AT&T, Verizon Manipulating "Access Line" Losses. U-verse and FiOS are NOT included. 25th Anniversary Report Coming.

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Bruce Kushnick" <bruce () newnetworks com>
Date: January 8, 2009 3:13:12 AM EST
To: <news () teletruth org>
Subject: AT&T, Verizon Manipulating "Access Line" Losses. U-verse and  
FiOS are NOT included. 25th Anniversary Report Coming.

Teletruth News Alert -- January 8th, 2008

(NOTE: (see below) New Networks Institute will be releasing "25th
Anniversary Report of Key Financial Indicators of AT&T, Verizon and  
Qwest"
later this month.)

AT&T and Verizon Are Manipulating "Access Line" Losses. U-verse and  
FiOS are
NOT included as "access" lines.  Verizon's largest competitor is --  
Verizon.

FCC data on Verizon and AT&T phone lines shows major phone line  
increases,
not decreases. Companies are manipulating the data to get deregulation  
to
raise rates and tax relief.


AT&T and Verizon have been complaining that they are losing 'access  
lines'
because of competition and should therefore be 'deregulated'.  This has
allowed them to continue to raise phone rates over the last decade, and
in some states, like New Jersey, they are claiming that they are  
competitive
and should not have to pay telecom related taxes or even property taxes.

Read this article from New Jersey
http://www.nj.com/news/index.ssf/2008/11/verizon_plans_to_halt_certain.html


We have uncovered a serious manipulation of the data to essentially  
game the
regulatory system and get major financial favors - even keeping their
networks closed to competition.

What's going on?

1) Verizon and AT&T are not counting FiOS or U-verse, their new fiber- 
based
products, as 'access lines', even though they are replacing the  
customers'
existing line or even using the line, as is the case with U-verse.
2)  Verizon and AT&T are 'double-counting' FIOS and U-verse as both a  
loss
to access lines, instead of as a gain to the access line count.
3) Verizon and AT&T are leaving out virtually all 'broadband'  
connections in
their line accounting.
4) Verizon, AT&T and Qwest are not counting an additional two hundred
million lines which would show major growth.

There are a host of other tricks, such as including the "competitive  
lines"
the company lost, or DSL replacement of a second line.

The Math

1) Verizon and AT&T are not counting FiOS or U-verse, their new fiber- 
based
products in their access line counts.

The stats: In the Verizon, 3rd Quarter report, 2008, Verizon claimed  
they
had 37 access lines, and 41 million lines in 2007 - a drop of 3.5  
million
lines.

However, Verizon also added 1.6 million FiOS TV customers and 2.2  
million
FiOS Internet customers as of the 3rd quarter 2008 - a total of 3.8  
million
lines.

When Verizon goes to a home they pull out or disconnect the customer's
existing copper 'access' line and replace it with a upgraded fiber wire.
Yet, they are not counting these 3.8 million additions in the access  
line
numbers. AT&T is still using the wire, but still changing the line  
count.

                                                Exhibit
                Verizon's Access Lines vs the Additions of FiOS
                                        (000) Source, Verizon.

                        9/30/07 9/30/08 Adding FiOS       Actual        
Access lines    40,719  37,072  40,872          44,672
change                          -8.96%  0.38%                   9.71%
Lines Lost                               3,647

2) Verizon is 'double-counting'.

Verizon is showing a drop of lines caused by the replacing of the wire  
of
3,647 million lines.  At the same time, 3.8 million FiOS lines should  
have
been added to the Verizon line count, not subtracted. Thus, not  
counting 7.6
million additional lines.

If they just added the 3.8 million lines then Verizon would have had a
modest increase of .38%, instead they show a decline of 9%. However,  
if they
accounted for both the failure to show FiOS as an addition, and not a  
loss
of lines,  the company's statistics are off by 7.6 million. Suddenly,  
the
company's numbers show a 9.71% increase from 2007 to 2008.

3) Verizon and AT&T are leaving out virtually all broadband connections.

To add insult to injury, Verizon also had 8.5 million 'broadband
connections', AT&T claims 14.8 million 'broadband connections' and 3  
million
'video connections'.  Based on the data supplied by the SEC-based  
annual and
quarterly reports, there is know way of knowing how many actual services
replaced the traditional access lines and were not counted.

4) FCC DATA: Total Lines Verses the Bells Access lines --- Almost 200
Million Lines Missing in Bell Count.

The Bells' stated number of lines in their press releases and annual  
reports
shows the lines went from 114 million in 1984 to 188 million in 2000,  
then
down to 140 million by 2006. If we use the peak of 188 million lines in
2000, according to AT&T, Verizon and Qwest, there's been a 25% decrease
in lines.  (We use 2006 in this example because the FCC does not publish
later data for total lines.)

However, the FCC required the Bells to send in data about ALL phone  
lines,
not what they Bells called "switched access" lines.

                                                        Exhibit
                        Bell Lines Vs FCC Bell "Total Lines",1984-2006
                                        (In the millions)

                1984    1990    1995    2000    2005    2006 From2000
overall
Bell  Lines 114 135     158     188     148     140     -25.4%    23%
"Total"       118     130     166     245     312     337    37.7%   187%
Difference                                              197

"Total Lines" tells a different story and it includes almost 200 million
lines the Bell companies have refused to discuss in their current  
discussion
of actual installed lines. Many of these lines are 'special access' or
'non-switched' lines or digital lines. A special access line can be an  
alarm
circuit, for example.

According to the FCC's "Statistics of Common Carriers" for the years  
2005
and 2006, the Bell's "Total" lines went from 118 million in 1984 to 337
million in 2006, a steady year by year increase. From 2000, these data
points show the number of lines increasing almost 38%. Overall, while  
the
Bells rise and fall numbers gives the total increase at 23%, the FCC's  
Total
line numbers reveals a 187% increase.

Why would a company distort line counts? It may be that they want more
'deregulation' benefits, not to mention tax breaks, or larger parts of  
the
proposed stimulus package.  If they are perceived as being put up by
'competition', then the regulators might be more obliging.

We note that in our full analysis of line counts we agree that there has
been some loss to competition from the cable companies or wireless  
services.
However, even when someone 'cuts the cord' for a wireless service,  
AT&T and
Verizon own most of the marketplace and have the largest market share in
their own territories.

All the information has been taken from Bell annual and quarterly  
reports
and FCC data.

25th Anniversary Report to be Released this Month.

1/1/09 is the official 25th anniversary of the break up or AT&T.   
Known as
"divestiture", 25 years ago AT&T was divided into seven regional  
companies,
commonly known as the Regional Bell Operating Companies. AT&T and MCI  
were
competing and there were a host of other independent phone companies,  
such
as GTE.

By 2009, Humpty Dumpty has been put back together again in the form of  
three
non-competing companies - AT&T, Verizon and Qwest - that control  
critical
infrastructure;  the Public Switched Telephone Networks (PSTN).

As America sits and discusses how to create a stimulus package for  
broadband
and the Internet, it is clear that most proposals simply want to repeat
history and are not addressing the primary issues of who should  
control and
build critical infrastructure, much less pay for it.

This study gives key financial indicators in a 25 year analysis  
including
revenues, employees, number of lines, construction expenditures,
depreciation, profits, broadband deployment, FCC data capabilities,  
and the
price of local, long distance and wireless service.

For More Information:

Bruce Kushnick,
Chairman, Teletruth http://www.teletruth.org
Executive Director, New Networks Institute http://www.newnetworks.com







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