The FCC's outrageous coverup

 
Telecom analyst Bruce Kushnick's new article brings the incestuous relationship between the telcos and the FCC into sharp relief.

In what Kushnick terms a "covert operation", the FCC released a major order on the Friday before Labor Day, perhaps to escape notice. The order deals with rewriting the rules governing the phone companies' offerings: allowing them to intermingle local- and long-distance, data services, etc. Shockingly, the order is heavily redacted, its key details hidden from prying consumers who are trying to determine what the FCC has wrought.

As Kushnick observes, the order directly harms VOIP providers, which offer competition for a variety of the telcos' services. The VOIP market, based upon the experience of companies like SunRocket and Vonage, is already wobbling. The FCC's new order may put a stake into the heart of the VOIP market altogether.

Here's the FCC ORDER: 8/31/07, FCC Replaces Outmoded Long-Distance Rules With New Protections For Consumers. News Release: FCC 07-159 (Order) http://www.fcc.gov: ...Let us summarize the worst problem [with this order]: The FCC's phone charges data is so bad it has no basis for making any decision. Worse, the only new data the FCC is dispersing is being redacted [i.e.,] covered-up. Here's a sample... [our] Favorite: "[1] Id. AT&T's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. See Appendix C, Table 3 for individual state results for Frame Relay services within AT&T's franchise areas with more than 30 observations. [1] Appendix C, Table 4. Bell Atlantic's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. [1] Id. GTE's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. [1] Id. Bell Atlantic's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]." The FCC also claims it is too complicated to get accurate data... Worse, because the numbers look like an anti-trust case waiting to happen, the FCC claims that the numbers submitted 'overstates' the market share Verizon and AT&T have, thus no anti-competitive problem. ...[in the past] we pointed out that the FCC had no clue about phone bundling statistical accuracy. The FCC stated in one report: "For some households taking bundled local and long distance service, it was impossible to separate the bill into its component parts. In those cases, the entire bill was allocated to the local exchange service provider." Now the FCC claims it can redact any information to make a case, and not have to show it to anybody. ...In fact, Teletruth guarantees that the [new] bills will still be unreadable, deceptive and inaccurate. This sweetheart cover-up now gives the local phone monopoly more control over your phone services and less choice. We also believe the data may also prove very damaging in that it can be used to demonstrate that the Bell mergers were all a mistake, increasing their market power in the their primary markets...

In other words, the FCC's brain-damaged policies have likely killed competition in many of the telcos' markets and, because they figure they can get away with it, they have simply censored the data that proves it.

Put simply, allowing ridiculously flawed mergers like the corporate absorption of BellSouth, SBC, Cingular and AT&T into a single entity has eradicated competition and suppressed innovation. Odds are the FCC knows it and they're covering it up.

The title of the press release should be changed from FCC Replaces Outmoded Long-Distance Rules With New Protections For Consumers to FCC replaces anti-competitive rules with even more anti-competitive rules because Consumers are Stupid.

Real conservatives want competition and innovation: witness the value creation associated with the Internet. Allowing a telecom monopoly -- reminiscent of the Soviet Union -- to rise again is anti-competitive and stifles innovation.

ASK THE FCC COMMISSIONERS: Visit http://www.fcc.gov and ask the FCC Commissioners these questions: How many low volume customers are there in America? How many stand-alone long distance customers are there? Has the market-share of AT&T and Verizon increased? Can consumers understand their phone bills? Did the mergers harm customers?

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Is the FCC on the level? Who knows? Given the level of corruption in government, I wouldn't be surprised if some of the commissioners' family members are pulling down a little "extra" income. Or scheduled to collect pensions upon their retirement from "public service". I couldn't prove it, to be sure, but from their actions on this and many other matters, something smells like the fish market on a hot, sunny day.