$200 Billion Broadband Scandal
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1 Broadband Scandal DRAFT 12/05/05 1 $200 Billion Broadband Scandal By Bruce Kushnick Chairman, Teletruth Executive Director, New Networks Institute This book has been prepared by New Networks Institute. All rights reserved. Reproduction or further distribution of this report without written authorization is prohibited by law. For additional copies or information please contact Teletruth in writing at 568 Broadway, Suite 404, New York, NY 10012, or by phone at , or by at book@teletruth.org Teletruth
2 Broadband Scandal DRAFT 12/05/05 2 Table of Contents Who Are the Bell Companies? Preface: How I came to write this book. Introduction and Summary What s in Volume II Part One The Diss-information Highway: What was Promised Chapter 1 Promises, Promises: The Future is Always. Chapter 2 Why Do It? Benefits of the Superhighway Justifying the Hype Chapter 3 Hollywood Calling TELE-TV and Americast Chapter 4 Hollywood Calling, Part 2 Chapter 5 And the Promises? The Annual Reports Tell No Lies. Chapter 6 And the Promises? Video Dialtone Commitments Chapter 7 And the Promises? Fiber Optic Upgrades-to-the-Home Were Promised. Chapter 8 Speed Matters: The Faster the Service, the More Stuff You Get, Faster. Chapter 9 And the Promises? Channels Galore, Interactive Programming Chapter 10 And the Promises? Open to All Competition Chapter 11 And the Promises? NOT DSL SPEED and Coverage are the Issues. Part Two Splat Interlude: The Paths to the Fiber Optic Scandals. Chapter 12 Chapter 13 Chapter 14 The Lay of the Land: The Interplay of Federal and State Fiber-Optic-Speak. Splat The Retreat: What Happened with the Info Bahn? Technology Doesn't Work and It Is Too Expensive: Original Cost Models Part Three: The Bell Mergers Killed Broadband and Competition Interlude: How the Bell Mergers Killed Fiber Optic Broadband.
3 Broadband Scandal DRAFT 12/05/05 3 Chapter 15 Chapter 16 Chapter 17 Chapter 18 The SBC-Pacific Telesis-SNET-Ameritech Mergers Were the Death of the State Fiber Optic Deployments. Failure to Compete, Failure of the FCC to Enforce Merger Conditions The Verizon-Bell Atlantic-NYNEX-GTE Mergers Were the Death of State Fiber Optic Deployments: The Con Job. Analysis of Verizon's Merger Conditions and "Truth in Speech" Statements Part Four: Follow the Money Chapter 19 Follow the Money: The Regulations Chapter 20 Alternative Regulations: The I-Way Sleight of Hand Chapter 21 Fiber Optic Scandal Alternative Regulation, Round 2 Chapter 22 Show Me the Money. Part 5 The States Get Hosed Chapter 23 Chapter 24 Chapter 25 Chapter 26 Chapter 27 Case Study: Opportunity New Jersey A Broadband Failure How Pac Bell and SBC Stole California s Digital Future. Texas Infrastructure Act: A Vanishing Act? Massachusetts s 330,000 Fiber Optic Lines That Never Showed Up. Liberty, Bell, Stolen. The Pennsylvania Fiber Optic Scam and the Future Special 20 th Anniversary Report Chapter th Anniversary Data and Analysis Summary CODA ISDN The Advanced Network Posterchild: "It Still Does Nothing"
4 Broadband Scandal DRAFT 12/05/05 4 Exhibits Exhibit 1 The Original Regional Bells by State Exhibit 2 The Current and Past Hype In Verizon s Own Words Exhibit 3 The Current and Past Hype In SBC s Own Words Exhibit 4 The Current and Past Hype In BellSouth s Own Words Exhibit 5 Deloitte & Touche Benefits of Information Highway, Indiana Bell, 1993 Exhibit 6 Opportunity Indiana's Impact on Health Care Exhibit 7 The RBOC's TELE-TV and Americast Partners Exhibit 8 Bell Cable and Entertainment Investments Exhibit 9 Announced RBOC Upgraded Residential Subscribers, Exhibit 10 GTE and SNET Projected Fiber-Deployments, Exhibit 11 Total Bell Household Deployments 2000, 2005 (With GTE, SNET) Exhibit 12 Permanent Video Dialtone Applications, Company and Location, 1994 Exhibit 13 Requested Video Dial Tone Applications by the Phone Companies Exhibit 14 Speed of Service Comparisons, 2005 Exhibit 15 Number of Channels on Bell Video Dialtone Services Exhibit 16 New Jersey Bell Advanced Network & Broadband Deployment Schedule, 1993 Exhibit 17 Rollout of Telephone Companies and Interactive TV, 9/96 Exhibit 18 Local Exchange Carrier Video Dialtone Pullouts, Exhibit 19 The Ongoing Bell Rollouts as of December, 1995 Exhibit 20 Verizon and SBC Fiber Optic Broadband Spending and Households Exhibit 21 The SBC Hatchet of Fiber Optic Deployments Exhibit 22 Pacific Bell Video Dialtone Deployments, 1995 Exhibit 23 SNET s Filed Connecticut Fiber Optic Video Dialtone Deployments, 1995 Exhibit 24 Ameritech Video Dialtone Requested Permanent Authorizations Exhibit 25 Ameritech Investment Commitments, Exhibit 26 SBC Out-of Region Cities, National-Local Strategy Exhibit 27 SBC Long Distance Applications and Status as of 2001 Exhibit 28 The Verizon Con Job of Fiber Optic Deployments, By 2000 Exhibit 29 The Original Bell Atlantic/NYNEX States Exhibit 30 Verizon US Territories, 2004 Exhibit 31 Video Dialtone Filings by Verizon,
5 Broadband Scandal DRAFT 12/05/05 5 Exhibits Exhibit 32 Video Dialtone Filings by Verizon, Exhibit 33 New Jersey Bell Advanced Network & Broadband Deployment Schedule, 1993 Exhibit 34 NYNEX Video Dialtone Announcements, Exhibit 35 Allowable Advertising Expenses by PUCs, 1995 Exhibit 36 States' Rate of Return Policies on Contributions and Dues Exhibit 37 Nationwide Telephone Charge Increases Exhibit 38 Southwestern Bell's TeleFuture 2000, 1989 Exhibit 39 Southwestern Bell's TeleKansas, 1989 Exhibit 40 Southwestern Bell's TeleFuture 2000 Return On Equity Splits, 1989 Exhibit 41 Alternative Regulation in Illinois, Ameritech, 1993 Exhibit 42 Alternative Regulation in Michigan, Ameritech, 1993 Exhibit 43 Revenue, Expense & Profit Margin, Selected BellSouth Calling Features, 1999 Exhibit 44 Profit Margins for Directory Publishing in 1999 Exhibit 45 New Jersey Bell Advanced Network & Broadband Deployment Schedule, 1993 Exhibit 46 Bell Atlantic New Jersey, Write Off Bonanza, 1994 Exhibit 47 Verizon New Jersey Employees, Exhibit 48 New Construction by New Jersey Bell, Exhibit 49 New Jersey Bell Return on Equity, Exhibit 50 The Verizon Opportunity New Jersey Commitments vs FIOS Exhibit 51 Opportunity New Jersey Broadband Digital Deployment vs Without ONJ Exhibit 52 Pac Bell s Consumer Broadband Hybrid Fiber/Coaxial Direction Exhibit 53 Pacific Telesis Consumer Broadband Deployment Schedule for California Exhibit 54 Video Dial Tone Applications by Pacific Telesis for California, Filed 1993 Exhibit 55 Pacific Telesis Construction & Capital Expenditures, Exhibit 56 Pacific Telesis Return on Equity, Staff, Exhibit 57 San Diego Tribunes Year by Year: A Plan that Failed Exhibit 58 Discretionary Services, Southwestern Bell, Texas
6 Broadband Scandal DRAFT 12/05/05 6 Exhibits Exhibit 59 Bell Atlantic's Return on Equity and Profit Margins Exhibit 60 Bell Atlantic-New England Tel Dividends, Depreciation, and Expenses Exhibit 61 Bell Atlantic-New England Telephone Revenues, Expenses and Income Exhibit 62 Regional Bell Residential ISDN Offerings, July, 1995 Exhibit 63 Ameritech ISDN Deployment, (Customer Lines), 1993 Exhibit 64 ISDN Deployment for Specific RBOCs Exhibit 65 FCC Statistics: ISDN Lines, Kansas and Missouri Exhibit 66 Ameritech's ISDN Direct Cost Comparisons Exhibit 67 NYNEX's Typical 5 Minute Call in NYC Using ISDN, 1997
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