Looking for new revenue opportunities

More than half (52 percent) of all U.S. consumers say Internet service is their home’s most important utility, according to a survey conducted by Verizon Communications as part of their Verizon FiOS Innovation Index project.

But Verizon’s research surveys go well beyond simply identifying who loves Internet access. Verizon’s real interest is identifying so-called “borderless consumers,” — customers who are seeking a seamless online experience and connectivity both inside and out of the home.

The convergence of wired and wireless broadband networks is a potentially enormous money-maker for Verizon, especially if you happen to be a Verizon Wireless customer.

“As the borderless consumer segment continues to grow, so will the need to identify, understand and anticipate what consumers truly want in their increasingly connected lives – today and in the future,” said Eric Bruno, vice president of FiOS strategy and development for Verizon.

Fran Shammo, Verizon’s chief financial officer, has previously told investors that monetizing data usage goes beyond text messaging and web browsing. The next frontier for enhanced revenue will come from the machine-to-machine segment. As consumers strive for a more connected future, enabling wireless connectivity for home appliances, automobiles, medical equipment, and other devices will create new revenue streams for the company.

Verizon’s new research surveys help the company target its future marketing to consumers most likely to be living the “borderless lifestyle.” Are you? Here are some key attributes:

• Above average income: Most are college educated, own their home, and nearly half earn $75,000 or more annually, so they can afford higher broadband bills;
• They are 18-34: Generation X and Millenials grew up in an increasingly connected world. Baby boomers are not far behind, but seniors are;
• Women somewhat outnumber men in their need to remain connected;
• You already have a computer, smartphone, or tablet and are connected to high speed Internet. Most of you want faster speed, if you can get it.

Verizon’s study becomes murkier over the issue of cord cutting. Verizon found that video streaming continues to drive Internet traffic growth, but at least 89% still prefer watching shows on their televisions. Verizon defines that as live TV, DVR, or on-demand from “TV/Cable service.”

But they did not ask whether consumers are watching more or less television provided by their cable, satellite, or phone company or if a larger proportion of viewing now comes from Netflix or other streamed content. That is a key indicator of whether a customer is gradually shifting viewing habits, which could ultimately make it easier to dump cable television.

With 90 percent of those surveyed looking forward to the day when every connectable device in their house can seamlessly interconnect and work together, Verizon’s potential revenue opportunities are enormous, if customers use Verizon Wireless for connectivity and not free Wi-Fi. Machine-to-machine wireless traffic can boost profits without costing the company much, especially under Verizon Wireless’ new Share Everything pricing. The impact of short data exchanges likely from home appliances and other similar devices is expected to be negligible. The profits from charging at least $10 a month to add each of those devices to a Verizon Wireless account are not.

“We know where you live, where your office is and who you owe money to. We are having your house watched and we are going to use this information to destroy you. You made a big mistake messing with TCI. We are the largest cable company around. We are going to see that you are ruined professionally.” — Paul Alden, TCI’s vice president and national director of franchising to an independent consultant hired to review competing cable operators for Jefferson City, Mo., in a historical example of cable industry abuse

The Federal Communications Commission last week voted unanimously to expire rules that required cable operators to make their programming available on fair and reasonable terms to competitors. Big mistake.

We have been here before. Let us turn back the clock to the days before the FCC and Congress mildly reined in the cable television industry with the types of pro-consumer regulations Chairman Genachowski and others have now let expire. Why were these rules introduced in the first place? Because years of industry abuse heaped on consumers and local communities took their toll, with high prices for poor service, outrageous corporate bullying tactics, and endless litigation to hamper or stop consumer relief.

How long will it take for the industry to resume the same abusive practices that forced the FCC and Congress to finally act once before?

The Central Telecommunications. v. Tele-Communications, Inc. (TCI): The Poster Child for Cable Industry Abuse

Tele-Communications, Inc. (TCI) was the nation’s largest cable operator. Later known as AT&T Cable, the company was eventually sold to Comcast.

Back in the 1980s, before the days of direct broadcast satellite competition like DirecTV and Dish, and years before telco-TV was allowed by law, the cable industry totally dominated the video marketplace. The only challenges came from incredibly rare competing cable TV providers or three million home satellite dish owners or wireless cable subscribers.

The industry’s only check on unhampered monopoly growth came from local authority over cable operations through the cable franchising process. If a cable company got out of control or did not offer the programming or service a community found adequate, it could offer a franchise to another company, effectively kicking bad actors out of town.

In Jefferson City, Mo., the local cable operator during the 1980s was Tele-Communications, Inc. (TCI). It had acquired the franchise in the city by buying out the original provider in the late 1970s. TCI had been buying a lot of smaller cable operators around the country under the direction of then CEO John Malone. By 1981, it had grown to the largest cable operator in the country, and few dared confront the well-heeled operator, which had a legal budget greater than the operating budgets of some communities TCI served. TCI was later acquired by AT&T Cable, which in turn sold its cable systems to Comcast, which continues to operate them to this day.

In 1980, Jefferson City officials decided it would be prudent to make sure they were getting the best cable service possible, so as TCI’s franchise agreement reached expiration, the city issued a “request for proposals” offering other cable companies a chance to bid for the right to serve the community of around 38,000. For TCI, this was tantamount to a declaration of war, and the cable company meant business. Malone equated anything threatening a permanent cable franchise for TCI as something like an act of government theft. In books later written about the events in Jefferson City, even some TCI executives admitted they were “horrified by the sleaziness” of the kind of hardball tactics involved, comparing them to a “B-movie.”

TCI revealed it would stop at nothing to keep competitors away from their territories and drag out years of litigation. Central Telecommunications, Inc., v. TCI Cablevision, Inc., revealed exactly how far TCI was willing to go:

From: Cutthroat: High Stakes & Killer Moves on the Electronic Frontier, By Stephen Keating

Cajole the mayor into canceling competitive bidding. In early 1980, after Jefferson City made it known TCI might get some competition, the company quickly met with the mayor hoping to persuade him to renew TCI’s franchise without a competitive bid process, so as to avoid a “frontal attack” by competitors.

Threaten the independent consultant. In December, 1980 the city hired Elmer Smalling, an industry consultant, to independently evaluate various bids from cable operators willing to serve Jefferson City. TCI immediately began publicly attacking his qualifications in a way the court later found to be defamatory. The court case documents Paul Alden, TCI’s vice president and national director of franchising, making personal threats against Smalling.  A sample:

“We know where you live, where your office is and who you owe money to. We are having your house watched and we are going to use this information to destroy you. You made a big mistake messing with T.C.I. We are the largest cable company around[.] We are going to see that you are ruined professionally.”

It got worse for Smalling. At this same time, Warner-Amex (another large cable company now known as Time Warner Cable) was a client of Smalling’s. Alden contacted Warner-Amex about Smalling. Following the threats, Smalling lost Warner-Amex as a client.

City Attorney Thomas Utterback later wrote a memo to the City Council in which he described TCI as a “relentless corporate bully.”

Threaten would-be competitors. On several occasions, from January of 1981 to the summer of 1981, Alden repeatedly telephoned Robert Brooks, chief operating officer of Teltran, a company which submitted a bid for the city’s franchise, and threatened him that unless Teltran withdrew from the bidding process, TCI would make trouble for Teltran in Columbia, Missouri, where it operated a cable television franchise. Teltran subsequently dropped out of the bidding process on the ground there was a “distasteful environment” in Jefferson City.

Another competitor, Central Telecommunications, became a defendant in a TCI lawsuit challenging the city’s right to request proposals from other cable companies. TCI argued it now had a 1st Amendment right of free speech to serve Jefferson City residents regardless of the wishes of city officials. In a wide ranging series of subpoenas, TCI demanded the bank handling Central’s financing turn over a “very wide range of potentially confidential records,” which according to Central was an effort to destroy its financing agreement with the bank.

Malone

Threaten customers. TCI warned customers that unless it won the cable franchise for Jefferson City, it would immediately shut off its cable system and leave customers without service, potentially for years, until Central built its own system from scratch. TCI officials said “it would not sell ‘one bolt’ of its system to whoever received the new franchise and that it would ‘rather have [its system] rot on the pole’ than sell it to a competitor at any cost.”

TCI’s system manager in Jefferson City told elderly residents of a senior citizens’ home that TCI would cut off service if denied a franchise, and the residents would be without television for two years pending construction of a new system because the concrete walls of their residence would not allow reception of over-the-air stations.

Lie, Lie, and Lie Some More. In one City Council meeting, Alden wildly claimed that TCI was the nation’s largest distributor of satellite dish antennas, with “an exclusive” right to sell in the state of Missouri. TCI promised that if the city renewed its franchise agreement, it would keep satellite dishes out of Jefferson City. If the franchise was not renewed, Alden promised to “flood the city with satellite dishes,” denying the city franchise fees. Alden later admitted both statements were untrue.

Threaten the mayor’s office. Although the mayor has never disclosed exactly what TCI threatened him with, the public record shows in March 1981, Alden called the mayor and threatened to turn the system off unless TCI’s franchise was renewed. TCI also filed an expensive lawsuit against Jefferson City regarding the way it handled its request for proposals.

By the fall of that year, TCI was meeting with city attorney Utterback in secret negotiations to renew its cable franchise, in direct violation of the city’s request for proposals  which required all negotiations to be open, as well as Missouri’s “sunshine laws.” By next spring, the mayor had privately notified council members he would veto any franchise renewal awarded to anyone other than TCI, which he later admitted was a condition imposed by TCI during its secret negotiations.

On January 25, 1982, the City Council provisionally awarded the franchise to… Central Telecommunications. TCI immediately refused to pay the city the prior year’s franchise fees, in excess of $60,000. It also reminded the mayor of his obligations to TCI as part of the secret franchise renewal negotiations held the prior fall. On April 20, 1982, the City Council passed the ordinance awarding a franchise to Central. The vote was six in favor and four against. The mayor vetoed the ordinance. The council then deadlocked five-to-five on awarding a franchise to TCI and the mayor cast the deciding vote in favor of that company. The next day, TCI dismissed its lawsuit against the city and paid the withheld franchise fees.

In the end, several courts upheld tens of millions in damages for Central Telecommunications, TCI’s lawsuit was dismissed at the company’s request, Mr. Alden was summarily dismissed by TCI after Malone referred to him as a “loose cannon,” and Jefferson City was stuck with several additional years of lousy service from TCI.

But TCI’s “bad corporate citizen” practices would come back to haunt the cable juggernaut, eventually failing to win assignments for two $800 million orbital slots for a direct broadcast satellite service the company proposed. After the Jefferson City experience, even the FCC could not, in good conscience, reward TCI with satellite slots it wanted for a “competing satellite service” it would sell through its own cable companies.

The memories of FCC officials are evidently short. Giving cable operators an inch has historically bought them a mile, paid for by consumers. Mandating easy to understand rules requiring cable operators sell programming to competitors on fair and reasonable terms is sound policy whether there is competition or not. Removing those rules or watering them down only promotes the kind of mischief that, when unchecked, leads to these kinds of horror stories. History need not repeat itself.

[flv width=”448″ height=”276″]http://www.phillipdampier.com/video/David Cay Johnston The Fine Print How Big Companies Use Plain English to Rob You Blind 9-19-12.mp4[/flv]

Fellow Brighton, N.Y. resident and Pulitzer Prize-winning journalist David Cay Johnston hits the nail right on the head describing the Big Telecom Swindle that promised America it was going to get something magical called “the information superhighway.”

Over a half-trillion dollars in rate increases later, AT&T and Verizon instead spent a lot of that money on an enormously profitable wireless business that redefines the average American family’s monthly phone bill at $100+. Johnston talks about the broken industry promises of ubiquitous broadband, leaving millions of potential FiOS and U-verse customers behind.

With vast lobbying arms, large cable and phone companies have manipulated public policy to assure they can gouge customers, shortchange workers, and erect barriers to fair play. If consumers don’t pay attention, politicians armed with fat campaign contributions will continue to represent corporate interests, not those of the average American.  

[Note to Mr. Johnston: He isn’t the only reporter paying attention. Hat tip to Stop the Cap! reader Pat McDermott who shared the video.]  (17 minutes)

Phillip “Tollbooths are not innovation” Dampier

Federal Communications Commission chairman Julius Genachowski last week wrote a guest editorial on TechCrunch espousing the benefits of faster broadband networks, but the advances he celebrates often come with innovation-killing usage caps and overlimit fees he continues to ignore.

We feel the need – the need for speed. As Tom Friedman and others have written, in this flat global economy a strategic bandwidth advantage will help keep the U.S. as the home and most desired destination for the world’s greatest innovators and entrepreneurs.

[…] But progress isn’t victory, particularly in this fast-moving sector. Challenges to U.S. leadership are real. This is a time to press harder on the gas pedal, not let up. The first challenge is the need for faster and more accessible broadband networks. We need to keep pushing because our global competitors aren’t slowing down. I’ve met with senior government officials and business leaders from every continent, and every one of them is focused on the broadband opportunity. If we in the U.S. don’t foster major investments to extend and expand our broadband infrastructure, somebody else will take the lead.

We need to keep pushing because innovators need next-generation bandwidth for next-generation innovations – genetic sequencing for cancer patients, immersive and creative software to help children learn, ways for small businesses to take advantage of Big Data, and speed- and capacity-heavy innovations we can’t yet imagine.

We need to remove bandwidth as a constraint on our innovators and entrepreneurs. In addition to steadily increasing broadband speed and capacity for consumers and businesses throughout the country, we need – as we said in our National Broadband Plan – “innovation hubs” with super-fast broadband, with speed measured in gigabits, not megabits.

[…]Some argue the private sector will solve these challenges itself, and that all government has to do is get out of the way. I disagree. The private sector must take the lead, but the public sector has a vital though limited role to play.

Among the policy levers government needs to use is the removal of barriers to broadband buildout, lowering the costs of infrastructure deployment with new policies like “Dig Once” that says you should lay fiber when you dig up roads. The President recently issued an Executive Order implementing this idea, suggested in our Broadband Plan. Government must promote competition, which drives innovation and network upgrades.

We must ensure the Internet remains an open platform that continues to enable innovation without permission.

Genachowski

Genachowski’s vision for faster broadband has the noble goal of maintaining competitiveness with the rest of the world and putting the United States back on top in broadband rankings and innovation. But while hobnobbing with his industry friends at recent industry conventions, he may have gotten too close to one of the biggest impediments holding us back — big cable and phone companies merrily working their magic to create a comfortable duopoly with pricing and service plans to match.

Back in the late 1990s, most cable operators thought of broadband as an ancillary service easy enough to operate, but probably hard to monetize. Just like digital cable radio services like Music Choice and DMX, “broadband” would likely appeal only to a tiny subset of customers.

“Back in the 1990s, Time Warner was primarily a TV company in a TV industry.  Broadband then was an innovating and radical thing, and a lot of people thought it was stupid and wouldn’t work,” Time Warner Cable CEO Glenn Britt said in April, 2009.

The launch of “Road Runner” was not the most auspicious marketing effort undertaken by the cable operator. In fact, the service was rarely targeted for price adjustments, hovering at around $40 a month for a decade.

When the Great Recession hit the United States, something unexpected happened. Cable operators discovered people were willing to cancel their cable and phone services, but not their broadband. In fact, as high bandwidth online video became an increasing part of our lives, the cable industry realized they were in the catbird seat to deliver the best broadband experience, and be well-paid for it. With little competition, increasing prices brought little risk and, thanks to the insatiable drive to boost revenue and reduce costs, implementing usage caps to control “excess” usage and costs were within their grasp.

In 2008, when Stop the Cap! launched, only a handful of ISPs had usage caps. Now most providers, with the exception of Time Warner Cable, Verizon, Cablevision, and a handful of others, all have usage allowances and overlimit fee Internet Overcharging schemes to further pad their bottom lines.

Innovation: Rationing Your Internet Experience — Stick to e-mail and web pages.

Genachowski has completely ignored the growing pervasiveness of usage caps, and even excused them as an experiment in marketplace innovation. But limits on broadband usage will also limit the broadband innovation revolution he wants, especially when most Americans have just one or two realistic choices for broadband service:

1. Usage caps are the product of artificial scarcity. Rationing Internet usage, even with now-pervasive cost-effective upgrades like DOCSIS 3, simply does not make sense (but it will make dollars). Cable operators are switching off analog television service to free up bandwidth to provider faster Internet speed and fatten the pipeline that delivers it. They have plenty of capacity, but continue to proclaim they must limit usage for “fairness” reasons, without providing a single shred of evidence to prove the need for usage caps. Consumers will self-ration just to avoid the prospect of being cut off or handed a bill with overlimit fees.
2. Usage caps make faster speeds irrelevant. Selling customers premium-priced, super fast broadband speed is hardly compelling when accompanied by usage caps that constrain the benefits of buying. Why pay $20-50 more for faster speeds when customers cannot take practical advantage of them. Customers using their Internet service to browse web pages and read e-mail have no interest in upgrading to 30+Mbps. Customers streaming video or moving large files do.
3. Usage caps retard innovation. Google’s new 1Gbps fiber optic network was built on the premise that usage caps were unnecessary on a fiber-based network and would retard innovation. Developing the next generation of innovative apps that Genachowski celebrates will never happen if developers are discouraged by Internet usage toll booths and stop signs. The cost to provide the service is not largely dependent on customer usage. It is the initial price of last mile infrastructure that really matters. Both cable and phone companies have reduced their investments to upgrade their networks, and AT&T and Verizon both contemplate getting rid of their rural landlines. Most cable operators paid off their networks years ago.
4. Usage caps create a whole new digital divide.  Time Warner Cable’s discounted Internet Essentials program delivers only a $5 discount with a harsh 5GB usage cap. For an income-challenged home compelled to switch to a provider’s budget plan, the result is a different Internet experience than the rest of us enjoy. Imagine if your home broadband account was limited to 5GB a month. What online services would you have to avoid to stay under the provider’s limit? Traditionally, operators sell the lowest speed tiers with the lowest usage allowances. Slower speeds already offer a disincentive to use high bandwidth services, but many providers typically drive that disincentive home even harder with a paltry allowance that will cost plenty to exceed.
5. Usage caps harm our broadband standing. While Genachowski celebrates increasing broadband speeds, he ignores the fact the rest of the world is moving away from usage caps even as the United States moves towards them. Both Australia and New Zealand elected to construct their own national fiber networks in large part because the heavily usage-capped experience was holding both countries back. Usage caps are a product of a barely competitive market.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bandwidth Caps 7-2011.flv[/flv]

Tech News Today debunks providers’ claims that usage caps are fair and control those who “overuse” their networks, noting the same phone companies (AT&T) pushing for usage caps are also moving voice calling to unlimited service plans. (August, 2011) (4 minutes)

AT&T has sent the Federal Communications Commission a bait and switch checklist that, despite the stated purpose of modernizing telecommunications networks, would also allow the company to completely abandon its landline network and win near-complete deregulation of its broadband service.

On Tuesday, August 28, Christopher Heimann and I met with Matthew Berry and Nicholas Degani, respectively Chief of Staff and Legal Advisor to Commissioner Pai, to discuss actions the Commission can and should take to facilitate the retirement of legacy TDM-based networks and services and transition to an IP-based Network/Ecosystem, consistent with federal policies and objectives, including those enunciated in the National Broadband Plan.

At the request of Commissioner Pai, AT&T has prepared and is submitting herewith a checklist of those actions, which identifies the critical first steps the Commission should undertake without delay to begin the transition as well as additional steps that would facilitate completion of that transition.

Under the existing statutory and regulatory framework, carriers already can undertake the steps necessary to make the transition, including, in some cases, steps requiring Commission approval (such as withdrawing legacy TDM-based services). But, insofar as the transition raises a number of novel and likely contentious issues, Commission action on the items included on the attached list would greatly facilitate and thus hasten completion of the transition. The steps we identify implicate an array of issues raised in the above-referenced dockets. Accordingly, we are filing the checklist in each such docket.

Respectfully submitted,

Robert W. Quinn, Jr.

AT&T’s letter and attached checklist are documents only a policy wonk or careful observer of Big Telecom could easily navigate. Despite the thicket of opaque terms like “TDM” and the not-immediately-apparent importance of the difference between an “information service” and a “telecommunications service,” AT&T has, to borrow a phrase from President Obama, some brass ones making its intentions perfectly clear.

With the help of Bruce Kushnick, executive director of New Networks Institute and a former telecom industry insider, we will guide you through AT&T’s filing and what it really means.

AT&T lists several “critical first steps” (we have put them in bold) to achieve the transition to an all-IP telecom world, retiring the traditional “public switched telecommunications network” (PSTN) which you know better as a landline.

1. Establish a date certain for an official TDM-services sunset, after which no carrier would be required to establish and maintain TDM-based services/networks, and purchasers of such services (including circuit-switched and dedicated transmission services) would have to switch to IP or other packet-based services.

No casual observer of FCC filings would be expected to understand the implication of setting a date to officially sunset “TDM services.” TDM is synonymous with the landline network Ma Bell established more than 100 years ago — the one that gives you a dial tone, DSL, and access to dial-up Internet where broadband is unavailable. AT&T wants the FCC to manage what the company has not been able to consistently accomplish on the state level: setting a final date when traditional landline service can be permanently disconnected, preferably at the convenience of the phone company.

2. Clarify that any state requirements forcing service providers to maintain TDM networks and services […] following the TDM sunset are preempted. Such requirements could deter investment in broadband, and thus are inconsistent with and pose an obstacle to federal law and policies encouraging the transition to all IP networks and services.

This provision would effectively eliminate any existing state laws or regulations that require AT&T to deliver a fairly-priced, well-run landline service for customers throughout its service area. Some states have not bought into AT&T’s lobbying juggernaut, often delivered with the help of the American Legislative Exchange Council (ALEC). Despite the enormous sums spent lobbying legislators, some states have kept oversight in place requiring AT&T to serve everyone that wants phone service. With this provision, those state laws and regulations would be pre-empted.

AT&T claims state requirements somehow deter broadband investment, a curious conclusion considering AT&T has already largely ceased its expansion of DSL and U-verse services.

3. Complete action in the IP-enabled services proceeding, and classify such services as information services, subject to minimal regulation only at the federal level. The Commission could permit service providers to offer DSL or other broadband transmission services on a common carrier basis if they so choose, but in no event should a provider be required to do so. 

Quinn

This is AT&T’s provision to kill regulation and destroy competition. Government rules, regulations, and oversight apply largely to “PSTN” landline services, not to IP-based or broadband networks. Basic landline service is designated a “telecommunications service” by the FCC, which makes it subject to regulator review. Broadband, on the other hand, and anything else using IP, is typically classified as an “information service,” where most oversight regulations do not apply.

AT&T’s plan is to shut down today’s landline “telecommunications” service in favor of IP-based Voice over IP, which would effectively reclassify your phone line as an “information service.” That means by changing just one word — “telecommunications” to “information” — AT&T can walk away from a century of basic consumer protection rules and regulations. AT&T also gets a divorce from its telecommunications service obligations as a “common carrier,” which requires AT&T to deliver service to any customer who requests it, at a fair and reasonable price, without changing its form or content.

If AT&T’s broadband networks were reclassified as a “telecommunications service,” Net Neutrality would be easy to enforce under the “without changing its form or content” provision of common carrier rules. Back in the 1996 Telecommunications Act, AT&T’s lobbyists had already made their mark, creating new “distinctions” of telecommunications services, some more regulated than others. Now AT&T is back to kill off the last regulatory obligations it still has to endure, taking Net Neutrality to the grave once and for all.

4. Reform Interconnection – after the official date for the TDM sunset, no carrier or other provider of TDM based services should be entitled to require others to interconnect in TDM. The Commission should take action to maintain the market-based, regulation-free interconnection regime that has applied to IP-based interconnection for decades.

[…] Reform wholesale obligations under section 251/271 to eliminate unbundling, resale, collocation and other requirements that could require ILECs to maintain TDM networks and services.

These particularly opaque sections give AT&T’s competitors real nightmares because they would wipe out requirements that phone companies open certain facilities to competitors who deliver services over AT&T’s network. If AT&T’s recommendation is adopted, no competitor would be safe if AT&T eventually padlocks access to its network.

But AT&T does not want its intentions to be that obvious. It throws a transparent bone to regulators to offer a facade of competition in both this and the preceding recommendation.

AT&T instructs the FCC it can mimic the time-honored patina of an open, competitive industry by allowing AT&T’s competitors to sell DSL or other broadband services over AT&T facilities, but only if AT&T feels like it (at comfortable prices that don’t undercut AT&T).

5. Eliminate regulatory underbrush/superstructure that accompanies TDM-based services. For example, phase out equal access, residual ONA/CEI, record-keeping, accounting, guidebook, dialing parity, payphone, and data collection (which should be limited to that which is collected on the Commission’s Form 477) requirements.

AT&T leaving town.

What AT&T calls “underbrush,” consumers and regulators call oversight and consumer protection.

“Sayonara any telco rules, regulations and oh yes, your rights,” says Bruce Kushnick. “Your service breaks… tough. Prices go up and there’s no direct competition — too bad. Networks weren’t upgraded — so what.”

Kushnick notes this provision would allow AT&T to avoid maintaining a public record of its performance (and its potential abusive practices, bad service, and high prices), including any requirement on the state or federal level to tell the public anything about how well we are being served by the wired monopoly.

Other things on AT&T’s hit list: “Equal Access,” which opened the door to competitive long distance calling and lower rates, “Dialing Parity” which lets you avoid dialing ten (or more) digits for every call (or being forced to learn more complicated numbers for things like directory assistance or other shortened dialing numbers), and public payphones. AT&T’s desire to kill off “residual ONA” refers to the costs to establish Open Network Architecture — the framework for opening up the nation’s phone monopoly for competition. Re-establish the monopoly and there is no reason to fret about the costs to maintain access for competitors AT&T will eventually eliminate.

6. Further reform USF to provide support for broadband regardless of the regulatory classification of broadband services, eliminate any obligation to offer such services on a common carriage basis to be eligible for such support, and provide incentives for service providers to invest and offer services necessary to ensure that no one is left behind by the transition to an all-IP, broadband ecosystem.

The reform of the Universal Service Fund has already opened up opportunities for rural telecommunications companies to apply for broadband infrastructure grants to expand broadband in rural America. Only AT&T has refused to participate in the current round of broadband grants because they do not like the rules. AT&T wants a free hand to receive broadband funding, so long as it faces no questions about where the money gets spent. Under AT&T’s recommendation, the company would receive money with no obligation to ensure everyone who wants broadband in rural America can get it. It also wants the government to hand out money to providers to implement their goal of regulatory nirvana — the conversion of basic landline service to Voice over IP, idolized as the golden calf of ultimate deregulation.

But although providers won’t be left behind, consumers might be:

7. Establish/reform rules to facilitate migration of customers from legacy to IP-based services and to prevent customers that procrastinate or fail to migrate from holding up the transition. For example, establish a process for identifying a default service provider if a customer fails to migrate, and/or permit service providers to notify customers that they will be dropped from service as of a date certain if they have not migrated to an alternative service/service provider. 

This particularly arrogant provision would put a stop to Aunt Maude holding up AT&T’s grand plan to live a regulation-free lifestyle. How dare she drag her feet with AT&T’s agenda at stake? If your elderly parents or extended family don’t understand why AT&T is meddling with their landline service and don’t want to change, AT&T has an unsympathetic solution. Under their recommendation, your parents would find themselves with a “default service provider” they might not want to do business with or, even worse, simply leave them with a dead phone line AT&T has no interest in repairing. But AT&T would likely still get their way. In rural areas they already cover, AT&T would be the “default service provider” because it is the only service provider. If Maude wants her phone line back, the only way she will get it is choosing the migration to Voice over IP AT&T intended all along.

AT&T’s language is remarkably frank, but was never intended to be viewed and explained to the public at large. It was the product of a phone company lobbyist talking to a politician, staffer, or regulator that one day could become an employee of that phone company. The only way to stop this cozy relationship is to tell regulators you are watching (and understanding) the game being played here.