05/17/2010 05:12 am ET Updated May 25, 2011

An Open Letter to Rep. Waxman on Broadband Fraud and the FCC

Dear Chairman Waxman,

I see where you commended the FCC for its new broadband plan. Maybe you should take another look? As chairman of the Committee on Energy and Commerce, and as a highly regarded investigator, you may find deep corruption and fraud in what you now refer to as "a comprehensive and forward-looking report."

I'd like to bring to your attention a June 16th article by Bruce Kushnick, a telecom analyst and activist on a journalism Web site, Nieman Watchdog:

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, 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 five 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.

Mr. Waxman, you mentioned that an Energy and Commerce subcommittee will hold its first hearing on the broadband plan March 25 and that the five FCC commissioners have been invited to testify. Perhaps that will be an opportunity to deal with some of the issues Mr. Kushnick raises.

--Barry Sussman,
Editor, Nieman Watchdog Project

This letter was faxed to Rep. Waxman's Washington, DC., office on March 17th.