How The Bells Stole America's Digital Future

End Notes

  1. "In the Matter of the Board's Inquiry into Bell Atlantic New Jersey's Progress and Compliance with Opportunity New Jersey, its Network Modernization Program," State of New Jersey Board of Public Utilities, Docket No. TX96100707, Division of the Ratepayer Advocate, March 21, 1997.

  2. Pacific Telesis, 1994 Annual Report, page 5.

  3. Melody Petersen, "New Jersey Telephone Plan Neglects Poor, Critics Say," The New York Times, April 1, 1997.

  4. Ohio Alternate Regulation Plan, "In the Matter of the Application of the Ohio Bell Telephone Company for Approval of an Alternative Form of Regulation, Case No. 93-487-TP-ALT, September 20th, 1994, page 68.

  5. In 1992, New Networks Institute started one of the largest research projects ever undertaken to examine the impact that the breakup of AT&T and the creation of the Baby Bells had on telephone customers. Titled "The Future of the Information Age," it consists of 14 volumes, over 1,900 pages, over 910 exhibits, a computer database of telephone prices, and two computer databases containing data from more than 2,000 consumer telephone interviews, (conducted independently through Fairfield Research). The bibliography can be found at: http://www.newnetworks.com/biblio.html. This material was updated in "The Unauthorized Bio of the Baby Bells," published in 1999, and once again for this report. The basis of our analysis for Bell overcharging was derived from a series of databases for the years 1980 through 1999 that included Bell revenues, expenses and profit margins (by line of business), number of Bell employees, construction expenditures, "in progress construction expenditures," return-on-equity, dividends, depreciation expenditures, and consumer telecommunications spending. This information was then cross-referenced with changes in state laws, specifically the introduction of Bell incentive regulation plans. A complete discussion of this material can be found in "The Unauthorized Bio of the Baby Bells," pages 169-215, pages 355-367.

  6. Southwestern Bell 1986 Annual Report, page 11.

  7. Ameritech 1991 Annual Report, page 6.

  8. Pacific Bell's "Education First" program, First Quarter Report Summary, March 31, 1994, page 1.

  9. NYNEX 1993 Annual Report.

  10. Ibid.

  11. James Gleick, "The Information Future Out of Control: Hello, Anybody Home?" New York Times Magazine, May 14, 1994, page 17.

  12. Southwestern Bell 1986 Annual Report.

  13. Pacific Telesis 1988 Annual Report.

  14. "Staking Out the Public Interest in the Merger between Pacific Telesis and Southwestern Bell Corporation," by Armando Valdez, Ph.D., Charles Carbone, and Laura Stuchinsky, M.A., 1997.

  15. Ibid.

  16. Ibid.

  17. Pacific Telesis 1994 Annual Report, page 5.

  18. Summary, FCC Report No. DC 95-40, Common Carrier Action, July 19, 1995, Authorization FCC 95-302, page 1.

  19. Pacific Bell Press Release, December 21, 1993.

  20. "Superhighway schedule criticized," Gerry Braun, San Diego Tribune, Jan. 19, 1994, Page C-1.

  21. Pipeline & Utilities Construction, Dec. 1, 1995, page 21.

  22. "PacBell to wire schools for high-tech," James W. Crawley, San Diego Union Tribune, Feb. 15, 1994, page C-1.

  23. Summary, FCC Report No. DC 95-40, Common Carrier Action, July 19, 1995, Authorization FCC 95-302, page 1.

  24. Pacific Bell's construction expenditures after 1996 are included in SBC's annual reports and are not identified separately.

  25. SBC 1999 Annual Report, from SEC Edgar Archives.

  26. NYNEX 1993 Annual Report, page 5, Bell Atlantic 1993 Annual Report, page 4.

  27. US West 1993 Annual Report, page 19.

  28. Ameritech Investor Fact Book, March 1994, page 2.

  29. NYNEX 1993 Annual Report, page 5.

  30. Bell Atlantic 1993 Annual Report, page 4.

  31. "Bells Promise of Fiber-Optics Impresses Few," The Wall Street Journal, March 15, 1995, page T1.

  32. Testimony of David Cole, House State Affairs Committee hearing, March 10, 1995, page 2.

  33. HB 2128, "An Act relating to the regulation of telecommunications utilities, to the provision of telecommunications and related services, and to the continuation of the Public Utility Commission of Texas," approved by the Texas Legislature in May 1995.

  34. Ibid.

  35. "Bush Signs Texas Bill–A Plus for SBC," Merrill Lynch, Global Fundamental Equity Research Dept., June 1, 1995.

  36. "Project Number 9418: Staff Evaluation of Earnings Reports for Calendar Year 1997," Public Service Commission of Texas, November 10, 1998.

  37. See: "The Unauthorized Bio of the Baby Bells," published by New Networks Institute, January 1999; "The Bells' Greatest Broadband Failures," http://www.newnetworks.com; "On the Need to Investigate Bell Atlantic's Failed Deployment of Advanced Networks and the Impacts on Customers," filed as a Complaint with the Massachusetts Department of Telecommunications and Energy, Oct. 6, 1999, http://newnetworks.com/Masscomplaint.html; "Petition Requesting a Revision of the FCC's Advanced Network Report Findings, and a Request for an Investigation into the Bell Operating Companies' Advanced Network Deployment Failures," filed with the FCC, Dec. 9, 1999. http://www.newnetworks.com/petitionfiled.html.

  38. "In the Matter of the Board's Inquiry into Bell Atlantic New Jersey's Progress and Compliance with Opportunity New Jersey, its Network Modernization Program," State of New Jersey Board of Public Utilities, Docket No. TX96100707, Division of the Ratepayer Advocate, March 21, 1997.

  39. "A New Opporutnity: Cost Based Pricing of Bell Atlantic Access Charges," Economics and Technology, March, 1996, page i (from web site: http://www.econtech.com/library/eti_nj.pdf).

  40. Ameritech/Ohio 1993 Annual Report.

  41. Ohio Alternate Regulation Plan, September 20, 1994, "In the Matter of the Application of the Ohio Bell Telephone Company for Approval of an Alternative Form of Regulation," Case No. 93-487-TP-ALT, September 20th, 1994, page 68.

  42. Ameritech/Ohio 1997 Annual Report, (from web site: http://www.shareholder.com/Visitors/edgar-get.cfm?document=732717/0000732717-97-000021&CompanyID=SBC&header=A&footer=A.).

  43. "Consolidation in the Telecommunications Industry: Has It Gone Too Far?" Senate Judiciary Committee's Subcommittee on Antitrust, Business Rights and Competition, S. Hrg. 105-1006, Serial No. J-105-120, September 15, 1998.

  44. 717 N.E.2d 613, Indiana Bell Telephone Co., Inc. v. Office of Utility Consumer Counselor, (Ind. App. 1999).

  45. Ibid., page 5.

  46. Ibid., page 11.

  47. Ibid.

  48. "Bandwidth Bandwagon," by David Lake, The Standard, May 15, 2000, (from web site: http://www.thestandard.com/research/metrics/display/0,2799,15018,00.html).

  49. Boardwatch Magazine, Feb. 1, 2000.

  50. NNI's ISP survey is at: http://www.newnetworks.com.

  51. Ibid.

  52. Ibid.

  53. U.S. Department of Justice, Ex Parte Submission Re: Application by SBC Communications Inc. et al. Pursuant to Section 271 of the Telecommunications Act of 1996 To Provide In-Region, InterLATA Services in Texas, CC Docket No. 00-65, June 13, 2000, (from web site: http://www.usdoj.gov/atr/public/comments/sec271/sbc/4950.htm#N_13).

  54. Ibid.

  55. SEC. 1. [47 U.S.C. 151] Purposes of Act, Creation of Federal Communications Commission, the Communications Act of 1934 (as amended in 1996).

  56. SEC. 215. [47 U.S.C. 215] Transactions Relating to Services, Equipment, and So Forth, the Communications Act of 1934 (as amended in 1996).

  57. SEC. 254. Universal Service, the Telecommunications Act of 1996.

  58. "In the matter of the application of the New Jersey Bell Company Approval for Its Plan For an Alternative Form of Regulation," Decision and Order, Docket No. T092030358, April 14, 1993, page 18.

  59. We have excluded U.S. West from the 1999 calculation because the company's ROE reported by Business Week was 87.8% and consequently would have biased the results.

  60. Ibid.

  61. Ibid.

  62. 4th Quarter Year-End 1999 Results, from SEC filings.

  63. "Telecommunications @ the Millennium: The Telecom Act Turns Four," Office of Plans and Policy, Federal Communications Commission, February 8, 2000, page 9.

  64. NNI has been tracking the Bell's revenues, expenditures and profits since 1992, and this includes all major revenue areas. NNI published "Regional Bell Earnings, Expenditures and Profits" in 1994, marketed by Phillips Business Information. These statistics were updated in the NNI publication "The Unauthorized Bio of the Baby Bells," published in 1999. NNI also updated this information using 1999 Bell Annual Reports.

  65. Bell Atlantic 3rd Quarter Report, 1999, Asian Investments.

  66. BellSouth 10Q 4th Quarter, 1999 (from web site, http://www.Bellsouth.com).

  67. Bell Atlantic and NYNEX combined statistics for 1984, (BA was 53, NYNEX was 68), Pacific Telesis was as of 1997, US West from 4th Quarter 1999.

  68. NYNEX 10Q, 3rd Quarter Report, 1996 (from SEC EDGAR Archives).

  69. Ibid.

  70. "Statistics of Common Carriers," FCC 1994, 1995, 1996, 1997, 1998.

  71. H.R. 2420 allows RBOCs to begin offering data services across long distance boundaries. Since technological advances have eliminated the distinction between voice and data traffic, passage of H.R. 2420 would allow voice traffic to be carried over data networks, eliminating the last remaining incentive for local competition and allowing the incumbent carriers to retain their monopoly grip on consumers.

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