. . . Because It Makes The Telcos More Money
by Bruce Kushnick, Oct 2, 2018; Original Medium article here.
What AT&T & Verizon Tell Investors But Are Hiding from the Public.
Introduction
Let's be very clear. Verizon and AT&T have one goal:
Goal: To make more profits for their investors by removing all regulations and public utility obligations.
They have demonstrated that they do not care about the customers, the cities or the state telecommunications utilities that they control. In fact, they claim that they are now wireless first
entertainment and media companies and there are no state telecommunications utilities anymore.
AT&T’s end goal, as stated by Randall Stephenson, AT&T’s CEO, July 24, 2018, is to be a “modern media company”.
“It was an exciting quarter for AT&T as we completed the acquisition of Time Warner on June 14 and created a modern media company built around premium content, 170 million direct-to-customer relationships, advertising technology and high-speed networks.”
Over the last two decades, what are now AT&T and Verizon decided that instead of maintaining and upgrading the state utility, copper-based networks to fiber-optics, they would force customers, especially in more rural areas, onto wireless service, even to be the primary broadband and video service at home — because wireless service is more profitable.
But here is the deep, dark secret: Wireless isn’t that profitable.
The Telecoms have been able to manipulate the FCC cost accounting rules that allocates expenses into the different lines of business so that the wired state utilities would end up with the majority of ALL expenses and this made the public utility networks appear unprofitable on paper — on purpose.
Moreover, Verizon’s fiber optic FiOS, or the wires to the cell sites, as well as Business Data Services, are ALL part of the state utilities and they have been able to put the majority of their construction budgets onto public State Telecom Utility's accounting books. Still worse . . . Verizon Wireless pays a fraction of the 'access fees' to use the utility networks and other expenses. This was all used as an excuse to . . .
- Not upgrade whole parts of the US from copper to Fiber Optic
- Raise local telephone service rates
- Save $ billions on taxes by creating 'artificial losses'
Thus, at every turn possible, the Telecoms have been able to pull one bait-and-switch campaign after another bait-and-switch campaign. In some states, Verizon was able to close down the actual commitments for fiber upgrades to offer wireless as a replacement, such as NJ and PA, even though customers paid billions for a fiber optic replacement of the existing copper utility networks.
In various ‘technology transitions’, AT&T claimed that wireless is the equivalent and a substitute for the wires, such as the AT&T IP Transition trial, which failed miserably.
Meanwhile, in Massachusetts and other states, Verizon claimed that they are doing fiber-to-the-home (FTTH), but appear to be using these budgets only for fiber-to-the-wireless telecommunications facility (FTT-WTF), with the funds coming out of the wired state telecom utility and charged to local phone customers.
Why should we examine the record of what Verizon and AT&T have been telling the investors now? Because the FCC has been on a path to help AT&T and Verizon by creating, over the last year, 30+ different interlocking actions in just two proceedings.
While the FCC et al. claim that with 5G Wireless there will be no need for wired services — that is not true because 5G requires a (fiber optic) wire every city block or two. Most importantly, the FCC is not examining the cross-subsidies of 5G with the state wired telecom utilities.
The Verizon and AT&T Executives Speak for Themselves: