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How the FCC's exciting new broadband plan is a fraud

COMMENTARY | March 16, 2010

Telecom analyst Bruce Kushnick writes that giant telecoms and cable companies -- and the lobbyists, think tanks and astroturf groups they fund -- have so corrupted the debate over broadband that what may look like progress actually amounts to small steps toward antiquated standards that taxpayers have already paid for many times over.

By Bruce Kushnick

The FCC today sent Congress a new plan that pretends to solve the nation’s broadband problem, but is in fact a testament to how corrupt America has gotten.
The new national broadband policy is tailored to reward telcom behemoths AT&T and Verizon, the very same corporate interests that got us into this mess in the first place. Meanwhile, the hard questions that need to be asked are being ignored.
How badly off are we right now? Well, while you sit on the web reading this, the current average US broadband speed, according to speedmatters.org, is 5mbps down and 1mbps upload. That’s 1/20th the download speed you can get in, say, Hong Kong, or Japan or France, and 1/100th the upload speed. Today in Hong Kong 100mbps in both directions costs about $20 -- cheaper than US broadband by leaps and bounds.
AT&T and Verizon claim there’s plenty of competition, but you can’t select your own Internet provider over the broadband networks and local phone prices have gone up  -- 90% in New York and New Jersey, for example -- over the last 5 years. If there was competition, prices couldn’t increase like that. The absence of competition has also raised Net Neutrality issues, as a provider’s ability to block or degrade or favor its own service over others wouldn’t be a problem if you could simply leave and go somewhere else.
But the real kicker is this: By 2010, America should already have been rewired. Taxpayers have spent about $320 billion for fiber-based networks since the 1990s but have nothing to show for it. In fact, in many states, all schools, libraries and hospitals should have been rewired with fiber optic service as part of changes to state laws that gave AT&T and Verizon billions per state to remove the old copper wiring with new fiber optic wiring. Worse, the money is still being collected today in the form of rate increases, tax breaks and other perks the companies got.
So what now? The FCC’s plan is to increase your taxes yet again, by adding broadband to the Universal Service Fund Tax -- rewarding the same companies that harmed you by giving them more of your money and a free pass.
And to make sure that America has broadband, the FCC proposes to have the deployment by 2020. As FCC Chairman Julius Genachowski put it last month: “A ‘100 Squared’ initiative -- 100 million households at 100 megabits per second -- to unleash American ingenuity and ensure that businesses, large and small, are created here, move here, and stay here.”  So what is already being offered in many other countries -- very high speed broadband -- should reach America in a decade, leaving us farther behind. This means fewer jobs and more expensive broadband and it harms our economy as many of the newest applications will be developed in other countries.
And there’s nothing in what the FCC is about to do that would compel the carriers to do anything-- except maybe come up with more schemes to get more money from taxpayers for services that they already got paid to do and didn’t. If the FCC did a search they would see Verizon claimed it was going to do 100 mbps services way back in 2003. (Barron's, March 24, 2003)
As for building new infrastructure, AT&T is asking the FCC to close down the Public Switched Telephone Networks (PSTN), the wiring to most homes, offices, schools and libraries; in short, the critical infrastructure that most services travel over today. AT&T claims that there are now two networks -- a “broadband: network and the aging “utility” network. What this plan would do is remove all vestiges of regulation, allowing them to afflict phone users with rate increases, worse service and no competition.
More to the point, AT&T is not currently building out fiber optic networks, but has pulled a massive bait-and-switch and is still using the old copper wiring, which was supposed to have been replaced. U-Verse, AT&T’s broadband product, can’t handle very high speeds and the failure to properly upgrade the infrastructure over the last 15 years is going to harm 22 states --  fully half of the US.
Because of devastating mergers that consolidated what is now AT&T, previous commitments made by Pacific Bell (California), Ameritech (Ohio, IL, WI, IA, or MI) BellSouth, (southern states, including Florida, MI or Kentucky), Southwestern Bell (including Texas or Kansas), and SNET (Connecticut) are being simply ignored, despite billions spent per state for upgrades.
Why is the FCC so ignoring the needs of consumers? Because of its coziness with corporate-funded think tanks and astroturf and co-opted groups.
For instance, the current head economic advisor for the FCC’s national broadband plan is Scott Wallsten. Wallsten is on leave from the Technology Policy Institute which, according the Washington Post, is “a think tank funded by major Internet providers AT&T Inc., Comcast Corp. and Verizon Communications Inc.”
Why hasn’t the FCC Consumer Advisory Committee said anything? I was on the committee in 2003-2004, but was not asked back after I complained that the committee was full of representatives from corporate-funded astroturf and co-opted groups and industry players, not consumers. It doesn’t seem to have gotten any better.
While there are some groups represented on the committee that are seriously “pro-consumer” many of the organizations are funded by Verizon, AT&T or the cable companies.  (See my NiemanWatchdog.org piece on this subject fromOctober 2007.)
The chair of the committee is Debra Berlyn of the National Consumers League, which is now getting funding from Verizon and other corporations for its projects.
Member groups include: 
  • Verizon,   --which has been on the board for multiple terms (why?).
  • LULAC  --an Hispanic group that gets millions from AT&T and Verizon
  • Communications Workers of America,   -- the primary AT&T and Verizon union.
  • Cablevision  -- a cable company in multiple states.
  • Communication Service for the Deaf, “CSD wishes to thank Verizon Wireless for their generous contribution”.
  • Consumer Action  -- AT&T and Verizon are “Benefactors”.AT&T Inc. was the proud sponsor the HLAA 30th Birthday Party , AT&T and CTIA are corporate members.
  • Hearing Loss Association of America.  
And every day is a new slap in the face. The FCC just announced that Karen Peltz Strauss is now deputy chief of the Consumer and Governmental Affairs Bureau. Didn’t the FCC also notice that she is on the Board of Directors of the astroturf group Alliance for Public Technology, whose funders include AT&T, CTIA (wireless association), Embarq (formerly Sprint), Qwest, Verizon and the phone lobby and United States Telecom Association?
No one is investigating the monies currently or previously collected by AT&T, Verizon et al, nor their failure to properly upgrade the utility phone networks they were paid to upgrade. No one is going to confront the 900-pound gorillas. There will be no mention of serious competition, but there will be billions more for the companies that already overcharged you. The FCC’s plan is a vision of the year 2020 that is antiquated today.
And worse, the FCC talks about “transparency” and “accurate data” is just lip service. This plan is the corporations’ design, not a design for America.

We should be using Mesh in this country which would proliferate all kinds of competition
Posted by PB
03/25/2010, 09:13 AM

We should be using mesh in this country.

But that would mean the telco controlling shareholders would have to give up their monopoly on the last mile! And they are certainly not going to let that happen with their astroturf, and their bought Supreme Court who will never rule in favor of ordinary consumers or citizens, and will let all these unconstitutional and anti-competitive laws and rules stand.

But, that is what real competitive market capitalism is supposed to be all about! Verizon, AT&T et al are thugs! And they are violated the arch rules of competitive capitalism.

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