You've Already Paid $2,000 For A Fiber Connection You'll Never Get

from the money-back,-please dept

As the Baby Bells falsely complain about how people aren’t paying them for the internet, or whine about how it’s unfair to expect them to compete against muni-broadband, there’s something important to remember. For the last decade, those same telcos have made promise after promise to local governments concerning the delivery of truly open fiber optic connections to the home. In exchange, they’ve been granted all sorts of privileges and rate increases by the government, costing all of us money. And where did the money go? Not towards what was promised. Bruce Kushnick, who we’ve written about before is now coming out with a book that details how the telcos scammed approximately $200 billion from all of us (about $2,000 per household), promising fiber to every home with symmetric 45 Mbps speeds and an open access model that would allow anyone to offer competitive internet services over that connection. This is a promise that they have not kept… though, they have kept our money. That fiber was supposed to be delivered this year (earlier in other cases), but it’s not coming. The fiber that telcos are finally starting to offer is much more expensive, much slower, and locked down. In fact, after all of these promises, remember that the telcos said they wouldn’t offer fiber at all, unless the FCC promised not to require them to let others offer services on it. Yet, for all of this, there’s been very little outcry, or very little discussion — and the latest moves concerning network neutrality show that the telcos are looking to take more of our money and deliver less yet again. For more details, check out Kushnick’s book, $200 Billion Broadband Scandal, and think about it next time the telcos whine about government interference.

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “You've Already Paid $2,000 For A Fiber Connection You'll Never Get”

Subscribe: RSS Leave a comment
admin (user link) says:

lest we forget

The fiber that they got on the cheap at the
expense of stockholders in firms such as GBLX
and MFNX. In the old days the crowd would have
strung them up by a rope …. im sure enough
strands of fiber would work just as well. Instead
people like Spitzer shake down Wall St and
other firms, not to give the money back, but to
fund their own office. Or worse, we end up with
Martha Stewart while investors have been fleeced
of countless billions and the management of those
companies walked and the ILCs walk away with the

Jonathan says:

Re: this crap

It’s too bad they can’t/won’t. Keep in mind how long ATT managed to keep an accepted monopoly before they eventually (sort of) broke it up. The telcos can lie their way out of just about anything, and if they can’t we still can’t do much because everyone relies on them. Suing them would just mean a rate hike for everyone and/or loss of service. It’s a sticky situation…

Dan says:

Re: Telco lies

Agreed, except that I think you made a typo… I have Vonage too, and it is very nice. I like being able to call my family long-distance with no extra charges. And my fiancee is considered “long distance” by SBC (and it was very expensive), but now the call doesn’t cost anything extra. Connection quality is excellent, too… out here, SBC has duplexed POTS lines, and the sound was awful.

llewdis says:

Re: Re: Telco lies

I just cancelled my vonage after ~1 1/2 yrs. I am now completely mobile. I use a vonage router at work and take it home so that I can work there as well. Not sure that we should ever believe what a telco promises. Very similar to the nirvana promises by BPL I should think. What we really need is a more jaundices and sceptical public that forces their ISP to provide what they promise. I regularly try to monitor the pipe that I am getting from my provider to verify that I am getting some semblance of actual service. Usually, they are not far off, but occaisionally the service is abysmal and I call and complain.

Perhaps I am just a squeaky wheel, but my connection has not gone down while I have been actively using it for over 6mo.

7mb down/ 786up

NetPhreak says:

Re: Re: Re: Telco lies

From what I read about the “experts'” assessment of generation “Y,” you are not a “squeaky wheel.” You are just not as demanding of the technology. The (nearly) latest generation; those brought up in an age than technology was making leaps and bounds, expect that it will keep going at that pace. –(We’re all working on that, but it can’t last forever!)

I’m not saying they are wrong.

I understand where you are coming from. People that know how far we have come in the last 25 years are astounded by the incredible advances that have been made. I remember being so excited about paying $200 for 16MB of RAM or my brand new 14.4kbs modem – wow it was so fast! Those days were quickly consumed by advances in technology – and forces of the open market.

The issue, however, that the original post implies is that (along the lines of demand for what we “believe we are owed” is) the increases of technology have NOT been delivered to all of us, as expected.

I’m happy with my connection: wireless, 8MB up, ~1MB down – a hell of a lot better than a 14.4kbps that prevented me from using my phone! BUT, I too am interested in getting what I pay for. Lately has been an EXTREMELY PROFITABLE time for Telcos and if they made a commitment to do something, and where paid to do so… it should be so.

George says:

Re: wait

what’s your information source? I live in work 2 miles South of LSU and can’t get DSL service due to outdated DSLAM equipment at Staring Lane and the poor quality of copper running Highland Rd. I’d like to believe your information but reality tells me this is years away. BS Atlanta exec’s just reported that VDSL won’t be happening in 2006.

shane says:

Re: Re: wait

that is true a lot of the copper in the ground is outdated, but they are starting with bellsouth with the schools first. all the public schools are getting a 24 strand fiber to them now. if you see the white grady crawford trucks around town they are doing the work for bell south. they are working on schools around broadmore and sherwood now in my work area… i locate underground utilities/ laonecall. more than likely they don’t have enough strands to spare extras for your dsl connection. it would probably mean your feeder cable is maxed out and they would have to run a new one. the money’s just not in it for bell to run a new cable just for your or a couple, you would have to have a large amount of people wanting it with zeal to persuade them to runa a new cable.

Mike (profile) says:

Re: wait

bellsouth in baton rouge right now is installing fiber within 2000 feet of every home and running a 12 pair copper line to every home, then in galvez/gonzalas, the two citys just south of baton rouge eatel is 3/4 finished running two strands to every home. period.

Yeah, but it’s slower, asymmetrical, and more expensive than promised. Not to mention that it’s not open for others to offer service on.

That’s NOT what they promised.

itsadelayworld says:

Re: Keep waiting,

Keep waiting for domestic gasoline production, keep waiting for fiber to the home, keep waiting for lots of stuff which, when you get it finally.. its diluted so much, its almost meaningless. And yet, Verizon has their slogan making progress every day…
By the year some of the things the President talked about could even take place, like with domestic alternative fuels, most of us will be too old to drive, Huh, go figure.
FYI, fttx deployment on the docsis (cablemodem side is lackluster as well) No deployment is above 30megabits, industry-wide.

harbinger says:

No Subject Given

Unfortunately, Cable in my area is oversold and they are refusing to split the node. Its slow kicks you off at peak times and is just plain bad.

Covad offers services in my area up to 6.0/768 for as low as $110/month, but you still wind up sending money to the ILEC if you go that way. Surewest terminated their last fiber run in my neighborhood (in fact right across the street from me) but then decided that they were not going to allow anyone at all onto that run (so why do the run in the first place?) Satellite is a no go due to latency and the city wi-fi is going to be exactly 1.5 miles too short to reach me (once they hit that particular neighborhood of the city).

So basicly, for me to get reliable broadband services, I have to put up with a middleman (covad) who is forced to give money to the ILEC (for whom I have a burning white hot hatred) or……. I can go with crappy/no services at all.

Where exactly is this type of situation benificial to consumers and why would any group of consumers have any faith in any of the companies involved when they have had to endure a situation like this for years and years?

haggie says:

Real responsibility...

should be put on the POLITICIANS (federal, state, and local) that signed these sweetheart deals in exchange for campaign contributions and then refuse to hold the municipal monopolies to even the vague terms of the sweetheart deals in exchange for additional campaign contributions come re-election time.

Don’t bitch about ATT, SBC, Comcast, etc. They are doing what makes sense for a for-profit company. Promise the most, deliver the least.

If our elected officials don’t hold their feet to the fire, we are screwed because, as these are monopolies, we cannot take our money to a competitor. Your elected officials are the only people that can break the cycle of lie and under-deliver, but that means THEY have to stop the same lies and under-delivering too.

TelcoWatcher says:

Re: Real responsibility...

You are so right “promise the most and deliver the least” is so unfortunately accurate. Yet remember that these “for-profit” companies were monopolists blessed for decades with guaranteed rate of return (11%) tariffs and prices.

Please note that it is not “municipal monopolies” which have allowed the kind of sweetheart deals and games the RBOCs have played. These companies are regulated at the state and federal levels – not the local level – and from my experience, are on very cosy terms with many of the federal authorities who regulate them before they go to work for them.

10-15 years ago, T=there were promises of updraded networks and fast connections and a whole new world of technology “if only” the FCC would grant “video-dial-tone”. Then there was “if only” the “Open Video System (OVS)rule, but that was not good enough for telcos, so they wanted – and got – a wipeout of the 1996 regulations for opening their networks to new entrants at wholesale rates. (don’t forget these are companies who built their plant as state-sactioned carrier-of-last-resort monopolists with that guaranteed rates of return or price-cap reguation, plus subsidies from the universal service fund (USF).
Meanwhile, SBC sold the video franchises owned by Ameritech when it bought Ameritech (incidentally reducing by another one the number of “baby bells”, having already done it to Pacific Bell).
And cancelled video trials in Texas and California, including Cerritos where cable service was actually being offered.

After numerous un-kept promises about upgrading their networks “if only”, and lots of chances to do video (which they – and especially SBC – blew off more than once) the newest whines are
1) others should not use our networks unless they pay for high speeds (even tho’ we the customers are already paying the telcos to connect to google or amazon or yahoo or whomever at certain speeds).
2) we would like to provide video (part of the triple play) honest-to-goodness-this-time-we-mean-it BUT, we want to choose where we offer service.

In SBC’s case that mean 90% of “high value” customers and 5% of “low value” customers (see their 11-12-04 Investor Update document for verification). Local Govt types are actively opposing that kind of cherry-picking and red-lining. Local cable tv franchises reqquire that everyone be served…..and any new video providers should have to do the same thing….otherwise it will be Kellor TX everywhere…..cablerates went down in the neighborhoods where Verizon deployed video….but stayed the same in areas without choice….so you will find citizens once again subsidizing cut throat price wars wherever there is not a “choice” of more than one wire-line video.

I submit that this is NOT the way to get a wired nation…..and federal/state policies which allow anything less than universal deployment of upgraded plant across the carrier of last resort footprint is just a give-away to companies that have already taken plenty of our money to spend on lobbyists and lawsuits and self-intersted rules.

But unless individual citizens starts speaking out loudly to your electeds (as happened with media ownership) , the telco juggernaut will roll over the public interest again…..the breadth of their astroturf groups and facile half-truths and enourmous lobbying machine/$$$ is breath-taking.

Anonymous Coward says:

Re: Real responsibility...

Our elected officials are doing what makes sense for them also: keeping the corporations that put them in office happy. And as long as people keep voting for the candidates that put on the biggest, most expensive, “best” campaign shows, things will continue as they are.

Denny says:

Didnt know

And just a few years ago we were drooling at the thought of 56k!! A few more years back and 1400 baud was uber sexy! I have SBC and they just increased the regular DSL speed to 768 down. I drool at the thought of fiber, no more need for hosting companies! Pop your fiber in, plug in your terabyte of storage and you’re set. But I wasn’t aware of this telco subject. I am now… and yea it really sucks that they took our money for a ride. How lame

VZ employee says:

Very slanted article

Although I would agree that VZ and the rest of the telcos are no angels, I think this article is very misleading (not completely false, but not telling the whole story).

First of all, all the major telcos (VZ, AT&T, and Bell South) are all currently building a fiber optic network. In Verizon’s case, we have already built fiber and have done all the back office work to sell the finished product to over 3 Million homes in the US. There are two main reasons why you dont have fiber today (if you are in a VZ territory).

1) local governments are trying to screw all the telcos and charge ridiculous franchise fees and/or make the telcos pay for unrelated local government projects. As a result VZ refuses to build in a locality without a guarantee that it can sell its products. If franchises were approved at the state or national level, and not EVERY SINGLE LOCAL GOVERNMENT IN THE COUNTRY a lot more areas would have fiber. Texas recently passed a state-wide franchise, watch how fast fiber is deployed there.

2) You might already have fiber available to you, but have never heard of it. VZ is not doing major advertisement of the fiber optic product today because it is only set up for a small fraction of its total customers. It doesnt make sense to do a national campaign for a product you cannot sell yet because you would just upset your customers.

As far as the “promises not kept” I will make these comments. Should VZ continue to offer an open network available to competitors when in the past the government let them use our network at rates less than what it costs us to maintain? Why should we spend BILLIONS to build a fiber network and then allow our competitors to use it for less than what it costs? Please keep in mind we are a FOR-PROFIT company you cant expect us to not do what is in our best interest.

As far as speeds go, VZ’s fiber network is capable of speeds up to 100Mbps per second far above the 45Mbps the author quoted. At this time however we are only offering speeds up to a max of 30MB up/5MB down, which is far more than you would need to do anything imaginable on the internet today.

As Far as pricing goes, the cheapest Fiber starts at $34.95 for 5Mbps up/2Mbps down plus taxes, set up fees etc.

To learn the truth about VZ’s fiber product (called Verizon FIOS) feel free to go the website and get the FACTS!

Mike (profile) says:

Re: Very slanted article

And now, your somewhat slanted response. 🙂

First of all, all the major telcos (VZ, AT&T, and Bell South) are all currently building a fiber optic network.

Indeed, as we noted. But, they’re doing so in a different way than promised. Remember, your employer specifically held New Jersey hostage, saying they wouldn’t build fiber unless they weren’t required to open the lines — something they had previously promised to get concessions from the gov’t.

local governments are trying to screw all the telcos and charge ridiculous franchise fees and/or make the telcos pay for unrelated local government projects.

Indeed, though this is a SEPARATE issue. We’ve already written in the past about the importance of getting rid of pointless franchise fees. So we’re on your side for that… but the franchise issue is just for TV, and totally unrelated to the rest of this argument.

Should VZ continue to offer an open network available to competitors when in the past the government let them use our network at rates less than what it costs us to maintain?

Nice spin! It’s completely false, but it certainly sounds good. We’ve pointed to documents in the past that have shown that the real cost of each copper line was somewhere around a penny… and VZ was demanding $15 or so for it. Hard to square that with the claim they were losing money.

The point of forcing the networks to be open is that it’s a natural monopoly (which is also the point of franchise agreements, but we agree those shouldn’t be locally managed). There isn’t any competition — meaning you guys get to rip people off. Having an open network spurs competition.

As far as speeds go, VZ’s fiber network is capable of speeds up to 100Mbps per second far above the 45Mbps the author quoted. At this time however we are only offering speeds up to a max of 30MB up/5MB down, which is far more than you would need to do anything imaginable on the internet today.

And you know how much speed we need? The amazing thing about the internet is that, for all the speed we get, new services and apps appear that make use of them. So don’t tell us how much we need. Give us the speeds you promised, and then see what happens. The folks in Asia seem pretty happy with their higher speeds — much of which they’re actually using.

As Far as pricing goes, the cheapest Fiber starts at $34.95 for 5Mbps up/2Mbps down plus taxes, set up fees etc.

Again, different than what was promised.

Nice response, but the facts don’t support you…

Mike (profile) says:

Re: Fios vs. cable

I dunno, I’ve got Verizon Fios and it’s every bit as fast as they claim.

Uh. Yeah, every bit as fast as they claim now. However, (1) it’s nowhere near as fast as they promised and (2) it’s asymmetrical, rather than symetrical (as promised). Also, the original promise was to allow other service providers to offer services, which they have not done.

Michael A. Collins says:

You've Already Paid $2,000 For A Fiber Connection

Where is the New York State Attorney General on this? Where is the State PSC on this? How come my Time Warner Cable triple play has a NYC tax on it for the Universal Fund? I thought that the Federal Court struck down this type of tax on digital information for VoIP and internet service? Why am I still paying? Are these seperate issues?

Michael Warner says:

Re: Why You Make Lie?

CEO’s the “backbones of america” as you so claim are spineless and greedy and don’t hold to their promises. Steel is a backbone of amierica, taxpayers are a backbone of america. Small businesses are a backbone of america, not these huge corporations you give verbal support to, borderlining on fellatio. The only way these huge corporations are what they are today is because people blindly buy into them, not those who actually founded these companies. Those who founded them just saw a huge income in them.

Gizmo says:

New Zealand

I am from new zealand and have “broadband” *cough* bullsh!t *cough*

I am getting a 2 Mbit connection (soon to be upgraded to 3.5)

This is NOT fast, Totally lagged, I am sure if I sent the same message by post (aka snail mail) it would get there quicker.

I play Red Alert 2 online, it runs better on my 56k dialup connection.

We are setting up our own wireless service provider, seperate to the internet, but joined to the internet for those that pay the extra for it.

We are trying to make this lag free, we currently get a ping of 15ms from one side of our town to the other, just working on lowering that figure and expanding the network.

Broadband in New Zealand isn’t worth the money to set it up, they should have used tax payers money for something better, like laying more fiber optics between each exchange instead of satalite and copper cables :O

Irritated Telco Customer says:

Interesting Info

So glad I came accross this thread. I found several posts especially TelcoWatchers and Mike’s comments to our Verizon rep very insightful. I have been absolutely baffled at the ridiculous progress and claims made by local telco companies in my area and frankly am quite fed up with excuses on why service is unavailable, overpriced, and under powered. I by no means consider myself an expert on the politics of this issue but I’m so glad to see I’m not alone in my frustration and irritation with companies like Verizon and Comcast, I’ve been waiting years for a high speed symmetric connection at a reasonable price, now I see why I don’t have it.

J.R. says:

Japanese Racing Ahead @ Light Speed

Having read through this string, others like it and relating articles I am irate. I have been reading alot of similar stuff for the last few months. I have been stationed in Sasebo, Japan on the Southern Island of Kyushu for the last three years.

For the last two years I have been receiving internet service via a company called BBIQ, run by the local power company, which has service very similar to this one: run by another power company in Tokyo. These are start-up tele-comms. It is true they had a solid financial base prior to entering this arena, but those fiber lines did not exist three years ago. Heck they aren’t even complaining about construction fee’s they just say “if you want it, it will cost this much to expand the system to your home”. And people (Including myself) pay it. They just run the fiber along their pre-existing power lines. 😀

For those of you who do not know the yen rate it is approximately 1,000 yen to $10.00. I am paying around $60.00 U.S. for a 100Mbps Symmetrical Fiber line into my residential home with no maximum data amount per month (Such as VZ’s 5G limit, which I have surpassed on many occasions with my current set-up) and I have a phone line with it as well.

VZ may be providing the Fiber but as Mike said they do not know nor seem to understand what we need, as this article illustrates:

To put it in terms your kids (or you) might understand better: I have had 8 people playing various MMORPG games at maximum connection speeds at the same time with little to no noticeable lag. Games such as Star Wars Galaxies, City of Heroes, Ever crack (quest) and Planetside. A few of us were also downloading various files via “bit torrent” applications.

I am preparing to come back to the States next year and have been searching for somewhere, ANYWHERE, that can match this and I can’t find it.

To know that American people have been paying for this service through taxes for years and have not seen anything near the promises made makes me sick. We advanced so much of this technology, we have been a major driving force behind it for so long and now we can hardly even use it compared to other countries!? This is just one more example of the apparent stupidity running rampant in our nation’s government. What makes it worse is we are the people that put our “leaders” in office. Things like this make me want to not come home.

Horatius83 says:

Japanese lagging behind

I wish I were in Kyushu then, we have a T1 line here in Hikone (1 hour by JR from Kyoto) and it’s absolute crap, network timeouts and incredibly slow. I have no idea how this place got it’s high-tech reputation. So taxes paid for a fiber-optic network that never materialized, and I assume these companies never paid the money back, so isn’t that fraud?

Douglas Rea says:

Mobile Trek

MOBILE TREK (Because In Space No One Can Hear You Dial), is a humorous, zany, off-the-wall look at Sci-Fi and call centres and is currently available in e-book form from For anyone who ever had to phone a “call centre”, or worked in a call centre, and thought they were connected to some spacecraft in the distant future. USS Cellforce 1 is an intergalactic mobile phone call centre, in which Captain Pilchard battles the call centre’s of the Krapulans, defeating them and forming a communications alliance. From there they battle the Bornagain and defeat them by crippling their international roaming rights. They go on to negotiate with the Phoebians over their ability to transport any object via a mobile phone to anywhere in the universe, which they call 8G. Through all this Captain Pilchard dreams of retiring to his ferret farm in Edinburgh.
“Anything resembling anything living…..isn’t”
Kind Regards,
Douglas Rea.

jm says:

Im no friend of cable or internet companies, but is there any proof of this? If I was going to pay someone 200B to do something, wouldn’t there be a contract? My internet is 20Mbs, it’s plenty fast for everything I do and I can watch flawless netflix on a fraction of that. What are people doing that they can use 1 GB internet? A bigger pipe will only move more data in the same time frame, functions like surfing and email will see no improvement plus most download sites are not going to let large numbers of users download at 1GB because it will take them down, I dont think people understand what they are asking for. And then there is the billing vs speed, 15 years ago I paid $50 per month for internet that was 1Mb, now I pay $75 for 20 Mb. I have many years experience in large network/computer performance, all of the talking points I hear seem skewed, can you provide more substantiating information other than pointing me at a book? I cant say this is all wrong, it’s the talking points that seem like a bunch of angry people that hate their ISP’s.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...