TeleTruth

Teletruth News Alert —-October 29th, 2008

TAKE ACTION: STOP the FCC from Raising Your Phone Rates and Taxes Through
Back-Room Dealings.

Demand a Full Audit of ALL Phone Costs and Accurate Data Before Any
Increases. Demand Congress Investigate the FCC’s Flawed Data.

Click here to send a letter to the FCC and Call Congress: – Don’t Raise Our
Phone Rates and Taxes! Get Accurate Data First.
http://www.teletruth.org/StopFCCIncreases.htm

Summary of the Issues:
http://www.teletruth.org/FCCincreasessummary.htm

While the current presidential candidates tell us they won’t raise our
taxes, rumor has it that on Election Day, the FCC will announce a series of
increases to your phone rates and taxes. It is a put on job by AT&T,
Verizon and the other local phone companies who submitted a plan two years
ago. It was laughed at because it just gives more money to the phone
companies – without a financial justification.

What is really appalling is this major decision could be made on Election Day when the country will be distracted, but more importantly, many of the items that are about to be increased are not being done as open meetings with comments but as something called “ex parte” submissions – separate meetings by the phone companies to raise your rates – You have no say in this process; your rights are being trampled on as there is no due process.

What’s happening? All of these items are on the table:

1) Raising the FCC Line Charge – possibly to $10.00 a month (it’s on
every local bill), which is also taxed. The FCC Line Charge does not go to fund the FCC, but is direct revenue to the phone companies.
2) Raising the FCC Line Charge on Business Rates – Rumor has it could
reach $13-$15 a month.
3) Raising the Universal Service Fund (USF) Tax, currently at 11.4%.
4) Raising or adding a new USF Tax — have customers pay for broadband
deployment, even though the FCC has never investigated the billions
per state already collected for broadband.

All these actions are being played against a backdrop of:

5) The FCC is using flawed data on local and long distance rates to
help raise rates.
6) The FCC isn’t examining the current local rate increases or phone
Charges, which is happening throughout the US.

These are very complicated, arcane issues but the bottom line is — We
believe these changes are unjustified de-facto rate and tax increases that
should be stopped and investigated.

And your bills? Since 2000, in almost all states, your residential bill has increased over $250 dollars for no reason. If the plan goes through, it could increase the costs an additional $50+ dollars annually as the FCC Line Charge is also taxed a Universal Service Fee, as well as state and local taxes and surcharges. And this is on top of all of the current local phone rate and long distance increases happening throughout the US. Virtually every charge, from directory assistance to inside wiring or Call Waiting have seen increases, not to mention local rates. Worse, increases to Universal Service increases also will be adversely impact long distance and wireless and broadband by the proposed FCC decision.

And right now both the Universal Service and FCC Line charge fees have
become corporate slush funds, with billions being collected as direct
payments to the phone companies. The FCC data is flawed, unaudited, and worse, politically driven to help the phone companies get your money.

In short, the phone companies, including Verizon and AT&T will get billions
in excess fees – your money. This is nothing more than taxation with bad
representation.

• Read our Summary and Mini-reports on USF and the FCC Line Charge.
• http://www.teletruth.org/FCCincreasessummary.htm

Then, if you agree — Take Action: Tell the FCC and Congress to stop these increases and investigate our claims. Don’t Raise Our Phone Rates and Taxes!
http://www.teletruth.org/StopFCCIncreases.htm

Reading Materials:
• Mini-Report on USF: “20 Reasons why the Universal Service Fund is an Out
of Control Slush Fund And What to Do about it.”
• http://www.teletruth.org/USFReport.htm

• Read our original complaint from 2004 against raising the FCC Line Charge
• http://www.newnetworks.com/PRFCCLIne.htm

• Read our analysis of the current plan to raise the FCC Line Charge based
the AT&T’s proposed “Missoula intercarrier compensation plan”
• http://www.teletruth.org/docs/TeletruthMissoula.doc

• Read about local phone rate increases in New York, New Jersey
• http://www.newnetworks.com/verizonincreases.htm

• Read about increases to California rates from the LA Times:
• http://www.latimes.com/business/printedition/la-fi-att24-2008oct24,0,3867945.story

• Read how AT&T and Verizon/MCI have had massive price increases, added fees, etc, even though the companies claim that these plans will lower rates. http://www.newnetworks.com/attmciharvesting.htm

• Read our complaint against the FCC’s long distance data.
http://www.newnetworks.com/dataqualityharvest.htm

Bruce Kushnick, Teletruth
bruce@teletruth.org

Tom Allibone, Teletruth
Tom@teletruth.org

1997 Data Was Used to Kill Off Data Requirements on AT&T, Verizon and Qwest. — Part One.

In the last forbearance decision the FCC removed obligations on AT&T, Verizon and Qwest to supply data about various parts of their business –number of lines, how they treated customers (quality of service) and infrastructure build outs.

In this recent document, the FCC is using data from 1992, 1997, 2002 and 2005 to explain why their decision should go through. — And when you track the information you find that most companies no longer exist and were sold to AT&T et al, and that the FCC had later data and knew about these issues but has decided to stick in whatever they feel like with no obligations to supply accurate data about the current marketplace and competition.

Here’s one paragraph using data from 1997 “Wireless Communications Services.  This service can be used for fixed, mobile, radiolocation, and digital audio broadcasting satellite uses.  The Commission established small business size standards for the wireless communications services (WCS) auction.  A “small business” is an entity with average gross revenues of $40 million for each of the three preceding years, and a “very small business” is an entity with average gross revenues of $15 million for each of the three preceding years.  The SBA has approved these small business size standards. [1]  The Commission auctioned geographic area licenses in the WCS service.  In the auction, held in April 1997, there were seven winning bidders that qualified as “very small business” entities, and one that qualified as a “small business” entity.”

We went to the actual auction information and tracked the companies since 1997— We did all this using Google and Yahoo searches, as well as the SEC’s EDGAR database and the FCC materials. The FCC could have done the exact same thing. In fact, in the case of Telecorp, the FCC knew about this transaction as they had to approve it in 2002.
http://www.fcc.gov/transaction/attwireless-telecorp.html

To sum up. 4 of the 8 were sold off by 2002, 1 never rolled out their services, 1 couldn’t be found, and the 2 others are non-profit co-operatives who receive USF funds

Wireless Spectrum Auction “Designated Entities”, 1997.

Bal\Rivgam, L.L.C. –
Signed a deal with Gabelli and sold off spectrum to Nextwave. Was supposed to roll out “the first commercial 2.3 GHz WCS network in the U.S. The network established by MegaBroadband of Massachusetts.”

Omnipoint Data Company, Inc.—
Omnipoint completed a merger with VoiceStream Wireless. On May 31, 2001, Deutsche Telekom AG acquired 100% of the common shares of VoiceStream.—The German company.

Telecorp Management Corp. Inc.
In 2002, TeleCorp became a wholly-owned subsidiary of AT&T Wireless.

Pioneer Telephone Association, Inc —Cooperative, non profit.

Valley Telephone Cooperative, Inc. —Cooperative, non-profit

Metricom, Inc.—
Went Bankrupt in 2003. In November 1999, the Company issued and sold to MCI WorldCom, Inc. 30 million shares –at a price of $10 per share, Vulcan Ventures 30 million shares –$10 per share, for gross aggregate proceeds to the Company of $600 million.

Pacific Triangle Communications—
Can’t find post 1997 auction. Most likely a spectrum speculator.

 Cellutec   
Never rolled out anything and asked for an extension of buildout requirements in 2007.

Source of Designated Entities (Small and Very Small Business): http://www.fcc.gov/Bureaus/Wireless/Public_Notices/1997/d970886a.html  

There’s a lot more to come.

However, just this one paragraph shows that:

a) Very small business spectrum was given to large corporate concerns who consolidated the industry.
b) the FCC had the power to redo the this analysis of what had occurred to the companies they mentioned in bulk. In fact, the FCC’s own merger decision of Telecorp in 2002, or the tracking the legal actions against Gabelli, all should have been put into this analysis.
c) I also doubt that the FCC received any compensation for the 25%-35% discounts that were applied to this auction.

The FCC can say — “What are you worried about? These companies no longer exist, so that means we can’t harm them with this decision, right?”

Had the FCC tracked this area well, starting from 1992, it might have noticed that virtually all of the small competitors died out, and that their auctions didn’t function well.