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AT&T Bribed Okla. Regulator to Keep Excess Revenue, But State Still Won’t Seek $16 Billion in Refunds

Phillip Dampier March 21, 2018 AT&T, Consumer News, Public Policy & Gov't, Video No Comments

AT&T successfully bribed a Oklahoma telecom regulator to allow the phone company to keep at least $30 million annually in excess revenue. Despite the fact two key players in the bribery scandal were eventually sent to federal prison, Oklahoma’s state government has done all it can to protect AT&T. At issue is up to $16 billion in refunds and damages payable by AT&T — approximately $15,000 per customer, that the state claims would not be in the public interest. Now a consumer group — Oklahomans Against Bribery — is taking its case for refunds to the U.S. Supreme Court.

Remarkably, AT&T has remained so confident of its case and close relationship with Oklahoma state officials, the company drew gasps in a 2015 hearing after its attorney argued even bribed votes count at the Oklahoma Corporation Commission (OCC), the state’s telecommunications regulator, and the Commission has no jurisdiction to tell AT&T to make things right with Oklahoma ratepayers.

The Oklahoma Corporation Commission: “Perjury Palace”

The notorious scandal began with the passage of the Tax Reform Act of 1986 during the Reagan Administration. Echoing recent tax changes passed during the Trump Administration, Republicans argued that reduced taxes would cut the burden on corporations by changing the way those taxes were calculated, with savings trickling down to individual taxpayers. Under Oklahoma law, when a regulated utility wins a tax break, so should ratepayers in the form of lower rates. In June, 1987 the OCC ordered utilities including Southwestern Bell Telephone Company (today doing business as AT&T) to be prepared to refund the excess revenue that came as a result of the tax cut.

Only AT&T had no serious intention of refunding the money to its customers. Investigators claimed the company’s senior Oklahoma executives conspired with at least one of their attorneys to bribe Corporation Commissioner Bob Hopkins with a $10,000 payment in return for his vote allowing AT&T to “invest” the excess money in network upgrades. AT&T got its wish in a 2-1 vote. For almost 30 years, the lone dissenter in that vote, Corporation Commissioner Bob Anthony, has led the charge to reopen the case and get consumers a long overdue refund.

In 1988, when he was running for a seat on the Corporation Commission, Anthony said he was warned he would not be a good fit.

“A friend and Crowe and Dunlevy attorney advised me that someone like me should not run for election to the Oklahoma Corporation Commission, calling it the ‘perjury palace,'” Anthony wrote in a 2016 dissent opinion of the rate case.

Even before Anthony won his seat on the Commission, the bribery attempts began, often involving a high-powered utility lawyer named William Anderson, hired by SBC/AT&T:

“My first introduction to this entire episode was in about the last six weeks of my campaign….I was sent word that some people wanted to meet me. Well, I was running a campaign so I was happy to meet people interested.

“So, I went over to Mr. [William] Anderson’s office, and we had a nice chat. He’s…an authority on utility regulation. We had a nice little chat, and he handed me an envelope, and I put it in my pocket. And I remember driving home, not at the first stop light, but at the second stop light, I opened up the envelope and there were 10 $100 dollar bills in it, with a little slip of paper in one person’s handwriting that had five names written on it. Now, I was supposed to assume that that was five people [who] contributed $200 apiece, and that I didn’t have to report it by name.

“I told this story to a high school friend of mine who just happened to be the U.S. Attorney at the time. And before I told him the name of the person, he said, ‘Was that Bill Anderson?’ And I said, ‘Yeah, that’s who that was.’ And he said, ‘Well, Bob, we’ve been interested in his activities for a long period of time, but it’s awfully difficult to get inside information.’ And I said, ‘If he continues to have dealings with me, I’ll keep you posted.'”

It wasn’t long before Anthony associated Anderson’s presence with pocketfuls of cash waiting to fall on the table:

“I remember the time he had 50 $100 dollar bills. And I said, ‘You know I grew up in the business world, and we counted money when it came in.’ And so he’d chuckle, and then I’d start counting it out, 1-2-3-4, and then it would get up to 45-46-47-48-49-50! And, uh, he had a funny little thing he’d like to say,…’Well, if there was one extra, I’d a’ jumped up there and grabbed it.’ And we’d chuckle about that.

“Then he’d go on and explain about what was expected for the money. The definition of bribery, out of Black’s Law Dictionary, includes a quid pro quo. If he just gives me a gift that’s not necessarily a bribe. But, if he does, like he did, say, ‘You know, these companies I represent, they expect to make a profit. They expect to be in business a long time. And we’re not going to bother you every day, but someday there will be some officer of one of the companies I represent, and we’ll need an appointment, and we’d expect for you to give us an appointment.’

“Well, a certain amount of this is a wink and a nod, too. But, there was no doubt in our minds what was going on. Very clearly what was happening was people were giving me a large number of hundred dollar bills because they were buying access, and they were buying influence. And those words were even used in conversations that I had with utility executives.

“So my high school friend arranged for me to meet him in his US Attorney’s office, and there were two top FBI agents from the city who were there. And I agreed to keep them informed if activities continued.

“And Mr. Anderson called, and he called again, and he wanted to establish a relationship. And eventually they got recording equipment put in my office, and he continued his activity.”

Anthony recounted how utility lobbyists and lawyers introduced themselves, almost always around the issue of money.

“You know, sometimes I get money for the commissioners,” one lawyer told Anthony, adding some lawyers and lobbyists frequently offer $300 or $400 in “walking around money.” Those lobbying Anthony also reminded him they were aware of his campaign deficit, and despite being illegal, one offered to bundle a $10,000 contribution to help retire his debt.

The SBC/AT&T Bribery Case

FBI Director Louis J. Freeh (right) presenting Commissioner Anthony (left) with the Louis E. Peters Memorial Service Award in 1995. (Image courtesy: Bob Anthony)

The prospect of AT&T getting to keep at least $30 million in excess revenue a year (later revised upwards in an independent audit to $120 million annually) meant going the extra mile with commissioners to assure a vote in AT&T’s favor. By this time, Anthony had volunteered to serve as a FBI informant and had turned over any money he received improperly to the government. Federal investigators also obtained wiretap warrants, which caught telephone company executives discussing the bribe they didn’t want to know about.

“Do it and don’t let me know how you do it,” Oklahoma SBC/AT&T division president Royce Caldwell is heard saying on one wiretap.

Anthony argues there is substantial evidence that AT&T’s bribery is only a part of a much broader conspiracy involving a variety of utilities who were routinely bribing regulators to win votes at the OCC. But the AT&T case was special because of the amount of money involved.

“Multiple executives and attorneys were involved,” he said. A judge that later reviewed the case called the money given to Anthony, “no more or no less than an effort to have him look with favor on their pending rate matters.”

Other executives named by Anthony in the case were David Miller, SBC’s vice president in Oklahoma for governmental and regulation affairs and SBC attorneys William Free and Glen Glass.

In a sworn affidavit, Anthony cited a FBI wiretapped conversation between Anderson and Free in which Anderson said, “[Glen] Glass knew the whole deal. We all knew. They all knew we were trying to work something.”

What they apparently knew is that their attorney, Mr. Anderson, had found OCC Commissioner Robert Hopkins, a grateful recipient of $10,000 in telephone company bribe money, and the critical second vote in favor of AT&T being allowed to keep its excess revenue.

In 1994, a federal grand jury indicted Anderson and Hopkins for illegal bribery and conspiracy charges. Both were found guilty in late 1994 and sentenced to federal prison.

The Bribery Worked: AT&T Still Benefits Today from Rigged Vote That Was Never Overturned


Despite convictions, jail time, and clear and convincing evidence of a corrupted regulatory process, the order granting AT&T permission to keep the money was never overturned, despite repeated efforts by Anthony to throw out the tainted vote.

Since the late 1980s, AT&T has collected an estimated $16 billion in excess charges from Oklahoma ratepayers, including interest. But every effort to see that money returned to Oklahoma consumers and businesses has met a roadblock of resistance from AT&T, the Oklahoma state government, and regulatory agencies who call the case “ancient history” and “closed for further debate.”

The most serious effort to overturn the OCC’s original vote came in 2015-2016, when a coalition of consumers, business leaders, and philanthropists teamed up to convince the OCC and the courts they should toss out the tainted vote. They ran head-on into then Oklahoma Attorney General Scott Pruitt (today the head of the Environmental Protection Agency in the Trump Administration.)

Pruitt had been a staunch defender and supporter of AT&T in his role as Attorney General. In 2014, shortly after Pruitt dismissed another challenge about excess revenue in favor of AT&T, the phone company and its executives richly rewarded Pruitt’s campaign coffers with $43,500 — 44.5% of all donations for the summer and fall 2014 period. Pruitt ran unopposed in 2014.

Pruitt’s office renewed opposition to those challenging AT&T once again in 2015:

The Oklahoma Attorney General’s Office has maintained the position that the PUD 260 matter should not be reopened for nearly 20 years. As Attorney General Drew Edmondson stated to the Oklahoma Supreme Court in 1997, and again in 2010, “[t]he public interest would not be served by reopening an evidentiary hearing occurring nearly [two] decade[s] ago. The resources of the Commission and of the parties could be better utilized than by rehashing ‘ancient history.’ Accordingly, a rehearing of this cause is not in the best interests of [Southwestern Bell Telephone]’s customers and is not advocated by the Attorney General.”

Independent news site NonDoc took issue with Pruitt’s premise:

How can Pruitt expect his position on PUD 260 to ring true with the public considering his lengthy and documented history of defending major corporate interests in Oklahoma?

For a politician so well-versed in the art of pandering — whose campaign website asks voters to “Help Scott protect the citizens of Oklahoma” — how does the potential reimbursement of an estimated $15,000 for every qualifying AT&T customer in the state not serve their “best interests?”

Whose best interest is really protected by refusing to re-examine a corrupt moment in Oklahoma’s political history?

The answer likely lies somewhere in the political realities of our time. When corporations are considered people, it’s corporate dollars that count, especially when most actual people can’t be bothered to get out and vote.

In 2016, the OCC dismissed yet another attempt to revisit the issue, this time with prejudice, telling the group and consumers across Oklahoma the issue cannot be litigated ever again.

Headed for the U.S. Supreme Court

After being uniformly rejected by Oklahoma’s conservative politicians and judiciary, the group of citizens fighting to get the original late 1980s ruling overturned and force refunds for customers is taking their case to the U.S. Supreme Court this week.

Oklahomans Against Bribery continues to believe the law is on their side, despite arguments from AT&T’s attorneys that even bribery-tainted votes count.

“We took on this fight when the Attorney General stopped representing Oklahoma ratepayers and started defending AT&T,” said bribery refund applicant and Nichols Hills Mayor Sody Clements. “We hoped the Corporation Commission and the Oklahoma Supreme Court would finally do the right thing – declare once and for all that bribed votes don’t count in this state, and give the billions stolen by AT&T back to the ratepayers.  Unfortunately everyone has passed the buck and claimed it’s someone else’s problem to fix. We believe the buck will stop at the United States Supreme Court.”

Their petition for writ of certiorari, filed March 19, argues their “right to petition” under the First Amendment was violated when the OCC dismissed their bribery refund application “with prejudice,” prohibiting them from ever raising the issue again.

“Denying citizens the right to further petition their legislative bodies on legislative matters – especially matters involving proven public corruption – threatens and undermines our very republican form of government,” the petition argues. “The high importance of this case to the public interest, both from a monetary standpoint and from the standpoint of harm done – now and in the future – to ‘the good order of society,’ warrants review.”

The U.S. Supreme Court is expected to rule on the petition before the end of its term in early summer 2018.

Even bribed votes still count at the Oklahoma Corporation Commission, argues AT&T’s attorneys. This overview looks at the AT&T Bribery Case still on appeal. (5:46)

Wireless Industry Claims Removing Regulatory Hurdles Will Save $1.6 Billion on 5G Deployment

Accenture’s six-page analysis.

CTIA, America’s largest wireless industry trade group and lobbyist, commissioned a research consultant to produce a six-page analysis that unsurprisingly concludes stripping some oversight responsibilities regarding cell tower placement would reduce the cost to deploy 5G wireless small cells by as much as $1.6 billion over the next nine years.

The Federal Communications Commission is currently considering industry-friendly proposals that would “streamline” and “modernize” the historic and environmental regulatory requirements for wireless deployments, exclude small cells from certain federal regulatory reviews, and put a strict limit on completing environmental impact reviews on new tower and antenna installations or else they will be automatically approved.

The Accenture analysis, produced at the request of CTIA, claims that it will cost an average of $9,730 for each 5G small cell regulatory review. But the report also states only 28-29% of installations will face this type of review. The CTIA implies it is much worse than that in its new 30-second ad complaining about regulatory burdens. That ad suggests 5G small cell “approval can take a couple of years.”

As the FCC ponders further deregulation of cell tower and antenna placement, wireless industry players are sharing their horror stories with the FCC to strengthen the agency’s likely  view that installation rules and oversight should be relaxed.

In January, Sprint complained it faced a demand to pay a $90,000 “tribal review fee” for six tower upgrades in the Chicago area. The company claims the towers were located in historic preservation areas, but not in areas of tribal significance. Sprint added in its letter to the FCC it only planned to install additional antenna equipment at those tower sites to increase capacity, not erect new towers.

The wireless industry is also lobbying to get cut-rate access to public infrastructure like street lights, on which it eventually plans to place 5G network equipment.

In states like California, AT&T has pushed hard for new legislation that would mandate cities and counties to give the company open access to public infrastructure in public rights-of-way or utility easements. In a 2017 bill before the California Senate, companies like AT&T would face a fee limit of $100-850 per small cell per year, indexed for inflation,

With multiple wireless companies prepared to enter the 5G marketplace, utility poles could get crowded.

Cities and counties may also find their right to object to what eventually ends up on their poles curtailed as a result of the deregulation effort.

CTIA’s new 30-second advertisement claims 5G small cells can be installed in about 90 minutes, but only after waiting years for a sluggish review process. (30 seconds)

Sen. John Kennedy (R-La.) Introduces Companion Bill for FAKE Net Neutrality

Sen. Kennedy (R-La.)

Senator John Kennedy (R-La.) today introduced a companion bill that broadly copies an industry-favoring, fake net neutrality protection bill introduced last year in the U.S. House of Representatives by Rep. Marsha Blackburn (R-Tenn.).

The Open Internet Preservation Act is essentially the Senate version of Blackburn’s House bill, bringing along all the major flaws and industry favoritism one expects from Blackburn, a notorious defender of large telephone and cable companies and a favorite target for their campaign contributions.

Blackburn was naturally delighted.

“Sen. Kennedy brings leadership and focus to this discussion of preserving a free and open internet,” Blackburn said in a statement. ” I appreciate his work and his attention to this issue.  Title II 1930s era regulation was a heavy-handed approach that would stifle innovation and investment. This legislation will go a long way toward achieving the goal of protecting consumers.”

Kennedy made sweeping claims about the power of his bill to protect consumers — power not actually in his bill.

“Some cable companies and content providers aren’t going to be happy with this bill because it prohibits them from blocking and throttling web content,” Kennedy said in a statement. “They won’t be able to micromanage your web surfing or punish you for downloading 50 movies each month. This bill strikes a compromise that benefits the consumer.”

Except it won’t. We expect no cable company will oppose a measure that is based largely on the recommendations from the cable industry itself. Nothing in the bill would prohibit Comcast, AT&T, or other companies from “punishing” you for downloading 50 movies each month with a much higher bill as a result of exceeding your data cap and facing punitive overlimit fees.

Read Stop the Cap!’s detailed analysis of Rep. Marsha Blackburn’s net neutrality bill.

Even Kennedy admits his bill isn’t perfect, and considering it is based on a bill introduced by Rep. Blackburn that we analyzed last year, Kennedy is being modest.

“If the Democrats are serious about this issue and finding a permanent solution, then they should come to the table and work with me and Rep. Blackburn on these bills,” said Kennedy. “Does this bill resolve every issue in the net neutrality debate? No, it doesn’t. It’s not a silver bullet. But it’s a good start.”

It’s actually a very bad start, in our view. The industry would like to declare the net neutrality issue ‘settled’ with the passage of a bill it effectively wrote itself.

We urge readers to vehemently oppose both measures, which represent net neutrality in name-only. The best way to find a permanent solution for preserving real net neutrality will come at the next election, when voters can replace lawmakers that represent the interests of big telecom companies over those of their constituents. Allowing either fake net neutrality measure to proceed will make it exponentially more difficult to raise the issue in the future.

AT&T’s Argument It Was Untouchable by Federal Trade Commission Fails in Court

Phillip Dampier February 27, 2018 AT&T, Net Neutrality, Public Policy & Gov't 1 Comment

AT&T’s attempt to avoid oversight and enforcement of consumer protection laws by the Federal Trade Commission (FTC) failed in a federal appeals court Monday, overturning a 2016 decision that agreed with AT&T the FTC could not oversee or punish AT&T for its business practices.

In a unanimous 11-0 decision by the Ninth Circuit Court of Appeals, the court found AT&T’s interpretation of a law it said gave the Federal Communications Commission exclusive authority to regulate and oversee “common carrier” telecom companies was overly broad and based on a misinterpretation of the law. The decision means the FTC will continue to pursue AT&T in court to secure relief for AT&T’s wireless customers that the FTC claims were misled by AT&T’s unlimited data plan that was not truly unlimited.

“The phrase ‘common carriers subject to the acts to regulate commerce’ thus provides immunity from FTC regulation only to the extent that a common carrier is engaging in common-carrier services,” the court ruled Monday. In laymen’s terms, the judges found that the FCC does have the regulatory authority to oversee common carrier services like basic telephone service, but the law does not prevent other government agencies like the FTC to oversee AT&T’s conduct in non common-carrier services.

The FTC and the FCC both argued that allowing AT&T and the 2016 lower court opinion to stand would create a regulatory loophole through which virtually any corporation with even the slightest ownership stake in a common carrier telecommunications company could escape all oversight and enforcement of consumer protection laws.

The dispute began in 2014, when the FTC sued AT&T in court for intentionally throttling wireless internet speeds of millions of AT&T customers hanging on to their legacy unlimited data plans.

The FTC’s complaint alleged that the company failed to adequately disclose to its customers on unlimited data plans that, if they reached a certain amount of data use in a given billing cycle, AT&T reduced – or “throttled” – their data speeds to the point that many common mobile phone applications – like web browsing, GPS navigation and watching streaming video –  become difficult or nearly impossible to use.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said former FTC Chairwoman Edith Ramirez in 2014. “The issue here is simple: ‘unlimited’ means unlimited.”

According to the FTC’s complaint, AT&T’s marketing materials emphasized the “unlimited” amount of data that would be available to consumers who signed up for its unlimited plans. The complaint alleged that, even as unlimited plan consumers renewed their contracts, the company still failed to inform them of the throttling program. When customers canceled their contracts after being throttled, AT&T charged those customers early termination fees, which typically amount to hundreds of dollars.

The complaint accused AT&T of violating the FTC Act by changing the terms of customers’ unlimited data plans while those customers were still under contract, and by failing to adequately disclose the nature of the throttling program to consumers who renewed their unlimited data plans.

AT&T responded in court asking the case be dismissed, arguing that the FTC could not bring a case against AT&T because, as a common carrier, only the FCC has jurisdiction over the company.

The case was largely decided on whether Congress intended to exempt common carrier companies from FTC oversight based on their “status” or their “activities.” AT&T argued the law clearly gave companies deemed to be common carriers a blanket exemption from FTC oversight. The FTC argued Congress only intended to exempt the specific common carrier “activities” or services sold by a company from FTC oversight, not the entire company. The three-judge panel of the Court of Appeals agreed with AT&T’s view, affirming AT&T’s claim it was untouchable by the FTC and dismissed the FTC’s lawsuit.

Judge Kozinski, questioning AT&T: “I’m regulated by the FTC and I don’t like it. I go out and I buy a small, money-losing common carrier. Do I say, ‘bye bye FTC,’ under your reading of the statute?”

The decision was a stunner in D.C. regulatory circles and opened a chasm-sized loophole for almost any company to completely escape the FTC’s oversight and enforcement of consumer protection laws just by providing a single common carrier service (or acquiring a small phone company that does) to secure blanket immunity. The FTC appealed the decision before the Ninth Circuit Court of Appeals.

Both the FTC and at least one judge hearing the federal agency’s appeal saw the potential impact of the earlier 2016 decision immediately.

“I’m regulated by the FTC and I don’t like it,” Judge Alex Kozinski said to AT&T’s attorney. “I go out and I buy a small, money-losing common carrier. Do I say, ‘bye bye FTC,’ under your reading of the statute?”

The FTC warned if AT&T’s view was upheld, any company could buy a common carrier and violate federal consumer protection laws with no recourse for consumers and no available FTC enforcement action.

This week’s decision, called “common sense” by the judge who wrote the summary of the court’s finding, restores the FTC’s authority over non-common carrier services at companies large and small, including AT&T. It is also a relief to FCC Chairman Ajit Pai, who earlier argued the FTC had jurisdiction over abusive ISPs and would effectively oversee broadband providers without any need to continue the net neutrality policies of his predecessor. Had the court ruled in favor of AT&T, Pai’s policy would have transferred oversight of internet services to an agency legally prohibited from overseeing most broadband providers.

The FTC was pleased with the decision.

“It ensures that the FTC can and will continue to play its vital role in safeguarding consumer interests including privacy protection, as well as stopping anti-competitive market behavior,” Maureen Ohlhausen, acting Chairwoman, said in an emailed statement.

AT&T was not, and claimed the court ignored the merits of the case.

“We are reviewing the opinion and continue to believe we ultimately will prevail,” the representative said in an emailed statement, which did not definitively state whether AT&T intended to appeal the decision.

San Jose Mayor Quits FCC’s Industry-Stacked Broadband Deployment Advisory Committee


San Jose Mayor Sam Liccardo has resigned from the Federal Communications Commission’s Broadband Deployment Advisory Committee (BDAC), claiming the panel has been stacked with telecom industry players that will advocate for the interests of the telecom industry, not the public.

“It has become abundantly clear that despite the good intentions of several participants, the industry-heavy makeup of BDAC will simply relegate the body to being a vehicle for advancing the interests of the telecommunications industry over those of the public,” Liccardo wrote in his resignation letter.

The corruption was baked in from the earliest days of the BDAC, originally created by FCC Chairman Ajit Pai in January 2017 to help resolve the digital divide between those who have access to internet service and those who don’t. BDAC was charged with providing advice and recommendations on how to accelerate the deployment of high-speed internet access. Pai used the BDAC partly as a front group to advocate for his own long-standing goal of reducing or eliminating what he believes are regulatory barriers to infrastructure investment.

Controversy erupted almost immediately as the BDAC member nomination process began. Pai and his staff packed the 30-member group with telecom industry corporate executives, trade groups, and free market scholars frequently funded or sponsored by telecom companies. According to the Center for Public Integrity (CPI), the FCC initially accepted only two of the 64 city and state officials nominated to serve on a committee that was likely to recommend major changes to local and state zoning and permitting laws. Liccado was one of the two.

CPI filed a Freedom of Information Act request with the FCC to force the agency to divulge detailed information about applicants and those approved to serve as panel members. They found three out of four members appointed worked for big telecom companies like AT&T, Comcast, Sprint, and TDS Telecom. Crown Castle International Corp., the nation’s largest wireless infrastructure company, and Southern Co., the nation’s second-largest utility firm, also have representatives on the panel. The “broadband experts” chosen as members largely came from conservative think tanks that have industry funding ties or connections with wealthy conservative donors like the Koch Brothers.

Liccardo sensed trouble on the committee as early as last August.

“It’s not lost on us that among the 30-odd members of the BDAC, only two represent local government,” Liccardo said. “We’ll see where things go in the weeks ahead, but it’s fair to say the footprints are in the snow.”

Gary Carter, who works for the city of Santa Monica, Calif., where he oversees City Net, one of the nation’s oldest publicly owned networks, thought he would be the perfect candidate to serve on the BDAC. The FCC didn’t think so.

“When I called [the FCC] to check on the status of the BDAC selection process [earlier this year] and identified myself as an employee from the City of Santa Monica, the gentleman on the phone laughed hysterically,” Carter said. “At first I didn’t get the joke. When I saw the appointees for the municipal working group—only three out of 24 positions were from local government—I got the joke.”

The corruption has not been a surprise to one telecommunications executive serving as a BDAC member. He candidly told CPI the committee was purposely “stacked” to guarantee findings and proposals that echo Pai’s anti-regulatory agenda.

“It’s definitely stacked towards private enterprise,” said the executive, who requested anonymity due to fear of retaliation from FCC officials. “It’s nothing new. The [current] FCC serves private enterprise.”

Nick Degani, senior counsel to the FCC and Pai’s wireline legal advisor, told BDAC members at a July meeting that only a few city officials were chosen because they are the ones that need guidance, not telecommunications companies.

City and state officials locked out of Pai’s panel warn that BDAC recommendations could soon lead to new rules that will ignore local residents’ wishes in favor of the interests of cable, phone, and wireless companies. Recommended rule changes could allow telecom companies to gain free or very low-cost access to public buildings on which it can place cell towers or the small cells that will end up on utility poles. Much of the equipment the industry wants to place threatens to clutter neighborhoods with unsafe, overloaded utility poles and some new infrastructure could block scenic views or be placed in sensitive environmental areas.

CPI spoke with many local officials who asked to participate as a member of BDAC, but were turned down:

“There are reasons you have to get a permit if you want to dig up the side of the street,” said David Frasher, city manager of Hot Springs, Arkansas, who also was nominated—but turned down—for a seat on the BDAC.

“The city needs to know if you’re going to block traffic or create a hazard to sidewalk users,” Frasher said. Maybe there’s a way to streamline those regulations, “… but with only 10 percent city government representation, how helpful will the end product be?”

The FCC also didn’t choose David Guttenberg, member of the Alaska state legislature. He said service providers writing local rules for internet deployment makes him fear for Alaskan residents, many of whom have such poor wireless service that they have trouble downloading emails.

“They [telecommunications companies] are only going to look after their own self interests,” Guttenberg said. “Find me the guy that works for telecommunications on this committee that’s going to sign onto a plan telling their business to do something they don’t want to do. Find me that guy.”

What Pai has done by packing the panel with industry representatives is, in the end, “pretty standard in Washington,” said Sarah Treul, a political science professor at the University of North Carolina at Chapel Hill. “The FCC expects certain outcomes from this advisory committee.”


That point was not lost by San Jose Mayor Liccardo, who finally had enough after witnessing several cases of BDAC’s industry members wielding veto power and unilaterally rewriting collaborative proposals to fit the agenda of large cable and phone companies.

“One working group, which did not have a single municipal representative among its 30+ participants, created a draft model state code that included provisions to eliminate all municipal control over when, how, and whether to accept industry applications for infrastructure deployment,” Liccardo complained. “Another working group had an industry representative dramatically re-write its draft municipal code in the 11th hour, pushing aside the product of months of the working group’s deliberations. The result, in each case, were provisions that plainly prioritized industry interests.”

Also dovetailing with Pai’s narrative, many telecom companies griped about the cost of complying with local rules and regulations. In April, Larry Thompson, CEO of the National Exchange Carrier Association, with 1,300+ local telephone company members, complained one member had to pay $700,000 in costs to comply with environmental laws, historical preservation rules, zoning, and construction-related paperwork.

A representative from Comcast worried that the BDAC’s work has been so polarized towards the telecom industry, excluded state and local officials will have every reason to resist the BDAC’s findings and recommendations and refuse to adopt them.

“If they don’t feel included, not only are they outside throwing [darts] at this process, but then in the end it’s those groups that we want to adopt these model codes,” said David Don, vice president of regulatory affairs at Comcast.

But Liccardo warns Pai and his Republican allies are laying the foundation to “steamroll” over local officials by bulldozing local control of zoning and code rulemaking. For that reason, he quit the committee.

“The apparent goal is to create a set of rules that will provide industry with easy access to publicly funded infrastructure at taxpayer subsidized rates, without any obligation to provide broadband access to underserved residents.”

If Pai does manage to enact new federal rules that are as industry-friendly as Liccardo and other city officials fear, the FCC could overrule local zoning and permitting rules on a scale never seen before.

“It’s obvious that this body is going to deliver to the industry what the industry wants,” Liccardo said.

That appears to be Mr. Pai’s agenda as well.

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  • kaniki: A lot of live action shows are like that.. Same with movies.. But, when you go toward the cartoons.. not so much. credits are a good example of the sp...
  • kaniki: Left most loop holes wide open?? and you expected them to close them?? If they did, it would hurt them, and they are too greedy for that.. As for the ...
  • kaniki: I did not mean it as it was one person, or anothers fault, but more like, they are sitting there talking about Republicans are... while this stuff hap...

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