has been charged with overcharging Massachusetts customers by more than $1 billion
over the past four years. The charges are made by a telecommunications analyst,
Bruce A. Kushnick, and Peter J. Brennan, formerly co-chair of a White House
Roundtable for Telephone Information Services and an expert in telecommunications
marketing and policy. The complaint, filed with the state's Department of Telecommunications
and Energy (DTE), alleges that Bell Atlantic (then New England Telephone) achieved
approval for price-based regulation by promising to develop enhanced cable and
video services. The charges are disputed by Bell Atlantic and by a DTE commissioner
who admit that the company made such representations in public statements about
its plans, but that they were not tied to the eventual regulation.
believe that Bell Atlantic misled Massachusetts consumers and regulators with
promises of advanced network deployments for the purpose of removing important
pro-consumer regulation, and that once regulatory relief was granted they abruptly
discontinued plans to deploy important new technologies. As a result, Bell Atlantic
may have taken as much as $800 million in improper tax deductions in Massachusetts.
In an apparently
coincidental development, soon after the complaint was filed Bell Atlantic announced
a new "do-it-yourself" DSL service for consumers.
Brennan, while the complaint largely deals with consumer issues, "for Internet
businesses who would, if the promises had been kept, now have affordable, reliable
high speed access to the home market, the cost of the lost opportunity is immeasurable."
Kushnick the actions alleged against Bell Atlantic represent only a sample of
the overcharging of consumers and businesses, and of other unfair practices,
that regional bell operating companies (RBOC's or "Baby Bells") have been guilty
of. He and other organizations and individuals will file complaints in at least
seven different states against a number of RBOC's over the next few months.
He will also file a Federal complaint alleging that the RBOC's wrote off, and
took tax benefits for, their copper plant in order to build a fiber network.
The promised fiber network has never been built, he argues, although the companies
reaped $21 billion in tax benefits. Kushnick is also working with the Commercial
Internet Exchange (CIX), a trade association whose member companies represent
over 150 Internet Service Provider networks that handle over 75% of the United
States' Internet traffic. CIX has already filed a petition with the Federal
Communications Commission opposing regulations that they claim provide Bell
Atlantic with unfair competitive advantages. Kushnick says "every ISP has been
getting substandard service from the RBOC's. These companies use their monopoly
power and insufficient regulation to walk all over their customers."
in the May issue of Red Herring magazine claimed that regional Bell operating
companies like Bell Atlantic "never wanted to be in the DSL business in the
first place it throws a wrench into the pricing strategies for their highly
profitable T1 and T3 services." That analysis supports Kushnick and Brennan's
claims, and provides good reason for any business that has been waiting for
home users to have faster access to the Internet, and any ISP, to wonder whether
the they've been treated fairly by their local RBOC. "This is a situation,"
says Kushnick, "that requires a lot of people to start complaining."