LVLT - Level 3

[brker_guy]

There’s No Growth Like Packet Data Growth

 

http://www.telecomramblings.com/2011/11/theres-no-growth-like-packet-data-growth/#more-13706

 

Level 3 CNS                Q3/10    Q3/11    % Growth - Infrastructure              147        155          5.4% - Transport                  289        298          3.1% - Data                              173        207          19.7% - Local/Enterprise Voice    98            99        1.0%

 

Any other questions about growth of revenue on "Data" for LVLT?  You can verify these numbers with the 10Q if you want.  It's already filed with the SEC...

[Cardboard]

19.7% growth is nice, but that is only for 21.9% of their overall sales. The rest shows not a whole lot. Then you have the smaller AboveNet showing faster growth in that same category.

 

I hate being negative, but I still think they need to do more. If you are satisfied with average performance with a top notch asset then fine.

 

Cardboard

[Ballinvarosig Investors]

Only a small thing, but I notice that Level 3 are providing a HD stream for RTÉ (the Irish national broadcaster) for an important soccer match. The stream itself is geo-blocked, but it's interesting to see 3's feelers extending into Europe!

 

http://www.rte.ie/sport/livestreaming/hd/

[brker_guy]

Very nice find, Ballinvarosig!

 

I am a huge soccer/football fan.  So, this site will come very handy next summer.

[Guest ValueCarl]

WASHINGTON (AP) -- The chairman of the Federal Communications Commission has come out against the merger of cellphone giant AT&T and T-Mobile USA.

 

http://finance.yahoo.com/news/fcc-chair-opposes-t-takeover-002135651.html

[Guest ValueCarl]

Somebody had asked about this recently, well, now it's gone as are all the environmental liabilities along with other specific coal related encumbrances which strained or restricted cash to the tune of $126MM at last check.

 

http://finance.yahoo.com/news/Level-3-Announces-Sale-Coal-prnews-1844707958.html?x=0&l=1

 

BROOMFIELD, Colo. , Nov. 23, 2011 /PRNewswire/ -- Level 3 Communications, Inc. (NYSE: LVLT - News) today announced that it has completed the sale of its coal mining business as part of its long-term strategy to focus on core business operations. On Nov. 10, 2011 , Level 3 entered into an agreement with an affiliate of Ambre Energy Limited to sell all of the common stock of the holding company for the coal mining operations. As a result of the transaction, the liabilities associated with the coal mining business will be removed from Level 3's balance sheet as of the closing.

 

(Logo:  http://photos.prnewswire.com/prnh/20111004/LA77008LOGO)

 

The transaction closed on Nov. 14, 2011 , and post-closing conditions were satisfied on Nov. 23 , 2011.The financial terms of the transaction were not disclosed.

[Cardboard]

Yup, I suggested that on November 8 after you told me to STHU...

 

Regardless, I am happy that they have finally closed the books on that. Had nothing to do with their company. A distraction that they did not need.

 

Now they need to find contracts and make money with their pipes, in order to fight the war on their equity that is raging out there.

 

Or sell the damn thing!

 

Maybe that some of you are happy to wait 20 years to see a 5 or 10 bagger, but I shall remind you that it means an average return of 8 to 12% a year respectively. Oh! And it is probably a lot lower, since I don't believe that you all bought at $0.80 or so or the current price for that matter since you have discussed this stock for years!

 

Cardboard

[Guest ValueCarl]

You told us something which was reviewed on this thread well before your recent comment?  ::) And, I told you "individually" to STHU because you asked about such value? Or, was I speaking to a group of "naysayers" collectively and historically who bash this company at every turn of the road, even with illegal methods while referring to the past? I can assure you that my STHU was for the latter, and I will say to that group once again, STHU, you SOB's!  >:(

 

Why don't you tell us what you think it means in value, inclusive of how much cash they may or may not have received in addition to restricted cash now becoming "unrestricted" due to the removal of "liabilities" on their balance sheet? 

[Cardboard]

Ok, fine ValueCarl.

 

Regarding this transaction, it will free up $71 million in restricted cash and it is likely that a larger amount up to a maximum of $179 million will go away from the liability side as reclamation. No idea what it is exactly since I can't find a disclosure.

 

Also, since I can't find what the net asset of that operation is, it is also hard to guess how much cash has been received for it. Receiving book value would be good based on how little profitability this operation has been generating vs revenues which is also small at only $60 million last year.

 

Say that they may have $100 million more available now to do something else. It is not big, it is a cleanup item. I still think it is better to have that to buy back some of their really expensive debt than keeping it and receiving say $4 million a year in profit and spending time on it.

 

Cardboard

[Guest ValueCarl]

Watching the change in cash on hand next quarter should give a clue if any additional values have been realized from this sale, Cardboard. One would think they would have to reference it at that time, if cash values have increased.  Historically, and I am talking when Surreal Choski was CFO nine years ago, I recall him suggesting it was worth $120MM while not fully referencing if the value was the advantage of removing "liabilities," though that may be the case. If that was the case, shame on them, and shame on me for not understanding the "concept."

 

This being said, we can save a lot of important cash by stopping these outrageous yearly cash bonuses to men including Jim Crowe for too many years of "building dreams" whose "cash flows" never turn dreams into reality for "equity owners."

 

Pollyanna Bull on (3) without EYES wide OPEN? Not always! ;)

 

 

http://seekingalpha.com/article/309134-level-3-communications-is-it-time-for-a-change-in-leadership?v=1321965900&ifp=0&source=tracking_email_activity     

[Guest ValueCarl]

Only in the Wacky World of Wall Street consisting of criminal robber barons and manipulators, or should we allow a euphemism like "stock operators," does a $3B write down in important cash to a company's balance sheet where every aspect of its 130 year monopoly is being attacked, does it mean NOTHING to its stock price.

 

You can't make this stuff up if you tried, but Goldman Sachs and others can!  >:(

 

 

http://www.telecomramblings.com/2011/11/att-t-mobile-retreat-what-does-it-mean/

[bmichaud]

$3B is less than 2% of the market cap - that writedown is immaterial. Who cares?

 

The market is going to need a lot more than that to mark down ATT's eroding competitive advantage - i.e. an actual decline in cash flows. Not unlike how the market will need to see actual cash before marking up LVLT's "fat pipes" ten times their current valuation.

[Guest ValueCarl]

We know the world has gone crazy when would be shareholders call $3B of their cash in write downs as "immaterial" and "Who cares?" Not only would I care if I were a shareholder of this flawed monopoly, I would be calling for its CEO's head. I felt the same way about Jim Crowe as well as Sunit Patel when the dynamic dumbos blew up $62MM in valuable owners cash on a complex hedge with their banking friends at Merrill Lynch. Merrill was on the other side of that trade, for the record.

 

AT&T has become, "too big for their britches!" while serving their owners, but more importantly their customers for way too many years, too little during the process.  >:(

 

http://www.telecomramblings.com/2011/11/att-prepares-fallback-position/#comments

[bmichaud]

We know the world has gone crazy when would be shareholders call $3B of their cash in write downs as "immaterial" and "Who cares?" Not only would I care if I were a shareholder of this flawed monopoly, I would be calling for its CEO's head.

 

Let's rephrase: "We know the world has gone crazy when would be shareholders call a write-down worth 2% of the market cap "material" after a 12.5% decline in marketcap from the company's mid-year 52-week high of $32."

[Guest ValueCarl]

Bmichaud, you know that I know "percentage rules"--my (3) example would be worse if we were comparing the two in this conversation although that was not my intention-- but to use Telephone's "market cap" as a form of analysis to measure the severity behind this cash loss which is more than likely coming onto their books is unwise.

 

Since it's valuable cash that their CEO exposed them to incinerating; I would recommend that you view it as a percentage of their cash on the books, which I believe is less than $11B at last check. For round numbers, let's call it 9 percent of their cash hoard going to vaporware, I mean into Deutsche Telekom's shareholder hands.

 

Without a doubt, T's CEO, Randall Stephenson should be held responsible including firing him, if he doesn't have the decency to resign after such a blunder!

 

By the way, if I am the CEO of Sprint or Metro PCS or anyone interested in TMobile's current assets at all, I do NOT want to be negotiating with Telephone, acting as a "broker" of last resort to purchase said assets under divestiture.

 

Rather, I want to factor for the purchase of those assets knowing that TMobile has already been paid some portion of "fair freight" as a result of the stupidity of that other competitor in the marketplace.

 

That's how "free markets" and "capitalism" are supposed to work, right? 

 

http://blogs.barrons.com/techtraderdaily/2011/11/25/att-4b-break-up-fee-marks-concession-in-t-mo-deal/

 

Sanford Bernstein’s Craig Moffett, who rates AT&T stock a Market Perform, writes this morning that the “fat lady has taken the stage” for this deal, further advancing a thesis expressed a while back, to wit, the deal is dead.

 

Moffett sees a further hurdle this morning in speculation that MetroPCS (PCS) would not be interested in buying any assets that AT&T might seek to divest in order to appease the Department of Justice.   

 

 

 

 

[Guest ValueCarl]

I continue to be thoroughly impressed with how U.S. agencies are protecting citizens' rights with respect to the definition of "competition" and what will bode best for consumers in the end.

 

If it weren't for the fact that I have vowed to never vote in a U.S. Election again, I am certain I would be leaning Democratic on this run, with or without any suspicions surrounding the qualification of "POTUS."

 

I am rooting for Jules Genachowski to do the right thing with this Light Squared mess as well!

 

As for this dinosaur, T REX, the world will be better served without it. Copper vestigial organs aside.

 

http://finance.yahoo.com/news/FCC-let-AT-T-pull-merger-rb-2889698893.html?x=0

 

http://finance.yahoo.com/news/FCC-questions-fact-AT-T-T-apf-3642419496.html?x=0

 

 

 

 

[brker_guy]

Carl,

 

You brought up LightSquared at the right time.  You and anyone else who is a CLWR/S shareholder might be interested in this:

 

https://event.on24.com/eventRegistration/EventLobbyServlet?target=registration.jsp&eventid=379931&sessionid=1&key=692F8C14E10E6CAD42D7AD19A92FDD73&sourcepage=register

 

 

[Guest ValueCarl]

Do you concur by having witnessed or experienced successful outcomes at this presentation as opposed to what the U.S. Air Force Commander had been on record as stating, "no magic bullets," or something to that effect, which he had yet to see or contemplate? This gentleman must be a genius if he can pull a rabbit like this out of his hat so inexpensively from what I recall, at the last hour.   

 

<At the November 9 meeting of the National Space-Based Position Navigation and Timing (PNT) Advisory Board, Javad Ashjaee, president and CEO of JAVAD GNSS, demonstrated his company’s newly developed filter technology proposed to protect GPS receivers from LightSquared broadband network interference. In this webinar, Mr. Ashjaee gives this presentation for GPS World's web audience, and answers questions from the magazine's survey editor, Eric Gakstatter.>

 

 

[brker_guy]

Carl,

 

How do you know when a CEO lies?  If you know the answer to this, you will understand my position on JAVAD and its proposed idea...

[Ben Graham]

Carl,

 

You brought up LightSquared at the right time.  You and anyone else who is a CLWR/S shareholder might be interested in this:

 

https://event.on24.com/eventRegistration/EventLobbyServlet?target=registration.jsp&eventid=379931&sessionid=1&key=692F8C14E10E6CAD42D7AD19A92FDD73&sourcepage=register

 

Space-based Positioning Navigation & Timing (PNT) National Advisory Board meeting - Nov. 9, 2011 in Alexandria, VA. Panel Discussion - LightSquared Compatibility with GPS with Dr. Javad Ashjaee, CEO, Javad GNSS, video by Professional Surveyor Magazine

 

[Ben Graham]

I continue to be thoroughly impressed with how U.S. agencies are protecting citizens' rights with respect to the definition of "competition" and what will bode best for consumers in the end.

 

If it weren't for the fact that I have vowed to never vote in a U.S. Election again, I am certain I would be leaning Democratic on this run, with or without any suspicions surrounding the qualification of "POTUS."

I am rooting for Jules Genachowski to do the right thing with this Light Squared mess as well!

 

As for this dinosaur, T REX, the world will be better served without it. Copper vestigial organs aside.

http://finance.yahoo.com/news/FCC-let-AT-T-pull-merger-rb-2889698893.html?x=0

 

http://finance.yahoo.com/news/FCC-questions-fact-AT-T-T-apf-3642419496.html?x=0

 

 

 

 

 

 

LightSquared’s mission is to revolutionize the U.S. wireless industry. With the creation of the first-ever, wholesale-only nationwide 4G-LTE network integrated with satellite coverage, LightSquared offers people the speed, value and reliability of universal connectivity, wherever they are in the United States. As a wholesale-only operator, LightSquared will deploy an open 4G wireless broadband network to be used by existing and new service providers to sell their own devices, applications and services – at a competitive cost and without retail competition from LightSquared. The deployment and operation of LightSquared’s network represent more than $14 billion of private investment over the next eight years.

 

For more information about LightSquared, please go to www.LightSquared.com, www.facebook.com/LightSquared and www.twitter.com/LightSquared.

[Guest ValueCarl]

Ben Graham,

 

While Mr. Javad conducted his four tests, were there any opposing witness experts involved who have changed their positions or did he go it alone? To be honest, I have not watched the whole presentation yet while I presume you have, but at the end, he seems to be marketing his boxes for the audience to do their own tests. I presume people would need to take them out to "real world" situations in order to verify results tied to such complex issues?

 

You seem to be a supporter of Light squared's broad "wholesale" wireless broadband plan which resembles LVLT's "wholesale" terrestrial broadband business model, i.e., Carrier Neutral and "Carrier's Carrier" or "Network Partner You Can Rely On."

[Cardboard]

60 minutes on CNBC last night talked about cyber warfare and how the U.S. military is spending millions to make its own chips in order to avoid using foreign components that may contain "self destructing" hidden features. So now, they are going to have to create chips to make this new filter?

 

Why does an entire country has to adapt for one company trying to make a buck from a service that is already available pretty much on a national scale? Verizon is there, AT&T, Sprint and Clearwire are getting there or will be there much faster than LS2.

 

Looking at the spectrum situation, I see no shortages. Clearwire is trading like the spectrum is worth $0.11 per MHz POP, Cox has some for sale, DISH has 40 or 50 MHz and the government will likely force some auctions soon from broadcasters.

 

I mean, if they want to go ahead, then they should find a way to deliver this service without any disruption. This means paying all costs necessary to upgrade all GPS devices in the U.S. with these filters. They could also turn around and sue whomever sold them that spectrum or authorized it for other purposes than GPS use.

 

Cardboard 

[brker_guy]

60 minutes on CNBC last night talked about cyber warfare and how the U.S. military is spending millions to make its own chips in order to avoid using foreign components that may contain "self destructing" hidden features. So now, they are going to have to create chips to make this new filter?

 

Why does an entire country has to adapt for one company trying to make a buck from a service that is already available pretty much on a national scale? Verizon is there, AT&T, Sprint and Clearwire are getting there or will be there much faster than LS2.

 

Cardboard,  this is because there are idiotic men out there who thinks he can re-invent the world as a way to feed one's huge ego...

 

Regarding your comments about cyber security, boy, do I have something for you:

 

http://www.uscc.gov/researchpapers/2009/NorthropGrumman_PRC_Cyber_Paper_FINAL_Approved%20Report_16Oct2009.pdf

 

http://www.bloomberg.com/news/2011-10-27/chinese-military-suspected-in-hacker-attacks-on-u-s-satellites.html

 

Not only do the Chinese and Russians are hacking our network, the Chinese are now hacking our satellites...

 

So, now we come to the part where we bash AT&T.  Looks like the FCC didn't take too kindly to AT&T's truth about the T-Mobile merger:

 

http://www.eweek.com/c/a/Mobile-and-Wireless/FCC-Report-Shows-Doubts-About-Truth-of-ATandT-TMobile-Merger-Claims-100463/

 

http://www.politico.com/news/stories/1111/69360.html

 

The report is so damaging that the FCC has to take them offline...  Ouch!

[Ben Graham]

Ben Graham,

 

While Mr. Javad conducted his four tests, were there any opposing witness experts involved who have changed their positions or did he go it alone? To be honest, I have not watched the whole presentation yet while I presume you have, but at the end, he seems to be marketing his boxes for the audience to do their own tests. I presume people would need to take them out to "real world" situations in order to verify results tied to such complex issues?

 

You seem to be a supporter of Light squared's broad "wholesale" wireless broadband plan which resembles LVLT's "wholesale" terrestrial broadband business model, i.e., Carrier Neutral and "Carrier's Carrier" or "Network Partner You Can Rely On."

 

ValueCarl,

 

This is my thinking on the Lightsquared matter. You can't have it both ways Carl, either you want the destruction of the Bells & Cable guys or you don't. I'm in favor of any or all ideas that will lead to their demise. The old guard gate keepers need to be removed!

 

DirectTV will be on my mind, because Ted Weschler - Warren Buffett's new replacement, seems to think it is a good investment. Satellite solution like Lightsquared. I hope you and brker_guy don't hate me now.  ;) :-\

 

Yes, I like the wholesale business aspect in a model.

 

Big Ted seems to have it figured out, maybe Big Mo (Mohnish Pabrai) is advising Charles T. Munger about things also.

 

Ben Graham

 

============================================================================

 

Cardboard

 

How the Phone Companies Are Screwing America: The $320 Billion Broadband Rip-Off

Americans are stuck with an inferior and overpriced communications system, compared with the rest of the world, and we're being ripped off in the process.

October 7, 2010  |

 

Since 1991, the telecom companies have pocketed an estimated $320 billion --- that's about $3,000 per household.

 

This is a conservative estimate of the wide-scale plunder that includes monies garnered from hidden rate hikes, depreciation allowances, write-offs and other schemes. Ironically, in 2009, the FCC's National Broadband plan claimed it will cost about $350 billion to fully upgrade America's infrastructure.

 

The principal consequence of the great broadband con is not only that Americans are stuck with an inferior and overpriced communications system, but the nation's global economic competitiveness has been undermined.

 

In a June 2010 report, Organization for Economic Co-operation and Development (OECD) ranked the U.S. 15th on broadband subscribers with 24.6 percent penetration; the consulting group, Strategy Analytics, is even more pessimistic, ranking the U.S. 20th with a "broadband" penetration rate of 67 percent compared to South Korea (95 percent), Netherlands (85 percent) and Canada (76 percent). Making matters worse, Strategy Analytics projects the U.S. ranking falling to 23rd by year-end 2010.

 

But these are just overall statistics. Today, people in Japan, Korea, Europe and other countries get broadband services that are 100-mbps services in both directions for what we pay for inferior, Asymmetric Digital Subscriber line (ADSL), while in Hong Kong companies have started to offer 1-gigabit speeds.*

 

Part of the reason for this is these countries have sunk more fiber optical cable into the ground and connected more homes to the next-generation grid. According to the OECD, the U.S. ranks 11th with only 5 percent fiber penetration, compared to Japan (54 percent), Korea (49 percent) and European OECD countries (11 percent).

 

Another reason for the woeful state of U.S. broadband is that we have one of the slowest networks in the world. According to the technology company, Akamai, the U.S. ranked 22nd globally in average connection datarate speed, averaging only 3.8-mbps in Q-4 2009. In comparison, Korea's average datarate was nearly three-times faster (11.7-mbps), Hong Kong more then double (8.6-mbps) and Japan was at 7.6-mbps. A surprise to many, Romania had an average rate of 7.2-mbps and Latvia clocked at 6.2-mbps.

Screwed

 

Grand cons regularly screw Americans. Millions bet the lottery that never pays off; millions go to Las Vegas and Atlantic City hoping for the big score and leave with empty pockets; and millions bet big-time on a housing run-up and lost big, big time. Hustlers offer a zillion get-rich schemes over TV and the Internet that people accepted either out of naivety, greed or desperation. But one of the greatest -- and little reported -- scams perpetuated on the American public is the broadband con.

 

The scam was simple. Starting in 1991, Verizon, Qwest and what became AT&T offered each state -- in true "Godfather" style -- a deal they couldn't refuse: Deregulate us and we'll give you Al Gore's future. They argued that if state Public Utility Commission (PUCs) awarded them higher rates and stopped examining their books, they would upgrade the then-current telecommunications infrastructure, the analog Public Switched Telephone Network (PSTN) of aging copper wiring, into high-speed and two-way digital optical fiber networks.

 

State regulators, like state politicians, are seduced by the sound of empty promises -- especially when sizable campaign contributions and other perks come their way. Hey, what are a few extra bucks charged to the customer every month for pie-in-the-sky promises? And who cares about massive tax breaks, accelerated depreciation allowances and enormous tax write-offs? The promises sound good on election day and nobody, least of all the voter, reads the fine print.

 

The broadband con has been played out across the country. In California, Pacific Bell (now part of AT&T) claimed it would spend $16 billion and have 5.5 million homes wired by 2000. Instead, after a merger with SBC in 1997 (renamed AT&T in 2005), it secured state deregulation and simply stopped building out the fiber-based broadband infrastructure. On the East Coast, things were pretty much the same. Bell Atlantic, which covered New Jersey to Virginia and is now part of Verizon, claimed it would spend $11 billion and have 8.7 million homes wires by 2000. And in Connecticut, SNET (now also part of AT&T) promised to spend $4.5 billion and have the entire state rewired by 2007. In the mid-West, the story was similar. Ameritech (now part of AT&T and which controlled five states, including Illinois and Ohio) claimed they would have 6 million homes wired by 2000. For Ohio, Ameritech claimed it would rewire every school, library and hospital with fiber by 2000. None of these promises have been realized.

 

Over the last two decades, the telcos have engaged in a lot of sleight-of-hand tricks to make Americans believe that broadband was real and their service was the world's best. In 1996 the Internet hit and everyone wanted to go online. This migration to the World Wide Web was led, not by AT&T and Verizon, but by thousands of small and larger ISPs from AOL and Prodigy to over 9,500 small ISPs.

 

By 1998, not only did the telephone companies mostly stop building out their networks, but instead of rolling out the next-generation "info superhighway," they pulled a bait-and-switch and rolled backward, offering customers ADSL service, a watered-down "broadband" connection that runs on good old copper wire.

 

Another trick used by telecoms has been to submit to federal and state regulators falsified cost models, often lying to regulators and the public. For example, the great lie was voiced in 1991 when the telecom boldly announced the new broadband age based on technologies that they claimed capable of delivering 45-mbps bi-directional services, but the technologies didn't exist and couldn't work out at the cost models submitted. When pushed, the phone companies presented self-produced, self-funded or self-serving "research" by shill think-tanks to buttress their claim for higher rates.

 

Now, nearly two decades after Gore announced the Info Superhighway and the telcos secured deregulation to build out the next-generation communications infrastructure, the nation's two largest phone companies, Verizon and AT&T, have begun to seriously deploy fiber services. In 2004 and with much fanfare, Verizon introduced FiOS, a fiber-to-the-home service. Today, it claims only 3.6 million subscribers and new subscriptions have stalled.

 

AT&T, which originally promised to launch its advances service, U-verse, in 2006 in 15 markets, got it running in 2007 but in only 11 markets -- and then not through an entire market. As of the end of Q-2, 2010, it claimed 2.5 million subscribers. Sadly, the telecoms have only 6 million full broadband fiber subscribers as of 2010. What happened to the other 94 million households they promised to sign-up?

 

Americans have paid and paid again billions of dollars for an imaginary upgrade to create a fiber optic future. The estimate of $320 billion has already been collected which means that every household has paid almost $3,000 to upgrade the phone networks. The question no wants to really address is simple: What have Americans gotten for the telecom broadband rip-off?

 

Playing the con

 

In order to understand how the broadband con works, it is useful to examine how it has played out in one state and extrapolate this to the other 49 states. In this case, we will examine New Jersey as representative of a nationwide policy.

 

New Jersey state law requires that by 2010, 100 percent of the state is to be rewired with 45-mbps, bi-directional service. To meet this goal, Verizon collected approximately $13 billion in approved rate increases, tax break and other incentives related to upgrading the Public Switched Telephone Networks. To cover its tracks, Verizon submitted false statements year after year, claiming that it was close to fulfilling its obligations. For example, in its 2000 Annual Report, it claimed that 52 percent of the state could receive "45-mbps in both directions or higher."

 

Based on such false claims, Verizon has benefited for significant pricing increases for essentially inexpensive computerized services. For example, Call Waiting and Call Forwarding cost less then $.01 cent to offer yet the company charges $4-$7 for such features. In addition, fees for inside wiring went up to $7.00 from $1.25.

 

The company also benefited from more invisible perks. It secured massive write-offs on its network even though it wasn't being replaced; it actually secured a write-off of over 105 percent above the amount of construction. These write-offs helped save it billions in taxes. These factors have helped significantly heighten the company's Return on Equity, the standard measurement of profits, jump from 12-14 percent before deregulation to 30-40 percent.

 

But all this gets complicated as they are no longer required to submit full New Jersey annual or quarterly reports and the FCC's filing requirements stopped in 2007. So, in 2009, Verizon, New Jersey outlined financials showed a "net income" loss of $194 million dollars, and a $160 million "tax benefit" and a series of "affiliate transactions," meaning transferring expenses to the utility but without showing monies flowing back.

 

Verizon's New Jersey coverage is for approximately 3.2 million households, which represents about 3 percent of total U.S. households. Extrapolating from New Jersey, we estimate that Americans have been bilked of at least $320 billion since deregulation went into effect in the mid-'90s.

Digital Houdini

 

Federal and state regulators ignore the great telecom rip-off -- politicians simply get too many contributions from too many lobbyists to worry about their constituents' phone bills. Telephone companies have orchestrated a massive digital Houdini act in which they present an image of an essential service that offers customers more for less.

 

After almost 20 years of telecom deregulation, the American communications infrastructure is in shambles. The FCC's broadband plans are now in play. While much debate has taken place over the future of net neutrality, particularly in light of the Google-Verizon proposal to maintain Internet net neutrality on wireline distribution and end it on wireless communications, little attention has been paid to the never-ending rate hikes, failure to deliver on previous promises, poor state of fiber deployment, and into who pocketed the missing $320 billion in over charges.

 

In 1967, James Coburn stared in a wonderful satire, The President's Analyst, about the corrupting power of a secretive TPC, the phone company. The film pits the Central Enquiries Agency (CEA) against the Federal Bureau of Regulation (FBR), an all-male agency consisting of J. Edgar Hoover look-alikes all under five-foot-six-inches tall. In the intervening four decades, but especially since the break-up of AT&T in 1984 and deregulation starting in 1993, the power of the telecommunications companies, including the cable industry, has both increasingly grown and become increasingly invisible.

 

A century ago, giant corporate trusts dominated America's economic landscape. A century later, they are back in full force and even greater control over the nation's economic life and political culture.

 

(For more detailed analyses of the great broadband rip-off, visit www.teletruth.com.)