[LINK] How the Phone Companies Are Screwing America: The $320 Billion Broadband Rip-Off

[Kim Holburn]

A fairly biased source, yet has some interesting factoids.  Is this  
what the coalition's broadband policy might look like?

http://www.alternet.org/media/148397/how_the_phone_companies_are_screwing_america_the_320_billion_broadband_ripoff

> Since 1991, the telecom companies have pocketed an estimated $320  
> billion --- that's about $3,000 per household.
>
> This is a conservative estimate of the wide-scale plunder that  
> includes monies garnered from hidden rate hikes, depreciation  
> allowances, write-offs and other schemes. Ironically, in 2009, the  
> FCC's National Broadband plan claimed it will cost about $350  
> billion to fully upgrade America's infrastructure.
>
> The principal consequence of the great broadband con is not only  
> that Americans are stuck with an inferior and overpriced  
> communications system, but the nation's global economic  
> competitiveness has been undermined.
>
> In a June 2010 report, Organization for Economic Co-operation and  
> Development (OECD) ranked the U.S. 15th on broadband subscribers  
> with 24.6 percent penetration; the consulting group, Strategy  
> Analytics, is even more pessimistic, ranking the U.S. 20th with a  
> "broadband" penetration rate of 67 percent compared to South Korea  
> (95 percent), Netherlands (85 percent) and Canada (76 percent).  
> Making matters worse, Strategy Analytics projects the U.S. ranking  
> falling to 23rd by year-end 2010.
>
> But these are just overall statistics. Today, people in Japan,  
> Korea, Europe and other countries get broadband services that are   
> 100-mbps services in both directions for what we pay for inferior,  
> Asymmetric Digital Subscriber line (ADSL), while in Hong Kong  
> companies have started to offer 1-gigabit speeds.*
>
> Part of the reason for this is these countries have sunk more fiber  
> optical cable into the ground and connected more homes to the next- 
> generation grid. According to the OECD, the U.S. ranks 11th with  
> only 5 percent fiber penetration, compared to Japan (54 percent),  
> Korea (49 percent) and European OECD countries (11 percent).
>

.....

> The scam was simple. Starting in 1991, Verizon, Qwest and what  
> became AT&T offered each state -- in true "Godfather" style -- a  
> deal they couldn't refuse: Deregulate us and we'll give you Al  
> Gore's future. They argued that if state Public Utility Commission  
> (PUCs) awarded them higher rates and stopped examining their books,  
> they would upgrade the then-current telecommunications  
> infrastructure, the analog Public Switched Telephone Network (PSTN)  
> of aging copper wiring, into high-speed and two-way digital optical  
> fiber networks.


.....

> The broadband con has been played out across the country. In  
> California, Pacific Bell (now part of AT&T) claimed it would spend  
> $16 billion and have 5.5 million homes wired by 2000. Instead, after  
> a merger with SBC in 1997 (renamed AT&T in 2005), it secured state  
> deregulation and simply stopped building out the fiber-based  
> broadband infrastructure. On the East Coast, things were pretty much  
> the same. Bell Atlantic, which covered New Jersey to Virginia and is  
> now part of Verizon, claimed it would spend $11 billion and have 8.7  
> million homes wires by 2000. And in Connecticut, SNET (now also part  
> of AT&T) promised to spend $4.5 billion and have the entire state  
> rewired by 2007. In the mid-West, the story was similar. Ameritech  
> (now part of AT&T and which controlled five states, including  
> Illinois and Ohio) claimed they would have 6 million homes wired by  
> 2000. For Ohio, Ameritech claimed it would rewire every school,  
> library and hospital with fiber by 2000. None of these promises have  
> been realized.


> Over the last two decades, the telcos have engaged in a lot of  
> sleight-of-hand tricks to make Americans believe that broadband was  
> real and their service was the world's best. In 1996 the Internet  
> hit and everyone wanted to go online. This migration to the World  
> Wide Web was led, not by AT&T and Verizon, but by thousands of small  
> and larger ISPs from AOL and Prodigy to over 9,500 small ISPs.
>
> By 1998, not only did the telephone companies mostly stop building  
> out their networks, but instead of rolling out the next-generation  
> "info superhighway," they pulled a bait-and-switch and rolled  
> backward, offering customers ADSL service, a watered-down  
> "broadband" connection that runs on good old copper wire.
>

....

> After almost 20 years of telecom deregulation, the American  
> communications infrastructure is in shambles.



-- 
Kim Holburn
IT Network & Security Consultant
T: +61 2 61402408  M: +61 404072753
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