Wednesday, February 01, 2006

How the phone companies ruined broadband and stole 200 billion dollars

Starting in the early 1990’s, with a push from the Clinton-Gore Administration’s “Information Superhighway”, every Bell company — SBC, Verizon, BellSouth and Qwest — made commitments to rewire America, state by state. Fiber optic wires would replace the 100-year old copper wiring. The push caused techno-frenzy of major proportions. By 2006, 86 million households should have had a service capable of 45 Mbps in both directions, (to and from the customer) could handle over 500 channels of high quality video and be deployed in rural, urban and suburban areas equally. And these networks were open to ALL competition.

In order to pay for these upgrades, in state after state, the public service commissions and state legislatures acquiesced to the Bells’ promises by removing the constraints on the Bells’ profits as well as gave other financial perks. They were able to print money — billions of dollars per state — all collected in the form of higher phone rates and tax perks. (Note: each state is different.)

  • ADSL is not what was promised and paid for. It goes over the old copper wiring, can’t achieve the speed, has problems in rural areas and is mostly one-way.
  • 0% of the Bell companies’ customers have 45 Mbps residential services.



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