Request for Immediate Hearings and an Investigation Pertaining to the Previous Mergers of SBC and Verizon.Edit
Dear Congressmen Barton, Upton, Markey, Dingell, Senators Lautenberg, McCain, Inouye, Stevens, DeWine, Kohl, FCC Commissioners Martin, Copps, Adelstein, Abernathy
- SBC = Southwestern Bell, Pacific Telesis, Ameritech and SNET
- Verizon = Bell Atlantic, NYNEX and GTE
SBC (Southwestern Bell, Pacific Telesis, Ameritech and SNET) has asked for the right to buy AT&T, while Verizon is asking to buy MCI.
The congress should investigate the previous mergers for their harms to America's broadband, competition and our economic health.
Do not let two companies that already control 70% of America's communications be able to shut down the rest of America's Digital Future.
Under the previous mergers:Edit
- 26 states' fiber optic deployments were closed down because of the SBC
and Verizon mergers. In every previous merger, SBC and Verizon closed down fiber optic deployments in over 26 states, impacting over 200 million American citizens, about 70% of the entire US population.
- 43 cities did not receive robust competition from SBC and Verizon. Both
companies were supposed to compete outside of their own regions with wireline competition as the basis for their last mergers. Virtually none of that competition ever materialized and today no Bell company is competing vigorously for wireline competition as committed. Ironically, every merger claimed it was opening the networks for competition, and yet the largest of competitors, AT&T and MCI, are now being sold off.
- $500 Billion annually was lost. New Networks Institute (NNI) estimates
that this lack of 'true' broadband cost the US economy $500 billion annually, about $4 trillion since 1996. America lost an entire decade of technological innovation because the Bell companies did not fulfill their obligations. America's broadband is 1/50th the speed of other countries. -"True" broadband can handle high-quality video.
- $205 billion of overcharging. We estimate that the Bell companies
collected over $205 billion in higher phone rates, including inflated Universal Service funding, and tax breaks for fiber optic networks the customers never received. That's over $2000.00 a household and growing.
The Fiber Optic Scam.Edit
America is 12th to 16th in the world in broadband, (depending on which International group you believe). The poor ranking behind many other nations is because two companies, Verizon and SBC, did not fulfill their obligations to build out the fiber optic networks as committed by state alternate deregulation plans. Instead, after the ink on the mergers was dry, they closed down more than 26 state's fiber deployments and spent the excess profits overseas, or rolled out the companies' other products. The companies did not put the money in the ground.
86 million households should have had these fiber optic networks by 2005, with services that could deliver speeds of 45mps in both-directions, with the capability of 534 channels. And these networks were supposed to be OPEN to all competitors, not controlled by the contractor.
Let's take SBC-Pacific Telesis-Ameritech-SNET.
- Pacific Telesis: SBC merged with Pacific Telesis and then closed down
fiber optic deployments to 5.5 million households in California, with a financial commitment of $16 billion dollars, all by 2000.
- Ameritech: SBC purchased Ameritech then closed down deployments to 6
million households in five states, including Ohio, Illinois, Michigan, Wisconsin an Indiana -- $29 billion was to be spent over 15 years, starting in 1994.
- SNET: SBC merged with SNET then closed down a $4.5 billion "I-SNET"
plan rewire Connecticut.
In the mega-SBC, these companies were supposed to spend over $33.6 billion, and have 11.5 million households wired with fiber to the home - By 2000. This was to replace the copper wiring with fiber optics to the home and office, school and library. This was NOT DSL over the existing copper wiring, at 50th of the speed.
And when the phone companies claim that they have millions of miles of fiber - Who cares? It is a highway with no on-and-off ramps. The fiber commitments were to the home and office, school and library, not somewhere in the network ether.
The fact is that state laws were 'deregulated' to give the phone companies billions of dollars per state to pay for these network upgrades. The companies made both state commitments with the Public Utility Commissions, as well as with the public through commercial speech commitments to deploy these networks. Hundreds of millions of dollars was spent to get agreements in the majority of US states and convince the public that they would bring a fiber optic future by the year 2000.
And then we have Verizon - NYNEX, Bell Atlantic and GTE. Verizon was supposed to spend $15.6 billion and have 17,750,000 households wired with fiber by 2000. Verizon also went state to state to change the laws, and was given multiple billions per state in the form of higher phone rates and tax write-offs. The company never fulfilled any of its fiber optic services that were promised in the states, such as New Jersey, Pennsylvania or Massachusetts, not to mention the GTE territories. After each merger, all of the fiber optic plans were simply canceled or written-off. They never spent the money on new construction and the public never received the services promised. For example, by 2004, Pennsylvania Bell should have rewired 50% of the state with fiber in rural, suburban, and urban areas equally, with speed of 45mps in two directions. None of it was ever deployed.
NNI estimates that $25-50 billion has been 'cross-subsidized', the phone company using local phone rate profits designated for fiber upgrades to pay for long distance entry, the inferior DSL or the companies' wireless services.