Stop the Cap! reader Steve L. has heard enough of AT&T’s promises that deregulation would bring more competition and better deals to Californians.

The Carlsbad resident is staring at the fruits of AT&T’s labor — winning deregulation of phone rates in 2006: a  basic phone bill that has increased from $5.70 a month before deregulation to $21.25 effective Jan. 2, 2014. That represents a 272 percent increase for basic measured (pay-per-minute) local telephone service. As if that was not enough, AT&T is also raising the per-minute rate for semi-local calls for the second time in two years. Earlier this year, AT&T slashed customers’ calling allowances by 25 percent, reducing the 225 minutes a month of toll-free calling down to 168 minutes in January.

Customers living in large, spread out cities in California are accustomed to Zone Usage Measurement (ZUM) charges for calls placed to numbers more than 12 miles from the local telephone exchange. But they may get bill shock after noticing how much the per-minute rates have increased:

• ZUM 1/2 (12-15 miles): Calls have doubled in price over the last 36 months. Prior to 2013, calls cost three cents per minute. AT&T raised prices to four cents in January and will raise them again to six cents per minute on Jan. 1;
• ZUM 3 (15-16 miles): Calling prices have increased from five cents a minute in 2012 to six cents a minute in 2013 and will be seven cents per minute in 2014.

“After surcharges, fees, and taxes, my bill will be nearly $30 per month for measured rate service, representing a near doubling of cost in just a 22-month period,” Steve writes. “I have no other choice than AT&T for a true powered landline, but I am rejecting this latest increase and plan to test and move to a VoIP system.”

The constant parade of rate increases from the state’s largest local telephone company began shortly after the California Public Utilities Commission (CPUC) unanimously approved sweeping deregulation of telephone rates in August 2006. Then Republican Commissioner Rachelle Chong was the driving force behind the effort, reports the San Francisco Chronicle.

Chong embraced AT&T’s attitude about telecommunications deregulation, promising consumers would not face abusive rate hikes or bad service. Under the old system, AT&T telephone rates were capped in California. AT&T had to approach the CPUC and justify any proposed increases. Without solid evidence, the company’s rate increase requests were rejected. Under deregulation, AT&T was permitted to set rates at-will.

“By the end of the 2010, these rate caps will no longer be necessary,” Chong promised as the new rules were being phased in. “The market will be so competitive it will discipline prices.”

Not quite.

AT&T’s rates have shot up as much as 222 percent for the average Californian’s measured rate phone service. Some customers, including our reader, found rates nearly three times higher than they were before deregulation. In the last few years, AT&T has increased prices on landline service and calling features even more dramatically across the state:

• AT&T Flat-Rate landline service jumped 115 percent since 2006, from $10.69 to $23 a month;
• Call Waiting, a popular phone feature, is up nearly 180 percent;
• Anonymous Call Rejection fees have almost quadrupled;
• Lifeline Service for California’s most disadvantaged is up 28 percent.

“My belief is that AT&T is essentially harvesting,” Dane Jasper, chief executive of Sonic.net, a competing broadband Internet service in Santa Rosa that tosses in domestic phone service for free, told the newspaper. “They jack up the rate by a pretty egregious amount … because if people leave, well, where are they going? AT&T mobile phone service in at least half the cases. So they’re happy to have them leave or happy to have them stay.”

AT&T defends the increases by suggesting rates were artificially restrained by rate regulators under the old system, and the new higher prices reflect economic reality and the deregulated marketplace. But AT&T’s rate increases have blown past other service providers in the state. Verizon’s flat rate service only increased 18 percent since deregulation. Independent providers SureWest and Frontier Communications have only raised prices by about six percent.

With these kinds of rate increases, customers like Steve are making hard choices about whether to keep or ditch their landline service. Ironically, AT&T’s argument to decommission traditional landline service is based on the premise customers are abandoning landline service. AT&T advocates moving customers to its deregulated U-verse platform in urban areas and switch rural customers to wireless-only service.

Chong paid a personal price for her erroneous predictions of consumer savings. In December 2009, the Democratically controlled State Senate refused to hold hearings on Chong’s reappointment to the CPUC, ending her term. AT&T and Verizon strongly backed Chong and lobbied hard for her confirmation. AT&T even turned out its notorious “dollar-a-holler” sock puppet brigade of non-profit groups that showered the legislature with letters supporting her reappointment, without bothering to disclose AT&T had made substantial direct or indirect contributions to the groups in the past.

Murray Bass, head of a small nonprofit in Northern California, initially wrote lawmakers saying Chong was a strong voice for low-income seniors. But in an interview, he admitted he’d endorsed her at the suggestion of executives at AT&T, which had given his group money.

“There’s an essential conflict of interest when a regulated — or supposedly regulated — entity is intervening on behalf of a regulator that’s friendly to them,” said Mark Toney, executive director of the Utility Reform Network, a group that opposed Chong.

SUPPORTERS OF COMMISSIONER CHONG WITH TIES TO AT&T

Organization	Funding Received	Letter Signatory (-ies)
Asian Pacific Islander American Public Affairs (APAPA)	The AT&T Foundation gave APAPA $25,000 in 2007. On the APAPA website, AT&T is listed as a top-tier event sponsor with a $50,000 donation in 2009.	Joel Wong, Bay Area Chapter PresidentNorm De Young, VP Outreach and Chair of APAPA’s GovernmentRelations Committee (spoke on behalf of Filipino Progress)
CA Small Business Association (CBSA)	AT&T is a corporate sponsor of the Small Business Roundtable (CBRT), the advocacy wing of CBSA, which has received $37,500 from AT&T since 2006.    The AT&T Foundation  underwrites  CBRT’s education fund, tech training and website.  Both CBSA and CBRT are active in CPUC proceedings, and CBSA endorses candidates and lobbies public officials.The California Small Business Education Foundation received a 3-year $1.125 million grant from the AT&T foundation.  Betty Jo Ticcoli, the letter’s signatory, is its Chair and CSBA is a member.CSBA is a member of the California Utilities Diversity Council (CUDC) along with AT&T and Verizon.	Betty Jo Toccoli
California Hispanic Chambers of Commerce (CHCC)	$30,000 from AT&T corporate since 2006, millions more from the Foundation.  Black, Hispanic & Asian Chambers are sharing a 1.25-year $287,000 CETF grant.   AT&T is a corporate member statewide and of several local Hispanic Chambers.  AT&T sponsors CHCC’s annual convention and underwrites local events such as FestivALL, sponsored by the Silicon Valley Hispanic Chamber.Member of  CUDC.	Kenneth A. Macias, Chairman of the BoardJoel Ayala, President & CEO
City of Firebaugh	$633,000 CETF grant.	Jose Antonio Ramirez, City Manager
Cristo Rey High School Sacramento	Received a $25,000 grant from AT&T Foundation in 2009.	Joan Evans, VP for Advancement
Fresno-Madera Area Agency on Aging (FMAAA)	$50,000 SBC Foundation Grant in 2002; $20,000 in 2003; AT&T has sponsored FMAAA’s Scamnot.org website since 2005.	Jo Johnson, Executive Director
Latino Community Foundation	$25,000 CETF grant.	Aida Alvarez, Chairperson
Latino Institute for Corporate Inclusion (LICI)	AT&T is a corporate partner of LICI; LICI’s IRS form 990 shows  income of $19,742 in 2008 and it has received $17,500 from AT&T corporate according to AT&T’s 77-M filing with the state, more from the AT&T foundation.Member of CUDC.	Ruben Jauregui, President & CEO
Latino Journal	$17,500 from AT&T since 2006; AT&T, Verizon and the CPUC are strategic partners in the Journal-sponsored California Education Summit, which AT&T underwrites.Member of CUDC.	Jose L. Perez
Mexican American Opportunity Foundation (MAOF)	$25,000 from AT&T Foundation.	Magda Menendez, Administrator
Other Connections Between AT&T and Chong Supporters
OCA – Organization of Chinese Americans Sacramento	AT&T is a corporate partner of national org and both AT&T and Verizon sponsor Asia Week and other heritage events	Joyce Eng, President
Tools of Learning for Children	Big AT&T logo on website. Told the Los Angeles Times, “he’d endorsed [Chong] at the suggestion of executives at AT&T, which has given his group money.”	Murray T Bass, MA, CFP
United Way of Butte & Glenn Counties	President Preston Dickinson is former Director of External Affairs for AT&T.	W. Jay Coughlin, Executive Director

 Notes

• 1.  CUDC – The California Utilities Diversity Council is a collaboration between the CPUC , the utility companies and other industry participants  to promote diversity in the utility industry.  AT&T is a gold sponsor of CUDC’s annual convention.
•  2.  CETF – CETF is a private non-profit corporation created by the California Public Utilities Commission (CPUC) and funded entirely by AT&T and Verizon.  Commissioner Chong is Chair of the CETF Board of Expert Advisors and its Accessibility Committee.  CPUC President Michael Peevey is Chairman of the CETF Board of Directors. The CETF board is appointed by the CPUC, AT&T and Verizon.

Sources:

• AT&T Foundation IRS form 990
• The Utility Reform Network

A portion of your cable bill pays for much more than programming, with millions diverted to Koch Brothers-backed astroturf groups, tea party candidates, fat paychecks for former public officials taking a trip through D.C.’s revolving door, and generous allowances for travel  expenses racked up by high-flying industry lobbyists.

The Center for Public Integrity took a trip through the 2012 tax return of America’s top cable trade group: the National Cable & Telecommunications Association (NCTA), which collected $60 million last year in membership dues from America’s top cable operators, who in turn were reimbursed by you when paying your monthly cable bill. They needed a shower when the journey was over.

NCTA president and CEO Michael K. Powell, the former chairman of the Federal Communications Commission during President George W. Bush’s first term, was well compensated in his new role representing the same cable industry he used to barely oversee, taking home more than $3 million in pay last year. Eight other employees, including NCTA’s executive vice-president, collectively cleared over a million dollars in salary according to the groups’ Form 990 filed with the Internal Revenue Service.

The revolving door at NCTA headquarters is kept well-greased, with 78 out of 89 federal-level NCTA lobbyists formerly working in government jobs representing the American people. Now they work for the interests of Comcast, Time Warner Cable, and other large operators.

Collectively, the NCTA spent $19 million on lobbying activities last year, much of it bankrolling “dark money” groups that refuse to disclose their donors and consider it their life mission to defeat President Barack Obama and blockade Democrats in Congress — the ones still most likely to demand more oversight and regulation of the free-spending cable industry. Among the groups receiving cable’s cash:

Americans for Prosperity, which received $50,000, spent $33.5 million opposing Obama during the 2012 election cycle, according to the Center for Responsive Politics, a nonpartisan group that tracks campaign spending. Americans for Prosperity often supports Tea Party causes and candidates and is the main political arm of billionaire industrialists Charles and David Koch. As the Center reported Thursday, the group spent a staggering $122 million overall in 2012. Americans for Prosperity is also actively involved in blocking community-owned broadband projects and advocates passing laws forbidding communities getting into the broadband business if a cable company got there first. Now you know why.

Americans for Tax Reform, which received $50,000, spent $15.8 million on the 2012 federal election, according to the Center for Responsive Politics. The group’s president and founder, Grover Norquist, is famous for his Taxpayer Protection Pledge, by which legislators and candidates promise to oppose all tax increases. The cable industry is also an advocate of tax forgiveness policies that would let cable operators repatriate the cash they stashed overseas, avoiding the same taxman they snuck around opening overseas bank accounts.

American Commitment, which received $10,000, spent $1.9 million on the 2012 federal election to advocate for and against political candidates — mostly to help U.S. Sen. Jeff Flake (R-Ariz.) defeat Democrat Richard Carmona. American Commitment also spent some of its money to oppose Sen. Tim Kaine (D-Va.) and Obama. American Commitment Founder and President Phil Kerpen is the former policy and legislative strategist at Americans for Prosperity and previously worked at Club for Growth, another group that doesn’t disclose its donors. Kerpen joined Glenn Beck on his program in 2009 to nod agreement when Beck hopped aboard the crazy train suggesting the Obama Administration’s support for Net Neutrality represented a Marxist-Maoist takeover of the Internet. Silly Beck, doesn’t he realize AT&T already called dibs?

The Center for Individual Freedom, which received $20,000, has been actively fighting against proposals for increased disclosure of donors to politically active nonprofits. It spent $1.8 million during the 2012 election cycle mostly opposing Democratic congressmen Steven Horsford, Bill Owens and Dan Maffei, all from New York.

The cable industry also bankrolls a number of our “favorite” sock puppet groups that reflexively support cable’s cause even when straying far beyond their alleged core missions and constituencies the groups claim to represent. Among those on cable’s payroll, sharing $5.8 million in “grant” funding, are some very familiar names to any regular Stop the Cap! reader:

• The Congressional Black Caucus Foundation
• The National Association for the Advancement of Colored People
• LULAC
• The National Gay & Lesbian Chamber of Commerce
• The National Urban League

The largest grant – $2 million, went to the industry mouthpiece Broadband for America, the largest telecom industry astroturf group in the United States, featuring honorary Democratic co-chairman Harold Ford, Jr., who now spends most of his life in MSNBC green rooms after being bounced from office in a failed Senate bid in 2006.

Ford landed on his feet after losing the election, fleeing Tennessee for big money New York, peddling his inside the beltway influence to Merrill Lynch, winning him the position of vice chairman and senior policy adviser, until Merrill Lynch nearly collapsed in the Great Recession and was bailed out by U.S. taxpayers. Ford kept his $2 million annual salary and bonuses, but it wasn’t enough.

He quickly upgraded to a senior managing director at Wall Street firm Morgan Stanley, supplying him with enough cash to buy a $3 million co-op in a tony Manhattan neighborhood.

From his perch in New York City, Ford pretends to know what is best for the little people across America suffering from no broadband, rationed access, or overpriced service.

His answer: buy it, if you can, from your cable company.

Ford’s co-chair at BfA is former Republican Sen. John Sununu who, by the way, also happens to sit on the board of Time Warner Cable. Need we say more?

There is no reason NCTA lobbyists shouldn’t travel in style when performing their advocacy efforts either. In 2012, they ran up nearly $800,000 in travel expenses.

Unsurprisingly, nobody involved was willing to comment.

EPB this morning celebrated its fourth anniversary by thanking Chattanooga residents for supporting the utility’s fiber network with a series of price cuts and speed increases.

Beginning today, EPB’s fiber broadband customers are getting the following upgrades and savings:

• 50/50Mbps customers get a free upgrade to 100/100Mbps service with no change in their current price ($57.99/month);
• 100/100 and 250/250Mbps customers get a free upgrade to 1,000/1,000Mbps service;
• 1,000/1,000Mbps customers now paying $349 a month will see their bills slashed to $69.99 a month, a savings of $230 a month;
• EPB’s business broadband customers will be contacted individually to coordinate the speed upgrades.

Customers will see the new speeds provisioned within the next two weeks. At least 3,000 residential customers will be upgraded to gigabit service.

EPB also reported this morning it has 55,000 broadband customers.

EPB is one of the nation’s most successful municipal fiber providers and is proving itself a major challenger to Chattanooga’s cable competitor Comcast and incumbent phone company AT&T.

AT&T’s U-verse is the least capable network in Chattanooga, because its fiber-to-the-neighborhood technology currently limits AT&T’s maximum broadband speed in the city to 24/3Mbps. AT&T says it is working on doubling or tripling speeds, but it still leaves U-verse far behind Comcast and EPB.

Comcast has lost at least 47,000 customers in Chattanooga, estimates EPB CEO Harold DePriest. Comcast originally had 122,000 customers on the EPB grid when EPB launched fiber broadband. This year, Comcast has about 75,000 customers and is expected to see numbers decline further in 2014 to about 60,000 customers.

Neither Comcast or AT&T is competing on price for higher speed broadband in Chattanooga. Comcast charges $114.95 a month for 105/20Mbps service and offers 505/100Mbps service in a handful of other cities, for $399.95 a month. Comcast is also currently testing the reintroduction of usage caps and overlimit fees in several markets.

AT&T charges $65 a month for 24/3Mbps service — its fastest — with a 250GB monthly usage cap, currently not enforced. For $5 more, EPB customers get 1,000/1,000Mbps with no usage limits or overlimit fees.

EPB has been criticized by conservative groups, bloggers, and its competitors that argue municipal utilities have no business being in the broadband business. Most of these groups predicted EPB Fiber would deliver a costly failure for Chattanooga utility ratepayers. The utility has also come under repeated fire from the conservative editorial page in the Chattanooga Times-Free Press, often from ex-editorial writer Drew Johnson, who was fired in August.

DePriest can afford to take the criticism all in stride. He has been with the publicly owned utility for 42 years and has seen Chattanooga transformed from its old manufacturing roots into an increasingly high-tech city, thanks in part to EPB’s robust broadband infrastructure that has exceeded even EPB’s expectations.

EPB’s original business plan called for 28,000 customers to break even, with an estimated ceiling of 43,000 customers that would be willing to sign up. EPB has already passed both estimates with additional growth anticipated. DePriest even predicts EPB could surpass Comcast — the city’s biggest broadband and cable TV player — in market share by the end of next year.

Far from being a financial failure, EPB Fiber is now covering the $19 million debt payment incurred by the utility’s electric business, protecting Chattanooga residents from an electricity rate increase.

EPB is also making money offering advice to other cities who want to launch their own publicly owned fiber networks and avoid making costly mistakes. Consulting services will net EPB more than $1 million over the next three years.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/EPB EPB 4th Anniversary Speed Increases Price Cuts for Gigabit 9-17-13.flv[/flv]

EPB CEO Harold DePriest announces speed increases and price cuts for customers to celebrate the utility’s fourth anniversary in the broadband business. (3 minutes)

Correction: The original story misreported Comcast’s upstream speed for its 505Mbps tier as 20Mbps. It is, as corrected above, 100Mbps.

Milwaukee’s Public, Educational, and Government (PEG) channels will soon be off Time Warner Cable’s analog basic cable lineup with little recourse for city officials upset about the channel losses.

Time Warner Cable is notifying analog cable subscribers in several Wisconsin cities about an upcoming digital conversion that will cut an average of a dozen channels from the analog lineup this fall. In Wisconsin, Time Warner is targeting several well-known cable networks like The Weather Channel and CNBC for the digital switch, as well as Ion TV over the air affiliates and several independent/religious broadcast stations.

The loss of PEG channels without any discussion with local officials has some Wisconsin community leaders upset, fearing significant viewing losses. Communities across Wisconsin lost their right to compel the carriage of the public interest channels after a 2007 deregulation bill essentially written by AT&T became law.

“It has been brought to our attention that a number of channels in the local Time Warner Cable ‘basic’ package will be shifted to the digital tier next month, meaning that most Milwaukeeans without a newer model television will need to obtain a digital to analog converter box in order to continue to view the entire basic cable package. We are both frustrated and perturbed by this news,” said Milwaukee Council members Jim Bohl, Robert Bauman, and Tony Zielinski. “Let’s not minimize who it is that will be most impacted by this move on Time Warner’s part either — people with older model televisions who only subscribe to a basic cable package. In short, this cut in service will have a disproportionate effect on residents within the city of Milwaukee.”

Time Warner Cable spokesman Michael Hogan made it clear the transition is something subscribers will have to get used to, because Time Warner is gradually moving all of its cable systems to digital only service.

“We are moving towards a higher-quality, digital-only experience by making channels that had been available in both analog and digital formats available in a digital format only,” said Hogan. “Delivering channels digitally frees up capacity in our network to deliver faster Internet speeds, more HD channels and On Demand choices, and other new services in the future. We began the process several years ago of moving towards a digital-only experience. All of our direct video competitors – including direct broadcast satellite providers and phone companies – already take advantage of the efficiencies of digital delivery and deliver all of their programming solely in digital format.”

The Sordid History of “Video Competition” in Wisconsin

The race to digital service to keep up with satellite providers and AT&T U-verse is not exactly the type of competition Wisconsin residents thought they would get from the passage of a 2007 statewide video franchise law advocated by AT&T.

According to the Center for Media and Democracy, the Wisconsin law is modeled on the American Legislative Exchange Council’s “Cable and Video Competition Act,” a model bill ghostwritten by AT&T for use in statehouses around the country. AT&T provided more funding for ALEC’s activities in Wisconsin from 2008-2012 ($55,735) than any other corporation. Supporters of the legislation promised it would lead to more competition, better customer service and lower cable rates.

Instead, it leaves Wisconsin communities with no recourse when cable operators decide to digitize or encrypt cable channels that city officials believe should be widely available to the public. Provisions in the law no longer permit local communities to have any say in a provider’s channel lineup, placement, or technology used to deliver the service.

Milwaukee Alderman Jim Bohl called the channel conversion a Time Warner bait-and-switch maneuver that will cut off residents’ access to city government. As for those promises of lower cable rates, Bohl rolled his eyes.

“I can only tell you it’s gotten worse,” Bohl told the Milwaukee Express. “This change would not have been looked at real happily by the council. I don’t think they ever would have done that if they were still accountable for their franchise agreement with the city of Milwaukee.”

Time Warner Cable subscribers without converter boxes who directly attach coaxial cable to the back of older television sets will be affected by the switch and will need to pay extra for a standard set-top box on each affected television in the home (roughly $7 a month each), or take advantage of a temporary offer from the cable company to supply a small digital to analog converter box that will be available for free for one year. After that, the smaller converter boxes will cost $0.99 a month each with no purchase option.

Without the boxes, Time Warner Cable subscribers will find themselves increasingly out of luck as the company gradually eliminates analog channels from the lineup.

Being AT&T’s Best Friend Can Be Rewarding

Supporters of AT&T’s video competition bill have been luckier than most Wisconsin cable subscribers.

Former Republican state Rep. Phil Montgomery, lead sponsor and claimed author of the 2007 video competition bill, was well compensated with a sudden $2,250 campaign contribution from AT&T the year the bill was introduced. Another $1,500 arrived from AT&T executives and one of their spouses in Texas and $1,500 from a senior AT&T executive in Wisconsin.

Before AT&T’s bill was written, the company barely knew Montgomery existed, donating a total of only $300 to his campaigns from 1998-2005.

After the bill became law, Montgomery spent his remaining years in the Wisconsin Assembly building a solid record avidly supporting AT&T’s public policy maneuvers, including a measure to deregulate basic phone rates and end oversight of telephone service quality by the state’s Public Service Commission.

Despite revelations Montgomery served as an ALEC board member and received contributions amounting to $10,800 from telecom companies, in 2011 Gov. Scott Walker appointed him to chair the PSC — very same agency Montgomery worked for years to disempower.

“He was very friendly to industry when he was a legislator, and was seen as carrying water for the telecommunications industry and the utilities,” said Mike McCabe, executive director of the Democracy Campaign. “Consumer advocates would naturally have concerns about somebody who seemed so supportive of industry now being in a position of overseeing those industries.”

Sen. Jeff Plale Takes Marching Orders from AT&T, His Chief of Staff’s Rap Sheet, a Freezer Full of Steaks and a Country Club for Cronies

AT&T’s biggest ally in the Wisconsin Senate was Jeff Plale, one of only a handful of Democrats — all pro-business conservatives — belonging to ALEC.

The patience of his district was tested after Plale began openly advocating for his corporate donors and claimed he could not understand why questions about his integrity were being raised by his opponents. Plale, after introducing AT&T’s companion video franchising bill in the Senate expressed he was shocked, shocked to discover he received more campaign contributions from AT&T and the cable industry than any other legislative Democrat. He added he did not know why AT&T’s Political Action Committee had suddenly maxed out on its campaign contribution two years before the next election.

Plale’s close working relationship with AT&T evolved inside of his office.

In 2003, Plale hired Katy Venskus, a charged felon, to raise funds for his election campaign. Despite pleading no contest to siphoning off more than $12,000 from an abortion rights organization and being caught up in a scandal over illegal campaign work for another Democrat, Venskus was appointed Plale’s chief of staff and would quickly become the point person for AT&T’s video competition bill in Plale’s office, working closely with AT&T to adjust the bill’s language to the company’s liking and help coordinate its movement through the Senate.

The successful passage of the bill would prove personally lucrative to Venskus when she left Plale’s office to join lobbying firm Public Affairs Co., of Minneapolis just one month after AT&T’s bill was signed into law. One year later, she took on AT&T as a lobbying client.

In 2009, Plale and AT&T closely collaborated to write another deregulation measure to be introduced in the Wisconsin legislature, this time deregulating phone rates, making provision of landline service optional, and gutting service oversight. By then, AT&T Wisconsin considered Venskus an on-contract lobbyist.

The irony of a felon serving as the chief of staff for a Wisconsin state senator or as a registered lobbyist was not lost on the Milwaukee Express’ Lisa Kaiser.

“Despite being a felon, Venskus can affect public policy at the highest levels as a registered lobbyist,” observed Kaiser. “Yet she couldn’t be licensed to become a day care provider.”

According to e-mails and draft copies of the telephone deregulation bill obtained from the Legislative Reference Bureau and interviews conducted by The Capital Times, a number of meetings —  “too numerous to count,” according to Plale’s chief of staff, Summer Shannon-Bradley — occurred with AT&T lawyers and executives and several other key industry stakeholders to work on the bill.

One important meeting in November 2009 included this attendance list: Andrew Petersen, director of external affairs and communications with telephone company TDS; William Esbeck, executive director of the Wisconsin State Telecommunications Association (WSTA) – a telecom industry lobbying group; that group’s attorney, Judd Genda; and AT&T attorney David Chorzempa.

E-mails and other correspondence between those at the meeting and Plale’s staff show slashes or check marks next to sections of the proposal that attorneys for AT&T and the WSTA suggested should be changed.

“It’s like lawmakers looked around and said, ‘These are the companies affected. So sit down with the drafters and make a bill,’ ” Barry Orton, a UW-Madison telecommunications professor told the Times. “The public interest isn’t represented. How could it be? Nobody was there to represent them.”

Life got tougher for Ms. Venskus a few months later when she was charged with felony theft and felony identity theft on suspicion of making $11,451 in improper purchases with her Public Affairs credit card, including a freezer full of steaks, according to the criminal complaint filed in Dane County court. She repaid the charges, but her contract to work for AT&T’s interests was suspended.

That September, Plale wore out his welcome in the 7th District serving southern Milwaukee and lost to primary challenger Chris Larson, who contended Plale was far too conservative and cozy with AT&T for his district.

Plale would land on his feet when, after siding with Republicans on a lame duck session vote to stick it to the state’s unions, he joined the administration of Republican Gov. Scott Walker as the administrator of the Division of State Facilities — a $90,000 a year job.

“Instead of seeking out the best and brightest, this governor is busy creating a country club for cronies,” Marty Beil, executive director of the Wisconsin State Employees Union, told the Wisconsin State Journal. “When he says ‘open for business’ and then appoints people like Plale, he’s obviously saying that he doesn’t draw the line at the world’s oldest profession.”

AT&T’s latest effort to rid itself of universal service obligations and a commitment to offer discounted phone service to more than one million low-income Californians has been temporarily stopped in the state legislature after advocates for the poor objected to the bill.

AB 1407 would have made major changes to the state’s regulations governing LifeLine, the low-cost phone service for the poor. In its place, both AT&T and Verizon advocated a voucher program that would effectively raise rates for everyone, gut regulatory authority to limit future rate hikes, and open a loophole that could allow phone companies to unilaterally abandon landline service in favor of wireless.

The bill, introduced by Assemblyman Steven Bradford (D-Gardena), would drop the current LifeLine program offering landline service at rates not to exceed $6.84 a month and replace it with a fixed amount voucher worth $11.85 a month that could be applied to reduce a wireless or landline provider bill. AT&T says the proposal will make it easier for consumers to adopt wireless LifeLine phone service and cut burdensome oversight and rate regulations.

Consumer groups argue the legislation delivers all of its benefits to phone companies like AT&T while eliminating consumer protection regulations. The California Public Utilities Commission (CPUC) also complained the bill could end guaranteed quality landline service, potentially permitting AT&T and other companies to stop providing wired phone service and force customers to wireless services instead.

The little-known and less understood bill moved quickly through the Democratic-controlled legislature over the summer and on July 9, AB 1407 passed a key Senate committee in a 6-1 vote, well on the way to passage in the state Senate. Consumer groups and low-income advocates learned of the bill and launched a broad-based opposition campaign including the Coalition for Economic Survival, AARP, the California Labor Federation and The Utility Reform Network. The Howard Jarvis Taxpayers Association, a tea party group that vigilantly monitors the state legislature for attempts to circumvent Proposition 13 limits on tax hikes, also opposed the measure because it adds a 3.3% state-mandated surcharge on all intrastate telephone services, also applicable to Voice over IP providers.

AT&T found a good friend in Bradford, who has advocated for the company’s interests since AT&T became his biggest campaign contributor by far, donating more than $40,000 to his re-election coffers.

Larry Gross of the Los Angeles-based Coalition for Economic Survival described Bradford as a “front person for AT&T.”

Bradford and AT&T’s lobbyists, dominating earlier discussions on AB 1407, were overrun at an Aug. 19 hearing when a group of tenants from San Francisco’s Central City SRO Collaborative (CCSRO) appeared and opposed the bill and its impact on the poor.

BeyondChron noted Bradford was so confident about the momentum his AT&T-ghost-written bill had received, he waived his testimony. Minutes later, he discovered the growing number of speakers lined up to oppose the bill. Bradford then attempted to rebut the surprising opposition, but it was too late. The tenants persuaded the majority on the Senate Appropriations Committee to suspend further consideration of the bill for now.

The proposed legislation had support from a number of elected officials, almost all recipients of AT&T campaign contributions.

Nearly all the non-profit groups supporting AB 1407 also received direct financial support from AT&T and/or Verizon. Among the first 20 supporters investigated by Stop the Cap!, all but a few turned out to have direct financial ties to either AT&T, Verizon, or both:

• Asian Pacific Islander American Public Affairs Association: AT&T is a “major sponsor.”
• Bakersfield Homeless Center: AT&T is a funding partner.
• Brotherhood Crusade: AT&T is a “silver partner.” Verizon, which also supports the measure, is a “platinum” donor.
• California Black Chamber of Commerce: Verizon is a “corporate member.”
• California Hispanic Chamber of Commerce: AT&T is a corporate member.
• California Partnership to End Domestic Violence: Verizon cut them a check for $130,000 to become a partner.
• Center for Fathers and Families: AT&T is a sponsor.
• COFEM: Verizon is so important to their mission, the company’s logo is on the group’s home page.
• Community Youth Center of San Francisco: AT&T is a “diamond sponsor.”
• Congress of California Seniors: Verizon is one of their “key sponsors.”
• Eskaton Foundation: AT&T is a “level 3” donor.
• Florence Douglas Senior Center: AT&T is a “primary sponsor.”

We stopped looking after researching the first 20 groups, but it is highly likely the others will also have similar ties.

Although Assemblyman Bradford repeatedly has claimed there is no intent to eliminate or diminish universal service “Carrier of Last Resort (COLR)” obligations that require basic phone service be provided to any California resident requesting it, the CPUC found ambiguous language in the bill that muddies the author’s intent. One section of AB 1407 states that “any lifeline provider, including a local exchange carrier, may use any technology, or multiple technologies, within the provider’s service territory.” This could be interpreted to allow a provider to meet its basic service obligation with wireless technology that may not meet the CPUC’s definition of basic landline service.

The legislation repeatedly states LifeLine providers should only be obligated to offer the minimum service elements as required by the FCC. Those provisions ignore the CPUC’s own rules and AT&T could theoretically prevent a wireless LifeLine customer from switching back to landline service because the wireless alternative is considered good enough.

Other provisions in the bill are tailored primarily for the benefit of wireless providers, including AT&T, and introduce new fees and charges for services that many customers would assume are included in the price of basic service:

• Flat rate local calling is eliminated;
• Providers can charge customers extra or deduct wireless minutes for 911 calls, calls to toll-free 800-type numbers, and incoming calls of all kinds;
• Providers can require a deposit for LifeLine customers and all former exemptions from taxes, surcharges and fees are canceled;
• The requirement to provide a toll-free method to reach customer service is eliminated;
• Providers can charge extra or deduct minutes for use of the California 711 Relay Service;
• Provisions requiring providers to offer surcharge-free outgoing calling service, touch-tone dialing, directory assistance (for LifeLine customers), access to an operator, a listing in the telephone directory, and a copy of the White Pages are eliminated.

The bill is probably shelved for the rest of this year but will likely return for consideration in 2014.