Tauzin-Dingell: Fact Sheet

The Bells’ Broken Broadband Promises Cost Customers $58 Billion and Their Fiber-Optic Future

Tauzin-Dingell will give the Bell companies more money for broadband, even though history shows that the Bell companies never fulfilled their continued promises to deploy high-speed networks. Here are quotes directly from the Bells’ Annual Reports: By 2001, over half of America’s households should have been rewired with fiber optics. None of these statements proved to be true, even though state and federal laws were changed to give the Bells more money for construction.

NNI estimates that $58 billion was already collected for a fiber-optic future that never arrived.

To read our report, published by NetAction in 2000: http://www.netaction.org/broadband/bells/

NOTE: NYNEX and Bell Atlantic are now part of Verizon. Pacific Telesis, Ameritech, and Southwestern Bell are now part of SBC.

NYNEX, 1993 Annual Report

“We’re prepared to install between 1.5 and 2 million fiber-optic lines through 1996 to begin building our portion of the Information Superhighway.”
Bell Atlantic 1993 Annual Report

“We expect Bell Atlantic’s enhanced network will be ready to serve 8.75 million homes by the end of the year 2000. By the end of 1998, we plan to wire the top 20 markets… These investments will help establish Bell Atlantic as a world leader in what is clearly the high growth opportunity for the 1990’s and beyond.”
Pacific Telesis 1993 Annual Report:

“Using a combination of fiber optics and coaxial cable, Pacific Bell expects to provide broadband services to more than 1.5 million homes by the end of 1996, 5 million homes by the end of the decade.”
U S West 1993 Annual Report

“In 1993 the company announced its intentions to build a ‘broadband’, interactive telecommunications network… US West anticipates converting 100,000 access lines to this technology by the end of 1994, and 500,000 access lines annually beginning in 1995.”
Ameritech Investor Fact Book, March 1994

“We’re building a video network that will extend to six million customers within six years.”
These promises didn’t start in the 1990’s. Zane E Barnes, Chairman of Southwestern Bell, in 1988 talked about the imminent rollout of ISDN. (now SBC) (Source: Southwestern Bell 1988 Annual Report:

“Southwestern Bell company, the subsidiary that provides telephone network service, is bringing high tech home to millions of people.
“In 1988, Southwestern Bell telephone company tested new services that ultimately could bring the Information Age to everyone in the company’s five-state area. One of the links will be fiber-optic cable which has more capabilities than standard telephone line. …Our regional telephone operation continues in leadership in development of Integrated Services Digital Network (ISDN). With more than 17,000 lines under contract, we’re the nation’s number one producer of this advanced technology capable of simultaneously transmitting voice, data, video services over the telephone line.”

Or take this pledge by Pac Bell to have all of its schools connected with ISDN by 1996.

Pac Bell’s “Education First” program. (Pacific Telesis First Quarter Report, 3/31/94)

“Pacific Bell Helps Bring Schools On-line. As part of a continuing commitment to education in California, Pacific Bell has launched “Education First”, a $100 million program to connect the state’s schools to the communications superhighway. By the end of 1996, all of the nearly 7,400 public K-12 schools, libraries, and community colleges in Pacific Bell territory will have access to the company’s Integrated Services Digital Network (ISDN), which enables simultaneous transmission of voice, data and video signals over a signals telephone line.”
By 2000, in many states ALL schools, hospitals, libraries and jails should have had fiber-optic based broadband by now: Ameritech, Ohio Bell, Alternate Regulation Plan, September 20, 1994

“21. INFRASTRUCTURE COMMITMENTS The Company’s infrastructure commitment in this Plan shall consist of the commitment to deploy, within five years of the effective date of the Plan and within the Company’s existing service territory, broadband two-way fully interactive high quality distance learning capabilities to all state chartered high schools including vocational, technical schools, colleges and universities; deploy broadband facilities to all hospitals, libraries, county jails and state, county and federal court buildings…”
And the deployment of residential services was supposed to be both urban and rural.

Bell Atlantic, Pennsylvania Bell Annual Report 1998

“The Pennsylvania Plan requires deployment of a universal broadband network, which must be completed in phases: 20% by 1998… Deployment must be reasonably balanced among urban, suburban and rural areas.”
The outcome in most states could be summarized by the Comments made by the New Jersey Ratepayer Advocate: New Jersey Public Advocate about NJ Bell Atlantic, (4/97)

“…low income and residential customers have paid for the fiber-optic lines every month but have not yet benefited.”
“Bell Atlantic-New Jersey (BA-NJ) has over-earned, underspent and inequitably deployed advanced telecommunications technology to business customers, while largely neglecting schools and libraries, low-income and residential ratepayers and consumers in Urban Enterprise Zones as well as urban and rural areas.”

There are thousands of other examples. The bottom line is that Tauzin-Dingell will give the Bells new financial incentives, even though they never fulfilled any of the stated obligations.