03/13/2013 03:32 pm ET Updated May 13, 2013

Dear FCC Chairman Julius Genachowski, "1 Gigabit City (Municipality) Challenge?" -- Ha, Ha, Ha...

Dear Chairman Julius,

Who knew the FCC has a sense of humor? A number of experts were discussing your call for the 1 Gigabit City (Municipality) Challenge -- (1 Gbps is 1000 Mbps) -- and we couldn't stop laughing.

"FCC Chairman Julius Genachowski Issues Gigabit City Challenge to Providers, Local, and State Governments to Bring at Least One Ultra- Fast Gigabit Internet Community to Every State In U.S. By 2015 FCC's Broadband Acceleration Initiative to Foster Gigabit Goal."

The laughter was not because it isn't a good idea -- but because in the announcement you ignored basic facts -- facts that we've attempted to call to the FCC's attention for the last decade.

However, you claim that the FCC is data-driven:

"All these of (the FCC) employees have the experience and knowledge to support the Commission's complex and unprecedented data-driven and fact-based efforts to achieve our country's broadband goals."

Your 'data-driving' makes the classic movie 'Driving Miss Daisy" into a story about a NASCAR race, as opposed to an elderly woman who wouldn't allow her driver to even approach the normal speed limit.

Truth? The FCC Can't Handle the Truth and is Denial of Basic Facts.

Let me be very specific -- The 'gigabit challenge' conceptually is based on municipalities being so fed up with the failure of the incumbent carriers -- AT&T, Verizon or Centurylink -- add in the cable companies, such as Time Warner or Comcast -- to properly upgrade their networks that they have to by-pass the companies' existing wires -- and take it upon themselves to do the upgrades for their communities.

Why wouldn't AT&T, for example, upgrade to 1 Gigabit? The FCC has failed to ask AT&T this -- or Verizon -- because they wouldn't want to actually confront the companies who failed to properly upgrade and maintain the utility networks.

For example, AT&T's U-Verse 'broadband' network is based on the old, existing copper wiring, commonly known as the Public Switched Telephone Networks (PSTN) -- the original wiring that is part of the state-based utilities.

AT&T's current top speed -- where they upgraded to U-Verse -- has a top speed of 24 Mbps for downloading and a paltry 3 Mbps for the upstream. And it isn't available to ½ of AT&T's customers. Here's an AT&T chart showing that at the lower end broadband service -- it can't do basic applications like video chat and only two of the five packages are good for online gaming.

And this is the current 'best scenario.' Meanwhile, AT&T has filed a petition to close down -- abandon -- basic services over the wires where they have NOT done even the basic of upgrades -- which could impact over 50% of their entire 22 states. Is shutting off grandma or a small business's fax and ATM machine part of the FCC's 1 Gigabit plan?

Worse, in a clear extortion play, AT&T claims they will upgrade more of the networks to higher speeds if the FCC grants their petition. Unfortunately, if you examine the history of AT&T's claims about upgrades you soon realize that they are bordering on fiction. Over and over now-AT&T used promises to upgrade their networks to get regulations changed or removed or got other financial perks.

The FCC has, in fact, aided the companies to pull off these scams as the FCC has never bothered to investigate everything from basic merger conditions to changes in regulations or commitments made to upgrade these networks to fiber optic services.

Where are the fiber optic upgrades anywhere in AT&T's 22 states -- besides the fiber-to-the-press release?

Here's a link to the Pacific Telesis chart of fiber optic upgrades to 5.5 million households in California -- it lists San Francisco, Los Angeles and even Silicon Valley that were to be completed by the year 2000.

And this failure to upgrade whole states has been ignored by this and previous FCC administrations -- regardless of how many times we've filed to explain this to the FCC.

But let's be current, as the FCC could, at any time, actually give a damn about broadband in America.

Two examples.

  • In March, 2012, the New Jersey Board of Public Utilities issued a 'show cause' order to have Verizon, New Jersey explain why 100% of the State was not rewired with a fiber optic service capable of 45 Mbps in both directions, which was to be completed by 2010. Rural, urban and suburban customers, as well as schools should have ALL been upgraded by 2010. We estimate that by the end of 2012 about15 billion was collected from Verizon New Jersey customers and is still being collected via multiple rate increases.
  • In 2009, the New York Department of Public Service allowed rate increases for Verizon New York's phone customers because of the "massive fiber optic investments". In 2010, Verizon announced it slowing or even halting their FiOS deployments. There has been an 84% rate increase of basic service over the last 5 years and customers are being charged for fiber optic deployments they will never get, especially rural areas.

California, Illinois, Massachusetts, Pennsylvania, Maryland, District of Columbia, Texas, Ohio and other states changed state laws in the 1990's to do these upgrades. In Pennsylvania, 100% of the state is supposed to be completed by 2015, Maryland was 2010 and Massachusetts was to have the majority of the state completed by 2010.

So, Boston, Chicago, New York, Baltimore, DC, Houston, Austin, Silicon Valley and even Philadelphia should have already been upgraded to a fiber optic service which could have been upgraded to faster speeds over the fiber optic wires that should have already been in place.

And yet, the FCC has never, ever bothered to discuss or point the finger at any incumbent -- AT&T or Verizon -- about their failure to properly upgrade the states -- much less a municipality.

We even did a full report to discuss this failure to properly upgrade the telecom networks. This was done as an enhancement to the Columbia Institute for Tele-Information (CITI) report, which was requested by the FCC in 2009 as "an analysis of the public statements of companies as to their future plans to deploy and upgrade broadband networks as well as an historical evaluation of the relationship between previous such announcements and actual deployment".

But all of this brings up a more disturbing fact -- in EVERY case, not only were state laws changed to pay for upgrades of the state-based utility -- serving the entire state -- but billions per state was collected to do these upgrades, as was the case in New Jersey, New York, as well as MA, CA, IL, OH -- the list goes on and on; in most cases, there were multiple rates increases since the 1990's not just one.

We estimate that by the end of 2012, $360 billion dollars and counting has been collected in the name of broadband from customers -- residential and business customers -- and that number is low when one considers the Universal Service funding and other taxes and mechanisms -- state and federal to fund broadband in a state.

By-Pass of the Incumbents and the Municipality Broadband Build-outs.

The current crop of municipality builds in the US includes Chattanooga Tennessee, Lafayette Louisiana and Google's fiber optic build in Kansas City MO and KS -- and they are all by-pass builds because AT&T et al failed to upgrade the utility state-based networks. Yet, now the FCC wants municipalities to rise up against the incumbents, at additional expense to what's already been paid and yet the FCC itself hasn't confronted the very companies that failed to do the upgrades.

Meanwhile 19 states have passed laws to block municipalities, which have been done by the phone and cable companies working with the American Legislative Exchange Council, ALEC. Georgia's citizens stopped a odious bill in the latest fight. -- a fact that the FCC has never confronted.

Worse, during almost every muni plan to do a new build, even if it is allowed by state law, the community will be undermined, attacked and most likely end up in court -- adding millions to the cost, before doing the actual build outs.

This brings me back to the FCC's "data driven" drivel. The FCC set up a Technology Transitions Task Force with the goal:

"The Task Force will conduct a data-driven review and provide recommendations to modernize the Commission's policies in a process that encourages the technological transition, empowers and protects consumers, promotes competition, and ensures network resiliency and reliability."

This group is an extension/outcome of the FCC's Technical Advisory Council (TAC), a group that was set up to close down PSTN. The TAC has never, ever mentioned any of the materials we just discussed. It has not investigated the failure of the companies to upgrade the networks to fiber -- even in states were there were and still are obligations. It has never questioned the fact that AT&T's entire U-Verse is a PSTN-based copper-to-the-home network. Nor has the TAC investigated the customer-funding of broadband networks in America.

And yet, the FCC is now preparing to allow AT&T to create new digital dead zones.

As our next letter to the FCC discusses, the FCC should instead be investigating the fact that the majority of the Technical Advisory Council members have direct financial conflicts of interest with the incumbent carriers Here is a list of the members of the TAC and their financial ties to Verizon and AT&T.

Meanwhile, the group's leader, Tom Wheeler was a former head of the cable association, NCTA and the Wireless Association, CTIA and cares nothing about broadband infrastructure as his focus has been wireless; his writings are called "mobile musings".

And yet the FCC now believes that it should promote 1 Gigabit Cities... Ha, ha, ha,...

Maybe if the FCC actually cared about data and not hype the FCC would actually be respected, instead of being considered a punch line of a bad joke.