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Illinois Lawmakers Earn Windfall from AT&T Lobbying

Illinois politicians raked in more than a half-million dollars in campaign contributions from AT&T, yet claim the money had no influence on their decision to let AT&T reduce investment in its landline network, still serving three-quarters of residences and businesses in the state.

Not a single “no” vote was cast in either state legislative body over the latest deregulation bill — a combined vote of 177-0 in the Illinois House and Senate.

But many lawmakers said “yes” to hefty campaign contributions from AT&T.

The St. Louis Post-Dispatch counted the money:

The AT&T legislation relaxes state rules on the company regarding its maintenance of basic land-line phone service, essentially allowing it to focus more fully on its wireless business. The bill also gave the company more flexibility in changing the packages it offers to customers without awaiting regulatory approval.

The company presented the measure as crucial to the unfettered advancement of the wireless market. Critics worried that land-line users and others would see a reduction in service from the company, and safeguards were negotiated into the bill with the consumer organization Citizens Utility Board and others. Gov. Pat Quinn signed it into law June 15.

Citizens Utility Board (CUB) Executive Director David Kolata says his group is still worried that land-lines users, rural customers and others may end up left behind as a result of the legislation. He stopped short of blaming AT&T’s heavy campaign donations for the company’s success at getting most of what it wanted from the legislation, but he noted: “Those of us who had concerns about the bill really had no money on our side.”

AT&T gave about $594,000 to state-level Illinois politicians from Jan. 1, 2009, through June 30, 2010, according to the most recent data compiled by Kent Redfield, a political scientist and campaign finance expert with the University of Illinois at Springfield. That puts the company among an elite core of high-powered donors — including Ameren, ComEd, the Illinois State Medical Society several major unions — who gave more than $500,000 during that time.

Lawmakers who receive significant money from donors, while helping usher their bills through Springfield, invariably maintain the support is a matter of shared goals, not a quid pro quo.

“They’ve been supportive of me for the last three or four terms,” state Rep. Kevin McCarthy, D-Orland Park, said of AT&T, which has given him more than $10,000 since 2006. McCarthy was the chief House sponsor of the telecom bill.

“I’m a pro-business Democrat,” he said. “I think it was a great bill for the people of our state. I appreciate their support.”

If only it were that simple.  AT&T’s contributions ebb and flow depending on legislative action items before the state legislature.  For instance, nothing provoked a bigger blizzard of AT&T money than the 2005 purchase of AT&T by SBC Communications.  Seeking regulatory approval for the merger, SBC/AT&T kicked in more than $1.17 million dollars to state legislators. Less than half that amount was handed to legislators the year before.

Money buys attention to legislative issues and can move a low priority agenda item to the front burner, especially if contributions are likely to arrive from all sides of an issue.

AT&T’s latest legislative accomplishment has bought the company the right to focus its attention on its wireless business, with financial requirements to maintain landline service quality eased.  While that might help urban residents in northern Illinois achieve better cell phone service, it could leave many rural, elderly and poor residents with deteriorating basic phone service at potentially higher prices and no broadband.

That is because AT&T’s deregulation campaign left the company off the hook for a requirement it deliver broadband to 90 percent of its landline customers outside of Chicago.

The Moline Dispatch and The Rock Island Argus had a problem with that:

CUB’s biggest objection, which we share, is that the measure as written lets AT&T off the hook from a state order to ensure that its network provide high-speed Internet access to 90 percent of its customers outside Chicagoland — including folks here in the QCA and just about every corner, and the vast middle, of the state. Telecom companies would have you believe that their industry is truly competitive. But in many areas it is not, particularly outside of large urban centers. Adds Mr. Kolata, “This should be of particular concern to residents of central and southern Illinois, as state regulators recently concluded that many areas in the land of Lincoln are ‘grossly underserved.'”

Ask any company, including this one, which has tried to get the monopoly service provider to cooperate in upgrading high-speed Internet access, or at least to get out of the way of others who would, what they think and you’re liable to get an earful. They know from experience that AT&T has shown little interest in any meaningful upgrade or expansion of its facilities in the Illinois Quad-Cities.

The telecom giant and its big communication company allies are calling this a jobs bill, but saying it doesn’t make it so. Indeed, the rewrite will have the opposite effect if it does not require the corporate giant to provide critical technology outside of Chicago.

AT&T’s landline rate plans force many Illinois residents to overpay for their phone service.  The CUB has a consumer fact sheet to help AT&T customers potentially save hundreds of dollars a year.

Currently there are 4 comments on this Article:

  1. Bob in Illinois says:

    There is no doubt that AT&T has ignored rural Illinois, even major metro areas of Central Illinois.
    No U-Verse available in Central Illinois,except for small parts of Decatur, Springfield, Champaign-Urbana, and Danville.

    Peoria’s fastest available AT&T DSL is 6Mpbs. Closest U-Verse is 75 miles away. Metro Peoria area is 375,000 population, and HQ of a Fortune 50 multinational company.

    But, you really have to feel sorry for the rural areas with only dial up. If you look at AT&T’s non-Chicago areas in Illinois, it is striking how scattered it is. AT&T may cover 75% of IL population, but Frontier now may cover 2/3 of Illinois’s square miles.

  2. Bob in Illinois says:

    Disturbing parts of the AT&T bill:
    1) Unanimous vote in both the Illinois House and Senate.
    2) Illinois General Assembly took time out to pass this legislation. Didn’t make any time to solve the state’s large fiscal problems.

  3. Fred says:

    Thank you for pointing to the undue influence of AT&T’s money in Springfield. I think much of this will never be adequately addressed until we have public financing of elections.

    However, heralding CUB and Dave Kolata’s criticism of AT&T is bizarre at best.

    CUB was a major champion for AT&T when state video franchising was passed a couple of years back. In and of itself, state video franchises aren’t necessarily bad, but the Illinois bill essentially represented wholesale deregulation (i.e. corporate welfare) for cable operators in Illinois and Kolata and CUB lead the way.

    CUB shilled for AT&T then. Why should we trust anything they say now?

    • Wow, I am actually surprised to hear about this Fred. If you can find any links to articles or other info about CUB and statewide video franchising, I’d love to read up on what you found.

      There have been a few regulators suckered by the enchanting promise of cable competition, and frankly there is nothing wrong with AT&T delivering it, but not at the expense of important consumer protections — especially for rural residents who will NEVER see U-verse where they live.

      AT&T started with the video franchise campaign and now is on level two — asking to dispense with universal service requirements that require them to provide phone service to any resident who wants it. That will leave a lot of customers with no phone service whatsoever. These areas are so rural, no cell tower reaches them, and cable surely isn’t going to deliver service.

      Deregulating basic phone rates also guarantees big price hikes in areas where nobody is going to compete with the phone company.

      It used to be that phone companies had guaranteed fat profits from the sale of overpriced phone features ($8+ Caller ID for example). It allowed them to tolerate regulated basic phone rates while the rest was pure gravy. When analog phone switches were retired, digital switching created lots of new revenue streams from voicemail to call waiting. Of course, the folks most likely to order these packages of features are exactly the same ones now cutting the cord in favor of “digital phone” service from the cable company or cell phones because the phone companies got too greedy and charged too much.

      The customers still loyal to Ma Bell are those who knew her on a first name basis 50 years ago. They’re the ones STILL renting their 1964 Stromberg-Carlson rotary dial phone hardwired in the living room and the lighted Princess phone in the bedroom. They don’t know what three way calling is, but they suspect it might be untoward and dirty.

      These customers are paying for the same basic phone service they had in 1974, with the only extra bonus profits coming from renting phone sets that are now antiques and those grossly overpriced inside wiring maintenance plans.

      A $70 phone bill in these homes would cause a stroke. For today’s smartphone user, that’s dirt cheap.

      Now companies like AT&T want to gouge the fixed income ratepayers by boosting basic phone rates. They know perfectly well these people are not going to run over to Verizon Wireless and pick up a Droid X.

      If -I- as a fellow consumer can figure this out, why our elected officials cannot comes down to one simple fact of life. They can’t see the truth because of the stacks of money blocking their view.

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