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 closely.