Fiber Optic Scandal: Billions Charged For Broadband That Never Showed Up.

- Sep 06, 2017 -

n 1993, Pac Bell California announced it would be spending $16 billion on fiber optic upgrades to 5.5 million homes by the year 2000; 1.5 million by 1996. This was 24 years ago. This page is from the Pacific Telesis 1994 Investor Fact Book.

Virtually no one knows the history of fiber optic broadband in America, much less what happened in their state, even though they were charged thousands of dollars per household. Instead, in 2017, we get embarrassing proposed laws, such as SB-649 in California, which claims that if the State just frees the companies from regulations, they will deliver new, ‘fabulous’, broadband wireless services. These are tied to other bills and new proposed regulations, including current FCC proceedings to ‘shut off the copper’ and replace it with wireless. It is time for investigations, not new gifts to AT&T et al.

I’ll get back to this in a moment

In Part 1 we detailed:

  • The price of the basic AT&T California state utility phone service went up 138% from 2008-2016. And this was just the basic service; other parts of the service like ‘nonlisted numbers’ or directory assistance calling went up 525% to 1891%, since 2004. Calling features, like Call Waiting, which went up 240%, are just pure profit and cost less than a penny to offer.

  • The companies manipulated the accounting of access “landlines”. While there have been declines in basic wired phone service, it turns out that the exact same wires – the copper wires, are also used for U-verse, which is a copper-to-the-home service that is based on the existing utility wires. And there are other services, from DSL, an older copper-based broadband service, as well as Business Data Services (also known as ‘special access’ services), which are the wires to ATM machines or are the fiber wires that go to the cell sites, and none of these other wires are never mentioned or even counted by the phone companies, the FCC or the State.

  • The State admits that it doesn’t collect or examine basic data about the companies’ financials anymore. The California PUC is simply allowing the companies to be ‘deregulated’, which is now just the punchline to a bad joke as it always means – give more money to AT&T, smile, then do it again.

  • This new proposed bill is just a put-on job: Worse, like talking to someone with Alzheimers who can’t remember yesterday, much less the last few hours, there is a proposed piece of legislation, SB-649, in the California State Assembly that is based on wireless ‘vaporware’, and the same false claims—if only we get rid of pesky regulations and preempt any zoning or customer challenges, we will get a fabulous broadband wireless future, “5G”. It doesn’t exist yet and whatever shows up will require a fiber optic wire and will have a range of a ‘small cell’, a city block or so.

  • Moreover, the state senators that are proposing the bill have not only gotten campaign contributions from AT&T, but also get AT&T Foundation grant monies for their districts.

Part 1 concluded that what is really needed are investigations and audits of AT&T’s financial books, now. There is an investigation of Verizon New York by the NY State Public Service Commission that corroborated our findings; that there are massive financial cross-subsidies between and among the wireline state utility and all of the other Verizon affiliates, including the wireless company. AT&T California appears to be doing the same financial chicanery.

The Fiber Optic Future that Never Came. The First Wave.

California was supposed to be a fiber optic state, starting in 1996, as was pointed out in the Pacific Telesis (now AT&T California) 1994 Investor Fact Book. Instead, customers paid billions upon billions extra, including low income families, seniors, small businesses and everyone else, as these promises of a broadband-internet–cable competition future were used over and over to raise rates and get tax perks – and then never showed up.

There have been three major waves of false claims to get rate increases and deregulation, and a host of other plays including merger conditions, the “IP Transition”, and rural government broadband funding, among others, and these happened on both the state and federal level.

  • The Information Superhighway and Competition, 1993-2004

  • The U-verse Bait and Switch, 2005-

  • The latest: The current wireless small cell, 5G, vaporware.

The Information Superhighway and Competition, 1993-2004


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