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

The FCC’s Broadband Reports are Useless to Fix America’s Digital Divide.

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(Read Comment Filed in the FCC’s Broadband Deployment Proceeding. Read Part II.)

OVERVIEW

The excerpt above is part of the 1993 Order by the NJ Board of Public Utilities (BPU) to have what is now-Verizon New Jersey, (the State of New Jersey’s primary telecommunications public utility) start the State’s fiber optic future by replacing the existing copper wires with fiber optic wires capable of delivering speeds of 45Mbps in both directions. By 2010, 100% of the Verizon territory (about 95% of the entire state) was to be completed.

The Telecommunications Act of 1996 established a requirement under Section 706 that the FCC would inform Congress and the American public every year whether broadband is being deployed in a timely fashion to all Americans. If not, the FCC was to take immediate actions to bring in competition and investment. By 2000, America was one of the world leaders in network infrastructure and internet services — yet it relied mostly on the existing copper wires controlled by what are now AT&T, Verizon and CenturyLink.

Unfortunately, the Section 706 Advanced Networks Reports have been a 20-year farce.

“Farce”, according to Dictonary.com:

“A comic dramatic work using buffoonery and horseplay and typically including crude characterization and ludicrously improbable situations.”

The first Advanced network report proceeding started in 1998, and we filed, and continued to do so almost every year pointing out the same flaws that one would think the FCC would address as it was supposed to act on behalf of the public, not AT&T et al. The opening quote is from an actual state Order that set the broadband speed that Verizon was supposed to be delivering over the newly installed fiber optic broadband-internet wires, starting in 1996, more than a decade before the company would announced FiOS.

To our surprise, and as we address in a moment, the FCC announced that the speed of broadband in America would be 200kbps in 1 direction, 1/5 of 1 Mbps.

Over the next 2 decades, the FCC would make a mockery of this required and essential report to Congress, manipulating the speed of broadband to be 2 cans-and-string, with deployment holes closer to the size of the Bermuda Triangle — nebulous and unknowable.

For example, the FCC claims that broadband is still not available to 25 million people, and the Digital Divide has “narrowed substantially”. Meanwhile, a Microsoft study claims that 163 million people “do not use the internet at broadband speeds”.

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We divided up our filing into 2 articles. This is Part 1. Read Part II.

Fix the Advanced Networks Reports: Fix America’s Digital Divide.

America has been play-acting at fixing the Digital Divide. Unless we as a nation finally deal with this massive financial shell game that has developed over decades and has given the corporations the power to harm America’s economic growth for their own needs vs US, the public, we will simply throw money at the companies that already failed to deliver.

The impacts of having atrocious data and standards that are laughable have cost America and all of us dearly.

§ The FCC’s Advanced Network Section 706 Reports have been used to create a revisionist history of the fiber optic and high-speed broadband deployments in America while ignoring and being, in part, responsible for the overcharging of America by at least $½ trillion dollars, starting in 1992. The FCC’s proceedings have been manipulated as they have ignored every state-based, fiber optic broadband commitment, not to mention the billions per-state charged to local phone customers for network upgrades. Most importantly, they have failed to acknowledge that the wired infrastructure, including wireless, is still based on state-based telecommunications broadband public utilities, which are being dismantled.

§ Download “The Book of Broken Promises: $400 Billion Broadband Scandal & Free the Net”.

§ Moreover, in order to continually inflate America’s broadband subscription numbers, the FCC has continually kept America’s broadband standard speed to be two-cans and string. And to add to the inflation, the FCC combined this with a costly broadband tracking system that is seriously flawed and unreliable — for almost a decade.

If this wasn’t enough:

§ IRREGULATORS v FCC is a challenge of the FCC’s accounting rules and formulas that have been applied to the allocation of expenses of the state-based utilities and it exposes one of the largest accounting scandals in American history, adding an additional $½+ trillion in overcharging — at least $50–60 billion annually. Over the last decade, we uncovered that the FCC, with the help of AT&T and Verizon, was able to manipulate the financial accounting formulas that now make the entire US wired infrastructure appear unprofitable.

§ This financial shell game helped to create the Digital Divide intentionally, with the plan to let AT&T and Verizon substitute inferior wireless services, including 5G. I.e.; it is designed to claim that rural areas are not profitable to upgrade, when instead, the wireline construction budgets that should have been used to upgrade rural areas and inner cities were used to build out the wireless networks. At the same time, the wireless company never mentions that the capex is never repaid by the wireless side of the business; this diversion is used to save billions in taxes, used as an excuse to raise local rates, making local phone customers de facto investors in the wireless business, but most importantly has led to excessive but artificial wireless profits at the expense of the states and cities’ public utility infrastructure.

§ Moreover, because AT&T, Verizon and CenturyLink, the original Bell companies, have been able to consolidate and control the wired networks, as well as capture the FCC, they have also taken control and can inflate the price of all services in the US, from wireless and wireline to broadband and internet.

§ The cable companies and the phone companies offer no serious competition to each other and so the cable side can add a continuous stream of added charges, have notoriously poor customer service and both can keep prices inflated 3–10 times more for communications services vs overseas.

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 — in every city and in every state, not to mention at the federal level.

IRREGULATORS’ Solution: There are billions of dollars per state that could be and should have been used for building out the entire state’s telecommunications wired infrastructure to fiber optics. As we will discuss, our analysis is based on decades of research, but also on actual financial annual reports of Verizon NY, the state-based, public, telecommunications utility and the only public and published financial report now available. As far as we can tell, there is no other state that requires a full annual report, and the FCC stopped publishing basic critical data state-based data in 2007. Moreover, these FCC advanced networks reports have done more harm than good to the America’s Digital Future.

This is not just a history lesson. The FCC plan for 2020 and the next decade to cure the Digital Divide is to give a paltry $2 billion per year for 10 years, to the states, and in turn to the wireless companies so they can deliver seriously inferior speeds with data caps in rural areas. But this is also about dismantling the state public utility infrastructure and handing over publicly funded and created assets to the wireless company as private property for private use.

Ironically, the FCC fails to mention that these government handouts are actually a tax on your bills, which was a whopping 25% on interstate services in the 4th Quarter of 2019, and 21.2% in the first quarter of 2020. (And this is one of the many taxes, fees and surcharges that are mostly revenue to the companies.)

History Predicts the Public Will Lose Over and Over. The current crop of National Broadband plans from presidential candidates’ Bernie Sanders or Elizabeth Warren are to hand-out $80-$150 billion in government funding. Worse, most of the cities have bought into the telco’s 5G bait-and-switch for their really dumb-smart cities. All of these plans are based on the revisionist history created by the FCC’s advanced network reports which have covered over basic facts and rewrote history.

The FCC has an obligation to tell the whole truth, and it is time that the FCC go after the massive financial cross-subsidies we uncovered, go after the billions per state to properly give residential and business customers, including low income families, what they have all paid for over the past twenty-five plus years. IRREGULATORS v FCC was designed to move in this direction — since the FCC ignored our repeated, but well documented claims of financial distortions that are creating flawed public policies; the case is intended to start investigations of the FCC’s manipulation of the financial books that have manipulated the FCC’s federal internet and broadband policies.

Thus, we took this case because it is the quintessential challenge that impacts every FCC decision, every state decision and exposes the billions of cross-subsidies that the FCC has refused to address after our repeated filings over the last 5 years. Hopefully, the Court will require the FCC to address the financial shell game and in turn, expose that their Section 706 reports are of dubious merit and manufactured and manipulated ‘truths’, which have relied on vigorous ignorance.

PART II: The Backdrop to America’s Fiber Optic Fiasco.

Read the Entire FCC Filing

Written by

New Networks Institute,Executive Director, & Founding Member, IRREGULATORS; Telecom analyst for 38 years, and I have been playing the piano for 63 years.

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