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Verizon Update
4/1/02
A. Tauzin/Dingell
Recap: As many of are aware from previous updates, this bill poses a serious threat to telecommunications industry by allowing the bells to offer long distance, voice and data services without first having to open up their exclusive networks to competition. In fact, should this bill pass, they can pull the plug on EVERY ISP that utilizes their systems. Current: As many of you know, this ludicrous bill was passed in The House of Representatives a number of weeks ago. What was interesting was that many of the representatives themselves admitted that they did not even know what it was they were voting for, and relied heavily on the lobby groups for guidance. Another interesting piece of data was that those who voted in favor of the bill have rather significant campaign contributions from the bells. You can view the voting lines and see the contributions here. Fortunately, the people have a champion in the form of Senator Earnest Hollings who has vowed not to let this bill pass the senate. His voice of reason has cut through the flawed rationale of the proponents of this bill, and it appears the bill is "...dead on arrival." Verizon was a major player in an attempt to see this bill pass and won many battles along the way, however the victory in this war goes to the people. B. Phone Charges In the previous newsletter, we mentioned an
individual by the name of Thomas Alibone who makes a living auditing phone
bills. He and his 8 employees have a thriving business off of simply
finding errors in phone bills, making the guilty parties (Verizon),
send out a refund, and then claiming a portion of it.
Tom had been quoted as saying that typically 50% of bills have
overcharging errors on them. In an effort to prove that this is
actually the case, Tom randomly audited over 50 phone bills in the state
of New Jersey. Not surprisingly, 50% had billing errors that cost
the consumer money. A lot of money. Many states have laws that
force Verizon to return this money with interest (as they should) for
years of billing errors. Ultimately the goal is to expand Tom's
influence so that he can handle the load that is beginning to come in now
that this information has been publicized.
C. Class
Action Suits
Unfortunately these court cases demand a
substantial amount of time before they are resolved, and this one is no
different. After hearing the latest update directly from one of the
attorneys involved, there is still a considerable amount of formality to
deal with before this case is argued in a court room. Hopefully
there will be more details before the issuance of the next newsletter.
D. Skeletons in the Closet
As you all know, Verizon was formed via the
merger of GTE and Bell Atlantic. In 1994, Bell Atlantic (then
"NYNEX") proposed a plan to rewire the Commonwealth of Massachusetts with
new fiber optic technology, replacing the older copper wiring. Bell
Atlantic represented that, if implemented, residential subscribers would
soon have access to up to eight hundred channels of new services,
including video-conferencing, movies on-demand and other enhanced cable
television and online services. Bell Atlantic proposed that this new fiber
optic technology would replace the copper wiring already in place.
According to Bell Atlantic, 330,000 residential consumers would have
access to the new fiber optic network by 1995, at a cost of $500 million,
and the rest of the Commonwealth would be connected
subsequently.
Bell Atlantic proposed that they could only afford to make this
considerable investment if the rate-of-return restrictions were relaxed at
the federal and state level, in Massachusetts and elsewhere.
Traditionally, rate-of-return restrictions capped Bell company profits at
10-12 % annually. Instead, they proposed "alternate regulations" that
would allow them to become vastly more profitable, and promised those
profits would be used to fund the development of the new services. Bell
Atlantic sought regulatory relief from the Massachusetts Department of
Public Utilities (now the Department of Telecommunications an Energy).
They sought similar relief in every other state in which they were the
incumbent local exchange carrier and from the Federal Communications
Commission, on the basis of, substantially, the same promises to build a
new network and offer new services.
As a result of the alternate regulations that were
approved, estimations are showing that Bell Atlantic garnered
over one billion dollars in increased profit above the rate-of-return in
Massachusetts alone. Ironically, they never built the new network
they promised, or deployed the new services that were the rationale for
the regulatory relief. In fact, just months after being granted relief as
an incentive to invest in the Massachusetts infrastructure, Bell Atlantic
abandoned plans to build and deploy the new network.
Personally, we here at verizonpathetic find it deplorable that these
regulatory commissions allow such loose enforcement of the policies that
are made to protect the population from abuses such as this. The
state of Massachusetts is owed a return, and now that this information has
been brought to the public, we intend to use this information as part of a
case against them. Next Newsletter at the
end of May!
If you have any questions,
comments, or suggestions, please contact marcus@verizonpathetic.com 
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