TELECOM Digest OnLine - Sorted: The Telcos' Latest Multimillion Dollar Subsidy and Ripoff

The Telcos' Latest Multimillion Dollar Subsidy and Ripoff

Dave Burstein (
Fri, 28 Jul 2006 12:44:24 -0500

by Dave Burstein
of DSL Prime and Future of TV
[July 27, 2006]

While the telcos complain to the government about losing money, they
boast to Wall Street about how many layoffs and profits they can
achieve. Now, a new telco subsidy will cost every phone subscriber in
the U.S. at least $3.50 per month.

Telcos' "Missoula Plan" disguises multibillion price increase
Will reporters find the facts in 193 dense pages?

A multibillion dollar per year D.C. story broke Tuesday to near total
press silence. The most important detail: a $3.50 per month+ increase
in nearly every phone bill in America. The "Missoula Plan" is backed
by a long list of phone companies. It will be very hard to stop. It
moves at least $4 billion from consumers to telcos. Add the $1.29 per
line USF subscriber charge, and more people will cancel phone service.

When Al Gore proposed a billion a year for schools and libraries,
Republicans called it "The Al Gore Tax." If Bush and his FCC demand
several times more, with the money going to the telcos instead of a
public purpose, I say call this "The George Bush Tax."

This will be another test of the backbone of the FCC. It's all being
presented in the guise of "protecting rural America" when instead it
actually raises basic phone rates in both rural and urban
America. Steve Labaton, Arshad Muhammad, Amy Schatz: Please take the
time to report this well. None of your papers had the story today, but
D.C. insiders know this is the biggest money deal in U.S. telecom.

The supporting documents are extraordinarily clever, but follow the
money flows. Consumers are being asked to pay 20 to 35 percent more
for basic phone service, with most of the benefits going to LD
carriers. The smaller telcos fought hard to keep their share, and
eventually a deal was reached to pass the bill to consumers.

Four hours with the proposal gave me confidence to see the main money
flow, but no depth. I'll have more as I fact check and get supporting
data. But heck, I'm the DSL reporter. I'd much rather the big papers
with more resources cover this so I can focus on chips instead of
Washington follies. Just follow the money, and question the lobbyists

Post Followup Article Use your browser's quoting feature to quote article into reply
Go to Next message: John Riddell: "Telecom Update #539, July 28, 2006"
Go to Previous message: Eric Auchard: "Web Services to Aid, Not Kill, Software"
TELECOM Digest: Home Page