Did Verizon Scam Pennsylvania? > Question

Question

I've not been able to read it at all because it is a word doc (I'm on a linux box, which is a dev machine without openoffice). I would surely be mucho pleased if some could post the salient contents in plain text (or link to pdf)

The doc file is way too huge to paste. Here's the summary. It goes into depths about the scams done at Verizon. I'm still reading it. I'd recommend finding a machince capable of reading it, and possibly print it out. Here's the summary
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EXECUTIVE SUMMARY
The Verizon Pennsylvania Commitment and Outcome

In 1994, Verizon Pennsylvania (then Pennsylvania Bell a subsidiary of Bell Atlantic) was granted the 'deregulation' of state laws that essentially gave the Bell company financial incentives to rewire the state with fiber optics for broadband services.

The Commitments:

"In view of Bell¡¦s commitment to providing 45 Mbps for digital video transmission both upstream and downstream, we look forward to Bell¡¦s providing this two-way digital video transmission at 45 Mbps."

"Verizon PA has committed to making 20% of its access lines in each of rural, suburban, and urban rate centers broadband capable within five days from the customer request date by end of year 1998; 50% by 2004; and 100% by 2015."

"In order to meet this commitment, Bell plans to deploy a broadband network using fiber optic or other comparable technology that is capable of supporting services requiring bandwidth of at least 45 megabits per second or its equivalent."

"It is apparent that DSL, as it currently exists today, (March 2002), is unable to provide the broadband availability of 45 Mbps both upstream and downstream that the Company voluntarily committed to and the Commission approved in 1995."

What is being promised is the replacement of the older copper wiring with a new, fiber-optic service that has speeds of 45 mbs in both directions. This is 50-100 times the current ADSL service, which goes over the 100-year-old copper wiring and is a mostly one-way product. The agreement also requires Verizon-PA to wire both rural as well as urban areas---- 20% by 1998, 50% by 2004. And this service is fiber-optics directly into the home and office, not ending at the street. Today, there are no homes with this wiring or that delivers the speed.

On March 28, 2002, the Pennsylvania Public Utility Commission rejected Verizon Pennsylvania's compliance with the state Alternate Regulation plan, stating that the Bell company had not satisfied its legal obligations to supply broadband services at 45mbs.

"¡Kthis Commission has a legal obligation to reject Verizon PA¡¦s 2000 Update and require it to submit a new update specifying its plans to satisfy its legal obligation to provide a modernized network with broadband capability of at least 45 Mbps upstream and downstream, to be available within five days from the customer request date."

TeleTruth and its members applaud the actions by the Pennsylvania Commission and await their continued analysis of the failure of Verizon, PA to deploy broadband. However, our position is that this situation warrants additional investigations into the possible fraudulent acts by Verizon, among other claims.

We believe:

„h Verizon over the last decade make false and misleading statements about proposed 'broadband" services to the Pennsylvania Public Utility Commission, the public and other regulatory bodies in order to reduce regulations and make more profits. They succeeded in getting large financial incentives for a broadband network they could never deliver.
„h Verizon lied when it said it could rewire 20% of the state with fiber-optics by 1998, 50% by 2004, including both rural and urban areas, and delivering speeds of 45mbs in both directions.
„h Verizon pulled a "Bait-and Switch" promising a new broadband fiber-optic digital future that could change the state's entire economy, and instead Verizon is barely rolling out an inferior ADSL product over the old, already existing wiring.
„h Verizon is illegally using ratepayer monies through excess charges on phonebills to fund the DSL business and other businesses, including wireless services and long distance services. Known as "cross-subsidization", services that should be funded for by shareholders are instead being charged to customers.
„h Yellow Pages Scam: Verizon also received major financial gains from the shifting of Yellow Pages subsidiary, who¡¦s revenues were used to subsidize local phone service. Yellow Page Advertising is one of the most profitable businesses in America ¡V paid for through higher fees from small business advertisers.

„h Customers paid for a network they will never receive. We estimate that the Company received $2.1 billion from this deregulation, including an additional $1.5 billion in extra tax deductions the Company received from excessive write-offs of the still existing networks.
„h We estimate this cost each household $785, by year end 2002, about $165 in just 2002. Customers are owed refunds.
„h There is ample documentation that this scam occurred in most, if not all of the other Verizon states (including Bell Atlantic and NYNEX). Therefore, we believe there was collusion between the Bell companies to not make public the truth about fiber-optic broadband deployments.
„h Verizon's failure to deploy broadband in the state (and elsewhere) has had a serious impact on the overall economy, as well as harm to the Tech sector and the value of shareholder stocks.
„h Rural Customers have been particularly harmed since the law to deliver them broadband -- like everyone else -- is being ignored.
„h The costs for all services have been incrementally increased through deregulation and snake-oil accounting.
„h The price for services should be declining because the costs have been decreasing --- in PA alone, 3,400 Bell employees have been let go since 1994 --- a drop of 23%, and construction from 2001 is down 36% in the state.

Therefore, we are calling on the State Commission and Attorney General's office, the IRS and the FTC, and FCC, to:

Conduct a Broadband "True-Up":

Step One: We are requesting a complete audit of the Bell's books to determine exactly what happened to the monies collected through deregulation. While we have used due diligence in going through the annual reports, these are closer to works of fiction than documents to be relied on for minute analysis.

„h How much money was collected because of the changes in regulations, including taxes and tax write-offs?
„h How much extra charges on phonebills does this equate to?
„h How much of this excess profit is being charged through higher rates to competitors trying to offer their own services over the Bell networks?
„h How much of this money was spent to roll out ADSL products or other services not related to the Bell's fiber-plans?
„h What fiber-optic services are being offered to residential customers? Was anything wired?

TeleTruth is Recommending:

„h A complete investigation into fraudulent acts. When did the Bell companies know they couldn't build these networks?
„h The Bell company's regulation should reflect its actions and therefore, the company should have the current deregulation plan revoked.
„h An estimated $2.1 should be collected in penalties and refunds.
„h $1.5 billion should be investigated for improper tax write-offs.
„h The state should start proceedings on whether customers should own its own fiber-optic infrastructure, which is built through competitive bidding. This network could be paid for through the current excess rates. It should not be owned by the Bell companies, who have proven to not be trusted with these important matters.
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Thanks for your effort! I think that gives enough of a summary for me. I might do as you suggest this evening (I have openoffice at home.)

Thanks again!

Dewi

reply to Dewi

Penn Complaint in PDF

PENNCOMPLAINT.zip 81,252 bytes (PENNCOMPLAINT.pdf)