SBC CFO jokes: we're out to pillage and plunder the industry

When I read the following quote in's newly posted "Free American broadband!

When I read the following quote in's newly posted "Free American broadband!" article, it, just like Marvin Gaye in "Inner City Blues," (made) me wanna holler, throw up both my hands. Sure, I know SBC's Chief Financial Officer was kidding, but hey, do you realize how that sounds?

I don't know if you are ready for this, but here ya go:

"SBC's $14.95 per month offer for its "DSL-express" service -- rolled out with much fanfare earlier this year -- is merely an introductory rate, which requires signing a long-term contract with an expensive termination penalty. Furthermore, subscribers must be new SBC DSL customers, and must purchase the DSL along with the additional cost of SBC telephone service. The connection itself is extremely slow by most standards of "broadband," as it only offers a maximum download speed of 384 kbps. When spread out over three years, the true cost of the SBC offer is about $25 per month, not including the cost of the phone line, taxes and other fees. When these additional charges are included, the total cost averages out to well over $40 per month.

"Rick Lindner, chief financial officer of SBC, told investors the offer was simply a way to lure customers away from cable companies and sell them other SBC products. Lindner explained that bundling low-cost DSL with phone service "suddenly takes you from ... being a $15 product to being a $65 or a $70 customer." He joked: "We're out to pillage and plunder the industry, that's our objective."


True is one of those articles that make jaded people alienated but I am not made that way. This just made me more determined then I have ever been in terms of energizing the citizenry to unite and fix an inequity.

More than one inequity, actually. As article author S. Derek Turner notes:

  • In France, DSL service is 10 times faster than the typical U.S. connection.
  • Also in France,you can get that fast DSL, 100 channels and unlimited phone service for the equivalent of $38 a month.
  • In South Korea, you can get super-fast Internet cnonnections for less than $30 a month.
  • In Japan, the average broadband subscriber has a connection fast enough to download a full-length high def movie in less than five minutes.

As's Turner points out:

"How did this happen? Why has the U.S. fallen so far behind the rest of its economic peers? The answer is simple. These nations all have something the U.S. lacks: a national broadband policy, one that actively encourages competition among providers, leading to lower consumer prices and better service.

"Instead, the U.S. has a handful of unelected and unaccountable corporate giants that control our vital telecommunications infrastructure. This has led not only to a digital divide between the U.S. and the rest of the advanced world but to one inside the U.S. itself. Currently, broadband services in America remain unavailable for many living in rural and poorer urban areas, and remain slow and expensive for those who do have access."

Turner also steers us to a reality check about those apparently good deals in which DSL and cable modem providers offer broadband along with digital cable - and although he doesn't mention it - VoIP. He's correct when he points out that many of these offers are introductory rate only.

And you do know what happens with introductory rates, right? Sometimes these rates are not identified as such. Even if they are, new subscribers are not given an expiration period.

The expiration, and conversion to a higher rate is liable to come in a small print notice that arrives as bulk mail (which many of us throw out) or as a bill stuffer (which many of us ignore because we pay online).

Shifty. Tricky.

Back to the article. Turner holds out some hope for Community Internet Wi-Fi networks, but says that the most comprehensive solution combines the regulatory and the technical.

He writes insightfully:

"But Congress needs to do more than just allow Community Internet projects. It needs to free up valuable 'spectrum' for these wireless networks to operate on. Currently, most Wi-Fi devices operate on an unlicensed basis in the "2.4 GHz" region of the spectrum -- a crowded area occupied by hundreds of different types of consumer devices such as microwave ovens and cordless phones. The physical properties of this end of the spectrum prevent wireless signals from penetrating obstacles and terrain. This means citywide networks using the 2.4 GHz band will require large amounts of antennae, raising the overall price of deployment."