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So Verizon and AT&T are 'very small businesses?'

ASK THIS | September 14, 2010

Bruce Kushnick says the use of obsolete data costs taxpayers billions, and he spells out how. But regulators don't even respond to his complaints -- not even to tell him he is wrong. Why is that?

By Bruce Kushnick

Dear FCC,

I and my group, Teletruth, filed three "Data Quality Act" complaints between June 29th and July 1. We used the proper form and also emailed them to the appropriate people at the FCC, as we had been told to do in the past.

Here is a link to the complaints. http://www.newnetworks.com/FCCDQA.htm     

No one got back to us and it is way past the deadline, as spelled out by the FCC:

"The FCC standard is that the relevant Bureau or Office will respond to initial complaints within 45 days. As provided in the OMB Guidelines, the Bureau or Office handling the initial complaint will respond in a manner appropriate to the nature and extent of the complaint. Complaints deemed to be inconsequential, trivial, or frivolous may require no response at all. We may also reject complaints made in bad faith or without justification."

Our complaints are far from inconsequential, trivial, frivolous, in bad faith or without justification.

In our first claim we stated: "The FCC is using 8-13 year-old data that are supposed to be reflecting the current markets in every National Broadband proceeding, including all Notice of Proposed Rulemakings and Notice of Inquiries."

The point of these complaints is that bad data have created harmful public policies and will continue to do so. In fact, the current Universal Service Order and Proposed Rulemaking dated September 3rd, 2010, is using data about the wireless market from 1997.

The FCC auctioned geographic area licenses for wireless communications services in 1997. Seven bidders qualifying as very small businesses and one qualifying as a small business were awarded 31 licenses. In our first complaint we pointed out that the FCC's failure to use accurate data allowed AT&T, Verizon and other large telecoms to pose as "very small businesses" to get spectrum at wholesale prices and block truly small businesses from bidding. This cost the American public $8 billion in 'small business spectrum,' limited competition improperly and, most likely, stifled the innovation that competition brings.

The FCC is creating rulings about spectrum without conducting full small business impact studies that are required under the Regulatory Flexibility Act. Instead it is throwing genuine small competitors under the bus by using old data even though up to date numbers are available.

My second complaint, also sent by Teletruth, my advocacy group, focused on how the FCC's previous and current data on broadband funding and investment have neglected plans put in place to rewire schools, libraries, hospitals -- all of America, in fact -- by 2010. This has cost citizens more than $320 billion, about $3,000 per household, as state regulations were changed to give Verizon, AT&T, Qwest et al billions of dollars per state to upgrade the Public Switched Telephone Networks, replacing the old copper wiring with fiber optic, 45mbps services. Only a small portion of that work has been completed. We have been filing with the FCC about this fact since 1998.

Let me be very clear. Telecom customers - not the huge companies themselves - are funding the broadband deployments. For example, in June 2009, the New York State Department of Public Service approved rate increases to fund Verizon's installation of fiber optic cable (FiOS).

"We are always concerned about the impacts on ratepayers of any rate increase, especially in times of economic stress," said Commission Chairman Garry Brown. "Nevertheless, there are certain increases in Verizon's costs that have to be recognized. This is especially important given the magnitude of the company's capital investment program, including its massive deployment of fiber optics in New York. We encourage Verizon to make appropriate investments in New York, and these minor rate increases will allow those investments to continue."

There has, in fact, been a 90 percent increase in local service charges in New York since 2004. How does this benefit, say, rural customers who will never get these services but are being charged for them? Local rates for low-income families rose along with everyone else's. Should they have?

The FCC has never investigated the money flow and chose to add broadband to the Universal Service Fund, increasing what already was a steep 13-15 percent tax on all phone users. This is in addition to a new proposed broadband tax, raising local rates as well as the FCC Line Charge on every local bill. (It is called the "FCC Line Charge" on Verizon and other telco bills, not "Subscriber Line charge" (SLC) - an apparent violation of Truth-in-billing laws.)

Instead the FCC will continue to give the same companies that failed to fulfill their previous obligations and commitments more customer money for services they already paid for. And it won't even examine whether the companies actually need the money, what with their subsidiaries getting a free ride, paid out of the Universal Service Fund.

My third complaint outlines just how atrocious the FCC's wireless and wireline phone charges data are. Teletruth's surveys and audits of companies (including class actions based on phone bill overcharging) reveal massive customer overcharging. Actual usage, including cost-per-minute, has no relation to the numbers in FCC reports.

There is insufficient competition to actually lower rates or fix the problems. Instead, the FCC, using obsolete data, will allow AT&T, Verizon et al to overcharge customers.

Now my question to the FCC is this: You were supposed to respond to my complaints by Aug. 15 and didn't. Perhaps you had a chance to look this letter over and you'll get back to me at this point? If not, which one of us would you say is acting in bad faith or without justification?

Adminstrator -aidd
Posted by Lee Gottlieb
09/14/2010, 12:34 PM

As long as corporations and their wealth are allowed to influence the people's regulatory agencies, nothing will change.

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