Monday, July 10, 2006

About Fraud...


From <li><a href="http://www.newnetworks.com/ShortSCANDALSummary.htm"></a></li>


The case is simple: Do you have a 45 Mbps,
bi-directional service to your home, paying around $40? Do
you have 500+ channels and can choose any competitive
service? You paid an estimated $2000 for this product even
though you did not receive it and it may never be available.
Do you want your money back and the companies held
accountable?



Background: Starting in the early 1990's, the
Clinton-Gore Administration had aggressive plans to create
the "National Infrastructure Initiative" to rewire ALL of
America with fiber optic wiring, replacing the 100 year old
copper wire. The Bell companies SBC,
Verizon, BellSouth and Qwest, claimed that they would step
up to the plate and rewire homes, schools, libraries,
government agencies, businesses and hospitals, etc. if they
received financial incentives.



The Commitment:



  • By 2006, 86 million households
    should have already been wired with a fiber (and coax),
    wire, capable of at least 45 Mbps in both directions, and
    could handle 500+ channels.
  • Universal Broadband: This wiring was
    to be done in rich and poor neighborhoods, in rural,
    urban and suburban areas equally.
  • Open to ALL Competition: These
    networks were to be open to ALL competitors, not a
    closed-in network or deployed only where the phone
    company desired.
  • Each State: By 2006, 75% of the
    state of New Jersey was to be wired, Pennsylvania was to
    have 50% of households by 2004, California to have 5
    million households by 2000, Texas claimed all schools,
    libraries, hospitals.…Virtually every state had
    commitments.
  • Massive Financial Incentives: In
    exchange for building these networks, the Bell companies
    ALL received changes in state laws that gave these them
    excessive profits, tax savings, and other perks to be
    used in building these networks.
  • This was not DSL, which travels over
    the old copper wiring and did not require new
    regulations.
  • This is not Verizon's FIOS or
    SBC’s Lightspeed
    fiber optics,
    which are slower, can't handle 500 channels, are not open
    to competition, and are not being deployed
    equitably.
  • This was NOT fiber somewhere in the network
    ether, but directly to homes.


The Harms and Outcome



  • Costs to Customers — We
    estimate that $206 billion dollars in excess profits and
    tax deductions were collected
    over $2000 per household. (This is the low
    estimate.)
  • Cost to the Country — About $5 trillion
    dollars to the economy.
    America lost a decade of
    technological innovation and economic growth, about $500
    billion annually.
  • Cost to the Country — America is now
    16th in the world in broadband.
    While Korea and
    Japan have 40-100 Mbps at cheap prices, America is still
    at kilobyte speeds.
  • The New Digital Divide
    The phone companies current plans
    are to pick and choose where and when they want to deploy
    fiber services, if at all.
  • Competitor Close Out
    SBC, BellSouth and
    Verizon now claim that they can control who uses the
    networks and at what price, impacting everything from
    VOIP and municipality roll outs to new services from Ebay
    and Google.


The Truth: This is a Fraud Case



  • Fraud: There is a dark secret —
    the networks couldn't be built at the time the
    commitments were made and are still not available. If
    someone pays thousands of dollars for a service and
    doesn't get it, isn't that fraud?
  • Collusion and Cover-up: TELE-TV and
    Americast, the Bell companies' fiber optic front groups,
    spent about $1 billion and were designed to make America
    believe these deployments were real in order to pass the
    Telecom Act of 1996 and enter long distance. How did
    every major phone company in America not know that these
    fiber-based services couldn't be built and were able to
    defraud over 40 states?
  • The mergers killed fiber optic deployments in
    over 26 states and harmed competition.
    With
    every merger, the phone companies simply dropped all
    state commitments and harmed every state they merged
    with. Case in point: Verizon cut deployments to 13 states
    during the NYNEX-Bell Atlantic merger, not to mention
    GTE's 28 state deployments. SBC did the same in all 13 of
    its states, from California to Illinois. Worse, the
    mergers were based on the companies competing with each
    other and there is NO evidence they ever did any serious
    wireline residential competition.
  • The Regulators Killed Competition and
    Broadband.
    Over the last 4 years, instead of
    continuing competition as ordered by the Telecom Act of
    1996, the FCC has rewritten the laws close down Internet
    Service Providers (ISPs) that brought America to the
    Internet, as well as virtually all local competition.
    AT&T and MCI couldn't compete because they were
    regulated out of business and thus were sold off.
  • Distortion of the Truth by the FCC.
    Virtually every piece of documentation presented in this
    work is missing from the FCC's Advanced Network Reports.
    The FCC defines broadband as 200 kilobytes per second in
    one direction — 225 times slower than what was
    promised in 1992.
  • Cross-Subsidization — Instead
    of spending the money on these networks, the Bell
    companies used the money to enter long distance, rollout
    wireless and the inferior DSL services. The Bells also
    lost over $20 billion overseas and paid executives over a
    billion in stock options during the mergers.
  • Bait and Switch — Customers
    paid for a fiber optic wire and got DSL over the old
    copper wiring — it's like ordering a Ferrari and
    getting a bicycle.


20 Year Analysis of Revenues, Profits,
Expenditures:
This book is based on a 20 year
analysis of Bell-supplied data, Census Data and Business
Week. Since 1984::



  • Revenues are up 128%.
  • Employees are down 65%, Construction is down
    60%.
  • $92.5 billion is missing in network upgrades.
  • Profits based on failed fiber plans up 188% as
    compared to other utilities.


Teletruth has filed a complaint with the Federal Trade
Commission, (FTC) to investigate the claims presented; the
book is the data for our complaint.

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