‘Broadband Scandal’: How the Phone Companies Screwed Us All

A new book called The $200 Billion Broadband Scandal claims to detail the variety of tax breaks and compensations offered to the Bell-spawned phone companies to build out our nation’s fiber-optic network—a network designed to bring 45-megabit per second connections into every home. We don’t know about you, but we are sending this text via a rickety old copper line, using the best 1-megabitish DSL connection Verizon has to offer.

Muni Wireless has read an advance copy and offers up an overview. Most interesting is the per-household figure of $2,000—the amount we as citizens paid for through the various government-sanctioned breaks for the phone companies.

This news is especially enlightening as all the Baby Bells continue to merge back into Ma Bell 2.0.

From Muni Wireless’s report:

• The phone companies pulled a bait and switch. In order to offer DSL over copper, it was not necessary to have state regulation changed. Their plan was to get rid of regulations and enter long distance.

• The Bell mergers resulted in the death of the state plans for fiber optic broadband. Over 26 states had fiber optic projects closed when the mergers of SBC and Verizon were completed. That affected almost 80% of all phone customers in the US.


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  1. bigkens says:

    a) Since SBC has been gobbling and growing and has now assumed the name, AT&T, is it going to start renting phones to us again?

    b) I have DSL from a local carrier, TDS, and it sucks. It has never reached anywhere close to the posted speed and the damn modem drops the connection at least once a day. What an aggravation. Too bad for us, we’re in a two year contract. It’s on a new line installed two years ago . . . and it’s copper.

  2. Brian D says:

    The worst part is that we’re not learning. Pennsylvania at one point gave Verizon billions in tax breaks to roll out fiber throughout their state. Verizon never did it. Then, when Philadelphia wanted to run its own broadband, Verizon put up such a stink that PA passed legislation essentially outlawing municipal broadband unless Verizon said it’s okay. You would think they would have learned that Verizon will do whatever it can to protect its own interests, but that’s what happens when lobbyists have more influence than regular citizens.

  3. scingram says:

    I like everyone else in the world I would like faster Broadband. And yes, the fiber backbone that was paid for by taxes and the gov is there and lit up like a christmas tree. The problem for the bells lies not in the fact that they want to limit speeds so much as it is a massive capital investment to run what they call the last mile, or fiber to the home. To get fiber from the Central Office, or the curb, is a major cost that the bells just cant take on currently in thier overall cash strapped state. And it is prohibitevly expensive to pass on to the customer. So, we are stuck as we are currently. Limited by the ancient copper pipe in all of our homes.
    For me, Qwest is at least able to provide me with a stable and fast (3mb/s) DSL connection. Sure it is not fiber, but it will hold me over till that is in place.

  4. mrscolex says:

    VoIP is the reason why telco companies and broadband will never get along. VoIP is going to spell the end of the telco as we know it, and they know it as well– why then would they hand their fates over to the consumer on a silver platter?

    I don’t mean skype, or vonage, or any of the new services you hear about, but I mean when VoIP really starts taking off into the mainstream and becomes less of a novelty.

    You’ve heard a lot of buzzing in the background about telco’s trying to influence the way packets go over the internet, in order to slow down certain sites and what not– this is part of their bullying to ensure that when VoIP becomes a dominant form of telephone operation, that they manage to continue their stranglehold into the internet age.

    To the average consumer who hears the word VoIP, which is now becoming part of the mainstream with products from Vonage, be wary of any congressional regulation that should come out in the future regarding this service. There is a good chance that the telco’s are going to try and find a way to dip the hands in the cookie jar and muddle it all up before it really gets a chance to take off.

  5. scingram says:

    I have to disagree with mrscolex on this issue. VoIP and Broadband are two services that go hand in hand. With the introduction of VoIP, especially at the telco level broadband will increase it’s market presence, become cheaper, and ultimately become faster. Plus the bundling of packages allows for telcoms to offer package deals that include DSL and VOIP at a competive price. Not only that, but with the telcos, you get the added reliability of Enhanced 911 services and other features that you dont get with the standalones like Vonage and Skype.

  6. AcidReign says:

    …..Be glad your only choices for broadband aren’t Bellsouth and Charter. I’m lucky to hit 700 kbps (according to CNET’s broadband meter) during evening hours. At, say, 3 AM, I might get 1000. And I’m paying Bellsouth for 1400. Of course, Bellsouth’s meter always says 1400. The Charter folks on my street say that speed in the early evening is about 75k. With numerious outtages.

    …..At least Bellsouth is on all the time. It didn’t drop out, even during Hurricanes Ivan and Dennis.

  7. Juancho says:

    I’ve been waiting for the “coming broadband revolution” for years. I heard that phrase so many times as a journalism student in college, I wanted to gag, and I graduated in 2003.

    The apartment I live in, in an inner-ring suburb of Cleveland, can’t get DSL because I’m too far from an access point and my building has phone lines so old that they are actually wrapped in paper. (Of course, SBC is my only DSL option.) My parents live out in the suburbs, and we’re unlucky enough to live in area that’s sliced between the edges of two DSL points, so we’re out of luck there as well.

  8. scingram says:

    That sucks. I know how it feels to be “Not in area”. Have been there before. Depending upon your budget, you may want to look into Verizon’s EVDO service. I keep hearing good things, the speed is great, and as long as you can get a cell signal you are pretty much set.