This section is from the document '/news-archives/clari/nb/telecom'.

From clari.nb.telecom Fri Jul 31 06:45:54 1992
From: newsbytes@clarinet.com
Date: 30 Jul 92 19:51:19 GMT
Newsgroups: clari.nb.telecom,clari.nb.top
Subject: ****Study Calls Bell Divestiture a Rip-off 07/30/92

NEW YORK, NEW YORK, U.S.A., 1992 JUL 30 (NB) -- In a 
conclusion he called "startling and disturbing," researcher 
Bruce Kushnick charged that the public is being ripped-off 
as a result of the 1984 break-up of the Bell System.

Kushnick's New Networks Institute, a telecommunications 
market research and analysis firm based in New York, came 
to that conclusion as Phase One of an ongoing project called 
"10 Years Since Divestiture: The Future of the Information 
Age."  

Kushnick charged that both Congress and the Federal 
Communications Commission are making decisions about 
the future of telecommunications "based on incomplete 
and misguided information, and these decisions should 
be reexamined." 

Specifically, Kushnick recommends that Congress explore 
the dismantling of the seven regional Bell companies created 
by divestiture. Ironically, Pacific Telesis is considering 
just such a break-up, between regulated and unregulated 
entities, in a bid to increase the value of its business to 
shareholders.

In his report, Kushnick charges that FCC statistics on local 
charges are incomplete, and that in fact the cost of local 
service has risen 315 percent since 1984, with New York 
City charges have growing 553 percent since 1980. 

The FCC claims such costs are up just 50 percent. Service, 
Kushnick charges, has not improved. Kushnick said long 
distance charges have gone down by 60 percent, but other 
studies have charged that the decrease in long distance 
costs represents only a reduction in the money paid by 
long distance companies to access local networks. 

Most damning, Kushnick charged that the regional Bells have 
changed their mandate from supplying, "Universal Service at a 
Reasonable Price" to pursuing a strategy which first serves 
their investors.  $11.3 billion has been spent in the last three 
years on foreign investments. Using their natural monopoly 
positions, Kushnick charges these regional Bells are costing 
consumers $5.6 billion in extra charges for toll calls, while 
the average consumer bill shows over $125 a year in added 
fees and expenses. 

Kushnick came to his conclusion after examining actual 
charges and payments of telephone bills from 1980-92.  
Information was combined with data from over 1,600 
separate documents, with sources including the FCC, the 
Department of Justice, the Bells' own BellCore research 
group, the National Association of Regulatory Utility 
Commissioners, telephone company annual reports, tariffs, 
and product literature. 

Kushnick will now look at the future of the industry, 
including the creation of a new telecommunications agency, 
a plan for regional Bell divestiture of their local networks, 
the creation of a universal fiber network, and the outlook 
for new services based on area codes like 500, 600, and 
(star)100.   

(Dana Blankenhorn/19920730/Press Contact: Bruce 
Kushnick, New Networks Institute, 212-837-7867)

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