Chapter 1 Phone Bills and Slush Funds?

Valerie walks into the room with a sense of dread. Sitting down at the dining room table she sorts through the pile of letters and envelopes - mostly bills. She can feel a knot forming in her stomach. Her long blonde hair ever so slightly swooshes as she moves it to her left shoulder.

Trying to remain calm, she can hear herself say "merde". She picks up a white envelope with the word "Verizon" on the outside, and tears open the bill, almost ripping the pages. Her head shakes in disbelief as she looks at all the little charges on the bill - 23 cents here, 57 cents there.

Val reaches for the sleek pair of glasses, her eyes needing more focus for reading all the details. Her anger grows. This can't be right. What the hell is this charge for? 'Surcharges' with nothing else?

Shaking her head and with the thought, This goes no further, she decides she will take the assignment. Valerie Simpson is a reporter for a major newspaper in a large metropolis, The New York Daily Gazette. Her editor had asked her a simple question:

"Why is there an FCC Line Charge on this bill?"

She had no idea. She never usually read anything more than the amount due. Valerie knew all those little charges couldn't be right. She knew that regardless of that old conception, blondes can't think, she was smart. She never looked at the phone bill details, remembering how when she tried once it only led to a headache. Numbers danced in her mind, meaningless items, all designed to nickel and dime the customer to death.

"I have no idea boss. Doesn't it go to fund the FCC?"

"That's what I thought" the gruff, yet very bright bulldog of a man responded.

"How about this thing called 'Surcharges'? You ever notice that before?"

She took the phone bill from his hand, put on her glasses and stared at the items. She had no idea what they meant and it showed on Valerie's confused face.

He continued, taking the half-chewed, unlit cigar out of his mouth and rubbing his bald, shiny head. "I just got this report from a group called 'Teletruth', based in New York. They wrote that the FCC Line Charge and all of these other charges shouldn't be on the phone bill. That a lot of them are just revenues back to the local monopolies, like Verizon."

"Doesn't surprise me. Who can read their phone bills? I remember seeing a story on some news show..." she thought but couldn't remember the name, "…where they had some rocket scientists on the air who couldn't figure the charges out."

"Exactly. But these guys from Teletruth, phone bill experts, seem to believe it is not only unreadable, but also covering up quite a few scandals. Because the bill is so complex, they just get covered over."

He handed her a big printed report. "I want you to read this. Then call Teletruth and interview this Tom Allibone and Bruce Kushnick."

The report was titled "The Dirty, Little, Secret Lives of Phone Bills".

"Great title." She laughed.

"And then if this checks out, I want you to go on this hard. This story has never been told. We're talking about slush funds, fraud, deceit, double, triple, and quadruple taxation, misrepresentation - not to mention that these guys show that even the numbers on the bills don't add up. If this is true, this story is big." He pauses and glances at the "Executive Summary" and summarizes.

"It looks like customers are being overcharged hundreds of dollars done through unreadable phone bills. It says that the profits from the FCC Line Charge were never checked - even though the charge keeps increasing - and that the Universal Service Fund is a slush fund that is constantly growing. Apparently there's even a charge on the phone bill to fund the 'Spanish American War'…that was in 1898 for Pete's sake!" He is waiving his big arms for emphasis. "There are no regulators examining the entire bill for these profits!"

"You've got to be kidding me?" She shakes her head in disbelief. "Harold, I haven't seen you this animated since you had to leave the office because of the blackout and we couldn't get the paper out."

"If this stuff is true, I'm really pissed, and so should every other American consumer who thinks these companies can be trusted to 'do the right thing'. I want you to do it as a mystery writer looking to uncovering more and more fraud and deceit. Go through each charge and uncover the truth about this. Let's Tell-The-Truth, whatever it may be."

"Do you think we'll have trouble convincing the other heads at this paper about going on it so strong? Don't all the phone companies pay us large sums of money to advertise and..."

"Check out this story and get back to me. We'll worry about that other stuff later. This report just came out and so far no one has had the balls to do anything about it. Every one of our readers pays phone bills, right?"

"Is this about AT&T, Verizon or MCI or…? Isn't MCI already being investigated?"

"According to Teletruth, this is about the local 'Bell' phone companies - Ma Bell's kids." He takes out the Executive Summary. "BellSouth, Verizon, (who owns GTE, NYNEX and Bell Atlantic), SBC, (which owns Pac Bell, Ameritech and Southwestern Bell) and Qwest, which was US West. Damn. This is already looking like these guys merged together so they wouldn't have to compete with each other. Check that out as well. And it's about the quiet local phone monopolies, not the wireless or long distance companies."

"They're all merging." Valerie at least knew that much.

"And find out what the FCC, Congress, and the state commissions have done about any of this. The current FCC Chairman's last decision was voted down, and the entire FCC got its butt kicked about allowing media companies to get larger. Is this the same thing?"

"The FCC stands for…?" Harold rocks his seat back and plays with his bright red suspenders. A blank stare comes back from Valerie. Her normal beat was consumer issues, nothing about phone charges and regulation.

He starts again, with his own doubts. "I think it's the Federal... Tele... No, Communications Commission. They regulate the phone companies I guess. I'll have Karl Harrison the business editor, fill us in. See that? If we don't know any of this stuff then the average consumer is walking in the blackout without a flashlight."

Valerie puts the report under her arm and leaves thinking that maybe this won't be as boring as she thought it could be. "Maybe", she thinks to herself, "I can put in something about sex phone lines or something to spice it up", though she thought more of the excitement of reading the white pages starting with the letter "A" than examining phone charges.

But what about this fraud, slush fund, deceit and overcharging? If this is true and I could break this story nationally, every phone customer in America would like that. I'd be a national hero if there are refunds. And who knows, with Worldcom and Enron, maybe this would be a big scandal itself. Why hasn't anyone covered this before if it was real? What is really going on?