4G/5G Wireless Is the New Bait-and-Switch Scandal

Adapted from a 3/8/18 article by Bruce Kushnick, New Networks Institute

The 4G/5G Close Proximity Microwave Radiation Antennas (‘CPMRA’) scheme is the latest in a long list of scandals by AT&T and Verizon to use the promise of a new technology to

  1. Eliminate regulations
  2. Kill off competition
  3. Raise rates

This 4G/5G CPMRA scheme relies on the AT&T/Verizon/ALEC-influenced FCC-Majority and Telecom-funded politicians, to push it through, since Americans hate this scheme: NO ONE WANTS A CELL PHONE TOWER 15–50 FEET FROM THEIR HOMES.

Compare the 4G/5G Densification Vision, as sold in the US House on 3/6/18 . . . to actual fights over 4G/5G Antennas in neighborhoods, documented at My Street, My Choice!

This onslaught on local communities has intensified with the FCC-Majority’s recent attacks on the public interest. Not surprisingly, the FCC-Majority is gung-ho about the 4G/5G densification plan. The FCC recently eliminated Net Neutrality and dumped Americans’ basic privacy protections. The FCC’s endorsement of 4G/5G densification should trigger both distrust  and disgust.

You might first want to read: “Verizon Wireless’s 5G Deployment is a 1 Gig Fairy Tale”. Written in January 2016, it details how 4G has also been a stream of hype. In fact, America is not even close to being Number One in the world in 4G speeds. OpenSignal’s new report, “The State of LTE”, published in February 2018, details that America is 62nd in the world in 4G speeds.

The history of fiber optic broadband in America should have every person calling for investigations: a $400-500 billion scandal that diverted Public Utility funds to private Wireless companies. Here’s part of the subplot that most are missing:

  • 4G/5G Wireless antennas require a fiber optic wire to be attached to each cell site, every block or two. No private company is going to roll out fiber to lots of new areas. The FCC rarely, if ever, mentions that 4G/5G densification requires fiber optic wires. Commissioner Carr’s 5G statement never mentions the terms “fiber” or “state utility”.
  • 5G doesn’t really exist yet and history shows that almost all “trials” are rigged to be successful — or you never hear about them. (See The 5G Gig Fairy Tale.)
  • As Gizmodo pointed out about AT&T’s fake 5G announcements, 5G is just a fuzzy marketing term. So there is , “5G really soon now”, “4G-LTE-soon-to-be-5G” — blah, blah, blah — and anything else they can make up.
  • Cross-Subsidy Heaven: Right now, AT&T and Verizon get to dump a large part of the costs of their Wireless build outs into the state-based Wireline utilities — which then charge these costs to local customers. This is fraudulent.

Meanwhile, there are proposed state-based 4G/5G densification bills that have been promulgated by AT&T-Verizon funded politicians based on “model legislation” that AT&T and Verizon created with a group called ALEC, the American Legislative Exchange Council, and others over a decade ago. In 2017-2018, these bills are being pushed through some State Legislatures. Importantly, California vetoed its version of this ALEC-bill, SB.649, on 10/15/17 for solid local-control, disability and constitutional reasons.

In short, H.R. 4986 (Repack Airwaves Yielding Better Access for Users of Modern Services Act of 2018 ) and the 3/22/18 FCC Report and Order, WT-17-79 (“Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Investment”) is a regulatory play to do the following:

  1. Remove all regulations
  2. Allow private Telecom companies (Verizon and AT&T) to take over the State Utility wired networks
  3. Hand over the customer-funded State networks for private use for whatever price they want (close to zero)
  4. Block any state or municipal actions via the FCC’s proposed rules

Fact: 5G Requires a Lot of Fiber to be Deployed

Government Technology’s headline details the flaw in the 5G deployment, quoting a study by Deloitte.

“Deploying 5G Will Cost at Least $130 Billion in Fiber . . . Deploying 5G wireless speeds 10 to 100 times faster than 4G will cost $130 to $150 billion in fiber optic cabling alone over the next 5 to 7 years.”

The article continues and claims that 90% of the current internet traffic relies on the wireline networks and the fiber optic wires.

“To illustrate how crucial fiber is, Deloitte reports 90 percent of all internet traffic travels over Wireline fiber, even if it ultimately terminates on a wireless device.”

And, according to Deloitte, without this fiber, 5G will fall short of expectations — widening the digital divide.

“Withholding that investment could be even more costly, according to the study. Falling short of fiber deployment will not only impede the deployment of 5G, it’ll mean a dwindling number of broadband provider choices for Americans the ‘widening of the digital divide’.”

Deloitte claims that less than 1/3 of homes have a fiber optic wire nearby and little broadband competition at 25Mbps.

“The divide is already significant. According to Deloitte’s figures, fiber passes less than one third of homes in the U.S., and only 39 percent of consumers have access to more than one broadband provider of 25 Mbps service — the minimum speed definition of broadband according to the Federal Communications Commission.”

Bait-and-Switch Alert

Wait a second . . . if 5G requires a fiber optic wire and few companies are willing to shoulder the costs of wiring American with fiber optic wires, especially in the rural areas . . . then, WHAT THE F-ILL (in the word or your choice)? Verizon and AT&T are misleading everyone about 5G and misleading everyone about the fiber deployments. This is a serious bait-and-switch scheme to eliminate regulations.

Sub-Plot One: Verizon Announced It Was Would Stop Doing Fiber-to-the-Home Because Wireless Makes Them More Money

Lowell McAdam, Verizon CEO , pointed out in the 2017 second quarter investor call that — I paraphrase: ‘Well, wireless is so much cheaper (and more profitable), why bother doing fiber to the home? (Note: “ONT” is an “Outside Network Terminal”.)

“From a pure cost perspective, again I think it’s a little too early to tell, but what I will tell you is about half of our cost to deploy FiOS is in the home today and the next biggest thing outside the home is the drop. And so our take is that with the router roughly costing the same — and, remember, we wouldn’t have to have an ONT as we think about it today.

“So we can deploy 4G and densify the small cell antennas [to provide] 5G [service] for very little incremental cost. With the router in the house being probably less than an ONT and router combination today and losing the wiring in the house and losing the drop, we expect there to be a significant cost reduction.”

Sub-Plot Two: Wireless is Cheaper Because Most of the Expenses are Paid for by the State Telecom Utility

Based on Verizon’s parent holding company’s ability to dump the expenses of the unregulated Verizon Wireless Company into the budgets of separate Title-II-regulated companies (the various Verizon State Utility Companies that built and maintain the Title II-FTTP networks, Verizon is fraudulently and illegally gaming the system to make Verizon Wireless appear more profitable than it is and make the State Telecom Utilities appear less profitable then they are. AT&T follows the same playbook. Not surprisingly, this doesn’t get discussed in Version’s or AT&T’s cost models or profit margins.

Fran Shammo, Verizon’s former CFO, told investors in 2012 that the wireless company’s construction expenses have been charged to the wireline business.

“The fact of the matter is Wireline capital — and I won’t get the number but it’s pretty substantial — is being spent on the Wireline side of the house to support the Wireless growth. So the IP backbone, the data transmission, fiber to the cell, that is all on the Wireline books but it’s all being built for the Wireless Company.”

The state-based ALEC bills for 4G/5G Close Proximity Microwave Radiation Antennas are designed to save Telecom companies money and to mislead the public about what is being actually deployed. In fact, the bills don’t even mention 5G. Verizon and AT&T plan to continue to cross-subsidize the Wireless build-out with funds collected from Wireline customers by dumping the Wireless expenses into the State Utility Wireline construction budgetsunless we stop them.

Lowell McAdam, speaking at the Goldman, Sachs 26th Communacopia Conference on September 13th, 2017 stated it will be substituting Wireless to the home instead of Wireline to the home for “the last mile”.

“Well, I think that’s where 5G and over-the-top come in because even in the markets where we have our FiOS footprint from Washington to Boston, the preferred architecture for us is going to be that last mile being 5G.”

The City of Boston’s residential customers were NOT told about this bait-and-switch :  the agreement in Massachusetts was for fiber optics to the home.

5G is another “We Will Expand Broadband if You Eliminate Regulations” Scam

The 5G frenzy is like any of the previous techno-bait-and-switch schemes — and this one is eerily similar to the super-hyped 1990’s “Information Super Highway” when America was supposed to get a fiber optic network that would replace the existing copper wires. The Telecom companies, through changing state laws, collected (overcharged) over $400 billion with this hype, and the original rate increases were built into most of the current rates that have continued long after these contractual obligations were abandoned. A lawyer after reviewing this data proposed a principle called Kushnick’s Law:

“A regulated company will always renege on promises to provide public benefits tomorrow in exchange for regulatory and financial benefits today.”

The Race Hype to 5G is similar to the techno-hype that was thrown at the public 25 years ago. In the spring of 1993, the fiber optic Info Bahn was thought to be just a few months away. The April 12th, 1993 cover of Time Magazine proclaims: “The Info Highway: Bringing a Revolution in Entertainment, News and Communication: Coming Soon to your TV Screen . . .”

“It’s not here yet, but it’s arriving sooner than you think. Suddenly the brave new world of videophone and smart TVs that futurists have been predicting for decades is not years away but a few months…. We won’t have to wait long. By this time next year, vast new video services will be available at a price to millions of Americans.”

America should have started on the path of a fiber optic future 25 years ago

  • AT&T (Pacific Bell) California claimed it would spend $16 billion from 1993–2000 to complete 5.5 million households with fiber — RESULT: Never deployed; AT&T pocketed the tax breaks and rate increases .
  • Verizon Bell Atlantic claimed it would spend $11 billion from 1993–2000 to have 12 million households wired with fiber to most of the East Coast  — RESULT: Never deployed; Verizon pocketed the tax breaks and rate increases.

Now, 25 years later we have little to show for it. AT&T California never deployed the fiber optics in the 1990’s and then pulled a bait-and-switch with U-Verse in 2005, claiming it was ‘fiber-based’ when it is really a copper-to-the-home service. Verizon deployed virtually no residential fiber from 1993–2005, even though they got billions per state. They ended up finally deploying FiOS in 2005, then stopped in 2010–2012, leaving less than ½ of the utility territories covered (and with major gaps). Unfortunately, no state gave refunds or lowered rates based on the state-based incentives and the removal of these ‘barriers to investment’.

We are, once again, facing a situation where a new technology is being touted as superior to upgrading the networks to fiber optics, even though 5G doesn’t exist yet and may never fulfill its projected destiny — and requires fiber optics anyway!

Inexplicably, the FCC is now giving Telecom companies the ability to dismantle the State Utilities and hand the Title-II regulated State Utility fiber optic assets over to the unregulated Wireless companies. Based on history . . . this needs to be stopped. Where are the audits of the financial books? The FCC is now ‘weed-whacking’ them to hide the decades-long cross-subsidies.

If you think there are no similarities to the fiber promises of the past and the ‘Wireless’ promises of today then please compare Brendan Carr’s 2018 statement that 5G will be a $500 billion dollar boost to the economy . . .

“Deploying 5G, the next-generation of wireless service, could mean 3 million new jobs, $275 billion in private sector network investment, and $500 billion added to the GDP.”

. . . to this — in 2001, when what is now Verizon et al. wanted to prove to America that increasing broadband deployment, could add $500 billion to the US economy, Verizon hired the Brookings Institute to prove the case.

“While the great broadband debate rages on at Capitol Hill, a new study released yesterday said widespread use of high-speed Internet service in the near future could pump as much as $500 billion annually into the U.S. economy.

The study, conducted by the Brookings Institute in Washington, D.C. and titled ‘The $500 Billion Opportunity: The Potential Economic Benefit of Widespread Diffusion of Broadband Internet Access….”

This 2001 study and others helped to create the Net Neutrality issues. The studies were used, in part, to convince the Republican FCC (and Congress) that our fiber optic future was just a few years away — and we needed to get rid of competitors, including small ISPs. This was done by combining the broadband service and the internet service and calling it broadband-internet.

By the end of 2017, about $500 billion has been overcharged in the name of broadband in the US: $400 billion extended from 1992 through 2014 and another $100 billion since then. Read more about this at http://mystreetmychoice.com/press.html.

Clear Next Steps

In the colorful words of former Yankees catcher, Yogi Berra, “This is Déjà Vu All Over Again.” Please don’t fall for the same old deceptive bait-and-switch tactics. Instead, please learn from history and put public needs first in fulfilling the FCC’s original mission (before the Commission was co-opted by AT&T, Verizon, Comcast, CenturyLink and their various trade associations):

From the 1934 Communications Act:

“For the purpose of regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States, without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges, for the purpose of the national defense, for the purpose of promoting safety of life and property through the use of wire and radio communication, and for the purpose of securing a more effective execution of this policy by centralizing authority heretofore granted by law to several agencies and by granting additional authority with respect to interstate and foreign commerce in wire and radio communication, there is hereby created a commission to be known as the ‘Federal Communications Commission,’ which shall be constituted as hereinafter provided, and which shall execute and enforce the provisions of this Act.”

The proposed Close Proximity Microwave Radiation Antennas in front of homes is merely the cheapest way to deliver internet and video data. Verizon’s and AT&T’s scheme to beam powerful microwave radiation wirelessly through homes 24/7/365 — through the homes of customers and non-customers alike — is disastrous. The obvious alternative — fiber optic cables to each home — is, by far, the most energy-efficient, most secure, most reliable and safest way to deliver Internet and video data. AT&T and Verizon have proven to be simply too uninterested in installing fiber optic cables directly to customers’ homes.

The United States, therefore, needs One Big Dig — a coordinated private/public infrastructure project to connect every business, school, home and farm with Title-II-regulated fiber optical cables — offering uncapped 1,000 Mpbs downloads for $40/month. This would create an invaluable and defensible national asset, as well provide jobs to many thousands of Americans.

Many private companies could then share access to this national asset to offer competing services, much in the same way that long distance telecommunications providers shared access to one integrated system of copper telephone wires, years ago. One Big Dig to ensure that video data transmission would travel from servers to homes and businesses in the most secure and energy-efficient manner possible (Wireless is millions of times less energy-inefficient than Fiber Optic Wireline).

This would create a platform on which many companies could compete without discrimination; it is the best solution, by far, and is a worthy National Priority.