Title II: The FTTP, Fiber to the Premises is a Title II, Common Carrier Upgrade of the Existing Telecommunications Public Utility Networks.

IRREGULATORS Position: Go After the Money and Halt Government Subsidies to the companies that have been and are still overcharging us.

This is from the Verizon DC cable franchise, 2007. — a Title II, fiber optic wire is part of the existing state utility. And it continued with a listing of all of the other TITLE II -FTTP installations throughout the Verizon territories and utilities.

.Let’s start again:

Over the last decade we pointed out a basic fact — Verizon’s fiber optic broadband services have been put in using the “Title II” designation — and that these were upgrades of the existing state telecommunications utility, and they never mention the “U” word”.

These quotes and the thousands of others are in the state franchises for Verizon’s FiOS cable TV and broadband service. Notice that these agreements state that the FTTP fiber optic wires are classified as Title II, and that the networks are upgrades of the existing state utility — though it never mentions the “u’ word.

Net Neutrality?. With claims Title II harms investment and others claiming Title II is critical, this is just noise because at the core:

Title II Classification was Used to Make Customers De facto Investors, and the Telecommunications Utility became a Corporate Cash Machine.

Title II did not harm investment; it was the investment mechanism that was used to make customers the ‘de facto’ investors and with a terrible return.

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Starting in 2012, we estimate, (based on a filing by the NY AG), that 75% of the $1 billion dollars of construction annually went to wireless instead of the wiring of homes and offices in rural areas.

• Using Verizon New York Annual Reports: Every year, Verizon NY has spent over $1 billion on construction and every year the majority was charged to local service category — the copper wired voice phone networks that are not being upgraded or even maintained.
• Over $7.5 billion over the last decade that should have not been used for wireless.
• State laws were changed to charge customers for these network upgrades.
• Overcharged about $3,500. per phone line paid extra since 2005 for rate increases for services, estimated, that they never received — and that’s just for the basic services.
• Over a billion annually in just New York State for underpayments of the subsidiaries, the excessive dumping of corporate expenses, and the question of tax benefits accrued.

How did they use Title II to Harm Customers?

Prices were set decades ago, and they never stopped increasing even when they were supposed to fund fiber optic broadband replacements of the copper that never happened. Nor did prices go down after the budgets to build out the fiber to their home were moved to build wireless networks. Thus, increases in 2022, 2023 and 2024 continue without inspection in almost all states.

These increases are on ALL services, including wireless, because Verizon’s wired networks have excessive profit margins — they aren’t paying most expenses, so this inflates all wholesale prices for wireless providers — likw Charter or Comcast, that resell Verizon.

Sarcastically imbued, How can anyone complain, then that prices are not just and reasonable — they are based on the regulators failing to come to grips with a fact if these networks are Title II already in the states, and therefore are telecommunications, then they are in the purview of the state public service commission, and the state has the right to audit the books.

To make a long story short — Verizon went to each state, from MA through Virginia and said: We’re excited about upgrading the state; so, change the laws to give us extra profits to be used to pay for the upgrade construction.

I’ll gladly pay you Tuesday for a hamburger today should come to mind. In 2005–2007, the states agree to let the fiber optic networks be ‘part of the utility’ upgrade, — and then in 2011, Verizon announced it was done, but the states never lowered rates and the budgets were diverted to wireless.

However, there were multiple rounds of making commitments for fiber optics and getting paid to do so, then without oversight, it keeps happening. Verizon Pennsylvania’s original 1994 law required urban, suburban and rural equally done — with fiber and completed by 2015.

Here’s is a trick that would fool Penn & Teller;

Title II was used as the investment mechanism.

• Verizon could not charge the state utility or the customers if the networks were classified as an information service, “Title I” — Oops.
• The company could not use the right-of-way for free as part of the utility if it was Title I. — Ow!
• The company could not cross-subsidize the other lines of business, legally, if they are an ‘information service’, and not telecommunications — Oy.

Here’s why investigations are needed, not more government subsidies.

Verizon et al told everyone that Title II harms investment. At the same time, there is a disconnect — -Verizon has been using Title II for the installation of fiber optic wires continuously — which ironically harmed customers who have been and are still paying for network upgrades of the utility as they became de facto investors in this switcheroo.

• This allowed Verizon to divert these construction budgets to upgrading wireless that should have been going to homes.
• This allowed Verizon to use the existing state utility telecommunications construction budgets for the wireless build outs — illegally.
• This allowed Verizon to put the expenses for these fiber optic wires into the expenses of local and wired services, which was then used for rate increases.
• The wireless subsidiary did not repay the utility for these construction budgets, and underpaid for the expenses as a competitor, such as what AT&T or T-Mobile, pays.
• This helped to create the Digital Divide because these Verizon franchise areas were not properly upgraded to fiber, even when state laws were changed to charge local phone residential and business customers.
• This helped to create artificial losses that were used to get tax benefits.

But what about AT&T?

We found this case dealing with ATT. This was the last specific discussion we could find — Illinois-Bell-telephone (AT&T) -v-village-of-Itasca. Notice that the term “Title II” is not used, but “telecommunications” is, though Title VI, cable, is used.

“Holding that a company upgrading its telecommunications network to fiber-optic “is not a ‘cable operator’ under the terms of [Title VI] because it is not providing the transmission of video programming. Right now, it is simply constructing a local distribution system capable of delivering video programming.”

“In an effort to upgrade its telecommunications network, AT&T developed Project Lightspeed, a $5 billion project to span across 13 states, including Illinois. Project Lightspeed is the most recent phase of AT&T’s transition from copper wiring to fiber optic wiring in transporting its telecommunications services. For example, in 1999, AT T implemented Project Pronto to deploy more fiber optic cable deeper into its network, so as to support Digital Subscriber Line (“DSL”) — based communications services, such as high-speed internet access. Project Lightspeed now seeks to expand AT&T’s fiber’.

AT&T went on to roll out U-Verse, which was a copper to the home service; a bait and switch from what was told to the public, and there are many who believe U-Verse is fiber. Worse, since it is copper, the infrastructure that was being upgraded wasn’t — and this happened in AT&T’s 21 states.

Now how much did the shell game cost America, as this is not an isolated incident?

You can’t understand why prices are so high compared to overseas, or why there is no serious competition, or even how the Digital Divide was caused over decades? It is because the incumbent phone utilities failed to properly maintain and upgrade the critical infrastructure of the state.

In fact, the most remarkable business ability the companies have is not broadband or 5-Gee- I -wish-it-worked-as-advertised, but to rewrite history and create ‘common wisdom’ amnesia.

This chart is in the Verizon NY 2021 Annual Report.

And this is why investigations are needed. This excerpt shows that the copper-based local voice service has been charged $700 million for ‘construction in progress’, for the year 2021 — which is about 73% of the total. while the other lines of business that also use these exact same networks, which include ‘backhaul’ data lines, also called ‘Special Access’, and ‘nonregulated’, revenues from FiOS video and VOIP. -are paying a fraction of this expense.

And amnesia? The state based 5-year broadband plans that are being submitted for NTIA BEAD funding have all failed the material facts check; not one state has felt an obligation to explain to the public — before the state receives hundreds of millions, billions of dollars, just how these incumbent wired utilities let the networks fall apart, or remain mostly copper.

But let me scare those who actually care about solving the Digital Divide — This chart is based on actual USOA accounting information about the construction expenses by the state telephone companies; this is the last available information from the FCC, for 2007.

Notice that across the country the construction expenses are mainly being paid by ‘Local Service’, averaging 71% vs ‘access’ sometimes called ‘backhaul’, the wires to the cell sites, are paying on average 29%.

What we found is that the construction budgets of the state utility have continued for the last 2 decades with no one actually investigating where the money is going.

And it matches the Verizon NY 2021 financial report information, taken directly from the filed public documents.

The wireline copper networks have not and are not going to be upgraded; they are not even being available and on sale now… Based on the current available data, the bucks are going to fund wireless, which is using the Title II networks and rights of way and the budgets at significant discounts.

This alternative funding path should be taken seriously,

So, every number of the supposed investments that went down or up when Title II was applied are all fantasy based on these actual financials for real construction dollars. In fact, every amount quoted by those not using these financial state documents, can not accurately assess the costs.

Much more important; the states have failed the basic oversight and allowed this situation to grow over decades.

With the expiration of the ACP funding, every state must ask the basic questions that they have avoided:

• How was the Digital Divide created in the state?
• Who is responsible for not properly upgrading the state’s critical wired infrastructure — the state telecommunications public utilities?
• How much money was collected over the last 3 decades for broadband networks that failed to materialize?
• Where are the current state utility construction budgets going?
• How was the Title II classification used to help create the cross-subsidies and charge wired customers for broadband services they never received?

And Net Neutrality and Title II vs the Existing Use of Title II and the Utility?

It should be obvious from the last 2 decades that this is all hand-waiving — mainly to hide what is not being said… to be continued.