Turner

Paralleling the debate for better broadband is the fight for renewable, domestically-produced energy, and outspoken former CNN founder Ted Turner has run into the same kind of corporate-backed opposition strategies broadband advocates face in a quest to deliver improved service to Americans.  As part of an event with T. Boone Pickens to promote the cause of renewable energy, Turner launched into an all-out assault on his former colleagues at Time Warner, who he characterized as inept.

“This is what I said at the Time Warner board room. I’m not on the board anymore because they didn’t get it, but I said ‘we’ve got to stop doing the dumb things and start doing the smart things.  We had 5 percent of Google in a music merger and I said to [former CEO] Dick Parsons, ‘Dick, I think we ought to hang onto that Google stock.’ This was about 10 years ago. He said, ‘That company’s a bunch of bullshit.’

Then, listen to this one. We had CNNfn, which was in 50 million homes, as Fox [Business] is in now. And they made the decision to close it down. It was breaking even, a cable network that was breaking even. We should have been in there competing with CNBC and Bloomberg.

They closed it down without even calling Rupert up, who said publicly he was looking really hard at getting into the financial news business. We could have gotten $100 million or $200 million from him just for the name and the 50 million subscribers. They didn’t even call him — they closed it down without even doing that, and he was sitting there with the money wanting to give it to ‘em. I mean, you know, how dumb can you be?”

Whenever incumbent interests are threatened with new innovations that challenge conventional business models, look out.  The well-financed opposition will do everything possible to stop new sources of competition, something a befuddled Pickens noted when he encountered a representative from oil and gas interests opposing his domestic production ideas.  He likened the guy to “Baghdad Bob.”  Turner also confronted corporate-friendly Fox Business News who interviewed both about their joint effort, leading Turner to drop the “BS-bomb” at one point on live television.

It’s just more evidence that the fight for better broadband with fiber-based networks, Net Neutrality, competition, and more affordable access will be resisted in much the same way entrenched incumbents always fight to preserve their profitable positions in the marketplace.  Your interests come second.

As for characterizations of Time Warner management’s ability to predict trends and make smart business decisions, Turner has the credentials to back up his beliefs as a vice-chairman of Time Warner from 1996-2006.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/Turner Blasts Time Warner 4-26-10.flv[/flv]

Speaking at the Milken Institute Global Conference in Los Angeles, Ted Turner had choice words for his former partner, Time Warner.  (2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Fox Business News Renewable Energy 4-26-10.flv[/flv]

T. Boone Pickens and Ted Turner sit for an interview with Fox Business News about renewable energy.  We’re into the weeds with this clip, but it’s useful to see the same kinds of astroturf campaigns drive other causes crazy as well.  Also fun to watch Turner drop the “BS-Bomb” on live television, causing some consternation for Fox Business News, which also challenged Turner’s notions of how to pay for smart grids.  (7 minutes)

Plale

Consumer advocates are celebrating the defeat of telecommunications bills designed to favor AT&T’s corporate interests in Wisconsin.

Assembly Bill 696 and Senate Bill 469 were designed to give AT&T and other telephone companies the option of no longer being classified as telecommunications utilities.

Once that happened, the state Public Service Commission would lose the authority to oversee much of their operations.  In practical terms, it means phone companies could raise their rates at will and never have to justify them by reporting their profits and expenses to the Commission.  Another provision would have eliminated the PSC’s authority to deal with phone service complaints on behalf of consumers and businesses.  But considering the bills would have also eliminated the universal service requirement, AT&T and other phone companies could have simply disconnected land lines in unprofitable areas of the state and left rural Wisconsin with no phone service to complain about.

The legislation was introduced by Senator Jeff Plale in the Senate and Representative Josh Zepnick in the Assembly.  Both men are Democrats serving districts in Milwaukee.

Zepnick

Potentially motivating the legislation were substantial campaign contributions from AT&T.  For Plale, who is the top recipient of telecom contributions among all Democrats across the state, AT&T provided $4,000 and the cable industry donated $6,446 from 2003 through 2009, according to the Wisconsin Democracy Campaign. Zepnick received $1,400 from cable providers and AT&T during the period.  In total, at least a half million dollars in contributions from the phone and cable companies have been spent on Wisconsin legislators over the past six years.

Zepnick’s legislative maneuvering to push through the bill in the waning days of the state legislative session collided with Senate Majority Leader Russ Decker, who pulled the rug out from under AT&T and other telecom interests by referring the bill to the Legislature’s budget committee for review — a black hole from which the bill had no chance of emerging.

That triggered a reaction from Zepnick and his friends in the telecom front group community.

Zepnick told Wisconsin newspapers he wasn’t sure what to make of Decker’s diversion of his legislation, which political observers suggest is nonsense.  At the end of every legislative session, large numbers of orphaned bills are dumped in study committees or never taken up in both bodies.

“If it doesn’t get done, that’s going to be a huge missed opportunity for Wisconsin,” Thad Nation, executive director of AT&T-backed Wired Wisconsin told the Associated Press.  Nation claimed the bill would have traded regulatory authority away in return for more investment in the state by communications providers. “As other states move forward, Wisconsin will be left behind.”

Consumer advocates suggested Nation had it exactly backwards.

“It eliminates the regulations the Public Service Commission has used to ensure affordable and reliable landline telephone service for decades,” said Charlie Higley, executive director of the Citizens Utility Board, who told the AP three million landlines still exist in Wisconsin.  That turns back the clock on service standards.

Nation

With AT&T and other providers left to increase rates at a whim, the only thing moving forward, and upwards, would be Wisconsin phone and cable bills.

Not every legislator bought AT&T’s position that less regulation equals more service.

Rep. Gary Hebl (D-Sun Prairie), opposed the legislation from the day it was introduced, suggesting he would push for amendments to ensure the PSC would continue to protect landline phone customers and, for the first time, extend that power to cell phone service.

“If a service provider is not doing their job, consumers should have recourse. That’s one of our jobs as legislators,” he told AP. “We have to be sure that consumers get the service they paid for and it’s properly provided to them.”

As late as last week, AT&T had a dozen lobbyists working the Wisconsin legislature for votes.  Wired Wisconsin, which is actually an extension of corporate lobbying firm Nation Consulting, pushed the idea that Google would bypass Wisconsin for its Think Big With a Gig fiber to the home network if the state didn’t adopt the deregulation bill the firm was promoting.

Ultimately, the proposed legislation passed the Wisconsin Assembly but was never taken up by the state Senate.  Since being shelved for the session, Wired Wisconsin has moved on to re-tweeting Broadband for America pieces bashing Net Neutrality and FCC broadband oversight.  As Stop the Cap! readers know, Broadband for America is the largest telecom Astroturf effort ever, with dozens of members that are funded by Verizon or AT&T or equipment manufacturers whose businesses depend on contracts with large telecom companies.

Back in May of 2009, I started a series called Follow the Money to illustrate the large amounts of money the telecommunications companies spend on legislators to push their agendas for them.  You can always tell how most legislators will vote if you simply follow the money.

Through the wonders of public records searches at the North Carolina State Board of Elections, I am able to see the PAC contributions that legislators have received.  I can also cross reference this information with the dates the legislators are in session and the Secretary of State’s online lobbyist database.  In North Carolina you can take PAC money from a PAC who has a registered lobbyist so long as the General Assembly is not in session. If you take the contribution while in session, the state’s General Statute says it must be forfeited to the state’s General Forfeiture fund.

In this Moratorium Watch 2010 edition I want to focus on two North Carolina legislators leading the charge to ban or restrict municipal broadband projects — Sen. Daniel Clodfelter (D-Mecklenburg) and Sen. David Hoyle (D-Gaston).

Clodfelter is the co-chair of the Revenue Laws Study Committee.  In just 24 months, he took in a total of $16,000 in PAC contributions from big telecom companies and their friends:

• $1500 from North Carolina Cable PAC
• $1000 from Sprint/Nextel
• $1500 from Embarq
• $500 from the NC Association of Broadcasters
• $5500 from Time Warner Cable
• $5000 from AT&T
• $1000 from North Carolina Broadcast PAC

Senator “Obsolete Fiber” Hoyle dwarfed Clodfelter over the past 24 months:

• $3500 from Sprint/Nextel
• $4500 from Embarq
• $8250 from Time Warner Cable
• $4000 from AT&T
• $2000 from Electricities (Drew Saunders is a lobbyist with Electricities and was a primary sponsor on the Level Playing Field bill for big telco a few years back)
• $1500 from North Carolina Broadcast PAC
• $1500 from North Carolina Cable PAC

That’s $25,250 for Hoyle from companies with an active interest in the telecommunications debate in this state.

When you consider more than $40,000 was spent to boost the campaign coffers of just two state legislators, it’s not hard to see big money is involved statewide.  It doesn’t even have to arrive in the form of a PAC contribution.  Clodfelter just had a $29 million Time Warner Cable headquarters building placed in Mecklenburg County.  Hoyle helped procure the Apple Data Center, located 22.5 miles north of his district in Maiden, NC.

When cross-referencing Hoyle’s PAC contributions with the state lobbyist database, I found several possible conflicts that warrant investigation, and I will bring my concerns to the North Carolina State Board of Elections.  If my complaint is upheld, perhaps Hoyle’s concerns about the need for additional state revenue could be eased knowing some potentially improper contributions made to his campaign were turned over to the General Forfeiture fund.  Hoyle has already announced he is not running for re-election so he doesn’t need the money anyway.

Once you count that money, it’s easy to discover why some of our state legislators are actively working against our own best interests here in North Carolina.  The corporate campaign contribution, which can be likened to legalized bribery, makes it difficult to convince legislators to always vote with their constituents’ best interests at heart.  Whenever legislators are willing to cash corporate contributions and vote against consumer interests, we’ll be here to call them on it.  Until this country gets corporate money out of government, it’s all we’ve got.

Reach Out and Touch Someone... With Cash

Stop the Cap! readers Terry and Scott write to let us know it was an Astroturf weekend in the pages of the New York Times‘ ‘Letters to the Editor’ section as two traditional allies in big telecom’s fight against Net Neutrality and broadband regulation blasted the newspaper’s recent pro-FCC regulatory authority editorial.

Mike Wendy, vice president of the Progress and Freedom Foundation, a disingenuously-named telephone and cable-backed front group, was first up, proclaiming the bipartisanship of the glorious Telecommunications Act of 1996 which made unregulated broadband’s growth possible:

Over the last five years alone, American companies — incentivized by the absence of Internet regulation — have invested more than half a trillion dollars to build broadband infrastructure. Consequently, this has exploded broadband choice and access, boosting jobs, productivity and commerce, as well as other important societal-civic benefits, for more than 90 percent of America. This growth will continue, fostered by vibrant competition among cable, wireless, wire line and other evolving means.

It is understandable that you ignore the second fact: it reveals an inconvenient truth. The Telecommunications Act of 1996, which put Internet services outside of 75-year-old telephone regulations, was passed by a Republican Congress and signed into law by a Democratic president, in an overwhelmingly bipartisan manner. The Bush-era regulatory changes, which ensure that Internet services get treated in accord with the law, only followed through on the pro-deregulatory, pro-marketplace intent of the law.

Speaking of inconvenient truths, it took the newspaper’s editors to fully disclose that “the writer is vice president of […] a think tank that takes support from the information technology, telecom, wireless, media, cable and content industries.”  Kudos to the Times for disclosing that — too often such hackery goes unchallenged, without informing readers who is paying for it.

In the case of P&F, it’s all our favorites:

Translation: We don't represent consumers

• AT&T
• Comcast Corporation
• Cox Enterprises
• National Cable & Telecommunications Association
• Time Warner Cable
• T-Mobile
• USTelecom – The Broadband Association
• Verizon Communications

Of course, those big dollar amounts representing industry investments ignores the even bigger profits reaped from those investments, particularly in barely-competitive broadband.  Nobody in the broadband industry is lining up for a bailout, that’s for certain.

As to the group’s assertion that bipartisan bliss made telecom deregulation all worthwhile, the only thing they managed to prove is that both political parties are ready and willing to be suckered into believing the broken promises of lower pricing and better service for their constituents (helped along with a generous campaign contribution to ease any disappointment later on.)

President Clinton, who signed the Act, considers it one of his mistakes after he saw the results.

Just days after the governor of Arizona signed a highly controversial border enforcement measure into law, LULAC labels Net Neutrality opposition its "top news story." Is this a group that represents the real interests of America's Latino community, or that of its backers AT&T and Verizon?

Next up is a letter from Brent A. Wilkes, Executive Director, League of United Latin American Citizens (LULAC).  He doesn’t like Net Neutrality either, and regurgitates familiar industry talking points our readers can recite in their sleep:

We’ve seen more than $200 billion invested in broadband networks — more private investment than anywhere in the world — and the Internet in the United States has been an unquestioned success.

Second, network neutrality regulations are largely a solution in search of a problem. The F.C.C. adopted “Open Internet” principles in 2005. Since then, there have been only a few alleged breaches that were quickly resolved under this framework.

On the other hand, net neutrality regulations could shield the companies that make billions in profits from the Internet — search engines and other providers — from contributing toward the $350 billion in investment broadband upgrades needed to handle bandwidth demands, which double every two years. That would shift these bandwidth costs exclusively — 100 percent — onto consumers and could thereby deter broadband adoption in Latino and other communities.

Net neutrality could also bar broadband providers from managing, in a nondiscriminatory manner, the few bandwidth-hogging applications and services that can consume nearly all of a neighborhood’s bandwidth. If and when critics identify a real problem, Congress should quickly grant the F.C.C. the express authority to fix it.

Now why would a Latino interest group be so ready and willing to carry the industry’s water in the pages of the New York Times?  Whenever AT&T and Verizon have a public policy concern, LULAC is sure to follow.  For years, this group has been a part of more than a few industry-backed astroturf campaigns designed to trick consumers into buying their corporate agenda.  For disadvantaged Latino communities already hard hit with an ever-expanding price tag for telecommunications services, it’s shameful to see a group openly advocating an agenda that extracts more money from consumers’ wallets.

LULAC has received millions in support from General Motors, AT&T and Verizon

LULAC was there as a card-carrying member of both TV4Us and Consumers for Cable Choice, front groups promising consumers in states served by AT&T that statewide video franchises would lower their cable bills.  LULAC was front and center in the cheerleading section.  Only Latino Wisconsins, along with everyone else, got rate increases instead.  Thanks, LULAC!

Telecom analyst Bruce Kushnick tears the lid off:

This “deception … is about playing on America’s caring about the public interest and about minorities getting a fair shake,” Kushnick says . Worse, “these organizations have very deep-pocketed funders with lobbying groups, PR firms and others to get them the loudest ‘volume’ in the media or access to regulators and legislators. They often overwhelm the message of independent consumer groups.”

LULAC was there in states like New Jersey when Verizon was looking for its own statewide franchises.  To not offer them, LULAC suggested, would harm Latino communities across the region.  Actually, for many of them, the fact their cable and phone bills continue to march relentlessly higher actually hurts more.

The group is an equal opportunity sellout.  During discussions about XM Radio and Sirius merging, LULAC was ready with a letter of support for the merger.  Because when you think about pressing concerns for today’s Latino community, dwelling on the merger of two satellite radio services is a real front burner issue.

When Verizon wanted to acquire Alltel, guess what group was there to cheer the deal on:

LULAC supports this merger because the networks of the two companies are largely complementary. That means that when the merger is complete, even more consumers will enjoy the innovations Verizon Wireless plans to bring to market in years to come.

It’s getting hard to find a cause célèbre for AT&T or Verizon where LULAC doesn’t have their back.

But why?

Money, of course.

AT&T and Verizon have both donated millions of dollars over the years to LULAC.  General Motors, which had a direct interest in the outcome of the XM/Sirius merger is a donor as well.

Don’t fall for hackery.  Net Neutrality protects consumer interests and guarantees online freedom, something especially important as the forthcoming immigration reform debate begins anew.  That’s an issue Latinos are concerned with.  Too bad those issues don’t generate multi-million dollar contributions, which might get groups like LULAC to stop advocating against the interests of their own members.

Back in 2006, Alaska Senator Ted Stevens emphatically declared that the Internet was not a truck, but rather a series of tubes.  That’s why Net Neutrality was such a bad idea, get it?

[flv]http://www.phillipdampier.com/video/Senator Ted Stevens on Net Neutrality.mp4[/flv]

Senator Ted Stevens Infamous “Series of Tubes” Speech from 2006.  (11 minutes)

Fundamentally misunderstanding technology and the Internet is not exclusively the domain of an ex-senator from the State of Palin, however.

North Carolina State Senator David Hoyle (D-Gaston County) managed to illustrate he didn’t know what he was talking about either.

Hoyle’s pretzel-like logic, in opposing municipal fiber broadband projects in the state, is that fiber optics could be obsolete within five years, so we shouldn’t even bother with them:

“You know the technology’s changing daily. Five years, ten years from now … wireless could replace most of fiber optics of coaxial cable or, or copper even. Might become not totally obsolete, but their ability to, uh, you know, to fund the debt service from the hard assets they had to put into the ground.”

If one extends that reasoning to his good friends in the cable and telephone industry — if fiber is potentially obsolete in five years, what about the phone company’s copper wires and the cable company’s coax?  Copper wiring was used for telegraphy starting in the 1830s and is still the backbone of today’s telephone networks.  Coaxial cable was invented in 1880 and still runs into virtually every cable subscriber’s home.  The first commercial application for a fiber optic communications system came in 1977.  In fact, most experts believe fiber optics will be the platform for America’s telecommunications network for at least the next quarter century.  The cable industry promotes its own use of fiber, and forward thinking phone companies like Verizon are relying on fiber to the home networks to stay relevant for the future.

Sen. David Hoyle (D-NC)

Fiber optic has all of the advantages:

• SPEED: Fiber optic networks operate at high speeds – up into the gigabits and still rising
• BANDWIDTH: large carrying capacity, and growing larger as advances continue
• DISTANCE: Signals can be transmitted further without needing to be “refreshed” or strengthened.
• RESISTANCE: Greater resistance to electromagnetic noise such as radios, motors or other nearby cables.
• MAINTENANCE: Fiber optic cables costs much less to maintain, and upgrades can occur without disturbing existing cable — just switch the laser technology used.

The costs to construct fiber networks, which used to be in the thousands of dollars per household, is now well under $1,000 for companies like Verizon.  Keeping happy customers and having the ability to market phone, broadband, and television services across an all-fiber network open new revenue streams which help defray initial expenses.  Fiber is an investment in the future.

Why isn’t wireless going to make fiber networks obsolete?

Allocating sufficient spectrum to support today’s high bandwidth applications is a practical impossibility, especially considering the politics and in-fighting from current spectrum holders to keep their allocations.  Spectrum is a limited resource, which guarantees limited competition, limited bandwidth, and higher prices.  While wireless applications will continue to be an important part of our communications future, it is unlikely they’ll be the favored method to support high bandwidth content in the near term.  Considering the implications of all of the new cell sites required to provide blanket coverage, it may never survive the inevitable howls of protest from neighborhoods who have to live with the eyesores.

Senator Hoyle opened his mouth and stupid fell out.  He’s not just wrong — his comments also carry implications for his constituents.

The City of Gastonia, along with Gaston County jointly filed an application alongside 35 others here in North Carolina seeking to get Google’s 1 Gigabit Fiber Optic to the Home Network.

How do city officials feel about their representative in the state legislature actively trashing fiber networks?  I will have that answer for you soon.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/fiber_obsolete_DS_You_Tube_HQ.mp4[/flv]

Senator David Hoyle (foreground, with back to camera) tells meeting fiber could be obsolete within five years.  (25 seconds)