FCC Rewrote America’s Broadband History; Covers Up $½ Trillion in Overcharging

09/26/2017 03:39 am ET Updated Sep 26, 2017

(I’ll get back to this in a moment. This was the speed of broadband in New Jersey state regulations in 2014.)

On August 8th, 2017, the FCC released the “THIRTEENTH SECTION 706 REPORT NOTICE OF INQUIRY”, with the goal being to answer a basic question: Is broadband being delivered in a reasonable and timely fashion”, and if not, what should be done about it?

We filed a version of this article with the FCC and we put into the record for documentation (free copy download) The Book of Broken Promises: $400 Billion Broadband Scandal & Free the Net”. Published in 2014, it is the 3rd book in a trilogy that started in 1998, (and fully documented at 581 pages, 729 footnotes).

Forget ‘fake’ news. These Section 706 inquiries started in 1998 and from the git-go the FCC has rewritten the history of broadband. This has helped now-AT&T, Verizon and CenturyLink charge the average American family at least $5,000-$7,000 per household, (with caveats) for a fiber optic-based future that never showed up, among other harms. And this is the low number of the overcharging of customers in the name of broadband.

NOTE: We also filed a separate document: “19 Years of FCC Section 706 Comments and Complaints”. Starting in 1998, we filed over 20 times to clean up the rewriting of broadband history and requested that the FCC start serious investigations into customer overcharging which now impacts all services; wireline, wireless, internet, broadband and even cable services. (This is a partial list.)

And if you compare the book and filings with the FCC’s 706 Reports, you will notice an odd thing—there is no mention, ever, of now-AT&T, Verizon and CenturyLink’s state-based broadband commitments and the failure to bring high speed broadband, even though they received multiple financial incentives to make these investments. And though it varies by state, in most states, billions of dollars were charged to local phone customers, making them defacto investors, (including low income families and rural customers who will never get upgraded). And there is no discussion that many of these state-based plans included upgrading all schools & libraries with fiber optics.

But everything is going wireless, right? This is not just history. Your smartphone service connects to an antenna, which is connected to a wire to work. The FCC also never mentions the cross subsidies charged to local utility phone customers for broadband infrastructure that is used for your wireless service, or that billions were diverted instead of upgrading cities throughout America, or that the price of your wireless service is part of this manipulated mess.

We say - Ignorantia historia et notitia neminem excusat; roughly translated, ignorance of history and the data is no excuse. Failure to not know the facts and even rewriting history when it suits the corporations who have gamed this process, needs to be exposed and challenged.

The FCC Rewrote America’s Broadband History through Vigorous Ignorance.

On September 14, 1998—19 years ago—we filed comments in the “FIRST SECTION 706 REPORT NOTICE OF INQUIRY”, which stated:

“Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996”

Section 706 of Telecommunications Act of 1996 requires the FCC to answer whether high speed broadband (advanced telecommunications) is being deployed in a timely and reasonable fashion.

And nothing has really changed. This current FCC has decided to follow the brain-dead analysis of its predecessors, which has been to vigorously ignore the factual history, much less investigate the customer overcharging for broadband.

Worse, their current goal is to help the phone companies at every turn; thus, the FCC has decided that the minimum speed of broadband should be decreased from the current standard of 25 Mbps download and 3 Mbps upload, (which was increased by the previous Wheeler administration) for residential broadband to the home, to 10 Mbps down and 1 Mbps upload, based on wireless smartphones.

Why? Lowering the speed increases the number of broadband users while it also lowers the bar for the companies to deploy wireless in rural areas, especially those who get government subsidies.

To demonstrate just how the FCC distorted broadband data and just how the FCC has worked to help the phone companies, in 1998, in multiple state laws and regulatory decisions, the speed of broadband was set at 45 Mbps in both directions, which we pointed out to the FCC multiple times since 1998.

Returning to the opening, this excerpt is from the Verizon Opportunity New Jersey Order of 1993.

Yet, in the FCC’s first Section 706 report, the FCC set broadband speed at 200 kbps (one-fifth of 1 Mbps) in one direction as our national standard. This was done to inflate America’s broadband stats as the truth would have been seriously embarrassing.

  • The FCC: Vigorous Ignorance Tied to Regulatory Capture

Every Section 706 report has failed the public and vigorously ignored primary facts. But most importantly, the FCC and states have not held the companies accountable or enforced basic laws and regulations. And this current FCC is captured by the industry, deciding to help and protect the phone and cable companies over the public.

  • The FCC has never examined the broadband commitments made by each incumbent phone company, even when it is part of the state law.
  • It never examined the “promises” told to the public in order to pass state laws; this included full reports that were used to change public policies, or sections of the companies’ annual reports, not to mention press releases or media interviews.
  • It never examined the billions per state that were paid by local phone customers based on the claims in state laws that this excess was supposed to go to fund the replacement of the copper wires with fiber.
  • It never investigated the role of the customer who has become a de-facto investor being charged extra—additional charges, to be used for broadband that were never built or that never reached the majority of these de-facto investors.
  • It never examined the fact that in many states schools & libraries were supposed to also be upgraded to fiber optics.
  • It never audited the commitments made for broadband in the mergers that made the companies larger, even though the “benefits” that were supposed to accrue never showed up.
  • It never mentioned or investigated the massive cross-subsidies that have been diverting the construction budgets of the state utilities to fund the wireless business.
  • Worse, the FCC never examined the harms caused by the FCC’s own now-deformed accounting rules, that are at the foundation of the cross subsidies.

And these failures impact every service. The broadband business services (special access) that are used for wireless have obscene profits through cross subsidies and FCC decisions, not competition. Moreover, charging local phone customers thousands of dollars extra over the last 20 years in the name of broadband – which never showed up, then claiming it isn’t profitable to upgrade customers, (the same customers that have already been paying extra, even on add-ons like nonlisted numbers), then cross subsidizing special access and charging it to local service, is now the standard in customer harms and corporate hubris.

And what is really annoying is – this is not about history – once the laws went through to increase rates, no state ever went back and got refunds, even when the companies failed to do the upgrades, or even lowered the rates that were increased. Instead, there has been a pile-on of increases, even to rural customers or low income families.

And, the companies’ failure to deploy the fiber optic services allowed the cable companies to also continually raise rates – as, in many markets, wired services are either a monopoly or duopoly. And all companies now have an industry policy to just make up fees and stick them on the bill.

The FCC asks questions, (then ignores the answers):

“48. We seek comment on whether other actions, in addition to those already under way, might encourage more expansive and rapid deployment of networks that provide advanced telecommunications capability. What additional efforts should we undertake? What market or regulatory obstacles stand in the way of investment, innovation, and entrepreneurship, and how can we eliminate them? Are there additional barriers to infrastructure investment and deployment that can be eliminated?”
“What else can we do to eliminate other regulatory barriers to infrastructure investment so that companies can deploy, for example, the small cells, the towers, the fiber, and the new services that consumers demand?”

After almost 20 years of filing at the FCC about broadband, the obstacle to deployment is the FCC. America already gave the companies over $1/2 trillion dollars—and counting—via state and FCC ignorance. The states removed the barriers to infrastructure investment multiple times, granting price caps, forbearance, tax breaks and incentives, and yet the FCC and states keep doing it, over and over without ever examining how AT&T, Verizon et al. gamed the FCC.

And to keep repeating the same mistakes and ignoring the record – which will happen again, should be confronted.

We say and repeat - Ignorantia historia et notitia neminem excusat; ignorance of history and the data is no excuse. Failure to not know the facts and even rewriting history when it suits the corporations who have gamed this process, needs to be exposed and challenged.

Part II

This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.
CONVERSATIONS