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

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

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

The St. Louis Post-Dispatch counted the money:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A Pennsylvania police chief is in hot water with his wife after AT&T combed through his calling records at her request and confirmed what she has suspected — he was calling an ex-lover on his cell phone and allegedly lying about it.

Garold Ray Miller, police chief of Industry, filed suit against AT&T for disclosing his call records to his wife, whose name was not on the cell phone account.

The lawsuit makes public the formerly private affair, and it’s now fodder for the Pittsburgh Post-Gazette:

According to the complaint, Mr. Miller’s wife confronted him in the spring of 2008 in regard to his communicating with a woman about a criminal investigation.

“Miller denied having communicated with the woman in question, as he had known the woman growing up and had also dated her in high school, and he did not wish to alarm his wife,” the lawsuit said.

However, it continued, Mr. Miller’s wife insisted he was lying and later told him that she had gotten access to his phone records from AT&T to prove it.

“His wife also revealed that the [AT&T] representative conducted a number search on his records, in order for her to confirm her suspicions that he was communicating with this woman.”

The complaint goes on to say the relationship between Mr. Miller and his wife became severely burdened. Further, when they went out for drinks one night, “Miller’s wife became violently ill, confessing that she had been troubled by her suspicions.”

Because of the invasion of privacy by AT&T, Mr. Miller contends, he suffered psychological pain and suffering, as well as humiliation, shame, embarrassment, self-revulsion and damage to his self-esteem.

AT&T won’t comment on the case except to say it values its customers and takes its obligation to protect customer data very seriously.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WTAE Pittsburgh Industry Police Chief Suing ATT For Releasing Phone Records To Wife 7-28-10.flv[/flv]

WTAE Pittsburgh covered the lawsuit between a Pennsylvania police chief and AT&T over the disclosure of his cell phone calling records.  (2 minutes)

Wal-Mart is expanding its prepaid wireless service Straight Talk to include new phones that will work on AT&T’s network.

Straight Talk, operated by TracFone,  currently resells Verizon Wireless service.  Adding AT&T coverage expands service into parts of the country where Verizon signals don’t make it.  AT&T’s network reaches larger parts of states like Wisconsin, West Virginia, and New Mexico than Verizon does.

Straight Talk phones that currently work with Verizon are not interchangeable with AT&T service, however.  Verizon uses the CDMA standard for its network, while AT&T uses GSM.  The two are not compatible.

Wal-Mart’s prepaid service is appealing to consumers who do not require the latest handsets and seek wireless service without a two year contract or expensive add-ons.  Straight Talk delivers cheaper cell service than Verizon does, with both using Verizon’s network.  The same will be true as AT&T service is added.

Straight Talk currently offers two service plans

Wholesale wireless service, typically sold to prepaid providers, delivers enhanced profits to big carriers like Verizon and AT&T without having to spend money on customer support.  Many prepaid providers sell older, more basic handset models that may have been in excess supply, are reconditioned/used, or are inexpensive to provide consumers.

Windstream CEO Jeff Gardner told a cable news audience Tuesday that the rural phone company already supplies broadband to 100 percent of its service areas where the service is “economically feasible” to provide.  Any additional expansion will only come with the assistance of the federal government’s broadband stimulus program.

“We’re in 23 states — mostly rural markets, so broadband reach is incredibly important to us,” Gardner said on CNBC’s Fast Money program.  “We’re getting to 90 percent of our customers today; in fact, we’ve built out to every customer that’s economically feasible, so the broadband plan that has been announced by the administration is critical to us getting to that last 10 percent.”

In 2006, when Windstream was created from the spun-off landlines Alltel used to own, broadband and business customers represented 35 percent of Windstream’s revenue.  Today that number has jumped to 53 percent.

That’s not surprising to many telecom analysts who suggest broadband will be key to the survival of rural landline phone companies, especially those adjacent to larger communities where cell phone providers extend coverage.

Windstream has applied for $238 million in broadband stimulus money and claims it is in the best position to spend that money to extend broadband to its most rural customers.  It also has a captive customer base in many areas, where no cable competition exists and wireless service is spotty.

Gardner promotes the results of their de facto monopoly, noting that while Verizon and AT&T lose up to 11 percent of their landline customers each year in certain areas, Windstream has lost just three percent.

Still, many think landline phone companies are ultimately a dying business and a real bad investment.  Except Gardner admits the most important reason why people buy stock in his company is the huge dividend payout.

“Most importantly, what people buy our stock for is our dividend,” he said. “We pay $1 dividend — an 8.5 percent yield, so our cash flow is something our investors are always tuned into.”

One of the show hosts acknowledged the huge dividend, but suggested that may be troublesome down the road.

“The dividend is interesting, but it’s getting to the point of where it might be a little too interesting, if you know what I mean,” said Guy Adami.

Adami may be referring to the practice of paying out a larger dividend than a company earns in revenue, something that can rapidly spiral a company into bankruptcy.

[flv]http://www.phillipdampier.com/video/CNBC Windstream CEO Jeff Gardner 7-27-10.flv[/flv]

Windstream CEO Jeff Gardner appeared on CNBC’s Fast Money program to talk up Windstream’s prospects for broadband, especially if the government delivers on the company’s request for $238 million in stimulus funds to extend service to its most rural customers.  (4 minutes)

“The World Company is complimented that a number of companies have expressed interest in its Sunflower division over the years. This continues today. There is no definitive agreement concerning Sunflower with any company at this time.” — Dolph C. Simons Jr., Chairman, The World Company

Those words were reported Wednesday in a brief story published by the Lawrence Journal-World is response to an article published by cable trade magazine Multichannel News that Sunflower Broadband was close to a sale to Knology.

The denial of a definitive agreement does not mean the company isn’t close to reaching one, which was the original claim in the article written by Mike Farrell.

The non-denial denial didn’t dampen excitement by several Sunflower Broadband customers who were delighted to learn of the potential ownership change for the usage-capping broadband provider.

Some have stayed with AT&T’s DSL service just to escape Sunflower’s pricing, which one reader called “insane.”

Another claims AT&T’s upgrades have helped improve broadband service: “AT&T service has improved greatly…not to mention the price blows Sunflower away. Though AT&T will not tell you that you don’t have to have their modems. Go to Best Buy and get a third party modem.”

However, the broader implications of a sale of the cable company are worrying some Lawrence residents pondering the future of the hometown newspaper, the aforementioned Journal-World.  Sunflower Broadband and the LJW share a common owner — The World Company.  While the cable industry remains very profitable, many newspapers are not.

Phil Cauthon added his views to the Lawrence Broadband Observer on the topic:

I can’t see how this is anything but ominous for the Journal-World. Sunflower has a been a boon to the otherwise sinking newspaper ship. Unless some of the money from this sale is set aside as a foundation to support the newspaper over the long term, I don’t see how the Journal-World survives post-Knology sale. That Dolph Simons is still alive during a sale bodes well for that kind of prospect. Otherwise, I hope the Kansas City Star sees fit to serve Lawrence as a primary market—maybe even purchasing the LJW—with more than just a page or two of “metro” coverage.