Important NOTE: Dear Reader: If you use a cell phone, a wired connection or cable service including broadband, or internet, this impacts you -- from the price of services you pay for, or the choices you have, to even the speed and controls over these services from your providers.
The Department of Justice (DOJ) and FCC are currently evaluating whether Verizon should be allowed to purchase wireless spectrum from the cable companies as well as co-market wireless services with cable-broadband products offered by the cable companies.
Instead, we request the Department of Justice investigate Verizon's business dealings and the harms to customers by Verizon Wireless and the rest of Verizon's affiliate companies, such as Verizon-state-based utilities, such as Verizon, New Jersey or New York, or Verizon's other affiliates from Verizon Business to Verizon Online. This analysis should also be done of AT&T and its affiliate companies.
This not only relates to the current Verizon deal with the cable companies but the manipulation of assets and data to help close down America's Public Switched Telephone Networks (PSTN), America's state-based public utilities.
It is a multi-layered problem as the companies have been at this for a decade and can manipulate the data (or eliminate collection of data completely) as well as have the financial resources to make their own agenda the 'common wisdom' on both the state and federal level, even though it is biased, anti-consumer, anti-public interest, and will harm the US economy.
Our research (based mostly on Verizon and AT&T's own SEC filings, statements as well as the regulators):
Report: "Verizon's State-Based Financial Issues & Tax Losses: The Destruction of America's Telecommunications Utilities, the Public Switched Telephone Networks (PSTN)." (NOTE: When we mention a specific telco it is because we have specific data about their actions. The other companies may be doing identical things.)
Wireline-Wireless Cabal and Affiliate Transactions:
1) AT&T has admitted that they are 'goosing', read increasing their wireless profits, which has been depressing AT&T's wireline services' profits. Thus, AT&T can claim that their local phone service is not profitable, which is then used to help close down the networks and get rate increases.
2) Verizon has been moving assets out of the utility into separate subsidiaries, then reclassifying publicly funded assets as 'private' assets, which also creates losses in the utility.
3) Verizon appears to be charging local phone customers for wireless construction, as well as dumping other expenses into the utility.
4) Verizon has a 'secret network,' which the company does not discuss in their discussions of FiOS deployment or their closing of the PSTN, which includes not only business services but also 'special access' network services that are sold to all cell phone companies and have an estimated monopoly profit margin of 80% or more. This gives Verizon control of all wireless service and pricing, but also wired broadband.
5) Verizon Wireless appears to be short-changing the utility in fees -- it appears Verizon is paying almost half of what other competitors are forced to pay for access but worse, it appears the utility (PSTN) doesn't benefit from these fees.
6) The movement of assets out of the utility, the failure to pay market rates, and the manipulation of profits has created massive losses in the state utilities, which means that Verizon is saving billions on state-based taxes. Worse, the companies use these losses as an excuse to raise rates and as 'data' to close down the PSTN.
7) The state commissions have not investigated the 'affiliate transaction' or wireless issues.
8) The FCC has never investigated the state-based issues, which has allowed AT&T and Verizon to manipulate the data including expenses, revenues and profits.
9) Bundling 'affiliate' products' with regular phone service reclassifies the phone service, especially when it's bundled with an "information service" like DSL, even if it uses the same wires. Which bucket of money does it go to, the utility or an affiliate?
10) Affiliate Freebees: Do the affiliates pay for mailing and printing of the phone bill or the phone bill insert advertising? This is just one of thousands of areas in question. (In some states there was a charge to customers for the 'educational insert' not just an advertisement.)
11) When Verizon puts in FiOS and pulls the copper wire, is that harm to the utility property compensated in some way?
12) When AT&T uses the old copper wiring of the utility for U-Verse, doe U-Verse compensate the utility for that use?
13) Shifting phone utility customers to fiber with or without their permission. Customers claim that when their service breaks they are forced onto using the fiber, which is 'digital voice' and can go dead in a power outage. They are also forced off of DSL and not given similar services on the fiber upgrade.
14) Because of a failure to properly upgrade the copper, many states are experiencing 'quality of service' complaints, such as New York, which filed a petition with the State Commission to put in stricter quality commitments.
15) AT&T has announced it is not expanding U-Verse.
16) AT&T announced it has no plans to upgrade rural areas, and is closing down DSL, their slower copper-based product.
17) Verizon has announced it is not expanding FiOS's footprint.
18) Verizon has announced it is abandoning DSL and the other wires.
19) Verizon, AT&T and Centurylink, in multiple states, failed to properly upgrade the PSTN to a fully fiber optic network-- but charged customers billions per state, though it varies by state.
20) In New Jersey, 100% of the state was supposed to have been upgraded to a fiber optic service capable of 45 Mbps in both directions by 2010. There is currently an open docket where the state issued a show cause order for Verizon's failure to upgrade the state
21) Whole areas of the US are not going to be upgraded, much less have competition, which harms local as well as national economic growth.
22) America 17th in the world in broadband (though it varies by organization and category) because of the monopoly controls over special access and the companies' failure to properly upgrade infrastructure.
23) The really fast American cities such as Chattanooga, TN or Google's play in Kansas City are 'by-pass' builds, going around the intransient incumbent. Yet AT&T, Verizon and even the cable companies have declared war on these by-passes and got at least 19 states to stop municipality builds.
Government Failure to Protect the Public Interest: Verizon and AT&T have been able to Shut Down Investigations by:
24) Data Deception. Verizon and AT&T have manipulated the data presented to the public to the point where it could be considered fraud. From the number of access lines to the financial 'losses' being claimed in the state utilities, or even the definition of the term "PSTN", Verizon has been able to obscure and obfuscate basic facts, shaping America's communication's policies with corrupted data.
25) AT&T does not include its 'digital voice' services (which are part of the U-Verse package) as an access line, not its other services over the copper wire.
26) Verizon claims that it is upgrading 18 million households with FiOS but never mentions the business customers or the total number of business lines.
27) In fact, FiOS only had 4.3 million TV customers, end of 1st quarter 2012, which means the majority of this 'potential 18 million are still using the old copper wiring.
28) Verizon and AT&T have stopped publishing any specifics on business lines, including special access, which can include alarm circuits.
29) Verizon is not publishing any state-based SEC reports as of 2010 (AT&T hasn't done it for over a decade),
30) AT&T and Verizon got the FCC to stop requiring basic business data as of 2007 that was published in ARMIS and other FCC sources.
31) AT&T and Verizon do not supply the state Commissions with data, especially about affiliate transactions.
32) AT&T and Verizon are getting rid of the oversight of the state commissions through new laws
33) AT&T and Verizon are getting laws to remove the obligations as the "carrier of last resort."
34) AT&T and Verizon are removing the state commission oversight claiming that it is all VOIP and not regulatable.
35) AT&T and Verizon are removing all telecommunications laws claiming everything is VOIP and therefore an 'information service.'
36) AT&T and Verizon's contracts are replacing tariffs and consumer protections with 'arbitration' clauses that protect the companies for legal remedies. This includes taking legal actions for wireless issues and more recently any 'information service,' from DSL to FiOS.
This is part 1 of a 2-part post. Read part 2 here.