; thus we have a made up tax applied to a made up tax — which are all just revenues to the companies.

There would be no need for government subsidies if the prices were ‘just and reasonable’.

The first wave of monies that were distributed to qualified low income families during the pandemic was called “EBB, Emergency Broadband Benefit”, which is a government subsidy program giving out $3.2 billion to broadband providers to cover discounts of up to $50 a month. The focus was on low-income children being able to go to school online, to provide critical medical services, and for those low-income adults who have to stay at home and work online. And other programs were implemented over the last year and still more will coming.

AT&T’s wireline broadband internet service was advertised in 2021 at $45.00 but this price was missing 30–40% of the actual expenses a customer pays, and the government paid out to cover the retail rates that included the made up fees as well as the modem fees.

Getting everyone broadband and online is critical; not addressing the model of having the government pay the made up fees and inflated prices — with billions of dollars annually being wasted, should be part of the reason for investigations of these egregious acts.

It’s OK to Spy on Us; Customer-Diss-Service.

All of the Verizon bills also have a small section on the back called “Customer Proprietary Number Identification” and it is the technical name of your phone number and related information about your account. And because of an ‘opt out’ practice, where you, the customer, must take actions to halt the distribution of your information, they can give this information out to all of the affiliate companies and combine it to sell the information. And while this is an additional revenue stream to the companies, you, the customer, don’t get paid for their ability to make money off of this — while they can track you online or on your cell phone, or even on your wireline home phone.

Giving Billions to those Who Created the Digital Divide is Just Plain Wrong.

Besides alerting the reader to the different ways AT&T et al. have overcharged us, during the writing of the books the pandemic hit and suddenly people and politicians became aware that there is a ‘Digital Divide’ between the served, unserved and underserved — which we, in the industry, have been complaining about for decades.

Have You been Quoting the Diss-Information about the Digital Divide?

We wrote these books because we have been shocked by the ignorance of even the experts and advocates in broadband, not to mention the press and the politicians.

AT&T, Verizon and CenturyLink control the state-based telecommunications public utilities, and thus almost the entire wireline infrastructure for wireless in their state territories.

But, they also took control of ‘common wisdom’, and rewrote history and erased their role in this mess. Virtually no one knows that there are still state-based telecommunications utilities or that the utilities were supposed to be upgraded to fiber optics over the last 30 years, that these utilities are being dismantled to privatize publicly funded networks, and that because these companies have been working as a cartel, they have captured the state and federal regulators who are as clueless as the public.

But it gets a great deal worse. The Biden Administration and Congress have created government grant programs, as well as the states, to give out over $100 billion to quote, “solve the Digital Divide”, unquote, yet much of it is going to these very companies that failed to deliver on commitments to do upgrades, or to get rid of the egregious made up fees — thus creating the Digital Divide.

Broadband Scandal

There have been no examinations of the financial books of these AT&T, Verizon and CenturyLink state-based public utilities or a plan to create maps of the copper, coaxial cable or fiber optic wires that have already been put in, and much of the fiber optic wires that were put in were never put into use — known as ‘dark fiber’. No state has been tracking the commitments that were made at both the federal and state government level, and there is no institutional memory of these commitments, even though in every state there were plans to do upgrades of the existing copper wires with fiber optics — which was later changed to ‘give them wireless’ as a substitute.

Ironically, by 2010, America should have been a fiber optic nation and the copper wires of the state public utilities replaced, even in rural areas, and while each state had different commitments, we estimate that over $500 billion dollars was collected in the name of broadband, and it continues unchecked today.

For example, in California, AT&T, (formerly Pacific Bell), which controls 80% of the state, should have had 5.5 million households upgraded with fiber optics and should have spent $16 billion to do it — by 2000. Meanwhile, Verizon claimed it would have 8.75 million households and spend $11 billion for fiber to the home covering the East Coast service area, from Maine to Virginia by the year 2000. And in some states, such as New Jersey, Verizon should have had 100% of their territory, which covers 96% of the state, completed by 2010.

In contrast, AT&T’s 3rd Quarter report for 2022 shows only 6.9 million total fiber connections in its 21 state footprint, which covers over 80 million locations. There has been a paltry increase of about a million lines since 2021; a 1/3 of what the company claimed it would have added in 2022.

What did America get instead? The entire US wired infrastructure has been left to deteriorate. There was a continuous bait-and-switch, where the companies would claim they were going to do fiber optic services, and then laws were changed to give the companies more profits to do it, but there was nothing to show for the billions collected per state.

Again and again, the companies claimed that wireless would be a good substitute; but it still requires a fiber optic wire in order to deliver wireless service.

The book was written to expose the ability of the companies to rewrite history — and because those who claim to be experts, pundits, and advocates have decided to not investigate how the Digital Divide was created in their own state or city, most want to throw more money at these same companies even though history shows that the companies will not ‘do the right thing’ and wire their territories with fiber optics for the home. Instead they have diverted the construction budgets to wireless.

In fact, in state after state, no state government broadband agency has produced a history of how the state ended up in this mess and worse, no state has named the players in the state that created this Digital Divide. For example, Los Angeles County never mentions that AT&T is the state telecommunications public utility, that it announced plans to do fiber optic upgrades of Los Angeles and the County starting in 1993, and it never mentions the name AT&T, even on the LA County Digital Divide web site, even though AT&T covers most of the County.

Is the failure of every state broadband agency to examine and disclose basic material facts about how the state ended up with a Digital Desert a violation of some regulation or just an egregious act that needs to be remedied?

One of the Largest Accounting Scandals in American History — and Why You Should Care.

The prices of all communications services in America are now under the control of AT&T, Verizon, and CenturyLink (Lumen) and the cable companies, who have a virtual monopoly/duopoly in all states, and this was done via a financial shell game where AT&T et al., with the help of the FCC, were able to manipulate the actual accounting rules so that the local (intrastate) utilities became cash machines to fund the other lines of these Holding Companies businesses, including wireless. Unknown to most, these other lines of business, such as the ‘backhaul service’ (also called ‘Business Data Services’ or ‘Special Access’) — the wires that go down the streets and to not only wireless affiliates but also competitors, have excessive profits — because their monopoly over these wires means that they can set the prices for all competitors, and keep prices inflated as there is no competition to lower rates. But, at the core, this flim-flam has given the backhaul line of business a whopping 60+% profits (EBITDA), where it should be under 12%. This also created artificial losses for the wired local service and the utility.

Halting the funds that have been diverted to pay for these other lines of business, would be enough money to upgrade the entire state and solve the Digital Divide, not to mention significantly lower the price of all services.

This is not history because this is ongoing, We estimate that America is being overcharged about $70-$90 billion dollars annually, and that this is from the manipulation of the accounting — and it has been going on for decades.

The research is based on Verizon New York’s Annual Reports because NY State has required that a full financial report be submitted. When we say this is an ongoing problem, we are basing it on the Verizon NY 2021 Annual Report published this year, in June 2022 — again, this is June 2022, and these reports are for the state-based telecommunications public utility and are based on the Uniform System of Accounting, USOA — which is still used in every other state with the exact same corrupt formulas.

But, when you add up the overcharging from this accounting shell game, and the monies charged to customers for fiber optic broadband that was never rolled out, not to mention the overcharging on the communications bills, we estimate that America has already paid about $1.3 trillion dollars through 2021.

Regulatory Capture — A Takeover of the Regulators and Politicians — Using Payola.

Imagine going to court and the jury selection was done by the company you are suing; even the judge and your lawyer, all worked for the company. But it gets worse when you realize that the Telecom/Cable Cartel have rigged the system so that you can’t just take the companies to court but have to use their arbitration system.

In fact, for decades, there has been an erosion of our digital rights and consumer protections, and this situation will continue to get worse unless we expose what is going on and what should be done to clean out the mess.

For example, AT&T et al. have taken over the FCC advisory committees, so that when there is a vote — the companies, their trade associations and their fake astroturf groups or the non-profits that they have paid off with grants, will vote against what is good for the Public Interest. (And we saw this firsthand when we were on the FCC Consumer Advisory Committee.)

Stealing Our Democracy with ALEC, using Payola and Corporate Created Legislation.

Probably the most insidious part of this grim tale are the stealth legislative ‘skunkworks’ networks that were created, such as the American Legislative Exchange Council, ALEC, and other groups that have been designed to have corporations write the legislation that is then given to politicians to introduce in their state legislatures and Congress. Most of these politicians have been paid off via campaign donations, but more importantly through the corporate foundation grant money that is given to a non-profit in the politicians’ district.

Thus, AT&T somehow got every state legislature in its 21 state footprint to put forward legislation that would remove the requirements to offer local phone service, helped to remove cities’ rights to deal with wireless deployments, and pushed through statewide cable franchises with little or no penalties if they didn’t deploy.

And while AT&T and Verizon will claim that they are no longer members of ALEC, an examination found that their primary associations, the CTIA, wireless association and the NCTA, the cable association, are both paying members of ALEC.

Even the FCC has been taken over by ALEC. The FCC Commissioner, Brendan Carr, worked for the wireless association CTIA, and then once he became a commissioner he pushed through “Carr’s 5G Order”, based on ALEC legislation, that is now the FCC’s regulations. This helped to lower fees to use the rights of way and poles and to block states and cities from having regulatory control over their own territories.

And the so-called 5G wireless service has been vaporware, as it was supposed to be fully deployed by now and could do 1Gbps speeds — but we find that some of it requires a line of sight to the antenna and a fiber optic wire; it is closer to a sticker on the phone labeled 5G than a working technology to substitute for a fiber optic connection. And when we examined the actual wireless expenses we find it very profitable because it has diverted the construction budgets of the state utilities and gotten the rights of way. Remove these freebies and make the subsidiary pay market prices, and the 5G vaporware will evaporate.

Bottom line as to why we wrote the books: The companies have used confusion, obfuscation, the capture of the regulators and politicians, and a rewriting of history with enough dis-information that you, the public, not only quote their made up storyline, but they use your ignorance to take advantage of you — and the public interest. The books detail next steps — which we dubbed a ‘clean slate agenda’, and specific legal and regulatory challenges to clean up what has been festering for decades.

Are these violations and egregious acts illegal? If someone steals an iPhone with a value of over $1,000, it is considered a felony in some states.

If you think it is OK for Big Telecom to overcharge you, and continually raise your rates, and add those made up taxes, fees and surcharges;
If you have been quoting the diss-information from AT&T et al.
If you think it’s OK to give billions in government subsidies to the companies that created the Digital Divide,
And if you think that the Digital Divide started in 2021, out of thin air, in coverage areas of each state utility where AT&T, Verizon and CenturyLink control the state franchises,
And if you are OK with are paying 5–20% more than prices overseas for the same service;
Or you can’t even get broadband even when you paid via rate increases to have it rolled out;
And you keep blaming the Democrats or Republicans— instead of the cable/telecom corporations that are really in control.
Or you are blaming the cable companies for a lack of choice and high prices, when it was AT&T et al. that never showed up to compete…

Kushnick and Rosen, the authors, are some of the founders of the ‘Interactive Age’, now almost 4 decades ago and they helped to bring to market the first wave of ‘new media’, products and services, from the first interactive CD player, (CD-I), to the first reports and industry events on ‘interactive’ telecommunications, with IDC/Link, or the creation and deployment of the first independent 3-digit information service, ‘511′, (like 311). Kushnick started New Networks Institute in 1992 to help bring America the fiber optic Information Superhighway and the new services that America should have been enjoying for the last 3 decades.