[governance] FW: [PEN-L] exposing the telecom ripoff

Rui Correia correia.rui at gmail.com
Thu Jul 27 04:45:07 EDT 2006

Rui Correia
Advocacy, Human Rights, Media and Language Consultant
38 Finch St,
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"Quando a verdade é substituída pelo silêncio, o silêncio é uma mentira" -
Yevgeny Yevtushenko
"When truth is replaced by silence, the silence is a lie" - Yevgeny

-----Original Message-----
From: PEN-L list [mailto:PEN-L at SUS.CSUCHICO.EDU] On Behalf Of michael
Sent: 27 July 2006 06:18
Subject: [PEN-L] exposing the telecom ripoff

BusinessWeek just published a terrific article, exposing the giant
telecom corporations as fraudulently winning regulatory support that
will solidify its control over the Internet.  In part, justification is
to promote the technology, but the article shows their research
commitment is minimal.

Gimein, Mark. 2006. "The Phone Companies Still Don't Get It:
They Block Competition and Charge Too Much." Business Week (31 July):
pp. 51-3.


51-2: "In case you haven't been keeping score, after the original phone
company, American Telephone & Telegraph, was broken up in 1984, the
country was left with eight major regional telcos.  Over the past decade
these companies proceeded to gobble one another up.  Now there are four:
AT&T, Verizon, BellSouth, and Qwest ....  The "new" AT&T is actually the
rechristened SBC, based in Austin, Tex., which acquired the venerable
name last year -- and it's in the process of buying BellSouth.  That
will leave two phone giants, Verizon and AT&T, and the much smaller
Qwest.  The biggest wireless carriers are Verizon Wireless, majority
owned by Verizon, and Cingular, which is soon to be wholly owned by
AT&T.  It's not exactly the return of the old Ma Bell monopoly -- the
world has gotten way too complicated for that -- but that's a lot of
power in the hands of just two companies."

52: "One way in which these companies are very different from the old
phone monopoly is that while the original AT&T had a world-class
research operation, its successors don't.  One of the signal facts of
the communications revolution is that virtually all the new technologies
that made it possible were developed outside the phone world.  Last
year, Verizon's revenue came in at nearly $80 billion.  AT&T (without
BellSouth or Cingular) had revenue of $44 billion.  And yet while Intel
Corp. spent $5.1 billion last year on research and development, AT&T
spent just $130 million.  The word "research" doesn't even appear in
Verizon's annual report."

52: "The phone giants have even used "innovation" as a key justification
for their aggressive merger wave. Last year, when SBC was buying the
remnants of AT&T, SBC Chief Executive Edward E. Whitacre made sure to
note that by merging, the combined company would have "the intellectual
and financial resources to spur innovation"."


Michael Perelman
Economics Department
California State University
michael at ecst.csuchico.edu
Chico, CA 95929
fax 530-898-5901

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