Category Archives: Legal

Michigan SB636 passed, allowing termination of landline phone service. Now what?

“Mr. Speaker and members of the House:

Today a disservice was done to the citizens of the State of Michigan. This bill hampers competition and allows a greedy large corporation to take advantage of some of the most vulnerable segments of our population. Senior citizens and lower income users deserve to be protected. In this case, they are not. I hope that in future votes my colleagues will take into consideration the long term effects of legislation that we pass.”

– Rep. LaVoy, Michigan House Journal 27 of 2014

On 3/11/2014, Senate Bill 636, as amended, was passed in the State House of Representatives of Michigan. For my post on the original bill, click here. (Please note there is an important amendment I'll be discussing below.)

Not all is lost. Numerous news reports (many of them sympathetic to AT&T's position, but it raised attention regardless), 19,000+ hits to this blog, attention from many other blogs and websites, and  outcry from numerous public safety, consumers rights groups, and competitive providers managed to hold off this law for almost 3 months. In that time, something that passed the state Senate in 2 days with a final vote of 31 yeas, 4 nays, 2 excused, and 1 abstain ended up passing the state House in nearly 90 days, with 71 Yeas and 39 nays, and only after being amended.

What was the amendment, and what does it do? Are we safe?

It adds onto the section that allows a provider to withdraw as a telephone company entirely (as long as there was a workable solution for 911 emergency calling in the area),  a section binding the withdrawing carrier to the FCC IP Transition order, should they choose to withdraw.  (This would apply whether it's a formal FCC IP Transition trial or not, until federal regulations are passed codifying the IP transition nationwide, which would likely supersede any state laws we have on the topic anyway, so we're only losing so much here)

Regulation of interconnection, wholesale access, and consumer issues would remain the purview of the MPSC, using the FCC IP Transition trial rules until the FCC passes its own final rules for the IP transition.

Have no illusions – this isn't the best case scenario for Michigan consumers, or competitive providers. But it's much better for them than the original SB636. The FCC IP transition order provides some consumer protection (but not a lot) by requiring applicants to prepare reports on the impact of transition for many different types of things, such as credit card terminals, heart monitors, etc. And it allows wholesale access to legacy network elements, so competitive providers could decide to provide legacy TDM/POTS equivalent service if there is market demand for it (and obviously in many places, there would be).

What it doesn't do is compel the RBOC/ILEC to provide those legacy TDM/POTS equivalent services. The upside for consumers is that there are carriers who would happily take that business from the ILEC (including the carrier I work for), and theoretically anyway, we'd be able to do so using our own equipment and the ILEC's wires.

The downside is, many subsidies would not be available to provide same, and CLECs don't necessarily have the sunk cost to provide this service cheaply (some do, in some areas). This could have a disproportionate impact on low-income families and rural customers, where there are fewer customers (or mostly low income customers who are paying the bare minimum the plans would offer) to subsidize a network build to provide a replacement product.

The FCC IP trials state there has to be protection of low-income/elderly/disabled customers, but I'm not certain what that would ultimately mean. Where are the cutoffs for low-income and elderly? What kind of price increases would be okay?

Smarter people than I have summarized the IP trial orders here.

The bill, because of the amendments, has to go back to the senate, where it is expected to be passed immediately, and the governor is expected to sign it. Rumors say that the governor pushed hard for these changes, as he did not want the original bill to be passed as written – nobody wants to be the governor that took away phones from elderly people, and gave away state level oversight of the largest public utilities in their state. Well, at least no governor with common sense, anyway.

Time will tell if these changes are enough to protect everyone. I'm not sure anyone with experience in the industry can tell you at this point where things will be by 2017 on these issues. It's notable that the Michigan IP transition laws would kick in right after the current presidential administration term limits out, and a new administration will take its place roughly 20 days after the law kicks in. Part of me can't help but think that AT&T will have their claws dug deeply into the backs of the nominees of both parties.

So is this the end? Are we screwed now?

No. Though many of these issues move to various other states, and the federal level. (AT&T often uses Michigan as a model for legislation in other places – HB4314 was used to prove that if similar legislation was passed in other states, they too would benefit from increased deployment of AT&T's U-Verse product, for example, and from increased investment in their state. AT&T expanded U-Verse deployment, and located more employees in Michigan as a reward for passing HB4314)

Additionally, with Network Neutrality changes, broadband data caps, and the consolidation of major industry players any ability to offer services over the broadband connection of a third party (such as Vonage, Aereo, Skype, Youtube, Hulu, and Netflix) is severely threatened. More independent carriers would let the free market figure out network neutrality, but with consolidation and things like SB636 (at least in its original incarnation, though we don't know what this new incarnation will really bring for certain) we impact the ability for new entrants to create proper competitive pressure. (Each of those links contains more information, and on most, an opportunity to voice your opinion).

As for the FCC's IP Transition policies, you still have an opportunity to lend your voice. DoctorOhhnoes points out in an earlier post that there is still an opportunity to comment on the transition with the FCC.

Numerous groups are working on things such as privacy from the NSA, SOPA censorship, overreaching copyright law, broadband data caps and lots of other things.

What would solve this entirely?

In short, what they call "Structural Separation" – this is when companies are split up between the side that maintains the outside plant infrastructure, and the company that provides voice and data services. The outside plant company would only care what customer belongs to whom as a technical necessity (ie: Where does this customer's wire, fiber optic cable, etc get hooked to in the central office? To AT&T's switch, or to another carrier?). They would own all the buildings, structures, and wires.

This company would be legally separate from any company providing data or voice services, much like AT&T long distance was broken off from the Bell system in 1984, but in this case we're taking it a step further – separating phone companies from the outside wires. AT&T would pay rent to be in the buildings under the same terms and conditions that competing carriers do, and be subject to the same outside plant conditions that the other carriers would.

Any improvements to the outside plant would be cost averaged across the combined customer base, and would affect all carriers equally. AT&T wouldn't benefit unduly from having a large embedded base (except from the usual economies of scale with billing, support, IP transport, and telephone service), and any carrier could roll out any technically possible service at any time.

The outside plant company would have an incentive to come up with better quality loops, better fiber optic penetration, better everything because carriers would demand that of them (and would work out a way to pay for it collectively, if necessary), and they would all benefit equally from the deployment. The outside plant company may even come up with better products to offer – for example, a wholesale VDSL2 DSLAM setup in the neighborhoods that any carrier could pay to use with their equipment to extend the reach. This would allow nearly any carrier to roll out a U-Verse like service overnight. Economies of scale would be spread across all market participants – Currently if 4 companies in a business park want service from 4 different carriers, each has to run their own fiber to the customer's building all the way back to a central point. A structural separated provider could run one 48 count cable to the business park, and hand all 4 carriers their own set of strands to each building. If a customer wanted to change carriers, or add a second, they'd be able to hook up unused capacity, or even swap a cable over from one carrier to another in the central office. This means the entire business park could benefit from that scale, and bringing the other buildings into the fold would be simplified, no matter what carrier they want to use.

It may sound utopian, but several countries are doing this today.

Imagine if your house had access to fiber optic services from 4-6 companies. Do you think people would still be talking about net neutrality and bandwidth caps? Heck no, because if one of those carriers sold capless products that worked well with everything, people could switch in a heartbeat to them. There's no sunk costs and no startup time. The company that tried to limit their customers unnecessarily would be out of business in a heartbeat.

TL;DR

Too much to read? Summary: AT&T managed to get their bill passed with some change due to consumer and citizen outcry. The changes are good, but not as good as not having the law at all.

While the future is uncertain, you still have influence, and there are many battles other than this one that can have similar impact on you, no matter who you buy your services through. I strongly urge you to weigh in on them with those who are in power (and many of them are actually listening, as this isn't a particularly partisan issue, and affects everyone!). I strongly urge people to pressure their legislators, and their friends, to become educated on the topics I mentioned above, and to push people to have positions on them, much like people do about things like abortion, gun control, social security, and other stuff. Almost everyone in the US uses a telephone or the internet daily, and what happens to these services matters a lot.

And if you haven't seen what the other side is capable of, I strongly suggest checking out my earlier post about AT&T's involvement with Astroturf groups here. Other sites discuss this in greater detail.

And to steal a line from Dr Seuss: “Unless someone like you cares a whole awful lot, Nothing is going to get better. It's not.”

How green is the astroturf over there?

A recent article in Fierce Telecom titled "Special access, end of PSTN no secret to wireline marketplace" , written by Bruce Mehlman was a response to an article written by Bruce Kushnick, who is no friend of the incumbent telephone companies, for sure.

But who is Bruce Mehlman and the organization he co-founded, the "Internet Innovation Alliance"? Good question.

The tone of the article would imply that they're an advocacy group for broadband by any means necessary – they want speed and don't care under what terms and conditions it's available, as long as it's "cheap".  Seems fair and innocent enough, from the "cheap, fast, good, pick two" – they chose cheap and fast. I disagree with this strategy, but more power to them.

But wait – what they're advocating is exactly what AT&T is trying to carry out with SB636 in Michigan. I can't help but think that's a bit odd, so I dig a bit to see what the story is with this "Internet Innovation Alliance" that I've never heard of before. What I found was interesting.

With some digging, I found their list of members.

I'll reproduce it here:

 

1 Economy Incorported Donor Supported by AT&T and Verizon
American Council of the Blind Donor AT&T and Verizon are major sponsors of their event.
The American Conservative Union Ideological Not specifically related to AT&T. Generally supports elimination of government regulations.
Applied Optoelectronics Supplier Supplier for AT&T and Verizon's FTTP products
Alcatel-Lucent Supplier/Common Origins One of AT&T's largest suppliers. Lucent was a spinoff of Bell Labs, which was at one time AT&T.
Americans for Tax Reform Ideological Not specifically related to AT&T. Generally supports elimination of government regulations.
AT&T Self The phone company. The people the organization speaks highly of in the op-ed.
B-Tech Supplier AT&T Supplier – AT&T's logo is right on their front page.
Berry Test Sets Supplier AT&T Supplier – Ironically provides premier test equipment for that "obsolete network" that they're trying to get rid of. Their techs carry this tool a lot.
Communications Technology Solutions / CBM of America Supplier AT&T Vendor
Ciena Supplier AT&T Vendor
Condux Supplier AT&T Vendor
CompTIA Indeterminate Not specifically related to AT&T, but AT&T is a large sponsor of theirs.
Connected Nation  AT&T related AstroTurf group Astroturf group heavily funded by AT&T. Even performs research for AT&T.
Corning Supplier Major AT&T Supplier of Fiber Optic Cable
United States Cattleman's Association Indeterminate, likely donor The site doesn't mention sponsors at all, but the cattlemen's association goes out of its way to file FCC comments all the time in support of various AT&T initiatives.
FiberControl Indeterminate Probably an AT&T supplier. Very niche equipment supplier.
GoFoton Supplier CTO worked at AT&T for 30 years, likely an AT&T supplier as well.
National Grange of the Patrons of Husbandry Indeterminate, likely donor Outspoken advocate of AT&T's policies. Major donors not mentioned on their homepage.
American Homeowners Grassroots Alliance Indeterminate, likely a front group AHGA and AHF Privacy Policy- AHGA and AHF will not disclose any information whatsoever about their members,
customers, or supporters to any other parties under any circumstances. – Advocate of AT&T policies in the past.
Hispanic Telecommunications and Technology Partnership Indeterminate, likely a front group Promotes many AT&T initiatives, ties to the NTCA and USTA. All positions seem to be related to AT&T initiatives.
Hispanic Leadership Fund Indeterminate, likely ideological Unknown, no public webpage, no known policy statements.
Independent Technologies Inc Supplier Supplier, ironically, of equipment for AT&T's "Obsolete" POTS/TDM network.
Independent Women's Forum Donor/Ideological AT&T is a donor to the IWF.  Generally supports elimination of government regulations.
Japanese American Citizens League Donor "Website made possible by the generous sponsorship of AT&T" (search in page for that string)
LCLAA Trade Union Trade Union group (Trade unions that deal with AT&T tend to support AT&T policy in exchange for promises to include their laborers in new initiatives)
LULAC
Donor/Ideological
AT&T is part of their "Corporate Alliance"
Intertribal Agriculture Council  Likely Donor Recently, the Intertribal Agricultural Council has been involved in many non-agricultural things, such as the AT&T and T-Mobile merger, and the Sirius XM merger. Why? Who knows.
MetroTel Corp  Supplier AT&T Supplier
Minerva Networks Potential Supplier Minerva sells IPTV middleware that controls IPTV set top boxes. AT&T uses Microsoft MediaRoom, but given that Microsoft has no interest in continuing that line, I suspect AT&T is working with Minerva at this point to replace MediaRoom.
National Assocation for Female Executives  Likely Donor Both NAFE and AT&T pat each other on the back a lot.
National Association of Neighborhoods  Likely Donor NAH has spoken heavily in favor of previous AT&T initiatives.
National Coalition on Black Civic Participation AT&T and CWA staff on board of directors
National Health IT Collaborative for the underserved Likely Donor They do not appear to have made any public statements in favor of AT&T initiatives, and appear to be otherwise legitimate.
National Black Chamber of Commerce Donor The AT&T Foundation has donated thousands to this group, if not more.
National Puerto Rico Coalition Donor AT&T is a primary sponsor.
National Spinal Cord Injury Association Likely Donor They do not appear to have made any public statements in favor of AT&T initiatives, and appear to be otherwise legitimate.
OASIS Institute Donor AT&T donated half a million dollars to this group.
National Utility Contractors Association Supplier Consortium of AT&T suppliers
Prysmian Cables and System Supplier Manufacturer of fiber optic cable
Small Business Entrepreneurship Council Ideological Possibly supported by AT&T, definitely ideologically opposed to government regulation.
Suimitomo Lightwave Supplier Fiber optic manufacturer
Sheyenne Dakota, Inc Likely Supplier They manufacturer wiring harnesses.
SeniorNet Donor AT&T and Verizon are sponsors.
SNC Manufacturing Supplier AT&T supplier of high voltage isolation equipment
Suttle Supplier Supplier of various telecommunications cabling and connectors. (Many punchdown blocks are made by Suttle)
Telesync Supplier Ironically, most of their products are for those old, evil POTS services they're trying to get rid of.
TechAmerica Consortium AT&T is a member
USIIA Consortium AT&T is involved with this group. Verizon has an employee on the board of directors. They have a history of speaking in favor of all AT&T initiatives, all the way back to the bell south merger.
Women Impacting Public Policy AT&T employees part of advisory board / Ideological Corporate Advisory Board has AT&T (and Comcast, who does not oppose these laws) members. Several.  Generally supports elimination of government regulations.
Asian Women in Business  Donor AT&T heavily sponsored this group

Now, to be clear, I don't think that taking a single dollar of AT&T's money taints you. But when you're part of a public policy group that is unrelated to your mission (What does this have to do with Indian agriculture, or cattlemen?), and you take money from AT&T, your opinion may be not as independent as you make it sound.

The thing with nonprofits is, they don't have an inherent means of self support. They rely on donors. If you get a big donor that seems awesome at first, it opens a lot of doors for you. When they ask for your support, and it doesn't seem completely unreasonable (just sign your name to this, it's going to pass anyway and we could really use your help, as we've helped you in the past) – few organizations can afford to say no, especially if it doesn't harm their constituency directly or go against their stated goals. It puts them in the unenviable position of either giving a large donor a hand over something inconsequential to their members/beneficiaries/whatever, or taking an unnecessary stand to say "This is tangential to our mission" and risk a pay cut.

How AT&T, Verizon, and Comcast are working together to cheat you by "Discontinuing Landline Service"

(TL;DR summary: AT&T is buying entire legislatures to rewrite the laws to allow them to become a fully unregulated company with no wholesale obligations, creating a de-facto monopoly. They can (and likely will) use it to squash or hurt wireless competitors as well, as they're permitted to favor their own subsidiaries with the network built and created over a hundred plus year monopoly, and Comcast is fully on-board because they'd like to split the market created when all their competitors are dead)

UPDATE: The bill passed with some modifications. Click here for more information.

There is a new bill going through the michigan legislature right now. Referred to as Senate Bill 636, it claims to provide for the discontinuance of landline phone service.

Let me explain what this actually does, and why you care, even if you only use wireless phones and cable.

First, the bill shores up a lot of language in the intercarrier compensation reform that went through last year. No big deal.

The big deal is that there are:

  • Language changes that seem to trend away from the use of tariffs to provide published service types, rates, and service territories. No big deal on it's face, but as part of a larger scheme, why this is being altered makes sense.
  • Language changes that allow a provider to leave a community high and dry, with no telephone service, starting in 2017. That's just over 3 years from now.

So you'll ask – I use cellphones and use Comcast for internet – how does this apply to me?

First – there are thousands of people that will continue to need, and desire landline service. And businesses aren't going to switch away from landline phone service to cell phones. And AT&T has no desire to cede this business to a competitor, so what's the deal?

Part of this dates back to the last "reform" of the Michigan Telecommunications Act. HB 4314 of 2011 removed many regulatory oversights that protected customers and competitors.

Most of interest today are clauses of HB4314 that:

  • Permit AT&T and other companies to sell, lease, or otherwise transfer assets and sell service to an affiliate below cost,
  • Allow companies to discriminate in favor of an affiliated burglar and fire alarm service over a similar service offered by another provider,
  • Allow AT&T and other phone companies to discontinue service in any area provided with anything resembling a two-way telecommunications service including wireless, radio, or Voice Over IP service. Last year's bill does not permit them to leave customers high and dry, there must be something there that people can use as a substitute instead.

(Have you noticed lately that AT&T through their UVerse brand, and Comcast through their Xfinity brand are offering home security and automation? That was sudden, right? Well – there's a reason. AT&T UVerse and Comcast are not required to provide landline service suitable for use by outside alarm company vendors for their services. And quality requirements are eliminated as well, so if your current alarm system doesn't work right, tough. So now AT&T and Comcast can deliberately impair alarm systems, then sell you their own when they don't work instead of fixing the degradation.)

But more concerning is AT&T's trend of wanting to leave the "landline" business. First it's important to understand that what legislators and lawyers consider a landline, and what you consider a landline are TWO COMPLETELY DIFFERENT THINGS.

A layperson looks at a phone coming out of their wall with a wire attached to it, and says "landline!"

What AT&T wants to eliminate is something very specific:

Telephone service that is:

  • Regulated for price and quality,
  • Offered on nondiscriminatory, consistent and identical terms to everyone in their service area,
  • Is delivered on copper pair,
  • Has dialtone even with no equipment attached inside the customer premises

Do you have uverse? Then you don't have "landline" service – even if you have phone service from them.

You'll note that AT&T speaks a lot about how their "landline" service is losing customers hand over fist, and is highly unprofitable. Guess who they are losing much of their lines to? AT&T.

See where I earlier mentioned 2011's HB4314 "Permits AT&T and other companies to sell, lease, or otherwise transfer assets and sell service to an affiliate below cost"? They are allowed to sell their phone service to themselves at below cost. When you switch from AT&T landline to UVerse, you are "disconnecting your landline". For regulatory purposes, AT&T can claim they lost your services to a competitor. A competitor that the more they sell services to, the more unprofitable their "landline" division becomes. Of course, AT&T doesn't really lose money on the deal, they're just taking the profits from your uverse and allocating them all to their "affiliate" rather than the company actually providing the service. They can show that divison as being artificially profitable, and the landline division as a huge drain on their bottom line.

Now they can say their landline division is losing tons of customers, and costing them a fortune. But hey, our uverse division is doing better than ever!

What does this let them do?

Well, the prices they set to sell wholesale services to competitors are based on the costs of providing service. As are the regulated products they tariff and provide to end users. So now, they can go to public commissions and the FCC and show how despite technical advances and the network being a mostly sunk cost, that expenses of providing service are going up, and they must raise rates to competitors and end users to cover for the massive atrophy the network is experiencing (even as it grows exponentially to handle the load from the supposedly nonexistent customers that ride it).

So okay, what's the big deal, right? What will happen in 2017? What's possible here?

First, it's important to go back to the initial Telecommunications act of 1996 and the Triennial Review and Remand Order of 2002.

TA 1996 created the concept of competitive local exchange carriers, and abolished the legal monopoly that the incumbent carriers enjoyed from the 1870s to 1996. The phone companies were required to share their lines (and service) with competitors under the idea that since numerous tax breaks, subsidies, grants and other instruments were used to fund the network at the public's expense, and because the network grew based on the legal monopoly status that was provided to the carriers, the thought is that while the lines legally belonged to the private carrier, they were fully funded by the ratepayers, and the ratepayers had an interest in the facilities, as they had no other options but to pay the monopoly provider for service. Because the incumbent was provided an unequal footing for over a hundred years, the cost of building a competing network overtop of the current one would be financially unfeasible for any market entrant, because the ILEC could simply leverage the fact their network is mostly bought and paid for, and price the competitive entrant out of the market.

So the ILECs, under many (but not all) circumstances, were required to share their networks with competitive entrants based on TELRIC (Total Element Long Run Incremental Cost) pricing. This (to be brief) says that the cost of the network element, from installation to maintenance over the cost of its lifetime, divided by the number of months in its lifetime, PLUS A REASONABLE PROFIT FOR THE ILEC, shall be the monthly cost of that part of the network.

This creates an entrenched position for the ILEC. The competitors are sharing the costs of providing the line, with installation costs and repair risks amortized over time. You'd think this would be good for both sides, right? Problem was, AT&T and others turned out to be incredibly financially inefficient at offering services. Competitive carriers came in, paid for the costs of dialtone, the local wire going to the house, and a DSLAM (the phone company side of a DSL connection) and blew them out of the water! Some carriers were able to cut the cost of a residential line in half, while still providing broadband services over that line. AT&T was obviously quite displeased.

By 2002, AT&T and Verizon were able to argue that the new entrants were no longer in need of certain services, and should have to construct them themselves to continue offering them. (let's ignore here that the entrants were subsidizing the cost of the ILECs existing equipment, so why should they have to go out and buy new equipment that is unnecessary?).

The Triennial Review and Remand Order (TRRO) eliminated the following services:

  • Use of the long haul fiber network of the incumbent, except in certain limited circumstances
  • Use of the incumbent’s excess phone switch capacity to provide dialtone on the line
  • Use of the local fiber loops installed into the customer premises (if you sold someone fiber, get digging, because you now have to overbuild AT&T to provide it, and quickly!)
    • (Does it suddenly make sense why Verizon rolled out FiOS so quickly in their biggest markets, and then stopped? They did just enough to serve a market need, and destroy competitors in that area. In many states, when they install the fiber, they are allowed to remove the copper phone wiring into the building. This permanently eliminates your ability to get broadband services from a competitive phone provider, as they cannot use the fiber into your house, and must pay exorbitant fees to reinstall the copper cabling into your building, IF they can get the ILEC to do it at all. If you previously had copper to the home, and copper is available nearby, there's a way to get the ILEC to provide copper again under the "brownfield" rule in the TRRO, but they hate doing this and often the technician will try to talk you out of it when they arrive to do the work (which is illegal, violating TA 1996 as well as most interconnection agreements, but it definitely happens anyway)).
    • AT&T, when entering new subdivisions, now typically deploys fiber to the home, but typically only offers the same uverse packages over it that they do to copper customers. Why do they roll out fiber and cripple it like this? Because it doesn't require them to upgrade their network heavily, and it invokes the "greenfield" rule in the TRRO – if the area never had copper before, the ILEC is not required to build copper to satisfy a CLEC order. They used their entrenched market position, and economies of scale to ensure that your only choices would be them and the local cable company, if that. When the ILEC does offer faster speeds in fiber areas, they only do so when the cable company comes in with a higher speed, and they actually have to compete to get your business.
  • Services provided by affiliates do not have to be shared with competitors, including DSL services, and uverse/FiOS.

Is it starting to make sense now?

If you were AT&T, what would you do in 2017?

You'd send a letter to all your traditional customers, informing them they have 90 days to convert services to AT&T UVerse or face disconnection, as AT&T is discontinuing landline services. But don't worry, there's some special 3 year promotional deals where you can keep paying what you're paying now, but get more! Worry not!

You'd send a letter to your CLEC competitors, saying 'nice knowing you! Thanks for your subsidy for so many years. See ya!'. Send letters to all their customers offering special deals to convert them.

In 90 days, you shut off all services that are considered "landline phone service", converting a few holdouts to VoIP or cellular based landline services or whatever you have to do in order to make it happen.

You sell your remaining assets to your uverse affiliate for a dollar, or whatever the legal minimum is. You know how you're complaining about how expensive copper is to maintain? Guess nobody noticed that when you enter a new neighborhood with uverse, you often install a new F2 cable into the area that goes directly to the uverse "VRAD", bypassing existing copper cabling and investing new money in, you guessed it! Copper!

Then you evict the CLECs, and the fiber networks they built through your building (that you forced them to build) as the central office access is only for access to unbundled network elements, and since they're not a phone company anymore, they don't have any unbundled network elements, so get out. Upside is, there's now no credible way to compete with you other than buy a nearby building, build fiber to that, and run cables to all your customers from there.

When there's public outcry, or if it makes things easier for you from a regulatory standpoint, pick a few of your favorite CLECs that don't hurt you too much, and offer them special private contracts under secret terms that let them resell uverse wholesale. Don't worry – as you control the pricing for the product, you can make sure they never devalue the product too much, and don't provide any services that require you to really step up your game, as they'll only be able to provide what you can provide. You can sell this to the legislators as a way that you're "preserving competition".

And now that the local government is irrelevant, you don't have to expend any more money supporting every candidate (strangely, all of the AT&T bills passed in the last 10 years have done so nearly unanimously, across party lines. If you know the Michigan legislature, this is no small feat! It doesn't hurt that AT&T contributes equally and heavily to both sides of the aisle, and because of term limits, every person there has their eye on the next elected office they can hold. Get voted out? No problem, there's plenty of lobbying positions and think tanks who could use someone with your wisdom and experience! You'll land on your feet!). Think of the cost savings!

(You're thinking – but there's still a phone switch in Michigan, right? So the call doesn't cross state lines! – hah! AT&T placed their uverse switching systems in Pennsylvania, where they're not a local provider. So all calls, even down the street, are interstate in nature and regulated by the FCC and federal law. And Pennsylvania has no reason to regulate them, as it's just a pile of servers and switches that connect to other states.)

So okay, this is all well and good. I hate government regulations! Why should I care?

Well, it's simple. AT&T just effectively eliminated all competition except the cable company. They also are eliminating wholesale services used by Sprint and T-Mobile to connect their cell towers to the network. See CLECAM13-099 as an example of the changes they're making to eliminate DS1/DS3/OC-3/OC-12/OC-48/OC-192 service around the same time by removing the ability to sign contracts that go past this target date. Who uses these? CLECs do, to some extent, but wireless/cellular companies use them more heavily. If you think that this change is for Sprint and T-Mobile's own good, I have some DS3s I'd like to sell you. Don't worry – you'll still be able to get them – at a private market based contract rate that AT&T can more or less negotiate unilaterally, as there's no effective competition to many areas where towers are at.

When AT&T only has to compete with Comcast, and it's unaffordable for Sprint and T-Mobile to put oodles of bandwidth to their towers (don't worry, AT&T and Verizon each own massive fiber networks (that they'll probably pay $1 to themselves for), and can work out capacity trades to make sure that each has cheap access to their networks outside their ILEC footprints!) – how do you think that will work out for you as the consumer?

There's a reason why Comcast has been speaking to the Senate and House in favor of this "modernization" – AT&T is eliminating Comcast's competitors too!

Even if you and your neighbors don't use competitive services, you benefit strongly by their existence. Even if they're not available in your area, they could be if your existing providers upped your rates enough where it made sense for the competitor to swoop in and try to undercut them. Usually your prices are not based on the cost of providing service, they're based on what the other providers will charge for similar services, and if they keep the prices just low enough to keep other competitors out of the market, you benefit. So you should definitely care.

The difference 2 words make

 

 

 

For the past nearly 10 years, I've been patiently waiting for a single event to happen. In November 2003, a ton of my personal belongings walked out the door of my apartment. I was told to forget about them forever. That the government would find a way to keep them, destroy them, or auction them.

I made it my personal goal to get that equipment back. I didn't have a lot of resources to fight that battle, and I still don't. Lawyers cost tons of money, far more than the equipment could ever be worth. But what walked out that day wasn't just a pile of equipment. It was 100% of my personal data I had ever collected, EVER, in the time I had computers. In that collection is floppy disks, hard drives, zip disks, DAT tapes, basically everything I had ever done from the time I first laid hands on a keyboard (or video camera, as they took all my VHS-C and SVHS tapes with raw footage on them too). I never really shot analog, so every photo I had ever taken, from my Polaroid PDC 640 onward, gone. I think I even have webcam shots, and pictures from our school's Sony Mavica in this pile of computers. Tons of scanned photos that were taken by others, from my first flatbed scanner.

Logs from some of the first BBSes I ever connected to. Some of the first programs I ever wrote.

And what they told me on that November day, is that all of this was gone forever. Even the stuff I wrote the week before. Back then we didn't have a cloud like you kids have nowadays. We had a garden hose and a sprinkler, and we got our rainbows that way, and we liked it… But seriously. If you woke up and someone said "all your stuff is stolen. We know where it is, but you'll never see it again. You need to let go and start over…."

Sure, you're thinking – why didn't you back it up? I did. On all the media that went out the door with it. DVD-RW, gone. DAT backups? gone. If it plugged into the wall, or stored a magnetic charge, it was fair game. They took my dreamcast games, for crying out loud.

So for years, I've been bugging the FBI any way I know how to find out where my belongings are, so I can go back and get them. For years, I'd get bounced around. I'd get referred to people who couldn't help. Irritated, I filed a FOIA/PA request, hoping to find any information about the whereabouts of my belongings (among other things). I was dismayed to find no information about the whereabouts of my belongings in the files.

But obviously it triggered something. I filed the request in July of 2012, and the response was (after a month of research time), well… literally stating that my FBI file was larger than the Bible. I got several CDROMs, which had interesting information (including the fact that they unsuccessfully continued to attempt to indict me for other crimes (I also did not commit) until 2009 with a standing grand jury. Yes, they had continued to fight to prosecute me for over 6 years afterward.). But nothing at all about the seizure except some notes they took during the raid.

I got my last CD from them in late December of 2012. In February 2013, I get a very upset call from Becky. "An FBI agent just left me a voicemail, he's looking for *YOU AND ME!* He didn't say why.". Obviously I immediately backed up a copy of everything I had offsite, then grabbed my phone and called the agent back, expecting the worst. … "I have some items we're looking to return to you. I need you to fill out some forms."

I don't have to tell you at this point my jaw just about hit the floor.

He went on to tell me about all these computers they found in a warehouse. Ones that belonged to me, from a case in 2003. I told him where to send the paperwork.

I get the letters a bit later, and my heart sank. They were authorization to return my computers, CONDITIONAL ON MY CONSENT TO WIPE THE DRIVES.

Because what I really want is the kind of computer I could afford in 2003, with no data on it. Yeahhhhhh.

It had a 30 day deadline. I redlined the sections providing consent to wipe the drives, initialed them and signed them, and sent them to the agent.

He calls and explains policy, and procedure. Tells me how lucky I am since "they don't have to return anything, according to my plea bargain"

I start to grin. Here's the turning point in that conversation.

Me: "Actually, according to my plea bargain, there's only one computer you don't have to return. The rest, I'm constitutionally entitled to due process to receive."

Agent: "Plea bargains always contain a forfeiture clause. It states we can dispose of the seized items however we like. We just like to give the opportunity to return them."

Me: "Mine, you'll find, is worded differently. The change is subtle, but important. Can you pull mine up, and read the first sentence of the forfeiture clause to me?"

Agent: "'The defendant forfeits and otherwise waives any ownership right in all items involved in the acts alleged in the Bill of Information or Bill of Indictment.' Now see, I told you…"

Me: "Read Adam's Forfeiture clause. His is the boilerplate one. He had much bigger fish to fry than I did."

Agent: "*murmering to himself as he read it, tried to compare it*. 'I don't see the difference here.'."

Me: "I'll fax over a copy for your review, so you can see the difference. This was specifically negotiated, and I should be able to enforce it in court."

Agent: "I'm just trying to do my job, and close this case out."

Me: "I understand that, but I had a deal with the US government, and they can't try to get out of their obligations under the agreement just because they're inconvenient 10 years later. This is a written and enforceable contract, and this was an inseparable part of the deal. I can't go and un-serve probation, and the government can't change their mind after the fact"

Agent: "If you can fax me the highlighted sections, I'll run this by my boss."

Me: "No problem, I'm hitting send on the fax right now. Talk to you soon!"

My lawyer thought I was crazy for worrying about this, but I demanded a 2 word change in the plea bargain. The prosecutor was anxious to close the deal, and figured it was a very minor change, he assured me it 'only changed the wording, as I'd get back anything not used in the crime anyway'. I knew otherwise.

Adam's forfeiture language
Adam's forfeiture language
My forfeiture language
My forfeiture language

Suddenly, the change is clear, isn't it? The court only had the right to dispose of one computer – the laptop used to connect to the Lowe's network to check my email.

Small problem for them – They never bothered doing forensics on any of my data.

The FBI agent calls back a few days later, says this is all well and good, but there's over 40 hard drives and do I really expect them to do forensics on the drives to determine what was used in the crime and what wasn't? ABSOLUTELY. I offered to tell them the serial number of the laptop used to connect to the wifi, to let them wipe that, but they stated they couldn't just take my word for it.

Then, I said, they'd better dust off their copies of encase, and get to work. Because "it'd look stupid if you had to tell a judge you didn't want to honor my civil rights because it's really hard, and time consuming, but not important enough to do over the past 10 years we've had the data"

I didn't hear from them for a few months. I figured they were mulling their options.

…3 months later…

A very upset call from Fedex to my cell phone. Apparently I missed a dropoff. And the items were very, very large. And they were not pleased about that.

"Where are the items shipping from?"

"US Department of Justice, Western District of North Carolina…. Sounds like these are important, huh?"

"That's an understatement. My wife was at an appointment, she'll be home all day tomorrow. Can you reattempt delivery then?"

"Sure. Thanks for choosing FedEx!"

I got a call from Becky the next day. Apparently, the packages were too large for the FedEx delivery driver to carry himself. Becky had to help unload and carry them. Inside, were hundreds of pounds of equipment, paperwork, videotapes, CDs, … everything. Untouched.

Over the last month, I've been firing up machines one by one, and finding to my amazement that after a decade in storage, 100% of the data was intact and recoverable. I haven't gotten to the floppy disks yet, but my Kryoflux controller should make short work of that. Then my professional grade editing SVHS deck should make viewing the videotapes a snap.

I leave you with a celebratory posting of the oldest photo I can find of myself – this is from October of 2000, on my last day at Isiah.com before they went out of business. I looked like a dweeb back then.

paul n richard

The master plan to be debt free is coming into place…

Failure is not a single, cataclysmic event. You don't fail overnight. Instead, failure is a few errors in judgement, repeated every day.
— Jim Rohn

Sometimes it's harder to be honest with yourself, than it is to be with others.

Ever since 18, when I began living independently, I learned a lot about putting myself in financial peril the hard way. Between numerous (likely actionable) missteps by employers when compensating me in my earlier years, misuse of credit, failure to plan ahead for my savings, failure to pay my bills timely, failure to stay organized, failure to file taxes timely and keep proper accountings of things, and unexpected expenses, I've put myself in quite a perilous place.

I make more myself than the average income of my neighborhood. But a few months ago, I was so far behind on my bills I was struggling to keep the lights on, and was only weeks from foreclosure. I didn't want to talk about it. I still don't. You write hardship letters to banks, and you don't know what to say. It's not like I lost an arm in a machine shop and lost my income, I made a ton of poor choices, poor organizational planning, and didn't keep track of what bills I was paying and when they were due. I was often a month behind on all my bills. I had only $500 in savings. When unexpected expenses came up, no way I was going further in debt, but I always thought "I can pay this, I have money in the bank!" and then a week later, I was all "oh crap, I forgot to pay DTE. That's why my power just went out.".. yeah.

2 years ago I locked all my revolving credit cards except a small $300 limit one for emergencies in a firesafe. I haven't touched them since. I cut my debts in half by focusing my efforts on paying those down as aggressively as possible. But I wasn't keeping track of things well, and more than a few times got more aggressive than I should have, and put money toward debt retirement I should have put toward normal bills. Obviously this was an untenable plan. I sat down and realized if I didn't put some serious math toward things and figure out a plan, I'd lose everything I worked for, and worst – continue to work my ass off and have nothing to show for it. I'd get massive bonuses, and dump them into paying bills.

I realized between jacked up penalty interest rates as high as 30% on balances as high as $5,000, and late fees, that my previously affordable plans had become a massive mess of unpayable penalties. I was getting kicked when I was down from every possible direction, and was liable every month for more than I made, despite the plans being affordable only months before. When you fail to pay one card, all the other cards take notice. They crank your limits down, they jack up your interest, and when you pay late on them, WHAM, 15% revolving interest just became 30%. Your budget to pay this card off in 3 years? No longer makes the monthly minimum payment anymore, which by the way  now has a $35 late fee.

After putting my head around every bill I was past due on, every revolving credit line I have, and the rare few collections I had, I realized I need a comprehensive plan. And then my car insurance doubled. WTF.

Today I got the fedwire transfer from a massive 401k loan (at 4something% interest). My first impulse when I saw the amount in my bank, combined with my biweekly paycheck, was to run to tijuana and say screw it all. But of course,  my debt will be 100% paid off in 5 years, and I'll save thousands in interest. The money I'm saving will be going directly into savings to cover rainy day funds, and my goal is to build up 3-6 months of pay in buffer money, as the financial folks always recommend.

I know 401k loans can be risky, but I read the risk carefully, and fully understand what I'm doing. By doing this, I've saved literally $500 a month in late fees, excessive interest, and other costs. That will obviously help when it comes to savings. I'm going to leverage the situation to try to refinance my horrid sub-prime 8.25% mortgage (shouldn't be hard, they said I could before if I were caught up in payments (as of tomorrow, I will be current to 4/1/2013 – I am current on mortgage payments on day 1 of the month for the first time in 3 years!) it's not like my debts disappeared, they just all went into one place). I see the light at the end of the tunnel.

And esurance cut my insurance rates in half for the same coverage. So there's another $150 a month I can put toward savings. EXCELLENT.

And when I have a buffer, I can safely put all my bills on autopay, and never screw them up again.

Things are coming together nicely! For the first time in 3 years, I'm looking forward to opening quicken, my online banking, and I'm feeling better about answering numbers I don't recognize on my cell phone. My credit score dropped 200 points this year. It's at 550. I have a long ways to go, but I'll get there. I can do this.

Uh wow. The second CD from the FBI arrived today…

Ok, the second CD from the FBI arrived today. I just popped it into the drive and haven't read it yet.

When I guessed there were things beyond the original case in my file, I didn't quite expect the stuff I found.

There's an entire CD they've refused to provide based on a second grand jury investigation I didn't even realize happened.

I'm starting to figure out why they've stalled releasing my stuff back to me. Not that I think it's justified, but their odd responses back in 2005-2006 make more sense in context now. Ugh.

 

More to follow. Sorry it's vague, I haven't even read everything yet.

Privacy Act request update (FBI)

With all the Billy related stuff, I forgot to post this excellent little gem:

So it looks like I won't be seeing these CD-ROMs until March of 2013. Open government, but not in a hurry.

I mean, I suppose it's fair given they have to read 2000+ pages to decide what to redact. But wow.

"We have located approximately 2,170 pages and 3 videos or other media which are potentially responsive to your request"

So I did a big dump of Privacy Act requests to the various parts of government that seem interesting. The DHS, ICE, TSA, and Customs and Border Patrol, the US Postal Service, the FBI, and US Marshals service.

Of the agencies that responded, only the USMS and FBI had anything on me (which I kind of expected). The USMS sent me a packet of information, mostly biographical, detailing my arrest record specifically related to the 2003 Lowes case, and some really grainy mugshots and fingerprints. I'll admit, it was mostly just information I gave them as a condition of bond and probation, so it wasn't that interesting.

I thought the FBI was ignoring me. They didn't respond to my requests for status. Then, on August 15 (almost 2 months after I submitted the request), I finally received a response by postal mail.

 

"We have located approximately 2,170 pages and 3 videos or other media which are potentially responsive to your request. Per US DOJ regulations, .. there is a duplication fee of ten cents per page if you receive a paper copy. Releases are also available on CD upon request. Each CD contains approximately 500 pages per release. ..You will owe $252 for a paper copy with the 3 media CDs, or $95 (7 CDs at $15.00 less $10) to receive the release on CD. The actual charges could be less."

They go on to say I may reduce the scope of my request (which was simply for any record pertaining to me, and my social security number was given) and warn that I'll be in a medium queue because my request is 500-2500 pages.

Obviously, $95 is a great deal to learn that much about yourself. *I* couldn't write 2,170 pages about myself, so what they have should be pretty interesting.