WEBVTT 00:00.000 --> 00:04.000 And then there was light. 00:04.000 --> 00:08.000 Okay, I might as well start. 00:08.000 --> 00:12.000 My name is Bruce Kushnick and I'm going to talk about the 500 billion broadband scandal. 00:12.000 --> 00:16.000 It's time to break up AT&T again. 00:16.000 --> 00:20.000 For those of you who don't know, I've been a telecom analyst for 36 years. 00:20.000 --> 00:24.000 I work with a group called the Irregulators at this point, which are 00:24.000 --> 00:28.000 former senior staff members of the FCC, 00:28.000 --> 00:32.000 the Attorney General's offices, consumer advocates, and our goal is to actually 00:32.000 --> 00:36.000 fix what's broken instead of keep talking about it. 00:36.000 --> 00:40.000 I've been doing this for a very long time, and 500 billion broadband 00:40.000 --> 00:44.000 scandal is sort of an update of the last book I wrote. 00:44.000 --> 00:48.000 But I'm going to basically make you 00:48.000 --> 00:52.000 ask people to pick one or the other. If you take the blue pill, I think 00:52.000 --> 00:56.000 you'll wake up tomorrow and not remember my name, which is probably a good thing. 00:56.000 --> 01:00.000 If you take the red pill, you'll go, what the hell was he talking about? 01:00.000 --> 01:04.000 Okay. I'm going to be talking about the history of broadband in America, which most of you 01:04.000 --> 01:08.000 probably may know pieces of, but I kind of doubt most of you know the whole truth. 01:08.000 --> 01:12.000 And I'd like to announce there was a settlement yesterday, 01:12.000 --> 01:16.000 I mean last week, of Verizon New York. We had been 01:16.000 --> 01:20.000 working on this for seven years, nine years total. 01:20.000 --> 01:24.000 And what happened was Verizon New York has decided to settle in a case where they are 01:24.000 --> 01:28.000 putting in 32,000 lines of fiber optics in unserved areas, and 01:28.000 --> 01:32.000 they're supposed to fix the copper that's been broken in areas that are not going to be upgraded to fiber. 01:32.000 --> 01:36.000 And we estimated this to be about a 300 million to 01:36.000 --> 01:40.000 half billion dollar settlement. 01:40.000 --> 01:44.000 Things take a little time, thank you very much. However, I'm about to talk about 01:44.000 --> 01:48.000 another half trillion dollars we've just found, which brings the total up to a ridiculous 01:48.000 --> 01:52.000 amount of more than a trillion dollars. And if you think I'm not 01:52.000 --> 01:56.000 going to give you some of the facts and some of the data points that you can check yourself, 01:56.000 --> 02:00.000 I've written a couple of books on this. 02:00.000 --> 02:04.000 We believe that AT&T, Verizon, CenturyLink, and the FCC 02:04.000 --> 02:08.000 intentionally made the local phone networks unprofitable to state utilities 02:08.000 --> 02:12.000 starting around 2005. And in fact, 02:12.000 --> 02:16.000 as I will discuss, it's a lot of money. 02:16.000 --> 02:20.000 Anyway, right now we are currently in an appeal of 02:20.000 --> 02:24.000 one of the FCC decisions, something about backhaul, which I'll be glad to talk about 02:24.000 --> 02:28.000 separately, but our plan is to sue the FCC, create a 02:28.000 --> 02:32.000 model complaint that everybody in this room and everybody in America can file, 02:32.000 --> 02:36.000 which basically is going to say, which I'll go into in a little detail, and we're 02:36.000 --> 02:40.000 going to call for the taking back of the networks. We paid for them, they should be 02:40.000 --> 02:44.000 more ours than they're not. For those of you who don't know, and we're going to call 02:44.000 --> 02:48.000 for the breakup of AT&T one more time. Now, I should give you 02:48.000 --> 02:52.000 some of my credentials. I started off in 1972, 02:52.000 --> 02:56.000 I was at a dorm at MIT, and we were building 02:56.000 --> 03:00.000 these boxes that would basically let you make 03:00.000 --> 03:04.000 unlimited long distance calls around the world for free by taking 03:04.000 --> 03:08.000 the box, taking a Tone 2600, getting 03:08.000 --> 03:12.000 disconnected into the long distance operator, and then going wherever you wanted to. Now, it turns out that the 03:12.000 --> 03:16.000 dorm that I was in was called Bexley. 03:16.000 --> 03:20.000 In the basement of Bexley, there happened to be a unique feature, 03:20.000 --> 03:24.000 which was all the phone lines in the entire institute were in the basement 03:24.000 --> 03:28.000 of Bexley. So some of the dorm rooms had nine, twelve phone lines. 03:28.000 --> 03:32.000 However, in 1972, 03:32.000 --> 03:36.000 we were warned that the FBI 03:36.000 --> 03:40.000 was coming to the dorm, and there was a banner, which I don't have a picture of, which 03:40.000 --> 03:44.000 said, welcome the FBI. 03:44.000 --> 03:48.000 And that's one of the FBI agents. I decided to redact his face. 03:48.000 --> 03:52.000 This is taken in 1972. 03:52.000 --> 03:56.000 They actually used pencils and paper, and they were like, well, 03:56.000 --> 04:00.000 how did you rack up half a million, nevermind, I don't go into details. 04:00.000 --> 04:04.000 We were working with some guys in California 04:04.000 --> 04:08.000 that started a company called Apple, specifically Wozniak was a friend of one of the guys in the dorm. 04:08.000 --> 04:12.000 So 04:12.000 --> 04:16.000 when I became a telecom analyst, they said, well, how did you start? 04:16.000 --> 04:20.000 And I said, well, I was very interested in the technology, of course. 04:20.000 --> 04:24.000 So before 1980, this is Ma Bell. Ma Bell was the entire country's 04:24.000 --> 04:28.000 telecommunications infrastructure. They also on long distance. 04:28.000 --> 04:32.000 They also, you even had to buy the phone, you rent the phone from them. And so 04:32.000 --> 04:36.000 essentially it was one large corporation. There was a million customers. 04:36.000 --> 04:40.000 See, I'm not good at this thing at all. Sorry. 04:40.000 --> 04:44.000 Let me go back. 04:44.000 --> 04:48.000 By the way, that's my book, The Book of Broken Promises. It's free. It's a download. 04:48.000 --> 04:52.000 It's online at theirregulators.org. I don't know why 04:52.000 --> 04:56.000 I missed that thing. Let me go back. Anyway, 04:56.000 --> 05:00.000 there we go. The Bell system was basically a collection of state utilities, 05:00.000 --> 05:04.000 which most people don't know. And so there was 05:04.000 --> 05:08.000 a New York telephone. There was Pacific Bell out in California. 05:08.000 --> 05:12.000 And so each of these separate entities were actually in charge of the 05:12.000 --> 05:16.000 entire infrastructure. However, AT&T, the parent, 05:16.000 --> 05:20.000 was basically in charge of the oversight of all these companies. 05:20.000 --> 05:24.000 Now, what's problematic is 05:24.000 --> 05:28.000 so I should give you a little history. So MCI, which was one thing that went to long 05:28.000 --> 05:32.000 distance business and a bunch of other players. So they sued the AT&T 05:32.000 --> 05:36.000 and they had something called a divestiture where they created seven baby 05:36.000 --> 05:40.000 Bells. Now these are the fattest babies in history. 05:40.000 --> 05:44.000 There was US West. There was Pac Bell. So all of these people 05:44.000 --> 05:48.000 wanted to be Ma Bell again. And that's why 05:48.000 --> 05:52.000 I'll get to how this all happened. But essentially what happened was all of 05:52.000 --> 05:56.000 these companies were basically supposedly supposed to compete with each other. 05:56.000 --> 06:00.000 They were supposed to go out and also 06:00.000 --> 06:04.000 wire America with a fiber optic line that was capable of 45 06:04.000 --> 06:08.000 megabits in both directions in the year 1992. 06:08.000 --> 06:12.000 Okay, so here's what's going on. 1991 there's a Clinton-Gore 06:12.000 --> 06:16.000 campaign that's talking about the information superhighway. This was basically a 06:16.000 --> 06:20.000 plan to just replace the existing copper wire with a fiber 06:20.000 --> 06:24.000 optic wire that basically would go to everybody's home, everybody's office by 06:24.000 --> 06:28.000 the year 2010. And the speed of broadband as listed in state 06:28.000 --> 06:32.000 proceedings, including 06:32.000 --> 06:36.000 there was a guy named Harry Newton who had a telecom library and 06:36.000 --> 06:40.000 published telecom dictionary. And he had, this was the speed of broadband 06:40.000 --> 06:44.000 in the United States in 1992. Now there was a couple of problems with this. Since 06:44.000 --> 06:48.000 45 megabits in both directions, the hard drives were only 40 megs. 06:48.000 --> 06:52.000 So there was a little disconnect between all this. Now I, 06:52.000 --> 06:56.000 and the information superhighway, which I should talk about, basically was 06:56.000 --> 07:00.000 everywhere. So if you were to go read a newspaper, 07:00.000 --> 07:04.000 a magazine, listen online, this is worse than 5G, it's wireless hype. 07:04.000 --> 07:08.000 This is sort of like America is going to have fiber optics coming 07:08.000 --> 07:12.000 soon to your TV starting in 1996. Now what most 07:12.000 --> 07:16.000 people don't know, 07:16.000 --> 07:20.000 so this is Pacific Bell's 07:20.000 --> 07:24.000 rollout of fiber optics for California. By the year 07:24.000 --> 07:28.000 2000 there was supposed to be 5.5 million lines. They were supposed to 07:28.000 --> 07:32.000 spend 16 billion dollars. And 07:32.000 --> 07:36.000 by 1997 they hadn't rolled out the squat. And in fact they 07:36.000 --> 07:40.000 pocketed the money. Now what you should know is that in every state, 07:40.000 --> 07:44.000 the phone companies went to the states, you know, if only you changed the laws, 07:44.000 --> 07:48.000 we would be glad to go out and spend the extra money on the infrastructure. 07:48.000 --> 07:52.000 And they gave them price caps, which basically said, make as much 07:52.000 --> 07:56.000 as profits as you want, don't worry about it. And use that money for the 07:56.000 --> 08:00.000 infrastructure. Not one state in the last 20 years 08:00.000 --> 08:04.000 has ever gone back and said, excuse me, where's the fiber optic lines that you were supposed to 08:04.000 --> 08:08.000 put in? Excuse me, did you refund the 15 billion dollars you collected 08:08.000 --> 08:12.000 for doing this over this period of time? This has never 08:12.000 --> 08:16.000 happened. So, 08:16.000 --> 08:20.000 now for those of you who think that I'm kidding, this is a 08:20.000 --> 08:24.000 list of the 22 filings at the FCC in 1993 and 08:24.000 --> 08:28.000 1994 by all the companies who basically said, well, let's see, 08:28.000 --> 08:32.000 it's kind of hard to read. It's in my book by the way. Let's see, 08:32.000 --> 08:36.000 Connecticut was supposed to have a million lines, put in permanent, which was 08:36.000 --> 08:40.000 AT&T owned it. Let's see another. There was supposed to be Cleveland, 08:40.000 --> 08:44.000 Indianapolis, Ohio, most of the East Coast, there was 08:44.000 --> 08:48.000 1.2 million lines, and it's supposed to be up the East Coast, 08:48.000 --> 08:52.000 and a million lines in District of Columbia. So, 08:52.000 --> 08:56.000 what happened was this, this is a very interesting thing. 08:56.000 --> 09:00.000 These models were all fraudulent. Now, 09:00.000 --> 09:04.000 I'm sitting there, 09:04.000 --> 09:08.000 okay, so I'm sitting, I'll go back, I don't know how to go back, 09:08.000 --> 09:12.000 I'm sitting there and basically what happened was is, I'm a consultant at this 09:12.000 --> 09:16.000 point to working for, have an agreement with 09:16.000 --> 09:20.000 International Data Corp in 1992. I helped roll out the first 09:20.000 --> 09:24.000 three-digit dialing service, independent dialing service, 511 with Cox 09:24.000 --> 09:28.000 newspapers. I was basically making a lot of money, I was 09:28.000 --> 09:32.000 traveling around the world and I was talking about things like the Information Superhighway 09:32.000 --> 09:36.000 until I realized that they were holes. The previous slide 09:36.000 --> 09:40.000 basically showed that there was, they claimed it was going to cost $750 to $1,000 09:40.000 --> 09:44.000 to put in a fiber optic line, and that the set-top box would be $250. 09:44.000 --> 09:48.000 This is 1992. I don't think it was 09:48.000 --> 09:52.000 capable of doing that, you know, we couldn't do it for $10,000 09:52.000 --> 09:56.000 in the year 2000, counting the box. The box had to handle 45 09:56.000 --> 10:00.000 megabits in both directions, video, and 10:00.000 --> 10:04.000 sorry, that made me laugh. So, the other thing that happened, at the 10:04.000 --> 10:08.000 breakup they made a couple of mistakes. The first mistake was they overcharged my NFL $1,000 10:08.000 --> 10:12.000 for this rotary phone. So, I'm sitting there with my 10:12.000 --> 10:16.000 clients who are AT&T and Verizon and all these companies, and essentially 10:16.000 --> 10:20.000 I don't look at the bills usually, and I go to my Aunt Ethel's house and she has a rotary 10:20.000 --> 10:24.000 phone. And her caretaker is saying, you know, my Aunt Ethel is 89 years old, 10:24.000 --> 10:28.000 legally blind, with walkers, and she's, and 10:28.000 --> 10:32.000 I go to look at the phone and I said, can you give me the bills? She gives me the bills 10:32.000 --> 10:36.000 and I'm like, this is incredible. I type them into a spreadsheet, 10:36.000 --> 10:40.000 find out that she paid over $1,000 for a rotary phone 10:40.000 --> 10:44.000 from 1982 to like 1995. 10:44.000 --> 10:48.000 And I was like, this is unbelievable to me. This is crazy. 10:48.000 --> 10:52.000 There was a case, by the way, about this, which I think 10:52.000 --> 10:56.000 it was like a $100 million settlement, which we did not take. Anyway, 10:56.000 --> 11:00.000 this thing triggered something where I realized my clients may not be telling me 11:00.000 --> 11:04.000 the truth about everything. 11:04.000 --> 11:08.000 And so, I decided that it was time to call for a second divestiture, 11:08.000 --> 11:12.000 divestiture two. The first divestiture broke up AT&T, but it didn't 11:12.000 --> 11:16.000 open up the local phone networks for competition. 11:16.000 --> 11:20.000 And I was called a phone bill fanatic by the Washington Times. I was very proud of that. 11:20.000 --> 11:24.000 And basically all of my former clients called all of the press 11:24.000 --> 11:28.000 and said, I wouldn't talk to this guy anymore. He's no longer reliable. He's gone off the deep end. 11:28.000 --> 11:32.000 Which is probably true. And I did write a 11:32.000 --> 11:36.000 report to warn people that things were not going to happen the way they thought called 11:36.000 --> 11:40.000 the information super highway get a grip. Where they were doing projections. Tomorrow 11:40.000 --> 11:44.000 there will be 48 million phone lines. There will be fiber optic by the year 11:44.000 --> 11:48.000 2000, I guarantee it. And if you wait three more days, we'll throw in the TV set. 11:48.000 --> 11:52.000 Now, 11:52.000 --> 11:56.000 1996, three things happened. So, let me just start. 11:56.000 --> 12:00.000 Let me just backtrack for a second. So, I was consultant for International Data 12:00.000 --> 12:04.000 Corps in 1986, where I was talking about all the wondrous new 12:04.000 --> 12:08.000 interactive services. Oh, by the way, I did help roll out a caller ID. 12:08.000 --> 12:12.000 I wrote a report called Automatic Number Identification. 12:12.000 --> 12:16.000 Ooh, hot topic. In 1987, which basically was that 12:16.000 --> 12:20.000 you could actually productize the phone number that was used in the networks 12:20.000 --> 12:24.000 as something that could be a residential service. 12:24.000 --> 12:28.000 I didn't call her ID. Thank you very much. I also asked for blocking, please. 12:28.000 --> 12:32.000 We did a survey that said 68% of the population did not want to give their phone number out, 12:32.000 --> 12:36.000 but 68% of the population wanted to see the number. They weren't 12:36.000 --> 12:40.000 quite the same people, but it didn't matter. 12:40.000 --> 12:44.000 So, in 1992, I realized that something's really wrong. So, I create new 12:44.000 --> 12:48.000 networks. We start doing a big study on the breakup. 12:48.000 --> 12:52.000 We also started tracking all of the broadband commitments. 12:52.000 --> 12:56.000 So, in 1996, three things happened. Just let me bring up the speed. 12:56.000 --> 13:00.000 1996, the Telecommunications Act of 1996 happens. It says that the wires 13:00.000 --> 13:04.000 that are there have to be opened to direct competition on 13:04.000 --> 13:08.000 all levels. Internet service providing broadband, 13:08.000 --> 13:12.000 phone service, data services, 13:12.000 --> 13:16.000 it didn't matter. Two, the phone companies decided 13:16.000 --> 13:20.000 to go out and marry each other. We know this is an act against God when 13:20.000 --> 13:24.000 siblings marry. Yes, and nature. And the internet 13:24.000 --> 13:28.000 hits. Now, you have to understand, as some first old guys, 13:28.000 --> 13:32.000 the internet was basically like a creaky old thing that you had to have somebody help you. 13:32.000 --> 13:36.000 Oh, that's a modem? Okay. That's a dial up. 13:36.000 --> 13:40.000 What do I have to do? I have to call these 15 numbers. I gotta see if it works. 13:40.000 --> 13:44.000 It wasn't an easy... And the graphic interface was basically 13:44.000 --> 13:48.000 a shaky thing. You would put it up and it says, that doesn't look anything like this. 13:48.000 --> 13:52.000 At all. Ever. 13:52.000 --> 13:56.000 Now, the mergers. 13:56.000 --> 14:00.000 AT&T was basically created by 14:00.000 --> 14:04.000 SBC, which was one of the Bell companies, and it married Pac Bell, which was California. 14:04.000 --> 14:08.000 Then it married Southern New England Telephone, which is Connecticut. 14:08.000 --> 14:12.000 Then it married Ameritech, which was the five states, Ohio, Indiana, 14:12.000 --> 14:16.000 Wisconsin, Michigan, 14:16.000 --> 14:20.000 and Illinois. 14:20.000 --> 14:24.000 Thank you very much. And Bell South, which was the last merger. And then it took over 14:24.000 --> 14:28.000 AT&T, and I'll explain that for a second. And Verizon was formed by the merger of Bell Atlantic, 14:28.000 --> 14:32.000 which was the bottom part of the East Coast, from Virginia to New Jersey. 14:32.000 --> 14:36.000 And Ninex, which was from New York up through Maine. 14:36.000 --> 14:40.000 And it took GTE, which was all these little places all over 14:40.000 --> 14:44.000 the country. And it also took MCI. US West, 14:44.000 --> 14:48.000 which is Montana, Washington State, was basically 14:48.000 --> 14:52.000 a thing called... Turned into Quest, and then now it's Town Street Link. 14:52.000 --> 14:56.000 So what you have is three companies that were formed out of all these other companies. 14:56.000 --> 15:00.000 And it wasn't really a good thing, because they controlled 15:00.000 --> 15:04.000 the wires and the state utilities. Now SBC, 15:04.000 --> 15:08.000 I love this merger. SBC is the five states in Ohio, 15:08.000 --> 15:12.000 and SBC is now Pac Bell, Connecticut, 15:12.000 --> 15:16.000 and Texas, Oklahoma, 15:16.000 --> 15:20.000 a bunch of states in the... I don't want to go through them all. And then 15:20.000 --> 15:24.000 Ameritech was the Ohio, Indiana. So they decided to merge, 15:24.000 --> 15:28.000 and they're going to be in 30 cities out of their region in 30 15:28.000 --> 15:32.000 months. Okay? They're going to compete. And so, and this was supposed to 15:32.000 --> 15:36.000 make everybody excited, because they were going to go out and have direct competition 15:36.000 --> 15:40.000 for the other Bell companies. Well, it turned out that the FCC 15:40.000 --> 15:44.000 in one of these clauses we found, basically said, you can 15:44.000 --> 15:48.000 basically just say that you've done that city if you have three 15:48.000 --> 15:52.000 unaffiliated customers in that city. 15:52.000 --> 15:56.000 And I'm sitting there going, I can give more than a bar. It's offering free beer 15:56.000 --> 16:00.000 to sign up for his phone service for three customers. That's all they got 16:00.000 --> 16:04.000 in certain cities. So after they filed with the FCC 16:04.000 --> 16:08.000 claim, we fulfilled our obligations. We have 30 cities, and 16:08.000 --> 16:12.000 maybe a couple hundred people. But they were supposed to have, 16:12.000 --> 16:16.000 we were supposed to have 10 million customers, and they never got 16:16.000 --> 16:20.000 maybe a squat number. So that merger basically was just a made-up thing. 16:20.000 --> 16:24.000 The Telecom Act, when they opened up the networks, 16:24.000 --> 16:28.000 also created Internet Service Providers. Most people don't know this, but in the year 16:28.000 --> 16:32.000 2001, there were 9,335 Internet Service 16:32.000 --> 16:36.000 Providers offering the majority of customers in the United States, 16:36.000 --> 16:40.000 the majority of subscribers Internet Service and broadband service. 16:40.000 --> 16:44.000 It was not the big telcos offering the service. It was 16:44.000 --> 16:48.000 the small guys. In fact, in New York City, there were 16:48.000 --> 16:52.000 331 ISPs advertising in just New York City. 16:52.000 --> 16:56.000 Now we have, as you know, 16:56.000 --> 17:00.000 a couple of Internet Service Providers and everybody else going, what do we do? 17:00.000 --> 17:04.000 Now, Mike Powell closed the networks. So the FCC is taken over 17:04.000 --> 17:08.000 by the Republicans in 2001, and Mike Powell, who's the chairman, 17:08.000 --> 17:12.000 basically, he basically says, you know, 17:12.000 --> 17:16.000 we don't want to have any of these pesky competitors around. Why don't we just close 17:16.000 --> 17:20.000 the networks? And what we'll do is, how do we close it? We're basically going to say that 17:20.000 --> 17:24.000 the, sorry, since AT&T, which was 17:24.000 --> 17:28.000 SBC at the time, said we are going to have fiber to the home in 2004. 17:28.000 --> 17:32.000 Fiber to the home, 2004. Now SBC is AT&T. 17:32.000 --> 17:36.000 Okay, just keep this in mind. SBC never rolled out 17:36.000 --> 17:40.000 fiber to the home in 2004. And then it rolled out 17:40.000 --> 17:44.000 U-verse. So the networks were closed based on this premise 17:44.000 --> 17:48.000 that was a lie. So the ISPs had a big 17:48.000 --> 17:52.000 run up, and then basically 7,000 ISPs were 17:52.000 --> 17:56.000 basically gotten rid of. By these caveats, 17:56.000 --> 18:00.000 which had nothing to do whatsoever with the quality of the service or market 18:00.000 --> 18:04.000 power, this was the FCC decided that we don't need competition anywhere. 18:04.000 --> 18:08.000 And it worked. They put all these ISPs out of business. 18:08.000 --> 18:12.000 So there were 7,000 ISPs that were killed off. 18:12.000 --> 18:16.000 The way they killed them off was they made the broadband network or the 18:16.000 --> 18:20.000 internet network one thing, which turned into net neutrality. 18:20.000 --> 18:24.000 So when people say how does net neutrality form? Net neutrality was not formed by 18:24.000 --> 18:28.000 here and there. This was we killed 12 competitors and we decided 18:28.000 --> 18:32.000 that the way to do this was we would make the broadband and internet service and information service 18:32.000 --> 18:36.000 Title I and get rid of Title II. And so 18:36.000 --> 18:40.000 the reason this was important was because Title II allowed the internet 18:40.000 --> 18:44.000 providers to use the networks. It was common carriage. 18:44.000 --> 18:48.000 Title I is an information service. They didn't have to rent it out. This killed off 18:48.000 --> 18:52.000 line sharing, by the way, where a company could go out and use the wires. 18:52.000 --> 18:56.000 And it basically shut down MCI and AT&T as the largest competitors because 18:56.000 --> 19:00.000 those guys couldn't rent the networks easily anymore. And they were the two largest competitors. 19:00.000 --> 19:04.000 So they were taking over. So Humpty Dumpty was basically 19:04.000 --> 19:08.000 put back together again. So you had one comp, you have three 19:08.000 --> 19:12.000 companies now that control both the infrastructure of the telecommunication side 19:12.000 --> 19:16.000 which are the state utilities. They control the 19:16.000 --> 19:20.000 wireless companies because they control the infrastructure of the state utilities. 19:20.000 --> 19:24.000 Most people don't know that wireless requires a wire. 19:24.000 --> 19:28.000 And in fact the punchline is 19:28.000 --> 19:32.000 basically this FCC is trying to get rid of all the remaining regulations 19:32.000 --> 19:36.000 that are left. And I'll go over that in a second. 19:36.000 --> 19:40.000 Now I was on the FCC Consumer Advisory Committee at this point 19:40.000 --> 19:44.000 in 2003. I was trying to defend the faith. I was working with 19:44.000 --> 19:48.000 one of the guys who was a phone bill auditor. We would go out and we took a bunch of 19:48.000 --> 19:52.000 class actions about phone bill overcharging. Three of which we 19:52.000 --> 19:56.000 settled and won. Thank God. Anyway, what happened was 19:56.000 --> 20:00.000 I'm on the FCC Consumer Advisory Committee and we're going to talk about truth in billing 20:00.000 --> 20:04.000 and we have one of the experts who does truth in billing and we have 20:04.000 --> 20:08.000 the guy who just collected all these bills in New York and New Jersey and 20:08.000 --> 20:12.000 the committee says it's a great idea but we're not going to have you speak. 20:12.000 --> 20:16.000 What do you mean you're not going to have me speak? Well, no, no, we're going to have these other 20:16.000 --> 20:20.000 people speak. Which was the wireless association spoke. 20:20.000 --> 20:24.000 Gosh, that made me very happy. There was the phone company association spoke 20:24.000 --> 20:28.000 and one of the advocates spoke except for they didn't really address the stuff that we had put on the table. 20:28.000 --> 20:32.000 So I decided to find out who all these people in the room were and realized that 20:32.000 --> 20:36.000 the majority of the people in the room, Verizon was on the committee. 20:36.000 --> 20:40.000 They had been on the committee since it started. It had all of 20:40.000 --> 20:44.000 these other groups like the wireless association but it had all these astroturf groups. 20:44.000 --> 20:48.000 These were fake consumer groups that were located in D.C. coming out of a lobby 20:48.000 --> 20:52.000 firm that basically said, no, no, we do long distance, 20:52.000 --> 20:56.000 we do Hispanic and we do poor people 20:56.000 --> 21:00.000 and we do all the different ethnic groups they decided to have different 21:00.000 --> 21:04.000 committees. So I decided to out them. Which was 21:04.000 --> 21:08.000 we got the Washington Post to write a story and I was not asked back on the committee. 21:08.000 --> 21:12.000 The most recent committee that happened, the same 21:12.000 --> 21:16.000 kind of story is current. Which is the, there's a thing called BDAC, 21:16.000 --> 21:20.000 which is the broadband whatever it is. And it's a bunch of things 21:20.000 --> 21:24.000 that are trying to get rid of the rights of the states to be able to 21:24.000 --> 21:28.000 deal with their own infrastructure and get 21:28.000 --> 21:32.000 rid of the cities and basically make the FCC control everything. And one of the guys, 21:32.000 --> 21:36.000 a mayor from San Jose said, you know, you guys are just giving away the store here. And he left the committee. 21:36.000 --> 21:40.000 So this is not, this is 21:40.000 --> 21:44.000 2003, this is a little later. 21:44.000 --> 21:48.000 So I don't want to think that I'm just picking on the phone companies. The cable 21:48.000 --> 21:52.000 companies also did some things that you should know about. 21:52.000 --> 21:56.000 They said also we are going to give broadband to America if you just 21:56.000 --> 22:00.000 let us raise our rates and add up to $5 22:00.000 --> 22:04.000 a month so that we can go out and build this new infrastructure. 22:04.000 --> 22:08.000 And basically they said, okay, that sounds great, but it expires in 2001. 22:08.000 --> 22:12.000 Well, it turns out 22:12.000 --> 22:16.000 this contract never got taken off. 22:16.000 --> 22:20.000 The extra $5 is still built into the rates. 22:20.000 --> 22:24.000 They just kept adding and adding and adding more money to the same 22:24.000 --> 22:28.000 things without ever looking at how much profits the companies were making anymore. 22:28.000 --> 22:32.000 I will also have to note that basically in the agreement 22:32.000 --> 22:36.000 Comcast will also provide a modem and modern 22:36.000 --> 22:40.000 modem service to all such schools within a year. 22:40.000 --> 22:44.000 That didn't happen either. So the FCC 22:44.000 --> 22:48.000 really doesn't do a lot of oversight. And also by the way, Time Warner 22:48.000 --> 22:52.000 did some analysis of their revenues 22:52.000 --> 22:56.000 and expenses. The local, the broadband 22:56.000 --> 23:00.000 service has a 97% profit margin because as I'll explain 23:00.000 --> 23:04.000 what happened with local phone service, they decided to dump all the expenses 23:04.000 --> 23:08.000 into the basic rate of the utility or in this case 23:08.000 --> 23:12.000 the cable service and then all the other services get a free ride. 23:12.000 --> 23:16.000 Now I have to come back once before I leave the mergers. AT&T 23:16.000 --> 23:20.000 was always one of my favorite mergers. This one was built south. AT&T in 23:20.000 --> 23:24.000 2006 when they filed this they said in 2007 we will have 23:24.000 --> 23:28.000 100% coverage of broadband in the United States in our 22 23:28.000 --> 23:32.000 states. Here is the language. And then we find out it's a slow 23:32.000 --> 23:36.000 broadband. The FCC's broadband speed believe it or not was 200k 23:36.000 --> 23:40.000 in one direction in this year. So they said 23:40.000 --> 23:44.000 well we'll do 200k. However, they never as we know later, we 23:44.000 --> 23:48.000 filed a case against AT&T, they never actually rolled out the 23:48.000 --> 23:52.000 broadband in any place because this would require them to do at least DSL. 23:52.000 --> 23:56.000 And they didn't want to go out and do a DSL so they basically just let all these 23:56.000 --> 24:00.000 unserved areas become unserved. Gee, I wonder how that 24:00.000 --> 24:04.000 happened. Okay, so part two of the broadband 24:04.000 --> 24:08.000 scandal which a lot of people don't know is that 24:08.000 --> 24:12.000 Verizon and AT&T after they closed the networks, after they get rid of all the 24:12.000 --> 24:16.000 competitors say we're going to roll out broadband, really we're rolling out fiber optic broadband. 24:16.000 --> 24:20.000 And Verizon actually did roll out Fios which was a fiber optic broadband service. 24:20.000 --> 24:24.000 Except for the fact that it is Title II, it is common 24:24.000 --> 24:28.000 carriers and it is paid for by local phone customers and dumped into the local 24:28.000 --> 24:32.000 rates. Now you could say what? So the 24:32.000 --> 24:36.000 Fios fiber optic wire basically was, and I read 24:36.000 --> 24:40.000 this is from New York State, it's basically part of the state utility 24:40.000 --> 24:44.000 and that it's just an upgrade of the existing wires and 24:44.000 --> 24:48.000 it's Title II which is very important because Verizon keeps telling the FCC 24:48.000 --> 24:52.000 that the broadband stuff and the internet stuff are Title I 24:52.000 --> 24:56.000 and that Title II harms their investment. This is the investment. 24:56.000 --> 25:00.000 This is how they, and I'll get to that in a second. 25:00.000 --> 25:04.000 Now the Public Service Commission in New York says, quote, 25:04.000 --> 25:08.000 we're going to give rate increases for the massive deployment of fiber optics. 25:08.000 --> 25:12.000 This is 2009. They gave three rate increases. They raised rates 84% 25:12.000 --> 25:16.000 in New York with basically because they needed the money. I mean, they 25:16.000 --> 25:20.000 are going to build up this massive deployment of fiber optics. 2010 Verizon stops 25:20.000 --> 25:24.000 rolling out fiber optics. Now what's going on? 25:24.000 --> 25:28.000 And this is the larger 25:28.000 --> 25:32.000 of the scandals which we only kept finding more and more crap about in the last year. 25:32.000 --> 25:36.000 So Verizon is the state utility. The state utility 25:36.000 --> 25:40.000 basically is, as I just pointed out, has 25:40.000 --> 25:44.000 fiber optic wires as part of the state utility even though everybody thinks it's just the 25:44.000 --> 25:48.000 copper wires that it isn't. It's paid for by the phone customers. 25:48.000 --> 25:52.000 There's the proof of that. And in New York basically we made them understand 25:52.000 --> 25:56.000 that they were paying for the fiber optic wires and that basically 25:56.000 --> 26:00.000 this was kind of crazy because, and being Title II, but nobody 26:00.000 --> 26:04.000 really cared about the part that's called the cross-subsidies part, which is what we found. 26:04.000 --> 26:08.000 So what's going on is Verizon was able to take the expenses 26:08.000 --> 26:12.000 and dump them into the state utility making the local wires look unprofitable 26:12.000 --> 26:16.000 while at the same time making all the other services that they have be very profitable. 26:16.000 --> 26:20.000 And they did this. 26:20.000 --> 26:24.000 Oh, by the way, and I just want to make sure that you know that Verizon is 26:24.000 --> 26:28.000 charging local phone customers for the wires to the cell sites. In fact, 26:28.000 --> 26:32.000 we have Fran Shamow saying, the fact of the matter is, wireline capital, 26:32.000 --> 26:36.000 and I don't want to get the numbers, but they're pretty substantial, 26:36.000 --> 26:40.000 is being spent on the wireline side of the house to support the wireless 26:40.000 --> 26:44.000 growth. So the IP backbone, the data transmission, the wires to the cell, 26:44.000 --> 26:48.000 this is all in the wireline books. Now what this means 26:48.000 --> 26:52.000 is that basically, grandma, the people who didn't get 26:52.000 --> 26:56.000 fiber optic services upstate New York or anywhere else, basically were charged 26:56.000 --> 27:00.000 for the wires to the cell sites. We don't think 27:00.000 --> 27:04.000 this is legal, by the way. And everybody is going wireless. 27:04.000 --> 27:08.000 We do know this. But the thing that's bothering, when people talk about 27:08.000 --> 27:12.000 the wireless, first 5G is just another hype, like the information super highly. 27:12.000 --> 27:16.000 5G is essentially, I have to say, it goes a block or two 27:16.000 --> 27:20.000 at this point. It basically, and it requires a fiber 27:20.000 --> 27:24.000 optic wire. So nobody in the rural areas is going to be wiring for 5G. 27:24.000 --> 27:28.000 Also, the bottom line is that almost all the regular cell service 27:28.000 --> 27:32.000 goes out back to the fiber optic wire. And companies know this. 27:32.000 --> 27:36.000 So the wireless service doesn't pay for the construction, it's not paying for the 27:36.000 --> 27:40.000 access fees. It's basically 55% profits. While local service 27:40.000 --> 27:44.000 loses money, dramatically loses money. Now 27:44.000 --> 27:48.000 the FCC, by the way, and the states, are all playing with the numbers. 27:48.000 --> 27:52.000 When you say to me, well how many lines are there, I will say, 27:52.000 --> 27:56.000 in New York, if you look at basically the 27:56.000 --> 28:00.000 79th Street, all of these wires, almost half of them are not counted as wires 28:00.000 --> 28:04.000 of access lines. Half of them are not being, so, oh we're losing all 28:04.000 --> 28:08.000 these lines, well you're not counting most of the lines that you are 28:08.000 --> 28:12.000 gaining from all these other services like the wires to the cell sites. 28:12.000 --> 28:16.000 Or the fiber optic wires. So this way of playing with the numbers 28:16.000 --> 28:20.000 is a standard operating procedure at the FCC as well. 28:20.000 --> 28:24.000 Now, Verizon just settled, and we asked 28:24.000 --> 28:28.000 for, was basically to say 28:28.000 --> 28:32.000 you shouldn't be cross-subsidizing these other businesses. This is not necessarily 28:32.000 --> 28:36.000 legal. And not only that, but if you cross-subsidize them 28:36.000 --> 28:40.000 you should, so, let me see if I have that. 28:40.000 --> 28:44.000 Yes, okay, so what we did find, which is zombie rules, 28:44.000 --> 28:48.000 this is about as crazy as it possibly could get. In the year 2000, 28:48.000 --> 28:52.000 the FCC sets the 28:52.000 --> 28:56.000 how the expenses will be allocated to the different lines of business. 28:56.000 --> 29:00.000 The year 2000 never changed 29:00.000 --> 29:04.000 for 18 years, and it's frozen. That's it. 29:04.000 --> 29:08.000 So in New York, 29:08.000 --> 29:12.000 Verizon New York, the state utility lost $2.6 billion 29:12.000 --> 29:16.000 in 2017, just so you know. May 31st, 29:16.000 --> 29:20.000 2017, Verizon 2017, New York, 29:20.000 --> 29:24.000 2017 annual report came out. And people like me, 29:24.000 --> 29:28.000 this is sort of like Nirvana. We have real numbers. And what we found 29:28.000 --> 29:32.000 was, Verizon not only lost $2.6 billion, but local service lost 29:32.000 --> 29:36.000 $2.9 billion. This is just the local services 29:36.000 --> 29:40.000 about a billion dollars of revenue out of five billion of Verizon New York, 29:40.000 --> 29:44.000 and local service basically on the regular phone lines. Now how 29:44.000 --> 29:48.000 does the phone lines lose $2.9 billion? Well, 29:48.000 --> 29:52.000 the way they did it was local service had $1.8 billion 29:52.000 --> 29:56.000 of corporate operations expense dumped into 29:56.000 --> 30:00.000 the state utility. The executive jets, 30:00.000 --> 30:04.000 the executive pay, the foundation 30:04.000 --> 30:08.000 grant money, the lawyers, the lobbyists, it's thrown into 30:08.000 --> 30:12.000 local service category for calculations. Local service 30:12.000 --> 30:16.000 is then unprofitable automatically. Local service also paid $1.2 30:16.000 --> 30:20.000 billion in 2017 for construction. This is 30:20.000 --> 30:24.000 the copper wires we're talking about. Verizon spent about 30:24.000 --> 30:28.000 $125 million on those wires. So what we found 30:28.000 --> 30:32.000 was all of these things. Now how did they get $1.8 30:32.000 --> 30:36.000 billion? How did they get $1.2 billion? And how do they charge 30:36.000 --> 30:40.000 all local service? It's very straightforward. 30:40.000 --> 30:44.000 In 2000, Verizon local service had 65% of revenues paid, 30:44.000 --> 30:48.000 65% of the expenses. In 2017, 30:48.000 --> 30:52.000 local service had 21% of the revenues and paid 30:52.000 --> 30:56.000 60% of the expenses. It didn't change. The expenses 30:56.000 --> 31:00.000 basically stayed flat all these years. This way of getting 31:00.000 --> 31:04.000 the local networks to be unprofitable was all on paper. 31:04.000 --> 31:08.000 I hate to tell you this. The digital divide was created this way. 31:08.000 --> 31:12.000 Because they said, we don't, it's expensive to do the 31:12.000 --> 31:16.000 other areas. Well, in a utility, we in New York 31:16.000 --> 31:20.000 State and the urban areas are paying more so that the rural areas get 31:20.000 --> 31:24.000 wired. And we're also paying for the wires. It wasn't like they're taking it out of their own budgets. 31:24.000 --> 31:28.000 So the zombie rules are the rules in 2000, 31:28.000 --> 31:32.000 the rules I'm talking about, which are cost accounting rules, were put in 31:32.000 --> 31:36.000 in 2000. Then in 2007, they decided to erase the 31:36.000 --> 31:40.000 the FCC decided to erase the tracks. Get rid of anybody that 31:40.000 --> 31:44.000 could follow it by getting rid of, they used to publish since 31:44.000 --> 31:48.000 1939, all of the information about each state utility, 31:48.000 --> 31:52.000 how much money it was making, the expenses and everything else. In 2007, 31:52.000 --> 31:56.000 they erased the entire collection of all data. 31:56.000 --> 32:00.000 In 2007, they all filed at the FCC to get rid of all the 32:00.000 --> 32:04.000 accounting rules so that nobody could track this anymore. Brendan Carr, 32:04.000 --> 32:08.000 who's the current commissioner at the FCC, was Verizon's attorney 32:08.000 --> 32:12.000 in 2007 when they filed to get rid of the accounting rules. 32:12.000 --> 32:16.000 Sorry, that one cracks me up. So essentially what you 32:16.000 --> 32:20.000 have, then in 2017, the first thing the FCC decided to do 32:20.000 --> 32:24.000 was to do weed whacking and get rid of the accounting rules. And I always wondered why. 32:24.000 --> 32:28.000 Well, because it turns out that in order to get rid of all of the rules, there are 32:28.000 --> 32:32.000 things that are still left hanging that basically hold them 32:32.000 --> 32:36.000 hostage, of course, for the public, and they're getting erased those. New York 32:36.000 --> 32:40.000 State is the only state we know of that actually publishes all of the financials. 32:40.000 --> 32:44.000 So, 32:44.000 --> 32:48.000 here's what we're suggesting. We just got back, you know, 32:48.000 --> 32:52.000 we're going after the companies because there's nothing left to do. We want them to basically go after 32:52.000 --> 32:56.000 all the money. We believe there's enough money to get America wired with fiber. 32:56.000 --> 33:00.000 We believe that it's been basically allowed to be diverted, the construction 33:00.000 --> 33:04.000 budgets diverted into these other buckets. We believe that the state utilities 33:04.000 --> 33:08.000 have basically been used as a cash machine, and we believe that everybody's rates here 33:08.000 --> 33:12.000 are up 30 to 50 percent more than they should be. Let me give you the basic 33:12.000 --> 33:16.000 example. Local service is now $57 about that Verizon collects 33:16.000 --> 33:20.000 per month on just the wired copper service. It should 33:20.000 --> 33:24.000 cost four. So, or 10, 12, 33:24.000 --> 33:28.000 the wireless services that we use are based on the fact that they 33:28.000 --> 33:32.000 all go back to the wires, and the wires are controlled by these companies. The wires that 33:32.000 --> 33:36.000 go to the cell sites have a 50, 65 percent profit margin. 33:36.000 --> 33:40.000 Why? Because they get away with it. 33:40.000 --> 33:44.000 So, what we're doing is we're saying that's, we're done. It's time to go after them. 33:44.000 --> 33:48.000 And we've been calling for the audits of the subsidiaries 33:48.000 --> 33:52.000 getting rid of them. But our goal now is the FCC's out to screw us. 33:52.000 --> 33:56.000 Literally and figuratively. So, if you 33:56.000 --> 34:00.000 look at what the FCC has done, what it does is, think of this 34:00.000 --> 34:04.000 as just like a large 34:04.000 --> 34:08.000 hog on a spit, and they're just cutting all this stuff away. 34:08.000 --> 34:12.000 They're basically, all of our rights are being taken away slowly because of the 34:12.000 --> 34:16.000 fact that they can allow the companies to control the wire, 34:16.000 --> 34:20.000 to control the services over the wire, including, that's why neutrality wasn't 34:20.000 --> 34:24.000 important. To control the privacy, when you sign up for a service, 34:24.000 --> 34:28.000 they get to now, if it's not basically a regular phone service, 34:28.000 --> 34:32.000 they get to take the data that you have and say, oh, we're going to use it. 34:32.000 --> 34:36.000 This is not common carriage. Common carriage is to keep your fucking 34:36.000 --> 34:40.000 hands off my data. You know, we have the right, it's our, you're just supposed to be 34:40.000 --> 34:44.000 a pipe. You're not supposed to go out and say, oh, would you like to buy this, 34:44.000 --> 34:48.000 buy this spangle or, you know, anything else. 34:48.000 --> 34:52.000 This is not your job. Your job is to give us the best broadband at the cheapest 34:52.000 --> 34:56.000 price and make sure that it's fast. Now, because 34:56.000 --> 35:00.000 of the fact that they just left most of America hanging, what happened was by 2010 35:00.000 --> 35:04.000 they just said, we're done, we're not going to bother with any more upgrades or anything. Upstate New 35:04.000 --> 35:08.000 York basically, the reason why there was a settlement was because 35:08.000 --> 35:12.000 the CWA, the union guys, testified saying, well, the wire was put in the 70s, 35:12.000 --> 35:16.000 or 60s, and was never changed. So, you have 35:16.000 --> 35:20.000 people with 40, 50 year old wires that basically are rotting and they didn't 35:20.000 --> 35:24.000 do anything for 40 or 50 years. The budgets were never there. So, our take 35:24.000 --> 35:28.000 now is that the FCC's plan, just so you know, is to erase 35:28.000 --> 35:32.000 all of the accounting rules, to erase privacy, 35:32.000 --> 35:36.000 they got rid of net neutrality, to go out and basically allow them to 35:36.000 --> 35:40.000 shut off the copper, to 35:40.000 --> 35:44.000 preempt the state laws, preempt the city laws, 35:44.000 --> 35:48.000 pretty much do whatever they want. And you have to understand 35:48.000 --> 35:52.000 from my perspective, 5G is just a shiny bauble, which is 35:52.000 --> 35:56.000 basically being used, oh, the new technology, we're definitely going to do that 35:56.000 --> 36:00.000 just to erase all the laws. Sure, we'll definitely do that. 36:00.000 --> 36:04.000 I mean, no offense, but deja vu. I've worked on these books 36:04.000 --> 36:08.000 for years. This is exactly what's going on. So, our take is we have to 36:08.000 --> 36:12.000 stop the FCC. We can't let this go on. If the FCC erases the rest 36:12.000 --> 36:16.000 of the rules, it'll be very hard to go back to the last layer. Now, most people 36:16.000 --> 36:20.000 don't know there's a state utility. Verizon New York is a state utility. 36:20.000 --> 36:24.000 And we just, and they'll tell you it's a state utility, we have to 36:24.000 --> 36:28.000 make sure that people know that, and they offer broadband. 36:28.000 --> 36:32.000 The only thing is we can't use the state utility as we thought we should, because basically it's been 36:32.000 --> 36:36.000 handed over to these guys. So, 36:36.000 --> 36:40.000 we believe that what should happen next is we should separate the companies 36:40.000 --> 36:44.000 from the wires. We've talked about this, I've talked about this 36:44.000 --> 36:48.000 since 1992. In fact, I was wearing a suit and I thought people were going to throw tomatoes at me, you know. 36:48.000 --> 36:52.000 No, doc. Especially 36:52.000 --> 36:56.000 my former clients. So, I think what we have to do now is we really have to think 36:56.000 --> 37:00.000 through the harms that we have 37:00.000 --> 37:04.000 and what are the other solutions. But there aren't that many other solutions. 37:04.000 --> 37:08.000 Unless we separate the wireless company from the wireline company, the wires 37:08.000 --> 37:12.000 are going to be handed over to this company's private property. That's not a good thing. 37:12.000 --> 37:16.000 And also, all of these mergers with 37:16.000 --> 37:20.000 them controlling content, why? What does it have to do with the offering 37:20.000 --> 37:24.000 of great service to us in each state? Now, these are state-based 37:24.000 --> 37:28.000 utilities. Just keep this in mind. So, we have the right to 37:28.000 --> 37:32.000 basically, we should have the right to use these state-based utilities, because we're basically paid for 37:32.000 --> 37:36.000 them over and over and over. I mean, the $500 billion 37:36.000 --> 37:40.000 was tracked starting in 1995 or 6, 37:40.000 --> 37:44.000 where I started realizing that all the state laws were being changed. And so, it really 37:44.000 --> 37:48.000 is over $500 billion that collected. This new scandal, where we figured 37:48.000 --> 37:52.000 out that they were being able to cross-subsidize all their other lines of business, 37:52.000 --> 37:56.000 and that essentially they decided to intentionally make local service look unprofitable 37:56.000 --> 38:00.000 so that they wouldn't have to go out and do the wiring and use it as excuses, 38:00.000 --> 38:04.000 I think we can nail them on it. So, my job now is to say 38:04.000 --> 38:08.000 anybody who wants to join us, we're looking for people to help. We're going to be raising money 38:08.000 --> 38:12.000 to sue that shit out of the FCC. Sorry, I'm part of my French. 38:12.000 --> 38:16.000 And we're going to try to separate, get all the affiliates to start paying market prices, 38:16.000 --> 38:20.000 which means that Verizon Wireless has to pay at the same price as everybody else. 38:20.000 --> 38:24.000 That's not legal for Verizon to charge their own affiliate 38:24.000 --> 38:28.000 less money than they do Sprint. But that's what came out of the 38:28.000 --> 38:32.000 investigation that we did in New York. And so, while 38:32.000 --> 38:36.000 the New York settlement, which just happened, basically did not go as far as 38:36.000 --> 38:40.000 we wanted it to, we're going to basically create a model complaint and file in every 38:40.000 --> 38:44.000 state that we can get people to go out and help us, and file in every city, 38:44.000 --> 38:48.000 have every city file, and say, how many lines are there in our city? How much money did you 38:48.000 --> 38:52.000 charge us for all these wires? Now, there is one other place 38:52.000 --> 38:56.000 known as Dark Fiber. For those of you who don't know, 38:56.000 --> 39:00.000 Verizon and AT&T and all these companies have been putting in 39:00.000 --> 39:04.000 fiber optic wires continually since the 1990s. It never 39:04.000 --> 39:08.000 stopped. In fact, 50% of all the fiber optic wires in the United States 39:08.000 --> 39:12.000 are all dark. Now, they're on the books somewhere. 39:12.000 --> 39:16.000 There are maps somewhere. But nobody's actually talking about this. 39:16.000 --> 39:20.000 From my perspective, taking the dark fiber that was already paid for back and using it 39:20.000 --> 39:24.000 for what we want to use it for, which is really fast, 39:24.000 --> 39:28.000 really cheap, really good, and keep your hands off of 39:28.000 --> 39:32.000 my bits, I think is the next step. And also open to all competition. Anybody 39:32.000 --> 39:36.000 who wants to use the wires would be able to use it. Which is what the Telecommunications Act 39:36.000 --> 39:40.000 basically said, but they started whittling it away year by year. 39:40.000 --> 39:44.000 So anyway, let's see if I have any more slides. 39:44.000 --> 39:48.000 No. Well, thank you very much. 39:48.000 --> 39:52.000 I like questions. People who want to play with us, let me know. 39:52.000 --> 39:56.000 I can't 39:56.000 --> 40:00.000 see a thing from here whether there are people with their hands raised. 40:00.000 --> 40:04.000 Yeah, are you taking questions? Yeah. Pump the mic, I guess. 40:04.000 --> 40:08.000 I feel like I'm under the film. I didn't do it! I didn't do it! 40:08.000 --> 40:12.000 The lights are a little bright. So you referred a few times to promises 40:12.000 --> 40:16.000 that have been made that haven't been kept. Yes. And you talked about 40:16.000 --> 40:20.000 the regulatory authorities who, it seems like you're implying they could have 40:20.000 --> 40:24.000 done something, so I'm just curious about the details of that. 40:24.000 --> 40:28.000 Did they not do anything because they did not hold the utilities accountable 40:28.000 --> 40:32.000 because of regulatory capture only? Or is it also because the 40:32.000 --> 40:36.000 structure doesn't really let them? Did the authorities only have a chance to say yes 40:36.000 --> 40:40.000 or no because there was a merger on the table or because a rate making was happening? 40:40.000 --> 40:44.000 Do they have an opportunity even structurally to go back 40:44.000 --> 40:48.000 now and say, hey, you did not do this? Okay. So the statute of limitations 40:48.000 --> 40:52.000 would say you can't go back 20 years and look at this. 40:52.000 --> 40:56.000 The cross subsidies are current. The stuff I just brought up at the end, which 40:56.000 --> 41:00.000 we can go after. And there is, in New York, 41:00.000 --> 41:04.000 $3.7 billion was overcharged as far as we can tell to just local service. 41:04.000 --> 41:08.000 So can the states do anything? Yes. They have the power to. 41:08.000 --> 41:12.000 Can the FCC do anything? Yes. But the FCC is useless. The FCC 41:12.000 --> 41:16.000 has taken over. The chairman of the FCC is a former Verizon attorney. 41:16.000 --> 41:20.000 The attorney for Verizon on this document, 41:20.000 --> 41:24.000 to get rid of the accounting rules, was Brendan Carr. So my feeling 41:24.000 --> 41:28.000 has been, and we've been doing this a very long time, in 41:28.000 --> 41:32.000 97, the New Jersey rate payer advocates stood up and said, 41:32.000 --> 41:36.000 you know, you guys didn't perform as you said you were going to. 41:36.000 --> 41:40.000 And so they were able to get some concessions 41:40.000 --> 41:44.000 for wiring the schools. 41:44.000 --> 41:48.000 The fact that I can list how many times there have been challenges 41:48.000 --> 41:52.000 about this is embarrassing to the country. My feeling is most people 41:52.000 --> 41:56.000 after 18 months, nobody remembers that there's even a law. 41:56.000 --> 42:00.000 And then my favorite one is in New Jersey, I was testifying and I was telling them about the 42:00.000 --> 42:04.000 history of broadband and not one of the commissioners knew the history. 42:04.000 --> 42:08.000 While they were about to give them a franchise. So I think that the 42:08.000 --> 42:12.000 truth of the matter is, it's holding up. First, they don't know. 42:12.000 --> 42:16.000 I guarantee you that most of the people don't know what happened in their state. Making them understand 42:16.000 --> 42:20.000 that is one. Two, all the cross subsidies I believe are not legal in some 42:20.000 --> 42:24.000 states. I don't believe you can go out and charge for, you know, the wireless 42:24.000 --> 42:28.000 build out or charge $1.8 billion in New York 42:28.000 --> 42:32.000 for corporate operations expense. Now the state basically doesn't 42:32.000 --> 42:36.000 want to look at this stuff because it's opening a can of worms. And I'll tell you, Cuomo 42:36.000 --> 42:40.000 actually probably killed off in New York, the governor, probably 42:40.000 --> 42:44.000 killed off the investigation of the wireless cross subsidy because he 42:44.000 --> 42:48.000 put a 5G bill into the middle of the 42:48.000 --> 42:52.000 budget last year. So we, and 42:52.000 --> 42:56.000 Verizon, the head of Verizon in New York and 42:56.000 --> 43:00.000 New Jersey happens to have been his economic advisor. So what you're dealing 43:00.000 --> 43:04.000 is, for everything you listed, there's probably some things 43:04.000 --> 43:08.000 that happen in every state. But for the most part, nobody's ever really just sat down and said, okay, 43:08.000 --> 43:12.000 we're going to go after this. Oh, I will say. In 2012, 43:12.000 --> 43:16.000 two cities, we got two cities wired in Stoke Creek and Greenwich in 43:16.000 --> 43:20.000 New Jersey because on the books, it actually said that they were required 43:20.000 --> 43:24.000 by law to go out and get 100% of the state 43:24.000 --> 43:28.000 fiber optics and didn't do it. So we actually were able to hold them accountable 43:28.000 --> 43:32.000 because the state made a mistake and actually 43:32.000 --> 43:36.000 issued a show cause order of why they hadn't done the work. 43:36.000 --> 43:40.000 This, of course, was rectified by Governor Christie coming in, putting 43:40.000 --> 43:44.000 in one of his staffers to the state commission and creating a stipulation 43:44.000 --> 43:48.000 agreement that says, it's over. You're not going to ever do this again. And now 43:48.000 --> 43:52.000 wireless is the substitute for basic fiber. 43:52.000 --> 43:56.000 So can we make a change? In New York, this one current 43:56.000 --> 44:00.000 settlement is a start, but we're going to be taking 44:00.000 --> 44:04.000 them to court, especially the FCC, because we believe 44:04.000 --> 44:08.000 that the FCC's data is corrupted so badly that we might be able to hold them accountable 44:08.000 --> 44:12.000 in every state. I mean, the FCC's rules that were 44:12.000 --> 44:16.000 corrupted are in every state. They're federal rules. So every phone 44:16.000 --> 44:20.000 company had to use them. We just don't have the books to prove this. 44:20.000 --> 44:24.000 Did I kind of answer? Yeah, thanks. 44:24.000 --> 44:28.000 For people who liked your talk, who else should they read or listen to on this topic? 44:28.000 --> 44:32.000 Is someone like Tim Wu, for example, who wrote a book on the master switch, 44:32.000 --> 44:36.000 a good guy, or basically where else can they start to learn more about this? 44:36.000 --> 44:40.000 Tim's actually, I like this book, and I think 44:40.000 --> 44:44.000 each of the, Susan Crawford, there's a whole bunch of people that have different 44:44.000 --> 44:48.000 points of view about this. Susan Crawford's another person that's been, 44:48.000 --> 44:52.000 had wrote a book on this stuff and is becoming more radicalized. 44:52.000 --> 44:56.000 But the truth of the matter is, is the stories have not really been told. 44:56.000 --> 45:00.000 I've been doing this now for a very long time, and 45:00.000 --> 45:04.000 if you type in my name in Verizon, you'll find that I wrote 90% of the stories. 45:04.000 --> 45:08.000 Or somebody quoted the stories that I wrote. 45:08.000 --> 45:12.000 So I think that we have to change this. I think when we start 45:12.000 --> 45:16.000 our plan now is to do this model complaint and get hundreds of groups to 45:16.000 --> 45:20.000 file at the same time. We're going to be asking for how much money was collected, how many lines are 45:20.000 --> 45:24.000 there today, and also the core subsidy stuff. How much did 45:24.000 --> 45:28.000 the wireless company of the construction budgets go to them? 45:28.000 --> 45:32.000 And I think that nobody's asked these questions. And I think now if we 45:32.000 --> 45:36.000 can get different groups around the country to file at the same time with our 45:36.000 --> 45:40.000 complaint, of which everybody will have input, I think this is a 45:40.000 --> 45:44.000 good start. We've been doing this for a very long time and realized taking legal 45:44.000 --> 45:48.000 actions is the only thing left to do. We don't think there's like a lot, for example, net neutrality 45:48.000 --> 45:52.000 is important, but at this point in time 45:52.000 --> 45:56.000 the stuff that we're doing, if we separated the companies, it would fix net neutrality because 45:56.000 --> 46:00.000 you can choose your own ISP. You don't have to pick this one. You can say 46:00.000 --> 46:04.000 you know, there were 331 ISPs in New York City 46:04.000 --> 46:08.000 in 2001 when I looked at this in the BoardWatch 46:08.000 --> 46:12.000 ISP directory. So that's a lot of ISPs. 46:12.000 --> 46:16.000 So I think bringing back competition, I think they'll show up, is an important step. 46:16.000 --> 46:20.000 And so I think it's up to us basically to go out and 46:20.000 --> 46:24.000 start telling the stories. You know, any help would be great. 46:24.000 --> 46:28.000 This is a great, you know, I want to thank the Internet Society for 46:28.000 --> 46:32.000 suggesting that I speak at this conference. 46:32.000 --> 46:36.000 Hi. So I am actually suing the FCC right now 46:36.000 --> 46:40.000 for data related to people who were astroturfing the 46:40.000 --> 46:44.000 common system during the restoring Internet, freedom proceeding last year that 46:44.000 --> 46:48.000 ended net neutrality. You had talked about astroturfing earlier. I was wondering 46:48.000 --> 46:52.000 if you can name some names of not only front groups, but 46:52.000 --> 46:56.000 groups that were funding the front groups. 46:56.000 --> 47:00.000 Well, my favorite group is ALEC, the American Legislative Exchange Council, 47:00.000 --> 47:04.000 which basically creates model legislation from the phone companies 47:04.000 --> 47:08.000 that puts it into, that gives it to politicians who then go out 47:08.000 --> 47:12.000 and do it. So I divided up the world in a couple of different ways. There's politicians who are just 47:12.000 --> 47:16.000 paid off. Like in California, there's a bunch of people that got, you know, half a million dollars 47:16.000 --> 47:20.000 from AT&T. It's usually done as foundation 47:20.000 --> 47:24.000 grant money, which most people don't know. 47:24.000 --> 47:28.000 There's a list of about 50. 47:28.000 --> 47:32.000 So let's start off with MMTC, I think it is, 47:32.000 --> 47:36.000 in DC. Well, I can't remember the name of that one. 47:36.000 --> 47:40.000 I'd have to... 47:40.000 --> 47:44.000 Is this too many? I'm getting confused. 47:44.000 --> 47:48.000 Sorry. 47:48.000 --> 47:52.000 We actually started outing them all 47:52.000 --> 47:56.000 about three years ago, and they've all changed names. 47:56.000 --> 48:00.000 That's why I'm having trouble with the old ones. There was one group called Issue Dynamics 48:00.000 --> 48:04.000 in the history, which basically had 15 or 17 groups working out of 48:04.000 --> 48:08.000 its own offices. But in terms of the 48:08.000 --> 48:12.000 new groups, there's a whole bunch of them that... I'd have to make a list and post it. 48:12.000 --> 48:16.000 But thanks, I should do that. 48:16.000 --> 48:20.000 If you look at anybody who's 48:20.000 --> 48:24.000 against that neutrality, they're probably paid off. 48:24.000 --> 48:28.000 Or at least lots of them. Hi, so my question was about 48:28.000 --> 48:32.000 companies like Facebook and SpaceX are trying to push toward satellite, 48:32.000 --> 48:36.000 internet. Do you think that's an actual possibility to shift 48:36.000 --> 48:40.000 the internet and the cable networks, or is that just going to be another carat on the 48:40.000 --> 48:44.000 stick like 5G is currently? I'd like to think it was going to work. 48:44.000 --> 48:48.000 I was around for Iridium, which was going to be the solution set for everybody's 48:48.000 --> 48:52.000 broadband. There was a thing called CAI Wireless in 95 48:52.000 --> 48:56.000 when the company stopped pulling out of their wireless thing. Oh, no, we're going to offer 48:56.000 --> 49:00.000 this other wireless. So I've seen this five or six 49:00.000 --> 49:04.000 times. And so history says if I had a bet on it, I would say 49:04.000 --> 49:08.000 it would be a good bet. But considering there's a lot more people out in space than there were 49:08.000 --> 49:12.000 before, there's a chance. I don't see it happening so fast. 49:12.000 --> 49:16.000 When AT&T bought DirecTV, I was going, oh, no, 49:16.000 --> 49:20.000 they're going to really shit up on all broadband. So AT&T 49:20.000 --> 49:24.000 said it's going to do fiber at the FCC, and then it rolled out U-verse, which is 49:24.000 --> 49:28.000 a copper to the home service. It couldn't do the speeds. And then basically 49:28.000 --> 49:32.000 they said then it wants to shut off the copper because it wants to give you DirecTV. 49:32.000 --> 49:36.000 And the answer is they just want to keep the standards so low that they 49:36.000 --> 49:40.000 can give you two cans and string and say, wow, we're offering broadband. 49:40.000 --> 49:44.000 I mean, it's gotten to the point where I'll give you an example. The FCC has set the 49:44.000 --> 49:48.000 rural areas as being 10 down, 1 up for wireless, fixed wireless. 49:48.000 --> 49:52.000 Now imagine, that's why we have to shut off the copper, because DSL 49:52.000 --> 49:56.000 could give that speed, but that would give you unlimited versus we'd 49:56.000 --> 50:00.000 have to go out and charge you per gig here. I mean, the tradeoffs are ridiculous. 50:00.000 --> 50:04.000 So I don't really, if I had to do a projection, I would say 50:04.000 --> 50:08.000 that the likelihood of satellite showing up and being 50:08.000 --> 50:12.000 ubiquitous and working, not big in the next couple of years, but 50:12.000 --> 50:16.000 you know. 50:16.000 --> 50:20.000 I love what you're doing, and especially the call that you said there's enough money. 50:20.000 --> 50:24.000 Can you hear me? 50:24.000 --> 50:28.000 I can't see anybody, but it sounds great. 50:28.000 --> 50:32.000 My glasses. 50:32.000 --> 50:36.000 Okay. 50:36.000 --> 50:40.000 Time is up. 50:40.000 --> 50:44.000 Last question first. 50:44.000 --> 50:54.000 I'm sorry.