Following the Money: Americans Overcharged Est. $1.3 Trillion by Big Telecom and Big Cable Over Last 30 Years

By B.N. Frank

The Federal Communications Commission (FCC) is supposed to protect Americans from the telecom industry. The agency has been catering to the industry instead for decades (see 1, 2). This has led to lawsuits being filed against it by numerous entities including a group of telecom experts who refer to themselves as The Irregulators.

The Irregulators’ lawsuit revealed many things including that Americans have already paid to have safer access to high-speed internet via fiber optics (see also 1, 2, 3, 4). This means the FCC should STOP giving tax payer dollars to telecom and cable companies to install unsafe technology for “bridging the digital divide” (see 1, 2, 3, 4, 5). Of course, it’s not only the FCC who has been catering to Big Telecom and Big Cable – legislators have been too.

Irregulator Bruce Kushnick has written many articles that reveal how Americans have been and continue to be overcharged for services that many still haven’t received (see 1, 2, 3, 4, 5). Thanks to Bruce to another infuriating albeit informative read.

From Medium:

Break Up Big Telecom: $1+ Trillion in Overcharging … And Counting.

By Bruce Kushnick

READ: FULL REPORT 3
READ: ALL Reports of the Break Up Big Telecom & Cable

This article is only about examining one basic question, besides the mind-boggling totals:

How much money have you, your family, friends, business, the city you live in, your neighbors, the State and even America been overcharged by Big Telecom & Big Cable over the last 3 decades?

New Networks Institute (NNI) and the IRREGULATORS estimate that we have all been overcharged over $1.3 trillion dollars over the last 3 decades by what is now a cartel — just a few very large corporate holding companies, dubbed ‘Big Telecom’ — AT&T, Verizon and CenturyLink (Lumen) and Big Cable, ‘Comcast and Charter’, and those that they pay to be their friends. The overcharging continues and has increased over the last few decades, now at an estimated $60-$80 billion annually.

But let’s get personal. Depending on which services are being used, who is the telco or cable company, the state, and the state and federal laws that helped to overcharge you, overall, each household is paying about $450-$625 a year, extra. But, since 1991, over time, the average household was overcharged (and these are the low numbers.) $8,000 to $10,000, though there are many caveats and details.

This answer begs the question — Why is America giving AT&T et al. a free pass — as well as a continuous stream of government subsidies to ‘fix’ the Digital Divide when these companies were responsible? As the data indicates, these few companies took actions over the last 3 decades to create the Digital Divide, not to mention leading the fight to disregard Net Neutrality, and a host of other issues that harmed our Digital Future.

On top of this are the ‘opportunity’ costs — such as the economic harms to your town because Big Telecom never upgraded their networks for high speed broadband connections, even when everyone paid extra for it, and there was no serious competition to lower prices. Moreover, throughout the US there is a pattern where those areas that did get upgrades were the wealthier neighborhoods, leaving the low income areas a Digital Desert, known as ‘redlining’.

New Networks Institute (NNI) and the IRREGULATORS are joined by other analysts who independently found massive overcharging and cross-subsidies. Consumer Federation of America’s examination of the Big Telecom & Cable companies, Overcharged and Underserved”, found that this cartel has worked together to overcharge America an estimated $60 billion annually, $250 billion in a 5-year period, 2012–2016, in a myriad of ways. This overcharging came to approximately $540 a year per household.

Thus, to solve the Digital Divide, as discussed in the other reports, America should not being giving out more government subsidies to Big Telecom & Cable. We need to halt the massive cross-subsidies and financial manipulations between the state based wired telecommunications public utilities that still exist and are hiding in plain sight, and the rest of the Big Telecom subsidiaries, like wireless. There is plenty of funding to upgrade America to fiber optics and to lower rates. And it is time to reopen these networks to all forms of competition. AT&T et al. created the Digital Divide to make more profits, not to better serve America or your town, your state or your family.

Let’s Follow the Money: Overcharging Details

In order to understand the power of these corporate monopolies to overcharge us, we identified 10 areas of market power impacts and what needs to be addressed.

1) Market Power: Added charges on telephone, cable, internet, broadband and wireless services — because they can.

2) Market Power: ‘Truth in Billing’, ‘Truth in Advertising’ Violations to Cover Over Charges. True market power is having bills no one can understand, examine and be able to explain basic charges on the bills.

3) Market Power: ‘Harvesting’ the entire US wired customer base, with over 100 million lines and make sure no regulator or politician examines the rate increases of 150%.

4) Market Power: America’s prices are 5–20 times more than overseas, Why? Overseas pricing vs US shows Monopoly controls over the wires.

5) Market Power: Wireless Underpayments $23 billion estimated annually has been diverted to fund the wireless subsidiaries instead up upgrading cities and towns throughout America and this includes over $6.2 billion in access fees to use the networks.

6) Market Power: “Backhaul”, the core infrastructure, also known as “Special Access” or “BDS”, “Business Data Services” which control the prices of wireline and wireless, have been manipulated to keep prices inflated for both end users and competitors.

7) Market Power: Massive deception about the actual number of lines in America. Hundreds of millions of access lines are also hiding.

8) Market Power: Other Voices: Consumer Federation of America’s examination of the Big Telecom and Big Cable companies, working together to overcharge in a myriad of ways — estimated at $60 billion annually, in 2016.

9) Market Power: Broadband Scandal: From 1992–2018 an estimated $500 billion was charged to local phone customers for upgrade of the states with fiber optics — but charge local phone customers, over and over.

10) Market Power — Accounting Scandal: The ability to manipulate the FCC’s cost accounting rules, known as ARMIS, made the entire US infrastructure appear unprofitable, and the utilities became a cash machine for the other subsidiaries, which started in 2001 and continues today.

NOTE: FULL DOCUMENTATION: We put together separate reports on the wireless-wireline cross-subsidies, Harvesting, the price comparisons of the US and the EU, full reports and books on broadband scandal and the accounting scandal.

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