New Networks The Man-Made Perfect Storm

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Verizon: Kill the Copper Lowell McAdam [1], Verizon Chairman & CEO,[1] “The vision that I have is we are going into the copper plant areas and every place we have FiOS, we are going to kill the copper. We are going to just take it out of service and we are going to move those services onto FiOS. “And then in other areas that are more rural and more sparsely populated, we have got LTE built that will handle all of those services and so we are going to cut the copper off there. We are going to do it over wireless. So I am going to be really shrinking the amount of copper we have out there…” [1] Verizon at Guggenhiem Securities Symposium, June 21, 2012 [1]

AT&T: Kill the Copper “In the 25 percent of AT&T's wireline customer locations where it's currently not economically feasible to build a competitive IP wireline network, the company said it will utilize its expanding 4G LTE wireless network -- as it becomes available -- to offer voice and high- speed IP Internet services.” AT&T press release room?pid=23506&cdvn=news&newsarticleid=35661

Reality: Kill the Copper AT&T's U-Verse is probably 99 percent copper- to-the-home. Out of 76 million locations, AT&T only has 5 million U-Verse TV locations -- less than 7 percent. AT&T could be abandoning 57 percent of customers. Verizon also only 5 million households have FiOS TV out of 27 million households in its territories -- only 18 percent of households. 82 percent of the wires are still copper. Verizon could be abandoning 47 percent of customers.

Man-Made Perfect Storm The IP-transition at the FCC The state-based deregulation VOIP bills Fire Island: The Voice Link Wireless Replacement of wired services The Verizon filed “discontinuance” of service in NY, NJ and then America. The Numbers are Cooked

History: The Rise and Fall of ISPs

Top US ISPs 2001 Downward trend

CLEC Rise and Fall, Bell Competitive Lines, ,000 10,000 15,000 20, Competitive Lines

Competition Rise and Fall Competition Disappears

IP Transition In 2009, AT&T wrote that there were 2 networks–broadband and the PSTN. In 2010, the FCC, with the help of AT&T, created the Technological Advisory Council (TAC)– which created a ‘sunsetting’ of the PSTN group- –tied to ‘the networks are going VOIP’. The majority of TAC members have a direct financial tie to either AT&T an Verizon In 2012, the TAC conclusion: ‘sunset’ the PSTN In 2012, the FCC created the ‘Transition Task Force to close down the PSTN.

The State-Based Deregulation VOIP bills Starting in 2007, Verizon, AT&T and Centurylink created model legislation at ALEC, the American Legislative Exchange Council. Using ALEC state legislator members, the companies created campaigns to close down the PSTN networks. By 2013, 25 states changed laws to close down part, if not all obligations, oversight and regulations. The rest of the states, including New Jersey will be under attack from these laws. These bills are the state equivalent of the FCC’s IP transition.

Fire Island & Voice Link After Sandy, Verizon decided to not fix the copper wires in multiple states. Verizon has proposed to replace the wires with “Voice Link Wireless” Verizon filed “discontinuance” of service in NY, NJ and at the FCC. This is the plan for the rest of America. Verizon and AT&T already have another products: Verizon has “Home Phone Connect” AT&T has “Home Phone”

Voice Link and VOIP: Not Equivalent--Data Applications. Voice Link Wireless is not a substitute for wired POTS service today. VOIP is not an equivalent service to regular POTS service today. VOIP requires a broadband connection so shutting off POTS doesn’t help customers with wireless substitution

The “Title” Bout Title I – IP & Internet Information Service Title 2—TDM Telecom Service Why Move? Title I is not regulated like a telecom service and has no obligations to rent to competitors. Title I moves everything to contract vs tariff Title I gets rid of the Unions tied to telecom Title I erases state and federal regulations. The issue was argued yesterday in court.

Wireless-Only Numbers are Cooked 40% of households are wireless-only-NOT. Wireless-only numbers are created by the CDC and they do not count anything but residential voice calling. They don’t count the wires, or business applications or data applications. No alarm circuits, DSL, cable, broadband, dial- up internet No small business credit card processing, ATM machines, alarm circuits, or even fax.

CDC Number about POTS vs Wireless-Only CDC’s Wireless Profile

Access Line Numbers are Cooked Access Line losses are used to show that customers are dropping their ‘landlines’ The access line accounting leaves out any ‘special access’ or non-switched lines. This includes data lines, such as DSL, or broadband or a whole class of alarm circuits. 60% of all lines are ‘special access’(as of the FCC’s last accounting in 2006).

Missing Numbers: POTS Data Lines & Total Lines There is no accounting the total lines in service. There is no accounting of the POTS lines using data services. There is no accounting of the percentage of POTS data lines vs voice lines. There is no accounting of small business POTS data and voice usage. There is no accounting of total household wires- in-the-home. There is no accounting of total wires-in-the- business.

Wireless Only vs POTS vs Voice Link Voice Link Fails

New Networks Goal: Stop the IP Transition’s harmful policies and mold it to make sure that ALL customers and companies are served. Stop or even reverse the dereg state laws. Goal: Confront the cooked data with statisticially accurate and bullet-proof data. Bring together everyone who is harmed by shutting down the networks.

We’re AT&T Digital Life And We Want Your Business --- Smiley Face.

AT&T & Verizon– be Alarmed One Word – History. They can bundle their service and use their staff They can make sure your service isn’t as reliable The can poach your customers as they know who they are, especially if there was a wire installed The can move to IP and Wireless as a bundle. The FCC and anti-trust and state laws will take too long to save the industry – if ever.

New Networks Filing comments is not going to work– been there– done that. The Disruptors – Data-driven campaigns with legal and regulatory challenges. TBA---We won -New Jersey’s broadband commitments TBA---New York New Networks working with CWA -- ‘wireless companies’ taken control of the wireline networks. Tell the public – including Alarm stories Survey and Release “POTS data applications”