Broadband for America is the product of the nation's largest phone and cable companies.

Broadband for America has begun assaulting the airwaves with a high-priced advertising campaign claiming that “broadband is leading the [economic] recovery” but is threatened by “1930s telephone regulations,” urging Congress to get involved to stop broadband reform.

The 30 second ads blanketed cable and several Sunday morning news shows yesterday.

What the ads don’t mention is Broadband for America is actually one giant front group backed by large phone and cable companies.  In a study released last fall, Stop the Cap! found virtually every single “coalition” member, including so-called “independent consumer advocacy groups,” do substantial business with, or have received significant financial contributions or board assistance from companies including AT&T, Verizon, and Comcast.

Well-financed by the telecommunications industry it directly represents, Broadband for America seeks further deregulation and wants Congress to stop the FCC from enacting broadband reforms ranging from “truth in marketing” and billing to Net Neutrality.

The “honorary co-chairs” of the group are Michael Powell, the same Bush Administration FCC chairman that badly bungled the FCC’s approach to broadband policy thrown out in the courts earlier this year, and former Congressman Harold Ford, Jr., who left public service for a very lucrative career in “dollar-a-holler” advocacy and working as a lobbyist for the economic-vampire investment bank Goldman Sachs (something Broadband for America left out of his online biography.)

Broadband for America, a telecom-backed astroturf group, is running these advertisements promoting the agenda of AT&T, Verizon, and Comcast to try and stop broadband reform policies.  (1 minute)

Wendy

Pro-broadband reform groups continue to hit the telecommunications industry’s last nerve.  While the fight for more expansive broadband and Net Neutrality continues, some providers and their water-carrying friends are pulling out all the stops to keep broadband under the firm grasp of a phone and cable duopoly.  Both will say or do just about anything along the way to stop consumer-friendly reform.

Say hello to Mike Wendy.  He’s made it his personal mission to “expose” groups promoting broadband reform as “radicals” and “hardcore entrenched lobbyists.”  Using rhetoric that will resonate with angry talk radio listeners, Wendy is convinced broadband policies that enforce the public interest and Net Neutrality are akin to a Marxist takeover.  While Wendy calls on good Americans like himself to man the barricades protecting AT&T, Verizon, Comcast, and Time Warner Cable, he just doesn’t have time to mention he happens to work for a special interest group funded by Big Telecom.  Maybe it slipped his mind?

Wendy’s ironically named “Media Freedom” blog is chock full of attacks on “Free Press and the radical media reformistas [sic].”  Special guest stars include Venezuela’s Hugo Chavez, Marxism, collectivism, and a whole slew of rhetoric that ultimately tells readers efforts to enact broadband reform are little more than a grand socialist conspiracy.

A real grassroots campaign is run for and by consumers. An astroturf campaign is bought and paid for by corporate interests to push their own agenda.

His visitors’ enthusiasm for such accusations might be diminished a tad had Wendy prominently disclosed his day job: Vice President of Press & External Affairs at the Progress & Freedom Foundation, a “think tank” that ingests money from Big Telecom and then spews forth their talking points.  Among the backers: AT&T, Comcast, the National Cable and Telecommunications Association, Time Warner Cable and Verizon.

That takes the wind out of the proclamation that Media Freedom is a bulwark against those who “threaten to quash speech and economic freedoms.”  Wendy isn’t working for Big Government.  He’s working for the interests of AT&T and Comcast.

Many of the companies supporting the Progress & Freedom Foundation have a vested interest in maintaining today’s barely-competitive broadband marketplace, avoid oversight, and stop reform regulation and legislation dead in its tracks.  They want Progress only on their terms and the Freedom to do whatever they please.

The real chutzpah moment came when Wendy claimed pro-consumer groups like Free Press and Public Knowledge were the ones running high-powered lobbying campaigns.  That’s a pot to kettle moment to behold, especially considering who paid to print Wendy’s business cards.  From a recent blog post:

The “public interest” lobby makes itself out to be the tireless, country-poor underdog for the downtrodden consumer.  But don’t be fooled.  In the technology space, three such groups – Public Knowledge, Media Access Project and Free Press – have few rivals.  Their humble appearance belies their take-no-prisoners, oftentimes shameless, below-the-belt approach to public policy formation and gamesmanship.  How do they do it?  They use all the tools, and then some, to make them every bit as sophisticated as the largest companies they’re trying to undermine.

Shameless and “below-the-belt” might better define Wendy’s last job: “Director of Grassroots” for the United States Telecom Association, a job title that literally defines astroturf-in-action. Who is on the board of USTA?  Among others, corporate executives and lobbyists for AT&T, Verizon, Qwest, and two members who shouldn’t be able to afford the annual dues considering their employers went bankrupt — Hawaiian Telcom and FairPoint Communications.

Wendy’s line of thinking is evident soon enough from his blog’s tag cloud, a regular cocktail of conspiracy:

The ironically named "Media Freedom" blog isn't media and its freedom is limited to carrying water for the nation's largest telecom companies.

• Al Franken (the broadband industry’s ‘Boogie Man’)
• Cyber-Collectivist (the secret link between broadband and Jean-Jacques Rousseau)
• Fairness Doctrine (guaranteed to perk up the ears of any conservative talk radio fan wandering through)
• First Amendment (for corporations)
• Freedom (for said corporations to abuse your wallet)
• Free Speech (for corporations)
• Hugo Chavez (the go-to-guy for lazy smear-by-association rhetoric)
• Marxist (chalkboard time)
• New Deal (broadband users sure want one)
• … and redistributionism (something overheard at the last session of the “Communications Comintern?”)

The rhetoric is two parts AT&T to one part 1970s Radio Tirana, Albania.  A Glenn Beck swizzle stick labeled “Marxism” is included to stir the overheated rhetoric into a hot mess for Verizon and the cable lobby.

All of the “isms” aside, we’ve created a convenient, handy-dandy chart you can use to see which team Wendy and his group really supports:

Distinctions With a Difference – A Telecommunications Issue Checklist

Citizens of Opelika, Beware!  Your city government wants to take over control of your appliances, censor and control the Internet, and plant the red flag of socialism at the new Kremlin building — the Opelika City Hall on South 7th Street.

Welcome to another classic battle against municipal broadband competition.  All of the usual players have assembled, and the opposition has a overstuffed bag full of tricks — many old, some new, to convince Opelika that bringing additional cable competition to the region is just the worst thing… ever.

The proposal: to spend $33 million dollars, financed by revenue bonds (not taxpayers), to build a fiber to the home platform to deliver 21st century broadband service and competition to incumbent, recently-bankrupt Charter Cable.  The city of Opelika itself would probably not get into the cable business directly.  It proposes to work with Knology, a credible cable overbuilder already providing cable and broadband services in Alabama, to manage the day to day operations and handle customers.

Why: (from the City of Opelika website) “For many years now – not only during Mayor Gary Fuller’s Administration, but during Barbara Patton’s Administration before him and even Mayor Freeman’s administration before her – numerous complaints were received from citizens about the high prices and poor service they were receiving, while others have complained that they can’t get any cable service in their neighborhoods at all.  After years of trying to get other cable/Internet providers to come into Opelika and give Charter Communications competition – to no avail – we decided that the best way to give our citizens competitive services was to offer competition ourselves.”  No surprises there.  Large cable operators have never challenged one another in their respective markets.  Why ruin a good thing by launching a price and services war?

The vote: A referendum on the question will be held this Tuesday, asking citizens to support the project.

Opposition to the project from some quarters has bordered on hysteria, especially from a so-called “consumer grassroots group” and a local website, Opelika’s Smart Grid, that has tried to scare residents into believing city officials are on the verge of taking control of residents’ air conditioners and ovens, unleashing Big Brother on a scale even the most paranoid haven’t even considered.

Stop the Cap! investigated the group claiming to represent the citizens of Opelika, and we came away with more questions than we originally asked.

The local media has accepted, without much challenge, the representations made by these groups opposed to the municipal project.  Few questions have been asked about who belongs to the groups and how they are financed.  As Stop the Cap! has seen over the past two years, opposition to municipal broadband projects usually comes from coordinated campaigns — a direct attack by lobbyists for the cable and phone companies, and efforts by political groups to demagogue such projects hoping to pick up citizen opposition on philosophical grounds.  If Americans for Prosperity, the Heartland Institute, Digital Society, or FreedomWorks is involved, you’ve got political astroturf in action.  Since many of these political groups are on the payroll of phone and cable operators, it’s just one more way to achieve the same thing — protection for America’s broadband duopoly.

Who is “Opelika’s Smart Grid” and the Concerned Citizens of Opelika?

Stop the Cap! has researched both “groups” and discovered they are essentially one and the same.  Some of the members of “Concerned Citizens” are also the authors, and primary participants on “The Opelika Smart Grid” website.  They are strongly anti-government, and their opposition to municipal services borders at times on the paranoid.  Neither group has more than a handful of loosely-associated members, but they do bring along those who share a common, mostly Libertarian/anti-government philosophy.  Think “tea parties against municipal broadband.”

Domain name records show the website was first registered July 4th, 2010 by William Mayfield who lives on 9th Street in Opelika.  Mayfield’s concern about the project’s capability to deliver “smart grid” technology to the local electricity provider prompted him to launch into some pretty far-out conspiracy theories about the implications of the project (taken from Google web cache):

The so-called smart-grid is a government controlled power and information distribution system that combines and monitors the activities of internet, phone and power usage of the customer.  This is the vision of socialists like Al Gore and would be a huge step forward for the watching “big brother”. We need to fight this very hard, very quickly.

[...]In government speak motivate = force. And if they determine that you are not worthy of receiving power for whatever reason, like being a reformed Christian, I can assure you they’ll find authority in the “Patriot Act ” to turn your lights out. While this may sound like borderline paranoid ramblings, keep in mind that history shows that the state always takes every chance to increase its power and ultimately uses that power against its own people. Let’s don’t give them the opportunity here.

Mayfield’s tentative writings on his Citizen 10/Limits on Government blog didn’t stay public for long.  That blog has since gone private and is now unavailable without an invitation.

Privacy is a major concern, not just for Mayfield, but for virtually all of these “concerned citizens” online.  Almost nobody is willing to divulge their real names.  In fact, very little about who backs and runs these groups has been disclosed.

Jack Mazzola claims to be a member of Concerned Citizens of Opelika and has become a de facto spokesman in the local press.  He claims he is “30 years old and have been a resident of Opelika for almost two years.” During that time, he evidently forgot to update his active Facebook page, which lists his current city of residence as Atlanta, Georgia.  Suspicious readers of the local newspaper did some research of their own and claim Mr. Mazzola has no history of real estate or motor vehicle taxes paid to Lee County, which includes Opelika.

The Smart Grid ‘Death Panels-Fear Factor’

Mayfield’s website spends most of its time scaring residents about the implications of municipal fiber as it relates to their electric bills, also ranting about the Kyoto Protocol, carbon footprints, government control of appliances, and socialism generally.  While appealing to anti-government and climate change skeptics, average residents pondering the mayor conspiring to turn off their air conditioners from his office might be a bit too over-the-top, so wild claims about spending increases and municipal broadband failures are included as well.

Most of the arguments made by “The Opelika Smart Grid” website and Concerned Citizens of Opelika obfuscate the larger and more important discussion about municipal broadband.  They have gained plenty of media attention with their claims and accusations, generating considerable controversy that has little to do with the actual proposal.  For cable and phone companies that oppose the project, that represents a gift that keeps on giving.  When city officials and proponents of the project are forced to spend time and energy debating and debunking some of the wilder claims, that’s time lost selling the project and successfully explaining it to constituents.  For many voters, demagoguery breeds doubt and delivers “no” votes.

Ultimately, for most Opelika residents, the real debate is over competition to area cable and phone companies, not whether Big Brother is going to tell you when you can use your hair dryer.

The Very Wrong Arguments Against Municipal Fiber

Mayfield’s website attempts to indict municipal fiber projects with a mix of incomplete storytelling, selective editing, and questionable sourcing.  The larger argument from the group is that municipal fiber projects always fail leaving taxpayers holding the bag.  But the examples provided tell a different story, ranging from ‘comparing apples and oranges,’ condemning systems facing the same financial challenges private providers are coping with during The Great Recession, or even attacking the viability of systems not even operating yet.

Some examples they mention and the part of the story they don’t:

• The systems in Provo and Memphis didn’t serve a single residential customer.  They were commercial service providers only serving business customers;
• The Burlington system got caught up in the banking crisis and is trying to restructure and refinance its operations;
• The attack on the Bristol municipal fiber system comes from The Heartland Institute, a classic political astroturf operation and an outdated 2007 piece from a political blog.
• The system in Davidson has been written about here before — it is not even municipal fiber.  It’s a formerly bankrupt Adelphia cable operation that required substantial rebuilding — spending the same sums Time Warner Cable and Comcast would have spent had they bought it.  The investment now has a chance to pay dividends… for residents, not Time Warner Cable, going forward.

The website even attacks a municipal fiber system in Salisbury, North Carolina that has yet to begin service.  Calling the project a failure is just a bit premature.  The “Smart Grid” folks were hard pressed to find credible sourcing for their attack on Fibrant, but finally settled for some fact-starved nonsense generated from, of all places, the John Locke Society.  What’s next — Atlas Unplugged: Ayn Rand’s Treatise on Synchronous Broadband?  The group attempted to downplay the connection to the John Locke folks by linking to a content aggregator– Scribd, instead.  Now that we’ve mentioned it, they could have credited us as well.

If you are suspicious about the viability of municipal fiber, simply ask yourself if they are such failures, why do phone and cable companies spend millions to lobby against them?  Why the blizzard of scare mailers, robocalls, astroturf opposition groups, and lawsuits — all to stop what many opponents continually claim are competitive and operational failures?

The answer is, most municipal projects, like co-ops and community owned utilities, are more than viable.  Ask the residents of Wilson, North Carolina who are enjoying the benefits of municipal broadband and cable service even if they don’t become customers.  Time Warner Cable didn’t raise rates on the residents of Wilson this year — the only place in the state not to face relentless rate hikes, all because of that community’s municipal provider keeping their competitors honest.  Those who do become customers enjoy far faster and more reliable broadband service than either the cable or phone company provides in the region.

Chattanooga, Tennessee is a lot closer to Opelika than Provo is, yet somehow “The Opelika Smart Grid” website missed the success story of EPB, a municipal provider delivering the fastest broadband service in the southern United States.  Folks in Lafayette, Louisiana have lots of nice things to say about their municipal provider — LUS Fiber, as well.

Who is Paying for All This?

One important clue that astroturf is being rolled over the municipal fiber debate is the lack of public disclosure about who is financing the muni-broadband haters.

Residents vaguely know the state’s cable companies are bankrolling some of the opposition in the media, taking out full page ads attacking the proposal in the local media “paid for by the ACTA.”  It’s up to readers to discern “ACTA” stands for the Alabama Cable Telecommunications Association, the cable industry’s lobbying group in the state.  Full disclosure that isn’t.

As far as “Opelika’s Smart Grid” website and the “Concerned Citizens” group, funding sources are more murky, if only because they go out of their way not to be specific.

Stop the Cap! posted a comment asking some questions about the website’s funding sources and backers as well as questioning some of their information.  Those questions have not been made public, much less answered, despite subsequent comments written after our own submission.  What are they hiding?

Another matter of concern come from the fact these “grassroots” groups have the ability to finance expensive radio ads.  They claim they are paid for by “concerned local citizens.”  That could easily include Charter Cable, the local phone company, or their representatives.  We don’t know because the owners of the website won’t say who those people are.  In a tight economy, would you be handing over hundreds, if not thousands of your hard-earned dollars to fight for Charter Cable and AT&T by paying for radio ads?  The cable and phone companies and their lobbyist friends sure would.

With no disclosure of real names, no direct statement that there is no industry money or involvement in these opposition websites, and way-too-convenient shared sourcing of “facts” with earlier industry “dollar-a-holler” movements, it would be a major mistake to simply give these “groups” or their arguments the benefit of the doubt.

As we’ve repeatedly uncovered in our own reporting, consumers do that at the peril of their wallets, learning only later they were suckered into opposing competition that could deliver significant savings and better service.

NNPA has direct and long-standing ties to AT&T

Sometimes it’s hard to tell real journalism from industry-backed “dollar-a-holler” hackery, but the National Newspaper Publishers Association, an organization of Black newspaper publishers, went way over the top and made it too easy.

Their “special correspondent” Yaounde Olu wrote a particularly nutty piece of paranoia in an article titled, “Free Press Targets Poor Blacks and Women for Net Neutrality Campaign,” attacking pro-consumer group Free Press for daring to work with the Harmony Institute to undo industry propaganda, astroturf group nonsense, and multi-million dollar corporate lobbying efforts to derail broadband reforms like Net Neutrality.

If this is what passes for “news,” newspapers should reconsider their NNPA membership unless they throw in some free iPhones from AT&T:

In a bid to ensure Net Neutrality, the Free Press has commissioned the Harmony Institute to develop a strategy that will target poor, rural African- Americans in the South and women to increase support for a Net Neutrality (NN) strategy. Net Neutrality is basically the principle that all Internet traffic should be treated equally. In other words, everyone has access, and all platforms, content, and sites are treated equally. The opposite concept is a system wherein there would be limited or possibly “tiered” access. This could impact small businesses and other individuals without the economic wherewithal to access all sites.

According to the Free Press, the core supporters of Net Neutrality are affluent whites, who, have easy access to broadband and understand the issues. Poor, rural African-Americans and women, however, are the demographic that must be influenced in order to build a secure NN support base.

The Harmony Institute, a self-identified nonprofit organization committed to applying behavioral science to communications, in response to the Free Press’ commission, has produced a manual for the purpose of achieving these ends entitled Net Neutrality For the Win: How Entertainment and the Science of Influence Can Save Your Internet. This 40-page document identifies poor, rural African Americans and woman as “persuadable” for Net Neutrality messaging, and lays out very specific strategies for accomplishing their end goal of manipulating this demographic.

[...]Prominent members of the African American community have expressed serious concerns about the strategy laid out in the Free Press document. Shirley Franklin, a former mayor of Atlanta, offered the following observation, “It troubles me that an organization would target women, African-Americans and other minorities on an issue of such importance as universal broadband services without basing their advocacy on access, affordability and relevance.”

Julius Hollis, Chairman and founder of the Alliance for Digital Equality (www.alliancefordigitalequality.org), an organization whose mission is to ensure accessible and affordable broadband to the unders erved and un-served, particularly to communities of color, also weighed in on the issue. He stated, “I am extremely disappointed in the Free Press, not only in its policies and tactics that they are attempting deploy in their strategy paper, but equally disturbing are its attempts to portray the African-American and Latino consumers as expendable in their efforts to promote Net Neutrality. In my opinion, this is going back to the tactics that were used in the Jim Crow era by segregationists. It’s no better than what was used in the Willie Horton playbook by Lee Atwater who, upon his deathbed, asked for forgiveness for using such political behavior tactics.”

[...]Danny J. Bakewell, Sr., Chairman of the National Newspaper Publishers Association (NNPA), is taking the lead on fighting the Free Press’s NN strategy. He has this to say about it, “… I am outraged. And you should be too. I urge you to get out in your community and tell your friends, tell your neighbors, and tell those you meet at church and other groups about this appalling report. Most importantly, call and email Free Press and tell them you need a broadband connection to your house, not a subliminal message beamed into your subconscious.”

The Alliance for Digital Equality is directly backed by... AT&T

The NNPA and this “reporter” failed Journalism:101.  Let us count the ways:

For NNPA’s reporter, Balance is a nutrition bar, not an objective to strive for in this thinly-disguised hit piece against Free Press.  Last time I checked, Free Press was happy to answer their critics and share their own views on the subjects that concern the telecommunications industry and their specially-funded-friends.  Olu couldn’t find the space for the other side after all those “shame on you Free Press” quotes.

The portrayal of issue positioning and strategic messaging to reach various groups with a pro-Net Neutrality message is hardly an insidious, offensive plot.  In fact, unlike big telecom companies, the pro-Net Neutrality side has released their findings in public.  While the telecom industry marks their astroturfing and corporate lobbying strategies “top secret,” the pro-Net Neutrality side has nothing to hide.

But what would a newspaper association catering to African-American newspapers be doing in the middle of this fight in the first place?  As Stop the Cap! has seen and reported countless times before, when interest groups suddenly take an interest in supporting the telecom industry’s agenda items, telecom money is usually not far behind.

The most shameful part of the original article is the “reporter” couldn’t be bothered to be honest with readers and disclose the fact NNPA, the organization behind the article, has direct close ties to AT&T.  So do all of the quoted sources in the article.  The lack of disclosure is inexcusable, shoddy journalism — ultimately producing  just one more piece of industry propaganda.

“NNPA and AT&T Are Partners”

AT&T’s North Carolina President Cynthia Marshall was NNPA’s special guest at a corporate luncheon held by the group this past February, during their Winter Conference held in Charlotte, N.C.

Pharoh Martin, NNPA National Correspondent, covered the event and noted AT&T had “recently established a partnership with NNPA and the NNPA Foundation.”  Martin noted AT&T’s interest in broadband issues and reform are a top agenda item for the telecommunications company and the company ran an Internet Cafe during the event, exposing visitors to AT&T’s agenda.

The Center for Media and Democracy’s SourceWatch also notes NNPA has maintained strong ties with AT&T.

Shirley Franklin provides "dollar-a-holler" support for big cable and phone companies. (Black Agenda Report produced this montage image)

Shirley Franklin, quoted in the piece, was called a prostitute for AT&T by the Black Agenda Report.  After her stint as Atlanta mayor, she’s been an enthusiastic “dollar-a-holler” supporter for big cable and phone company interests.

Julius Hollis, chairman and founder of the Alliance for Digital Equality might be deeply disappointed with Free Press in his word salad of hyped outrage, but consumers should be even more upset that Hollis, too, is working for AT&T’s interests.  In fact his group is directly supported by AT&T.  Actually, calling the ADE a “group” might be a stretch.

As SourceWatch noted, “According to its 2007 tax return (Form 990), it had an operating budget of over $2 million, of which no money was allocated for fundraising, nor hiring of employees. In fact, the total compensation for board members exceeded the amount of all program-related expenses.”  That means loads of largesse for Hollis and the aforementioned Ms. Franklin, who “seems to be some sort of senior advisor to ADE,” according to the Black Agenda Report.

Mr. Bakewell’s admission that he’s taken a political position in this debate makes the NNPA just another player in the political arena.  They cannot call themselves impartial in this debate, nor should they be writing ostensibly unbiased news reports while also cheerleading AT&T and proclaiming a partnership with the phone giant.

Bakewell’s half-baked notions that AT&T will suddenly provide affordable broadband to most Americans while it continues to raise prices on broadband service (and in some cases limit its use), would simply be dismissed as naive if AT&T’s money wasn’t helping to feed the rhetoric.

The subliminal message beamed into the subconsciousness of NNPA’s readers is the one carefully crafted by AT&T to generate fake outrage and turn a telecommunications debate into another piece of raw meat for racial politics.  Once the puppet strings leading back to AT&T are revealed to readers, the real outrage should be reserved for the NNPA itself, cynically doing the bidding of a phone company and manipulating readers with false scandals and pointless side shows of distraction.

Obtaining universal access to affordable, high quality broadband service is not, nor has it ever been, a racial issue.  It’s an economic issue that has been exacerbated by companies that enjoy their current duopoly status and can afford to keep raising the prices on their customers, regardless of who they are.

Stop the Cap! is a pro-consumer group with no industry ties and no corporate money to hide.  We’re 100 percent consumer backed and consumer supported.  Too bad the NNPA, Ms. Franklin, Mr. Hollis and Mr. Bakewell cannot say that.

Alltel's logo, in use before 2006

Alltel Wireless is back.  Two years after Alltel was bought by Verizon Wireless, some 900,000 customers in Georgia, Illinois, North and South Carolina, Ohio and Idaho not included in the transition to Verizon will remain Alltel customers under new management.

For many customers, that suits them just fine.  In fact, with an increasing number of complaints from the 13.2 million former Alltel customers forced into a shotgun cellular wedding with Verizon or AT&T, many wish they could have the choice to return to Alltel themselves.

The demise of Alltel is another classic example of a telecommunications deal that made sense (and dollars) for Wall Street and a handful of Alltel executives, but left thousands of employees out in the cold in the unemployment line and customers coping with broken promises and higher bills.

It’s a story familiar to most of our readers, because the game plan for most telecom mergers and acquisitions delivers all of the benefits to a select few and ends up costing consumers plenty.  That these deals get almost routine approval from the Federal Communications Commission is ironic, considering that same agency commissioned studies that unsurprisingly found increased consolidation and lack of competition in the wireless marketplace.

The end of Alltel is a great example of what happens when an industry achieves near-total deregulation. Lobbyists sell deregulation as directly benefiting consumers with increased competition, more innovation, and lower prices.  In reality, from broadcasting to broadband, deregulation sparks escalating rounds of mergers, acquisitions, and buyouts.  Wall Street doesn’t want increased competition — it wants fewer options, less costly innovation, and higher prices to sustain profits.  When Wall Street speaks, most of these companies listen.

Since 1996, when the Telecommunications Act was passed, more than two dozen telecommunications companies have been swallowed up in mergers and buyouts.  Consumers find themselves with new providers and higher bills.  But not everyone is hurting from laissez-faire tele-economics.  For a handful of top executives, the result has been riches beyond their wildest dreams.  Even when they are forced out through merger deals, the golden parachutes that follow brings tears of joy.  Just ask Alltel’s last CEO — Scott T. Ford — he said goodbye to Alltel in 2007 with a parting bonus of nearly $150 million dollars.

Alltel’s History — Keeping It In the Family

Alltel’s history in the telephone business traces all the way back to 1943, with the formation of the Allied Telephone Company of Little Rock, Arkansas.  Back then, telephone service in the U.S. was mostly a monopoly of AT&T and several smaller independent phone companies. Allied’s business began as a pole and wiring provider for those phone companies.  In 1983, Alltel – the traditional phone company – was created from a merger between Allied Telephone and Mid-Continent Telephone.  In 1985, Alltel Wireless service began from its first cellular system in Charlotte, N.C.  In less than a decade, the wireless division would expand service in smaller cities and towns across mid-America and the south, often where larger carriers didn’t want to provide service.

Just about everything in the telecommunications industry changed with the passage of the 1996 Telecommunications Act, signed into law by President Bill Clinton.  The law that promised to open the doors to better service and more competition actually deregulated most of the industry into an “anything-goes” circus of money-fueled mergers, buyouts, and consolidation.  Important consumer protections were discarded along the way.

The implications of the Act were well understood by corporate executives in the industry, and companies spent millions to lobby for its passage.  They considered it a down-payment for better days to come.  The biography of Alltel’s then-CEO Joe T. Ford noted the passage of the law changed everything, even leading to a violation of an agreement he made with his son when he was only 12 years old:

Scott T. Ford, the president and chief executive officer of the Alltel Corporation, made his first business deal at the age of 12 with his father, Joe T. Ford. The two agreed that Scott would never work at Alltel. Joe wanted to spare his son what he himself had endured since coming to work for his father-inlaw, Hugh Wilbourne Jr., in 1959. After the passage of the Telecommunications Act of 1996, however, the Fords rethought their agreement, and, at age 35, Scott Ford became executive vice president of Alltel. Within two years he was appointed CEO, following in the footsteps of his grandfather Wilbourne, who formed Allied Telephone Company in 1943 in Little Rock, Arkansas.

All that hard work by earlier generations was about to pay some serious dividends in a laissez-faire telecommunications world.

Beebe literally drew his own road map depicting his idea of success - remaining on top after a flurry of mergers and ongoing industry consolidation

The Dot.com Boom… for Some

At the end of the 20th century, the telecommunications industry was in the middle of the dot.com boom.

The impact of the 1996 Telecom Act did fuel change among traditional telecom companies.  While some new players were wildly upgrading networks and building fiber optic networks to sustain the dot.com book, most of the traditional phone and cable companies were spending their time and attention on mergers and leveraged buyouts.  The Baby Bell-AT&T empire that was broken up in the mid-1980s was nearly restored to its former glory with super-sized Verizon and AT&T.  Independent phone companies which operated for a century were suddenly the targets of buyouts, now consolidated by regional players like CenturyTel, Embarq, Alltel and Citizens.

Alltel didn’t just buy up other independent phone companies.  It also bought wireless providers and soon merged its landline and wireless divisions into a single company.  This was the era when the “full service phone company” was trendy — capable of delivering local, long distance, and wireless service all from one company, usually on one bill.

Alltel’s executives, like then-Alltel group president Kevin Beebe, delivered presentations to Wall Street bankers like Credit Suisse/First Boston promoting Alltel and its made-for-consolidation balance sheet.  He literally drew his own road map showing his route to success, depicting himself on top after successive mergers with smaller players.

Unfortunately, the high-powered, cash rich days of the dot.com deal were about to end.  By the start of the new century, it was all over.  An oversupply of infrastructure was built to support web-based businesses that would never launch.  Many of those already in business shuttered their virtual doors.  Venture capital for telecommunications projects dried up.  But there was still plenty of money to be made in wireless, and Alltel did obtain financing to launch mergers and buyouts with as many small cell phone providers as possible.  By the early 2000s, the mentality in the telecommunications business was “small is bad.”  The only path to success was to buy your competition, or be bought by them.

The business of mergers and acquisitions earned countless millions for Wall Street banks, who charged fees to help structure the deals and usually helped finance them.  Executives always won, even if a merger brought an end to their career at the company.  Golden parachutes kept the top floor happy.  The only losers were the soon-to-be-ex-employees and middle management declared redundant and escorted from the building.  They were the “cost savings” promoted as a benefit of the merger months earlier.  Meanwhile, customers were stuck dealing with the transition changes, service interruptions, and the eventually higher bill that always result from reduced competition.

During the first half of this decade, it was Alltel doing the acquiring — spending fortunes to acquire other regional wireless phone companies:

• 2002: Alltel acquires 700,000 wireless customers from CenturyTel Inc. in Arkansas, Louisiana, Michigan, Mississippi, Texas and Wisconsin for $1.5 billion.
• 2003: Alltel purchases wireless properties in Mississippi from Cellular XL.
• 2004: Alltel acquires wireless properties from MobileTel, U.S. Cellular and TDS Telecom.
• 2005: Alltel merges with Western Wireless Corp., acquires wireless properties from Public Service Cellular, certain wireless assets from Cingular and exchanges properties with U.S. Cellular of Chicago to meet divestiture requirements related to Alltel’s merger with Western Wireless Corp. Alltel agrees to purchase Midwest Wireless for $1 billion in cash.

Despite the shopping spree, Alltel’s executives like Beebe continued to let it be known Alltel itself was “well-positioned for wireless consolidation” — available for a buyout… for the right price.  By 2006, Alltel had become the fifth largest telecommunications company in the country, with operations in 34 states.  Thanks to lengthy roaming agreements with Sprint and Verizon Wireless, Alltel could deliver national service even from a regional network.

Alltel also enjoyed a satisfied customer base, thanks to innovative calling plans and services that were unheard of from other cell companies.  In 2006, it introduced the popular My Circle calling plan, which allowed customers to make unlimited wireless calls to up to ten numbers, regardless of whether they were landlines or other Alltel wireless customers.  That same year, U Prepaid was introduced, which included unlimited calling and text messaging to a pre-designated number — perfect for those needing to call home.  Alltel prepaid customers could also roam on many other carrier’s networks without paying enormous roaming fees.

Alltel Sells Out Its Landlines

Until the 1996 Telecom Act, most publicly-owned telephone companies were considered a safe utility stock.  In rural communities, many of the phone companies that established service where AT&T’s Bell System did not have been around since the 1890s.  Often owned by a family or cooperative, these independent phone companies popped up when Alexander Graham Bell’s telephone patents expired.  The companies were hardly growth hotbeds, traditionally serving communities that saw little growth and lots of expenses from the wide-open country they had to wire.

After deregulation, venture capital moved aggressively into the wireless and cable sectors.  For the first time, many rural phone companies faced competition from rural cellular providers and cable companies experimenting with “digital phone” service delivered over cable television lines.  But unlike the phone company, these providers were not required to deliver service to everyone.  Most of these services would only challenge the phone company in population centers within towns and villages, that also happened to be where most of their customers lived and worked.

The business model was changing.  As rural phone companies began losing customers to cable and wireless providers, some of them looked to mergers and acquisitions to reduce costs and improve revenues to keep revenue stable, even as customers disconnected.  To maintain interest and  investment from stockholders, many traditional publicly-held phone companies began paying shareholders increased dividends, which attracted attention from Wall Street.

On July 11, 2004, one independent phone company set a new bar for dividends and probably changed the long term business models of rural phone companies for years to come.  Citizens Communications Corporation, as part of a corporate re-shuffle, announced the resignation of its then-CEO Leonard Tow, changed its name to Frontier Communications, and announced an incredible one-time payout of a $2 dividend for every share of common stock, and an ongoing annual $1 dividend, payable every quarter.

With a payout like that, investors began demanding increasing dividends from other phone companies, Alltel included.  To pay that kind of dividend, you need revenue, and slow-growth rural phone companies cannot just generate millions in new revenue selling voicemail, long distance plans, and caller-ID.  That kind of money comes from new lines of business, such as broadband, or from cash-generating mergers and buyouts.

Broadband required millions of dollars in new investments, increasing short term costs and having to wait several years to see a return.  Mergers and acquisitions delivered fast cash and instant results — short term benefits Wall Street loves to see.

So while phone companies continued to lose landline customers at rates up to 7 percent per year, another round of frenzied consolidation through mergers and buyouts erupted.

For Alltel, already established with a strong wireless division, seeing the long term prospects of trying to sustain its landline business as it lost customers seemed pointless.  In December 2005, Alltel announced it was dumping its 3,000,000 landline customers, combining them with another 500,000 customers of Irving, Texas-based Valor Communications in a $9.1 billion dollar tax-free deal to create a new independent landline company — Windstream Communications.

Alltel would henceforth be a wireless phone company-only, and a much richer one at that.  Unfortunately, despite its ranking as America’s fifth largest wireless provider, Alltel still remained a regional player, far behind its fourth largest rival T-Mobile.  With a dwindling number of wireless companies to acquire, speculation grew Alltel itself would soon become a takeover target.

KLRT-TV in Little Rock covered the announced acquisition of Alltel by Goldman Sachs on May 20, 2007 in these three reports.  (15 minutes)

Goldman Sachs Moves In

Within two years, Alltel’s independence would come to an end.  In 2007, Alltel formally opened an auction to sell the company’s wireless assets to the highest bidder.  But in a surprise move, company executives suddenly canceled the auction and accepted a $26 billion leveraged buyout takeover offer from TPG Capital and the buyout arm of Goldman Sachs.  Now, Wall Street investment bankers would own and control Alltel outright.

Speculation in the financial press about why Alltel canceled the auction and didn’t even entertain other bidders for the company raised eyebrows at the time.  The windfall payouts to Alltel’s executives disclosed in later Securities & Exchange Commission filings may have had something to do with it.  Company executives won the equivalent of the Powerball Lotto:

• CEO Scott T. Ford received nearly $150 million dollars.
• Richard Massey, former chief strategy officer and general counsel walked away with almost $50 million.
• Alltel Chief Operating Officer Jeff Fox cleared more than $70 million.
• C.J. Duvall, who was EVP of human resources earned nearly $10 million.
• Kevin Beebe, group president of operations went home with more than $60 million.

That’s quite a haul for the top floor executives at Alltel heading for the exits.

But Goldman Sachs had no intention of running its own phone company for long.  Analysts predicted the investment bank would hold onto Alltel for a year or two in hopes of selling it at a premium to one of the other wireless carriers, probably AT&T or Verizon.

That’s exactly what happened, except it only took seven months.

Bloomberg News took an in-depth look at the 2007 Alltel acquisition by Goldman Sachs and ongoing wireless consolidation. (Corrected Video) (5 minutes)

Verizon Takes Over – The Dog & Pony Approval Circus

With the collapse of the banking sector in 2007 and 2008, Goldman Sachs needed to get rid of assets to raise money.  The subprime mortgage mess left banks with $386 billion in asset writedowns and credit losses.  By putting Alltel up for sale, Goldman would earn $28.1 billion, enough to pay off the loans financing Alltel’s buyout months earlier, and even come out ahead.

The buyer, Verizon Wireless, sought to combine Alltel’s rural cell tower network with its own to expand coverage and pick up a stronger presence in middle America.

In the high stakes, high cost consolidation of telecommunications in the United States, what few regulatory hurdles Verizon would face getting the deal approved meant bringing forth the dog and pony show from Verizon’s lobbyists.  The Federal Communications Commission could alter or even kill its deal.  To make sure that didn’t happen, Verizon counted on the usual assortment of “dollar a holler” advocacy groups, heavy lobbying in Congress, and other friendly allies to help get the deal approved.

Unsurprisingly, Verizon can always count on help from free market allies and alleged community service groups with whom it has a financial relationship or contributes executive talent to serve on their boards.  Most of these have no involvement in telecommunications matters, except when it interests or impacts Verizon.  Suddenly they spring to action, conveniently submitting similar comments supporting whatever Verizon had on the agenda before the FCC.

KLRT and KTHV-TV in Little Rock, Ark., where Alltel was headquartered, ran a series of reports explaining the impact the Verizon-Alltel merger would have on Alltel’s service and jobs in Little Rock. (23 minutes)

Selected Members of the Verizon Friendship Crew Filing Comments Supporting the Verizon Purchase of Alltel (click the names to read their letters to the FCC):

• Institute for Policy Innovation
• Communications Consumers United
• Native American Television
• ASPIRA Association
• Organization of Rural Education
• The Free State Foundation (Political)
• U.S. Hispanic Chamber of Commerce
• U.S. Pan Asian American Chamber of Commerce
• Pacific Research Institute
• Small Business and Entrepreneurship Council
• National Hispanic Council on Aging
• Women Impacting Public Policy
• American GI Forum
• U.S.-Mexico Chamber of Commerce
• Hispanic Alliance for Prosperity Institute
• Latino Coalition
• Consumers for Competitive Choice (Astroturf)
• Dominican American National Roundtable
• National Black Chamber of Commerce
• National Indian Council on Age
• Freedom Works Foundation (Political and Associated With Corporate Lobbying)
• American Association of Peoples with Disabilities
• U.S. Cattlemen’s Association
• League of United Latin American Citizens

Alltel's service areas were carved up between three major providers - Verizon, AT&T, and ATN

Bloomberg News considered the business/industry implications of the Verizon-Alltel merger in these reports. (9 minutes)

Consumers Get Broken Promises & More Expensive Service

The benefits list of what Verizon promised to bring Alltel customers was heavily redacted in FCC filings as “highly confidential.”  What was promised, in public, was that Verizon would deliver improved service to Alltel customers who could continue with their existing service plans..

What consumers really got were major headaches, bad service, and much higher bills.  Former Alltel customers continue to tear up Verizon Wireless’ support forums with page after page of complaints.  As one former Alltel customer puts it, “we are the abandoned children of the redheaded stepchild.”

Some readers of Stop the Cap! shared their own experiences with the Alltel sale. Penny writes:

I first had Midwest Wireless that was bought out by Alltel which was just bought out by Verizon. With each switch I had to change my phone because something on the new system would not work on my old “previous provider” cell phone. Verizon has yet again said that for the “data charges” I can not block anything as my cell phone is too old and that I need to get a “Verizon” phone. My phone is not even a year old.

Enough about phones, data charges, rude customer service. You want to talk about dishonesty and unfair practices…just say Verizon.

In May I called and asked what I should do about leaving for a trip in which I would go out of my phone zone. The customer assistant that I talked to informed me that to avoid roaming charges I should temporarily switch to a national plan. I asked several times if I would be able to go back to my previous plan and was promised that I could set the start and end date for the new national plan. Well can you guess what they did? Yep they did the old bait and switch and from what I know about law….or what I thought about law was that this practice is illegal. Verizon started the new plan almost after I got back from my trip and plus would not set me back to my old plan. So now I had over 2 times the old bill plus roaming charges and less minutes. All I can say is my last call to Verizon was asking when my contract was up and what the termination fee is. By the way the $200 might be well spent.

Penny was switched away from her grandfathered Alltel plan to a new Verizon service plan, and potentially also ended up with a brand new two year contract, without new phones to accompany it.  Any Verizon customer on a grandfathered service plan should never consider allowing a customer service representative to make substantial plan changes — you could lose your old plan.  Grandfathered customers can make certain changes from the Verizon website (adding text plans, changing calling features on phones, etc.) without terminating their existing plan, but be cautious.  Once you lose an old plan, you may never get it back.

Steve, another Stop the Cap! reader, writes:

I was with Alltel for 15 to 20 years and a very happy customer — never a problem. Then Verizon took over and it has been a problem ever since. First off let me tell you that we are truck drivers and travel all over the US. We were in Texas when our laptop died so we went and bought a new one.  Our Alltel air card would not work in the new computer. This was at the time when Verizon was taking over, so we had to go to Verizon and get a new air card. By the way we had unlimited with Alltel. The sales person in Verizon sold us a new card and got us on the road again. From that day forward we have had to visit a Verizon store about our bill every month. Last month was the final straw. We did not like the 5 gig limit to begin with and did not trust it so we were watching it closely so we thought. When the MB’s got up near 4100 we called Verizon and they said you are no where near your 5 gig. Well when the bill came in it said we used over 8 gig and instead of our bill being 200.00 it was over 400.00 for the month . Since this has happened we have already dropped their phone service and may have to drop the Internet and pay the penalties.

Verizon's wireless modem

Steve ran into the problem former Alltel customers frequently encounter when traveling or moving outside of their old Alltel service area.  Many Verizon representatives are not well trained about their new Alltel customers.  Until the transition is complete, many Alltel customers still use equipment that gives priority to Alltel’s network first.  If not correctly provisioned, equipment may not work properly outside of areas where Alltel had service.

Alltel and Verizon were accused of bill cramming in the state of Florida — subjecting customers to monthly charges for “free” ringtones and other services.  The Florida Attorney General’s office ordered refunds for all affected Floridians.  Cell phone companies have an incentive to allow these services to get away with loading up customers’ bills with unauthorized charges — they receive a cut of the action.  WTVT-TV in Tampa reports.  (3 minutes)

Verizon’s 5GB usage cap also includes a steep overlimit penalty.  We’ve seen reports that customers who use service around the country do not immediately see correct numbers for data usage.  That can cause a sudden traffic spike as usage from other areas finally shows up on one’s account.  Verizon customers should have the ability to opt-out from overlimit penalties.  When their 5GB is used up, they should be presented with a screen that requires them to acknowledge they wish to continue using the service and face the consequences on their bill.

Verizon’s tricks and traps for Alltel customers always pay off for Verizon, almost never for customers:

1. Verizon is doing everything possible to get Alltel customers to “upgrade” their service to Verizon plans so they can get them away from Alltel’s legacy plans offering more features for less money.  Once a customer renews a contract with a new Verizon phone or makes a significant change to their service plan, they are switched to a new Verizon plan… often including tricks and traps.  Unlimited texting costs extra on Verizon, as do many other features.  Customers who mistakenly buy what they thought was a comparable service plan learn the errors of their ways when the $1,100 Verizon bill arrives a month later.  Forgetting to add text and data plans can be an expensive mistake on Verizon’s network.
2. Dangling a free or discounted phone upgrade for former Alltel customers often also requires an “upgraded” service plan… from Verizon.  If you want a new subsidized phone, you may lose your old Alltel plan.
3. In many areas, Alltel phones gravitate towards Alltel’s legacy cell network.  That means the phone will choose a weaker cell tower formerly operated by Alltel instead of a closer Verizon cell site.  A roaming/software upgrade normally would correct this and help route calls to the best possible cell site, but customers overwhelmingly complain that doesn’t happen with Alltel-provided phones.  Customers are encouraged to choose a new Verizon phone instead… with a new Verizon service plan.

http://www.phillipdampier.com/video/WTKR Hampton Roads Norfolk NC man overcharged 400 dollars when switching from Alltel to Verizon 1-19-10.flv

This former Alltel customer in North Carolina was charged $400 for an unjustified early termination fee when his service switched to Verizon Wireless as part of the merger.  Despite repeated calls, Verizon-owned Alltel turned his account over to a collection agency. Verizon told him to pay off the Alltel collection agency account and they’d credit him $400.  He paid and then Verizon refused to credit his account and turned him over to their collection agency who started calling him at work.  They also ruined his credit.  It took WTKR-TV in Hampton Roads, Virginia airing this story on the 6 o’clock news to get Verizon’s attention after seven months.  (2 minutes)

Things are even more complicated in areas where the FCC has forced Alltel to divest its wireless assets and not transfer them to Verizon.  In most areas, those customers will shortly discover they are becoming part of AT&T’s wireless family, as AT&T bought the majority of those divested markets.  AT&T, however, does not operate with the same wireless standard Alltel and Verizon do.  AT&T phones work on the GSM standard while Alltel and Verizon work on CDMA.  For the time being, AT&T will simply operate the existing CDMA network Alltel used to own, but eventually every affected customer will get a free upgrade to a new GSM phone.  That upgrade better come quick for frequent travelers who are former Alltel customers switched to AT&T.  They’ll find getting service from AT&T outside of their home areas difficult on a network that uses an entirely different standard.  AT&T will likely have to maintain roaming agreements with Verizon for former Alltel customers until conversion is complete.

KELO and KSFY-TV, both in Sioux Falls, South Dakota, informed South Dakota’s former Alltel customers they’d soon have AT&T as their cell phone company, making Apple’s iPod available in stores in the state for the first time. (3 minutes)

A handful of customers won’t end up with either Verizon or AT&T.  In parts of Wisconsin, Element Mobile will take control of their Alltel account. But nearly a million customers will find their former Alltel service is now provided by… Alltel?

The Return of Alltel Wireless

McGill

Allied Wireless Communications Corp., which is staffed by former Alltel employees, has acquired the remaining leftover pieces of Alltel’s network, including its name, for $223 million dollars.  The all-new Alltel will have the same logo and calling plan features the old Alltel offered, and for 900,000 customers, it will be as if they never left.

“We feel like it’s putting the bank back together here in Little Rock,” Wade McGill, chief administrative officer for Alltel Wireless and AWCC told RCR Wireless. The original Alltel Corp. was headquartered in Little Rock, Ark., before being acquired by Verizon Wireless for $28 billion in early 2009. As part of the acquisition, Verizon Wireless was forced to divest some markets, a majority of which were acquired by AT&T Mobility for $3 billion, with most of the rest picked up by what will remain Alltel.

The company will have extensive roaming agreements for nationwide coverage and will focus on maintaining high quality customer care.

“The ability to retain the brand was key in these markets and you can’t underestimate the value of that,” McGill noted, adding that more than 50% of its current customer base have been Alltel customers for more than six years.

“We need to have a laser focus on the customer experience and being local,” McGill explained, citing a common mantra of rural carriers forced to compete against large, nationwide operators. “That’s how we want to think about our plans moving forward. … I think our plan is to grow organically at first and just focus on providing excellent customer service and support.”

But that doesn’t preclude Alltel from starting to expand operations to other parts of the country, perhaps even in areas now taken over by Verizon.

The new Alltel will remain a CDMA provider with plans to move to the LTE standard, which will deliver a 4G-like experience.

Going Back to the Future

In the end, many of the 13 million former Alltel customers probably wish they could have their old Alltel back, too.

Instead, they got wheeled and dealed away, first by an investment bank/casino that later used taxpayer dollars to bail itself out of its own greed, then by Verizon and AT&T who promise a future of higher bills and poorer service for many trapped in two year contracts. Too often, what’s in the best interests of consumers are an afterthought in these kinds of transactions, even today. Despite the FCC’s own findings that wireless competition is shrinking in a consolidating wireless world, they still found a way to green light deals like this that reduce competition even further.

Mehlman

A telecom industry front group acknowledged today American broadband in the last decade has not won any awards for speed or price, but if you just give the industry ten more years of deregulation, there will be more competition than ever to change that.

For the Internet Innovation Alliance’s Bruce Mehlman, the cable and phone companies have done a fine job bringing broadband to Americans, especially considering the industry is only ten years old.  If you leave things the way they are today, the next decade will bring even more competition from phone and cable companies, he promises.

But consumer groups wonder exactly how a duopoly will ever deliver world class service in the next ten years when it has spent the last ten hiking prices on slow speed broadband and now wants to limit or throttle usage.

This afternoon, National Public Radio’s All Things Considered tried to referee the broadband debate, pondering whether America is a world leader in broadband or has just fallen behind Estonia.  Reporter Joel Rose was perplexed to find two widely diverging attitudes about broadband, each with their set of numbers to prove their case.

On one side, consumers and public interest groups like Consumers Union and Free Press who believe deregulation and industry consolidation has created a stagnant broadband duopoly that only innovates how it can get away with charging even higher prices.

On the other, the phone and cable companies, the groups they finance, and their friends on Capitol Hill who believe there isn’t a broadband problem in the United States to begin with and government oversight would ruin a good thing.

Compared with other nations, the United States has continued to see its standing fall in broadband rankings measuring speed, price, adoption rates, and quality.  When East European countries and former Soviet Republics now routinely deliver better broadband service than America’s cable and telephone companies, that story writes itself. Embarrassed industry defenders prefer to confine discussion of America’s broadband success story inside the U.S. borders, discounting comparisons with other countries around the world.

For Rep. Joe “I Apologize to BP” Barton (R-Texas), it’s even more simple than that.  Even questioning the free market is downright silly.

“As everybody knows, if it’s not broke, don’t fix it,” Barton said at a March congressional hearing to discuss broadband matters. “And y’all are trying to fix something that in most cases isn’t broke. Ninety-five percent of America has broadband.”

Industry-financed astroturf and sock puppet groups readily agree, and dismiss industry critics.

Bruce Mehlman, co-chair of the industry-supported Internet Innovation Alliance, which opposes more regulation, acknowledges that the story of broadband in the U.S. is a classic glass-half-full, glass-half-empty predicament. Still, he says he thinks broadband adoption in the U.S. is going pretty well considering broadband has only been available for 10 years.

“For the optimist, you’d say within a decade we’ve seen greater broadband deployment than you saw for cell phones, than for cable TV, than for personal computers,” Mehlman says. “It’s one of the great technology success stories in history.”

Mehlman says Americans don’t need more government intervention to make broadband faster and cheaper. “We haven’t yet and that’s in the first decade,” he says. “In the second decade, the marketplace is only going to be that much more competitive.”

Kelsey

The problems go further than that, however.

Derek Turner, research director for the public interest group Free Press, told NPR broadband rankings tell an important story. “For the providers to try to say that there’s no problem, it’s merely just a smoke screen,” he says.

Providers would prefer to measure their performance against each other instead of comparing themselves with foreign providers now routinely providing better, faster, and cheaper service than what American consumers can find.  They have to, if only because of those pesky international rankings illustrating a wired United States in decline.

Joel Kelsey at Consumers Union tells NPR there is an even bigger question here — what role broadband plays in our lives.

Because 96 percent of Americans can only get broadband from a duopoly — the phone or cable company, the only people truly singing the praises of today’s broadband marketplace are the providers themselves and their shareholders.  Consumers see a bigger problem — high prices, and particularly for rural consumers, slow speeds.

“If you talk to [the] industry,” Kelsey says, “they think of broadband as a private commercial service akin to pay TV or cable TV.”

On the other hand, Kelsey says, “There’s a lot of folks who think it is an essential input into this nation’s economy — an essential infrastructure question.”

National Public Radio reporter Joel Rose dived into the battle over broadband numbers between consumer groups and industry representatives. Is America’s broadband glass half-full or half-empty? (June 28, 2010) (4 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Shapiro

Yesterday, Stop the Cap! reviewed a report from Robert J. Shapiro and Kevin Hassett suggesting “heavy users” should pay 80 percent of the costs to upgrade and expand broadband service to help lower prices for Internet access among America’s poor.  But what might have read to some as a scholarly assessment of challenges confronting American broadband is, in reality, propaganda produced by Sonecon, a Washington, D.C.-based lobbying firm hired by AT&T to sell their corporate agenda to the American public, interest groups, and Congress.

Beltway Economics – Buying Credentialed “Experts” to Back Discredited Policies

The dirty little secret of Washington power politics is that money buys attention, access, and all too often votes.  What began as a cottage industry to help facilitate communications between private business and political Washington has grown into a monstrosity that now largely controls the agenda, giving the upper hand to those who can outspend their rivals.  Since all too often those rivals are consumers who don’t bring money to play the game, they don’t even get a seat at the table.

Few people start a career thinking they’ll ultimately wind up prostituting their good name and resume to the highest bidder.  For many inside the beltway, what may have begun as a well-intentioned career in public service too often ends working for one of countless “public strategy firms” that help special interests get their way. Their impact on the debate is pervasive, especially when Congressional allies are on board: using suggested witnesses at Congressional hearings that lock out true consumer groups, reading lobbyist-provided talking points during floor debates, quoting from industry-sponsored reports sold as “independent research,” and gratefully accepting any accompanying campaign contribution checks along the way.

Most D.C. lobbying firms rely on recognized names who maintain a high profile in Washington power circles even years after leaving the public sector.  When selling an agenda, it helps if the person doing the sales pitch already knows the person being sold.  That’s why so many ex-Congressmen, deciding they’ve gotten used to living in Washington and want to stay, find new careers and a much bigger paycheck working as lobbyists.  But elected office isn’t a requirement.  Even those appointed to positions in the public sector can turn those lean government pay years into an income bonanza once that administration leaves office.

Robert J. Shapiro has come a long way from his early days in progressive politics found him in positions at several liberally-minded groups like the Progressive Policy Institute and the Progressive Foundation.  He advised several Democratic presidential candidates, including Al Gore, John Kerry, Bill Clinton, and Barack Obama.  Bill Clinton appointed Shapiro the U.S. Under Secretary of Commerce for Economic Affairs during his second term in office.

Unfortunately, although that title looks great on a business card and future resume, the pay is downright lousy.  Besides, his temp job would end with the Clinton Administration’s departure.

Shapiro combined his credentials with years of networking into Sonecon, LLC — a D.C. lobbying firm that pays dividends from its grateful clients, including AT&T.  Sonecon describes itself as “an economic advisory firm that provides in-depth analyses and unique insights into changing economic conditions in the United States and around the world and the impact of government policies on those conditions….”

Sonecon Knows Its Place

But just a little digging reveals Sonecon is really just another cog in the wheel of corporate campaign strategy and messaging.  Among the services promised to its clients (underlined emphasis ours):

• [Sonecon] works extensively with a network of affiliated firms (read that other lobbyists, astroturf groups, and think tanks) to help design and execute message campaigns;
• Sonecon plays an influential role in shaping public policy debates. We identify economic risks and opportunities created by recently proposed or enacted laws and regulations. By outlining the risks and opportunities associated with these changes, Sonecon enables business and government decision makers to react in a timely and appropriate way.  One recent example: Our reports on proposed new FCC regulations effecting broadband providers focused on broadband access issues for lower income households.
• As part of our services, Sonecon principals and advisers take part in strategic public relations campaigns designed to promote the firm’s work in the media, Congress and Executive Branch.  Well-informed, credentialed, and highly credible spokespersons, our team members are available for special appearances as well as ongoing communication campaigns.

Sonecon’s involvement in this particular ongoing communications campaign was made considerably easier by CNET’s sloppy editorial policy which effectively handed free media to AT&T without adequate disclosure of Shapiro’s agenda.  A simple Google search would have given CNET ample evidence that Shapiro and his firm were performing work on behalf of its clients — the telecommunications industry, especially AT&T.  This is not CNET’s first lapse.  On June 3rd, they provided column space for Robert Hahn to bash the FCC for involving itself in data plan pricing.  Only they never disclosed the fact Hahn is associated with the Technology Policy Institute (TPI), a phone and cable industry-backed think tank.  Even Comcast managed to disclose that association in their company blog.

In March, Shapiro appeared on an industry-backed panel to oppose broadband reform (from left, Robert Crandall-Brookings Institution, Walter McCormick-USTelecom, Lee Rainie-Pew Internet and America Life Project, Robert Shapiro-Georgetown Center for Business and Public Policy, and Joseph Waz, Comcast)

The unfortunate part of this story is that Sonecon and Shapiro have also infested the current debate over the National Broadband Plan.  This past March, Shapiro joined forces with the aforementioned TPI and its benefactors AT&T, Verizon, Comcast, Time Warner Cable, and the cable lobbying group NCTA to appear at a half-day “event” at the National Press Club to whine about broadband reform’s impact on industry investment and broadband expansion.  To underscore the economic investment threat, the sponsors were only willing to provide a continental breakfast for participants.  Leave us deregulated or else American broadband will resemble this stale pastry and ersatz “orange juice”-flavored beverage.

Such events happen easily in Washington with a swipe of a corporate credit card.  If consumers still had money, they could hire firms like Sonecon to represent their interests in these beltway policy debates.  But then hard-hit Americans don’t even have credit cards to spare these days, thanks to earlier lobbying efforts that allowed banks to use the economy as their personal casino.  Shapiro played his part in this too, writing a January 2008 report, “American Jobs and the Impact of Private Equity Transactions” that advocated for big Wall Street private equity leveraged buyouts, playing down the typical wholesale job losses that followed:

The data strongly suggest that private equity operations have solid, positive effects on U.S. employment, a finding consistent with the general role that private equity transactions play in the American economy. Private equity funds identify inefficient companies or subsidiaries, leverage those companies’ assets to borrow much of the financing to purchase them outright or to purchase a controlling interest, reorganize their operations and management, and run the enterprises as privately-owned entities.

Friends Until the End… Of the Contract

True to word, Shapiro did work extensively with a network of affiliated firms.  Many of the sources in his report are other groups also working for the industry or dependent on it.

The challenge here is that industry and government experts now expect that broadband bandwidth demand will continue to rise rapidly with the fast-expanding use of video and audio applications, and that consequently broadband providers face an extended period of significantly higher investments to accommodate this growing bandwidth demand.

[...]Another estimate cited by David McClure, the head of the U.S. Internet Industry Association, and John Ernhardt, Senior Manager of Policy Communications for Cisco Systems, projects that the long-term investments required to keep up with rising bandwidth demand could cost providers an additional $300 billion over 20 years, on top of their trend level investments.

Recently, the FCC broadband task force suggested that the additional investment requirements, including wiring every household with fiber, may well reach $350 billion.

The U.S. Internet Industry Association is a trade association for service providers like AT&T and Verizon.  A Verizon executive serves on its board.  Its mission includes working “to enhance your existing legislative and regulatory resources, giving your company a stronger voice over a wider range of issues — and at a reduced cost.”

Cisco Systems, principal advocate of the theory of the Internet traffic tsunami, makes its living selling equipment to manage the “exaflood” to the same industry that it pals around with in public policy debates.

Kevin Hassett co-authored the Sonecon report

And where does Shapiro’s estimated price tag of $350 billion come from?  His proclaimed source, the FCC broadband task force, is only half the story.  In fact, this cost estimate came from service providers, equipment manufacturers, and trade associations/lobbyists, among others¹.  That part didn’t make it into Shapiro’s report  — maybe he ran out of room.

Therein lies the basic problem with sock puppet research.  The credibility of any industry-funded study is questionable before the first copy even gets published.  Common sense dictates that a firm’s longevity is directly tied to its performance for clients.  Producing research that questions the strategy a company hires you to push is a one-way ticket to bankruptcy.  It doesn’t matter what credentials one brings to the table, money always speaks louder, especially in Washington.

Shapiro’s co-author, Kevin Hassett, is a political polar opposite, having served as an economic adviser to John McCain’s 2000 presidential campaign and Director of Economic Studies at the very-business-friendly American Enterprise Institute.  The potential friction between the two was eased by the ultimate incentive: big piles of bipartisan telecom cash.

In the end, Sonecon has done its client’s bidding — fixing facts to subjectively argue that unlimited, flat-rate broadband has to go. Their evidence is as flimsy as can be — assumptions that overcharging some people for Internet service will guarantee upgrades and cheaper pricing for others.

If you believe that, you’ll also believe Shapiro and Hassett wrote this report for free.

¹Federal Communications Commission. FCC Task Force on the National Broadband Plan Presentation to the FCC: September Commission Meeting (Slide 45)

Gilbert

Only in Texas.

Less than a day after the Texas Department of Agriculture unveiled its statewide broadband map, an opposition candidate running for the office of Agriculture Commissioner dismissed it as a re-election scheme that will never benefit rural Texas.

Hank Gilbert, the Democratic agriculture commissioner candidate, criticized the incumbent commissioner’s efforts as a cheap stunt that took four years to deliver and wasted taxpayer money.

“This is yet another stupid, sleazy, ‘look-at-me’ political trick designed to cover up the fact that he’s one of the best at wasting tax money in the history of the state,” Gilbert said. “That map will do nothing for people without broadband access.  I’m sure people on landline modems will be grateful to Todd—after the 45 minutes it takes them to actually view the map to determine, sure enough, that their area isn’t served by broadband,” Gilbert continued.

Gilbert is referring to a joint broadband mapping project by the Texas Department of Agriculture and telecom industry front group Connected Nation, which is stacked to the rafters with telecom industry executives with a vested interest in making sure those maps reflect the industry’s interests.

Current commissioner Todd Staples released the map with great fanfare, claiming 97 percent of Texas already had access to broadband service, with just three percent, representing 250,000 Texans without.  Those numbers were debatable, considering Connected Nation was involved.  In earlier mapping efforts, the group claimed ubiquitous broadband was already available over large sections of several communities, even though it turned out many of those homes could not qualify to receive the DSL service the group said was available.

Gilbert put a less fine point on it:

Texas Broadband Map (click to enlarge)

“Aside from the fact that he considers the federal stimulus dollars for broadband an excuse to gain further name recognition, what has Todd Staples really done to increase broadband connectivity in Texas,” Gilbert asked. He also questioned why TDA officials have said publicly, in the weeks prior to the map’s unveiling, that they didn’t know what areas of Texas were not served by broadband or high-speed internet access.

“It is a sad day when the agency and commissioner in charge of making sure rural areas get broadband don’t know which areas are underserved. It’s even more sad that the TDA had to depend on a public-private partnership with a non-profit agency to figure it out. I don’t think it will come as a surprise to anyone that telecom companies have far more granular information on existing service areas,” Gilbert said.

“Based on the information available on the website Staples is touting, anyone with a pulse, vocal chords, and the ability to dial the keys on a telephone could have collected this information from providers. I don’t see why it has taken Todd Staples nearly four years to do this,” Gilbert said.

Gilbert is apparently new to the broadband availability debate.  Telecom companies treat specifics about their broadband service areas and speeds as proprietary business information and will not disclose it to the government or any other third party, claiming it needs to protect the information for competitive reasons.  Earlier efforts to collect this information in other states met with stonewalling from providers.  Even the federal government has been unable to gather street-level statistics on broadband service from some providers.

But Gilbert has a point that a map project, especially with an industry front group in the mix, does not actually bring broadband to anyone.  Too often, such maps are used to block would-be competitors from getting federal broadband grant money, with nearby providers claiming the maps show the funding would help a community already served by broadband, even if it was not.  They also help paint a helpful picture for an industry seeking funding for middle-mile projects that divert broadband stimulus funding to help incumbent providers enhance their networks at the public expense.  In short, Texas cable and phone companies get to argue the stimulus program is a waste of money (unless they are recipients) because Texas doesn’t have a broadband problem.

Cue the Texas Cable Association:

“The map shows that less than 1 percent of all Texans cannot access some form of broadband, whether, wired, wireless or mobile. Yet – without this information – the federal government awarded more than $200 million in grants and loans to projects in Texas. Some of these projects propose to duplicate service in an area already served by multiple broadband providers.

“In addition, the federal government set a deadline for second-round funding applications that forced the Texas Department of Agriculture to again make recommendations without the benefit of the mapping data.

“As the federal government considers these new applications, the Texas Cable Association urges it to make its decisions based on the new Texas broadband availability map.

“Taxpayer dollars – in the form of government grants – should not be used to duplicate services or to provide free capital that allows grant winners to gain market advantage over private companies that have invested millions of dollars of their own money to make broadband available.”

The state cable lobby even has a 30 second ad running, thanks to the help of the mother-of-all-astroturf groups, Broadband for America — a front group for big cable and phone companies.

The Texas Cable Association has this not-too-subtle ad promoting private investment in broadband, suggesting Texas telecoms are helping, not hurting consumers and businesses.  (30 seconds)

The Staples campaign responded to Gilbert’s accusations Texas-style — by accusing their opponent of being a crook.

Staples’ campaign manager Cody McGregor said:

“Our opponent has a criminal conviction for theft, unpaid taxes, current tax liens, and allegedly accepted a bribe for $150,000. I hope all Texans will gain access to the Internet and have the ability to view www.guiltyguiltygilbert.com and get the facts about our opponent and his campaign’s trouble with telling the truth.”

Staples’ website is way over the top, accusing Gilbert of being a “villainous Obama Democrat” who is guilty of not wearing his seatbelt and being stupid.

Todd Staples owns stock in at least two telecom companies, AT&T and Fairpoint Communications, the latter of which is probably not helping his portfolio too much considering it declared bankruptcy.

Read Gilbert’s “fact sheet” on Todd Staples’ broadband mapping project below the jump.

And you thought your state’s campaign ads were too negative.  The Staples campaign goes back to the old west to drive home a message about their opponent.  (1 minute)

… Continue Reading

Illinois politics is business as usual — if you’re a high-powered business like AT&T, that is.  They’ve just proven how easy it is to sucker the fifth largest state’s legislature and several newspaper editorial boards with a dog and pony show of promises that it will have few regrets (and no consequences) for breaking later on.

Once again, AT&T is upset about the terms it agreed to in efforts to rebuild its nationwide reach through frenzied mergers and acquisitions.  This time it’s the 1999 merger with Ameritech.  AT&T claims the promises its partner SBC made to state regulators to green-light the deal are now too hard to honor. If only you and I could lobby legislators to walk away from our own personal responsibilities.  “I can’t pay my town taxes because the neighborhood has changed since I first moved here, so it would be unfair of you to ask.”

The argument apparently worked in the Illinois General Assembly which passed AT&T’s Get Off the Regulatory Hook Bill (Senate Bill 107) unanimously earlier this month.  The bill has now been sitting on Governor Quinn’s desk for more than two weeks, and AT&T is getting nervous.  Letters to the editor and AT&T-friendly editorials have started appearing in the Illinois press in a coordinated effort to beat the drum loud enough to get the governor’s attention to sign the bill unchanged.

Ameritech used to provide phone service to most of Illinois before being purchased by SBC Communications (later AT&T) in 1999.

Memories are short.  The Illinois Commerce Commission established ground rules for AT&T precisely because its predecessor provided abysmal service in the state.  As part of a hard-fought campaign to secure Ameritech, AT&T promised Illinois it would:

• provide reliable landline service in rural Illinois at a fair price;
• provide DSL broadband to at least 90 percent of Illinois customers;
• recognize that landline service remains an essential utility for millions of residents, many of whom don’t have the option of switching to another provider.

That was then, this is now.

These days, those requirements are apparently too tough on AT&T.  The company complains Illinois residents can switch to Comcast phone service (from the Worst Company in America 2010) or sign up for cell phone service from AT&T or a few other providers, assuming one has reception.  With all of this “competition,” AT&T argues there is no reason to continue regulating the company’s landline services, especially in rural areas AT&T could probably do without anyway.

Illinois is just the latest stop on AT&T’s big budget deregulation traveling circus, starring high-paid lobbyists and astroturf friends, all coordinating to unshackle their benefactor from pesky regulations.

The state’s legislature is evidently a million miles away from its fellow midwestern states who have been chauffeured down AT&T’s Promise Avenue before, only to discover it quickly became a one-way toll road for consumers.  Ask Wisconsin.

AT&T’s Message — Less is more.

AT&T routinely promises less regulation will magically open the door for its much-coveted U-verse platform.  Every elected official would love to claim he or she brought much-needed cable competition to their district, so promises of telco-TV are quite an incentive for legislators.  The formula is simple — you deregulate us and we’ll bring more U-verse deployment to your state.

Illinois State Senator Michael Bond (D-31st District)

Politicians trip over one another running to the nearest microphone over promises like that.

“This legislation is the key to opening up investment in the telecommunications industry in Illinois,” said state Sen. Michael Bond. “By modernizing our system, we are showing providers that we are worthy of their investment.”

But hasn’t AT&T already made a trip to that well before?  Last June, AT&T issued a press release crediting deregulation undertaken in 2007 for making U-verse expansion possible in Illinois:

AT&T U-verse is being expanded in Illinois thanks to legislation passed in 2007 and supported by State Senators Larry Bomke and Bill Brady and State Representatives Raymond Poe, Rich Brauer, Robert Flider and Bill Mitchell. The Cable and Video Competition Law provides an environment that encourages new video providers, such as AT&T Illinois, to invest in Illinois to compete against incumbent cable providers.

What will AT&T want next to finish U-verse deployment in Illinois – tax-free status?

That U-verse was designed to save AT&T’s landline business from a torrent of disconnect requests always gets missed by elected officials.  Basic landline service over copper wire is a dying business.  If AT&T doesn’t deploy U-verse, its ultimate destiny as a landline provider will be the horse and buggy industry of the 21st century.  Regulators need not throw away valuable consumer protections to protect a multi-billion dollar company already well-aware of what it needs to accomplish to stay profitable.

What consumers end up with — Less service for more money.

Despite the flowery rhetoric that competition is breaking out all over Illinois, 78 percent of state residents continue to rely on landline telephone service. That numbers 6.5 million consumers. Among the well-represented holdouts are fixed income seniors, and for most of them, a $200 monthly deluxe triple-play package of services is out of the question.

For customers that cannot afford higher rates, the Illinois Citizens Utility Board fought for and won a three year rate freeze and reprieve for AT&T’s budget-minded Consumer’s Choice telephone packages that were slated to be discontinued.  These packages don’t bundle unneeded calling features or extra services, instead providing affordable basic telephone service.  But after three years, AT&T can cancel these packages and raise prices at will, particularly in rural areas where competition is minimal to non-existent.  State oversight of AT&T is also history, leaving little recourse for consumers who suffer through poor service or AT&T’s legendary billing nightmares.

Supporters also promoted the deregulation legislation as a “jobs bill” — a ludicrous contention for legislation that contains no section pertaining to jobs.  Perhaps they meant more jobs for AT&T’s lobbying crew.  In fact, landline phone companies like AT&T are slashing jobs by the tens of thousands and will likely continue to do so.

Illinois Senate Bill 107 allows AT&T to set the stage to follow Verizon’s example — exiting rural areas, leaving the bulk of their investments and potential profits in large cities like Chicago.

The State Journal-Register wrote a shortsighted editorial supporting the proposed deregulation bill

Newspaper editorials like this one in the State Journal-Register in Springfield mean well but are breathtakingly short-sighted.  The editorial staff gushes about the benefits U-verse will bring Springfield, without any evidence U-verse will actually be universally available in the community anytime soon:

On a less philosophical level, we believe the new telecom law will be beneficial to most Illinois consumers because it should promote competition for household cable TV, Internet and phone service. In markets like Springfield, it could allow AT&T and Comcast to go head-to-head throughout the city, not just in the few areas where AT&T’s U-verse service is now available. That’s what cable customers have been demanding for decades.

AT&T customers have learned not to hold their breath waiting.  Any regular visitor to the company’s own support forums will quickly discover customers frustrated by lack of availability, hit or miss service, and no coverage map.  One customer summed it up:

I have NEVER in my life had to fight so hard to spend money on something.
Not even my wife makes it this hard on me to get something.
I have NEVER in my life (aside from when I got my AT&T POTS service) had a company work so slowly to accomplish something to try and attract a perspective customer or keep a current customer.

But there’s more.  Had the Journal-Register picked up the phone and checked with their neighboring states, they would have learned U-verse is not the competitive nirvana it’s routinely promised to be.  In Wisconsin, rates for cable, broadband, and phone service continue to increase, not decrease.  Most of the savings built into introductory packages for new customers expire after one year, and some providers limit the discounts to once per household.  That means once your new customer discount package expires, you may never get it again.  Then it’s a lifetime of ever-increasing pricing.

AT&T-backed bills also never require the company to completely wire every community for its U-verse service.  The company can bypass neighborhoods, towns and villages, or buildings it feels are not cost-effective to serve.  There are states that deregulated AT&T to their specifications and years later, communities are still waiting for service to reach their areas.  Illinois will be no different, and if AT&T determines U-verse isn’t worth the investment in large swaths of southern Illinois, so be it.

The Citizens Utility Board is correct when it predicts most of the investment will end up in Chicago, even at the expense of other parts of the state.  AT&T always follows the money.

AT&T’s Astroturf Friends Join the Parade

You have to look closely to see the connection. Who really is behind ITP?

AT&T’s friends are also writing letters to the editor demanding action, without disclosing they are bought and paid for sock puppets.

Take the Illinois Technology Partnership, which claims to represent a grand union of consumer and private interests for the betterment of Illinois’ high tech future.  In reality, it’s yet another AT&T astroturf group that works against consumers.

Their claim:

The Illinois Technology Partnership is the Illinois-based project of Midwest Consumers for Choice and Competition, a non-profit organization of individual consumers interested in technology, broadband, and telecommunication issues with state projects throughout the Midwest region.  ITP brings together industry experts, thought leaders, and Illinois consumers to foster an environment that will encourage emerging technologies, jobs, and investment, and spur economic growth on the state and local level.

Reality Check:

Both ITP and the ironically-named “Midwest Consumers for Choice and Competition” are both creatures of AT&T.  Thad Nation, behind all of these groups, invents AT&T-supported astroturf campaigns in various states where the company delivers service.  Over the past few years, Nation has cooked up TV4Us, Wired Wisconsin and Technology for Ohio’s Tomorrow, among others.  But his real day job is the founder and senior partner at Nation Consulting, a politically-connected lobbying firm:

At Nation Consulting, Nation focuses on assisting corporate clients with strategic planning in government and public relations, and managing crisis communications.

Our team has worked on the “inside” of the offices of Governors, Congressional members, and state agencies. We’ve worked at every level of government, and we have the relationships necessary to help you navigate state and federal bureaucracies to accomplish your goals. We know how government works – and we know what government can do for you.

Getting government officials or bodies to do what you want isn’t easy. Government is inherently a slow, bureaucratic entity. When you want elected or appointed officials to change policy, you need a comprehensive plan – and the resources, relationships and quick-thinking to implement that plan.

We come to you with decades of experience in advocacy, moving legislators and engaging state agency leaders to action. Let us help you build and drive an aggressive advocacy agenda.

Regardless of your industry, the internet has a role to play in achieving your public relations goals – and we have the experience and the expertise to implement a plan suited to your needs. Whether you need to effectively use social networking sites, manage a blog, conduct email campaigns or use Web 2.0 tools, Nation Consulting can help you maximize your online presence in a way that is both cost-effective and beneficial to your business or organization.

Ordinary consumers can’t afford Nation Consulting’s services so he doesn’t work for them.

As usual, AT&T’s connections don’t end there.  Many of the “partners” listed on ITP’s website are themselves also backed by AT&T — the Illinois State Black Chamber of Commerce and Illinois Hispanic Chamber of Commerce just two examples.  Several of ITP’s partners follow Nation’s efforts wherever he goes, also ending up affiliated with his other astroturf projects.

A letter to the editor appearing in The Daily Herald signed by Lindsay Mosher, executive director of ITP, applauds the state legislature for passing AT&T’s custom-crafted deregulation bill:

This legislation will spur significant private investment, increase broadband access and create jobs for Illinois residents at no cost to taxpayers.

The legislature deserves our thanks for taking this step.

Now it’s up to Governor Quinn to finish the job and sign the bill without changes, as some have suggested.

As is too often the case, readers are done a disservice when a newspaper prints a self-interested letter to the editor or guest editorial without fully disclosing who is behind it.  Mosher could have signed her letter “AT&T lobbyist” and been more honest.  In fact, in addition to her position at ITP, she’s also employed by another Chicago lobbying firm — Resolute Consulting.  It specializes in issue advocacy as well, and doesn’t work for free.

AT&T spends an enormous amount of money carefully crafting its issues advocacy campaigns designed to convince consumers they are representing your best interests.  Wouldn’t using all this money to lower your phone bill and provide better broadband service be a better allocation of resources if, as AT&T claims, this is all to benefit consumers?

Here’s another question — if an individual consumer in western New York can expose all of these incestuous ties between supposedly grassroots consumer groups and the telecom companies and interests that fund them, why can’t the news media in Illinois?  If they only followed the money, the real story about Senate Bill 107 could have been told before it sailed through the legislature unopposed.

Now, the only chance Illinois consumers have is if Governor Quinn loses the bill.