For months now, several groups purporting to represent the interests of minorities have busily been attacking Net Neutrality as beside the point for the poor and unserved consumer who has been left out of the broadband revolution.  To varying degrees, several of these groups have been spouting broadband industry talking points to the Federal Communications Commission, members of Congress, and the public at large.

For them, and the profitable broadband industry they indirectly represent, providing access at affordable prices is much more important than making sure providers don’t lord over the network they provide to customers.

Access vs. Openness

Consumers are perplexed by this either/or proposition.  For us, both issues are vitally important.  In urban, income-challenged areas, affordability is a crucial issue.  In rural areas, access to anything resembling broadband comes before worrying about the price.  For all concerned, making sure the Internet is not subject to corporate content control, either through direct censorship or through the far-more-common practice of pricing and policy controls, is just as important.

Providers have their self-interest on display when they promote broadband expansion — they want to receive the public dollars available from the broadband stimulus package to pay for that expansion.  Of course, every step of the way they have their fingers all over the process, from broadband mapping that protects incumbents from potential competition, defining what constitutes broadband to be as slow and as cheap to provide as possible, to implement usage rationing through Overcharging schemes like usage limits and usage-based billing, and to advocate for public policy that keeps the Money Party of fat profits running as long as possible without oversight.

The entry of minority interest groups into the debate is nothing new.  Groups of all kinds, including many who one would think wouldn’t have an opinion on Net Neutrality, are all part of the discussion.  Debates ensue, statements are fact-checked, back and forth discussion ensues.  What disturbs me is the small handful of groups who are willing to deal the race card when their own views and statements are challenged and they are threatened with losing the argument. Ill-equipped to argue the merits of their case in detail and withstand the scrutiny of fact-checking, some have introduced race into the debate to obfuscate the issues.

While I don’t doubt their sincerity and passion advocating for increased access and affordability, too many of these groups hurt their own case by accepting generous contributions (or advisory board members) from the telecommunications industry.  Consumers who witness the near total alignment of views between these groups their corporate benefactors are right to be concerned.  Many are asking if those views represent true conviction or “a dollar a holler” advocacy.

The Black Agenda Report, which created this graphic, ponders the same questions many consumers are asking

As Stop the Cap! documented just a few months ago, Broadband for America is a great example of industry-funded astroturf in action.  Large numbers of groups with no apparent connection to the broadband policy debate have found their way onto the roster of members.  From a cattle association to a Native American group that also has a burning interest in sharing their views about corporate jet landing rights, the one thing in common with virtually every last one of them was a financial contribution and/or board member working for big cable or telephone companies.  Thus far, debating a cattle association has not brought charges of being anti-cow, although I suspect consumers are anti-bull.  Debating the merits of Net Neutrality with Native American groups has not brought charges of anti-Native American bias.

Stop the Cap! itself has been on the receiving end of racial rhetoric offered by one of the anti-Net Neutrality advocates out there, Navarrow Wright.  Wright is a former corporate executive at Black Entertainment Television, and spends his days now as a self-proclaimed social media and branding expert. Last year, after exiting as CEO of Global Grind, a hip hop social network, Wright launched Maximum Leverage Solutions, which claims to be a full service consulting firm specializing in social media strategy and Internet Consulting.

Just a few months later, Wright suddenly discovered a big interest in the concept of Net Neutrality.  While he doesn’t disclose his client list, would it surprise anyone if a telecommunications company hired his services for their own “social media strategy?”

Since last fall, Wright has been generating a mix of provider talking points, Google bashing, and attacking groups that support Net Neutrality.  He’s called supporters of an open Internet “digital elites,” the FCC a player of “dangerous games” by ignoring the anti-Net Neutrality public, Free Press a group that wallows “in crazy claims and race-dividing rhetoric,” and tries to connect support for Net Neutrality as somehow representing opposition to increased broadband adoption.

Challenging and debunking his talking points isn’t difficult — they are precisely the same ones the broadband industry has used for several years now.  We invited Wright to a full, in-depth discussion about the merits of Net Neutrality and broadband adoption.  We even got the discussion started, but that’s exactly where it ended.

Wright is also incredibly defensive about the issue of industry-backed mouthpieces and astroturf efforts in general.  Suggesting Wright’s views are inaccurate brings his resume in response, which I suppose was designed to impress readers with suggestions of his built-in expertise, belied by his silence on these issues prior to last year.  In Wright’s original comment, he took our comments about economically disadvantaged Americans and made it an issue of color:

Our piece:

The letter represents the groups’ concerns that broadband for many in America is simply not available, especially for the economically disadvantaged.  They’ve been swayed by industry propaganda to characterize Net Neutrality as a threat to addressing the digital divide by making service ultimately even more expensive.

His response:

Phil, I know (at least I hope) your intent wasn’t to suggest that people of color have been “swayed by industry propaganda” and aren’t capable of thinking for ourselves on technology issues.

James Rucker, executive director of Color of Change added to the debate in late January, wondering why some civil rights groups are only too willing to support discredited industry talking points and advocate against Net Neutrality.

Rucker discovered the same thing we did.  Challenging these groups to explain their positions brings forth repetitious inch-deep talking points and total silence when a rebuttal is offered.  If pushed, they obfuscate with claims their views are being disrespected, when in reality they are only being fact checked.  Perhaps inconvenient, and even slightly embarrassing, but it’s completely appropriate for consumers to ask whether a conflict of interest exists when a group advocates for the positions of the same industry that is sending them big contributions.

The risk, of course, is to tie an organization’s good name to demonstrably false provider propaganda that some groups are willing to repeat, nearly word for word.

Take for instance Wright’s claim that Net Neutrality will force providers to spend money they would otherwise invest for the benefit of the rural, the downtrodden, and the unserved:

That brings me to the other corporate interests: the Internet service providers. It is the ISPs who must invest in, upgrade, maintain and build out the networks that allow us to receive these cool applications. While I don’t find the network side as sexy as the content side, I do know that we have to have it and ISPs need capital to build and maintain it. So the question remains who is going to pay for maintenance and upgrades to the network if Google gets a free ride? Basic economics tells us that if government requires ISPs to give Google a free ride, there’s only one other place to look for the money: consumers like you and me. What’s more, there are those who want to make it even more unfair by insisting that your big-bandwidth-using neighbor should not have to pay more than you, even if all you want to do is check email and watch some YouTube. Who will all of this hurt the most? Low-income consumers.

The only color that really matters here is green

Wright doesn’t know his American telecom history.  Let’s discuss this fiction:

1. Bruce Dixon, a writer for the Black Agenda Report says it better than anyone: “Phone companies invented the digital divide more than a century ago as their core business model, preferring to extend service to affluent areas where they could levy premium charges, rather than building networks out to reach everybody.”  The cable television industry “franchise” requirement came as a direct result of cable industry redlining, the practice of wiring wealthy neighborhoods for cable while bypassing urban and rural areas deemed “unprofitable.”  It’s the same story for broadband, and Net Neutrality is beside the point.  The number crunchers look for Return On Investment (ROI) when considering who gets on the right side of the digital divide.  If they can’t make a killing on you, they’re not going to provide you service.  If you can’t afford their asking price, which is increasing regardless of Net Neutrality, why serve you?  Ultimately it is consumers who overpay for these networks, priced well above cost, generating literally billions in profits.  Why ruin a good thing with altruistic broadband expansion at a fire sale price?
2. Regardless of what Google is doing, providers are seeking new ways to further monetize broadband service, enriching themselves even further.  Prices go up even as the costs to provide the service go down.  The old chestnut about the next door neighbor being a usage piggy is just more of the same “us vs. them” propaganda from providers who want consumers to fight amongst themselves while they run to the bank with the money.  Grandma doesn’t want her broadband service limited either, and she’s way too smart to believe a provider promising dramatic savings for less service from companies that jack up her rates year after year.
3. The best way to guarantee affordable access to broadband service is to develop a national broadband plan that provides the same kinds of “lifeline” services already available for economically disadvantaged phone customers, legislative policies that force markets open to additional competition, government oversight to ensure providers are required to provide service throughout their respective service areas, and stimulus or Universal Service Fund assistance for projects that assure access to those who simply will never pass ROI tests.  Or we can solve everything by not passing Net Neutrality?  Please.
4. Google doesn’t have a free ride.  First, consumers -pay- providers for connectivity.  Ultimately, they are the customers — content producers are not.  Nothing prohibits an ISP from offering hosting services to content producers at competitive prices.  If Google, Amazon, Netflix, or Hulu want to host their content on servers owned by Verizon, Comcast, Time Warner, or AT&T, nothing stops them.  Google pays for its own connectivity to the Internet.  Customers pay for accessing it.  Now providers want to get paid again.  It’s like triple-charging for snail mail – you pay for a stamp to mail it, the person you wrote pays to receive it, and the airline that flew the letter cross country has to pay to transport it.

Remember, it’s the content that drives broadband adoption. ISP’s honestly don’t fret as much about traffic as they claim.  They just care whether they can own it, control it, and profit from it.  The evidence to back this up comes from cable and phone companies in a big hurry to stream video content over their TV Everywhere projects.  Nothing consumes bandwidth like online video, yet there they are enthusiastically embracing it.  They have to, because if they don’t control it, it could eventually lead to people dropping their cable TV subscriptions in favor of online viewing.

Wright’s blog promotes another industry favorite — the dreaded phony “exaflood” which threatens to bring chaos and disorder to our online world… unless we totally deregulate broadband and let them do whatever they want to “solve it.”  That’s more of the same.  We’ve seen the results of that for more than a decade now, and the very digital divide that Wright complains about comes as a direct consequence to letting broadband providers serve, or not serve customers as they please at the prices they want.

Wright and other civil rights groups can throw as many race cards as they like against consumers who see right through their corporate-backed agenda.  That’s because consumers know Net Neutrality isn’t an issue of black or white.  The only color that really matters here is green.

Exasperated consumers fed up with a two party system feasting on big corporate campaign contributions buying legislative favors from Washington have a point.  With a Supreme Court decision ripping the limits off the corporate ATMs installed in the halls of Congress, corporate interests will now spend more than ever to keep their agendas front and center among lawmakers.

Some consumers demand an end to the money-influence machine in Washington with public financing of campaigns, an allotment of free advertising, and strict ethics laws to prohibit corporations from buying favors from elected officials.  Others have joined a “tea party” movement that believes a wholesale slashing of the size of the federal government will help accomplish the goal of keeping government out of our lives.

The demand for real change is sincere, even if the proposed solutions differ. The debate comes after years of watching common-sense, pro-consumer public policy get watered down or blown out of the water after lobbyists descend on the Capitol like locusts swarming a field of wheat.

It’s unfortunate that those swarms don’t just wreak havoc on lawmakers — they’ve also quietly infested the “tea party” movement that advocates reform.

It’s akin to the Boston Tea Party being sponsored and organized by the East India Company.

After this weekend’s “tea party” convention in Nashville, it’s more apparent than ever that teabags come with corporate strings attached.

Perhaps that shouldn’t be surprising, considering the modern reincarnation of the “tea party” was channeled by a business news network. About a year ago, CNBC reporter Rick Santelli ranted on air about the federal government bailing out Americans underwater on their mortgages after the housing market collapsed.

“We’re thinking of having a Chicago tea party in July,” Santelli offered.

For Stop the Cap! readers, the names and groups affiliated with the “tea party” movement are already familiar.  FreedomWorks’ Dick Armey (R-TX), the former House majority leader in Congress openly considers himself a leader in the movement.  But his day job involves creating fake “grassroots” campaigns for corporate interests, including Verizon and AT&T.  Phil Kerpen from Americans for Prosperity promptly registered “taxpayerteaparty.com” and joined the movement while continuing to represent the broadband industry against Net Neutrality and against municipal broadband network competition.

Kerpen’s group should be called “Americans for the Prosperity of Big Telecom.” They oppose Net Neutrality to the degree Kerpen appeared twice on Glenn Beck’s Fox News show, mostly as an enabler of Beck’s paranoid rantings about Net Neutrality.  After two sessions of Beck’s chalkboard conspiracy theater, the host had Kerpen nodding in agreement to the proposition that Net Neutrality was Maoist.  The group also harassed North Carolina residents with robocalls opposing municipal broadband service that would bring fiber optic connectivity to residents.

Americans for Prosperty's Phil Kerpen on Glenn Beck's show opposing Net Neutrality

Wherever common-sense pro-consumer public policy threatens to become law, the corporate-backed lobbying groups take the anti-consumer view and hoodwink consumers into supporting the corporate agenda.  Trying to convince Americans they are better off taking the anti-consumer position takes a lot of money.  You can’t argue your position beneath your corporate banner.  That’s too transparent.  It’s much more effective to spend tens of millions on creating fake “grassroots” groups with no visible ties to their corporate benefactor.  You need to fund so-called “independent” research groups to cook up phony reports that prove pre-conceived corporate positions.  Writing big fat checks to elected officials can’t hurt either.

Billions in profits are at stake.  In 2008 it was the oil industry and the ridiculous spike in energy prices.  Millions were spent to keep oil and gas interests free from meddlesome Washington and their pesky investigations.  In 2009, the health care industry spend tens of millions of dollars to fight health care reform, while Wall Street bankers tried to keep up with tens of millions of their own to preserve the special favors they earned from being “too big to fail.”

Right after big oil, health care, and banks comes the telecommunications industry.

Last Friday, Verizon had the dubious distinction of appearing on USA Today’s top-20 big spenders.  The only good news is the company only spent $17,820,000 in 2009 on their lobbying efforts.  That’s down from 2008, when Verizon spent $18,020,000.

Not to be too outdone, the cable television industry handed over part of your rate increase to their own lobbying machine.  In 2008, the National Cable and Telecommunications Association spent $14,500,000.  But your rates went up in 2009, and so did their total spending on an army of lobbyists — $15,980,000 worth.

That buys a lot of plastic grass.

Where does the money go?  Among Verizon’s benefactors and friends:

Consumers for Cable Choice: Common Cause notes Verizon spent $75,000 in just one year on this group, which fights for statewide cable franchises, mostly benefiting phone company cable TV from Verizon and AT&T.  While this short cut may bring consumers a choice in providers, it doesn’t bring them any savings.

FreedomWorks: Adamantly opposed to Net Neutrality, FreedomWorks also backs those statewide video franchises, thanks to generous fees paid by AT&T and Verizon to take those views.

The Progress and Freedom Foundation: They define “progress” much differently than consumers.  Opposed to a-la-carte pricing for cable television packages (letting you choose and pay only for the channels you want), P&F also hates Net Neutrality and the concept of government issuing franchises for cable and telco TV in the first place.  Let them dig up your streets and backyards without oversight!  The group receives so much corporate telecommunications money, it would be easier to list the companies that don’t cut them a check.

The American Legislative Exchange Council: They exchange Verizon’s money in return for strong opposition to Net Neutrality.  They are at the forefront of opposition to municipal broadband networks, with a staff of lawyers who “helpfully” draft legislation for state lawmakers to ban such networks.  Part of the broadband protectionist racket, ALEC makes sure even unprofitable, unserved areas stay that way.  ALEC believes Net Neutrality will harm states’ economies, which would be true if a state was defined as a corporate broadband provider.

New Millennium Research Council: They “develop workable, real-world solutions to the issues and challenges confronting policy makers, primarily in the fields of telecommunications and technology.”  This so-called “think tank” issues suspect reports mostly for the benefit of Congress, which some members use as cover when voting against their constituents and for the provider.  You’re certain to hear elected officials railing against pro-consumer policies quoting liberally from these industry-backed “think tanks,” which provide a patina of independent legitimacy to corporate-backed propaganda. Need to scare people with stories about an overburdened Internet that will crash and burn without “network management” that slows service and enriches providers?  No problem! (That the group has had Verizon employees working for them doesn’t hurt either.)

Broadband for America: This relatively new group is infested with Verizon and AT&T contributions from top to bottom.  In addition to direct contributions from big telecom interests, virtually every single public interest non-profit group on their roster has an AT&T or Verizon lobbyist on their board of directors, or accepts generous contributions from the telecom industry.

Frontier of Freedom: Another so-called “free market” group advocating deregulation, FF doesn’t disclose its donors and considers itself independent, but a familiar pattern belies that.  Frontier of Freedom advocates statewide video franchises and has even run advertising promoting telco-friendly legislation in states like Texas.  The cable industry was displeased because Frontier of Freedom used to represent their best interests but suddenly flipped sides in 2005.  Money talks.

MyWireless.org: “MyWireless.org is a national non-profit consumer advocacy organization” the site declares, without bothering to disclose it is really a sock puppet of the cell phone industry’s trade group CTIA – The Wireless Association.  Ostensibly interested in stripping taxes and government-mandated surcharges off of cell phone bills, the group also opposes Net Neutrality and consumer protection laws.  It’s a bit difficult to call yourself pro-consumer when you oppose a California and Minnesota consumer Bill of Rights that would have required a 30 day penalty-free trial of cell phone service, expanded a toll-free complaint hotline, set minimum service standards, and required easy-to-understand billing.

NetCompetition: Another front group bought and paid for by the industry it seeks to zealously protect.  Adamantly opposed to Net Neutrality, NetCompetition also spends its time Google-bashing and attacking Free Press, seen as one of the strongest advocates for Net Neutral policies and consumer protection from provider abuses.  Their member page explains everything.

The unfortunate part of all this is that many participants of the “tea party” movement seem blissfully unaware of the corporate manipulation of their movement, all happening barely beneath the surface.  Millions of dollars are flowing into the bank accounts of astroturf groups doing all they can to channel public anger against Washington into something they can use to benefit their corporate backers.  The end result may be the ultimate feedback loop — consumers already angered by Washington not listening to their needs and concerns compounded by providers picking their pockets.  That bitter tea may be easy to brew but impossible to swallow.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Phoney Baloney Ad.flv[/flv]

Phoney Baloney: The National Cable & Telecommunications Association, the cable industry lobbying group, ran this hissyfit ad to combat Verizon and AT&T outmaneuvering the cable industry over statewide video franchising laws. (1 minute)

The issue of copyright enforcement is a thorny one, and Stop the Cap! doesn’t spend a lot of time dwelling on it, except when it sneaks its way into our issues.

CNET News started a brush fire yesterday when they quoted a Verizon representative who claimed the company had been kicking off users who use peer to peer (typically torrent) software to exchange copyrighted material.  The gist of the piece was that Verizon has been receiving copyright infringement notices from copyright enforcers and they’ve been notifying their customers to stop or risk service suspension.

“We’ve cut some people off,” Verizon Online spokeswoman Bobbi Henson told CNET. “We do reserve the right to discontinue service. But we don’t throttle bandwidth like Comcast was doing. Verizon does not have bandwidth caps.”

With that purported admission, the story was off and running.  We received several news tips about it from readers.

But this morning, Henson claims she was misquoted and the company has not actually suspended anyone’s account, but reserves the right to do so.

For now, anyway, it appears there has been no policy change at Verizon.  The company dispatches canned e-mail messages to account holders targeted in copyright complaints asking them to stop the infringing activity.  Verizon claims most don’t have to be warned twice.  That’s a commonly found policy at most providers.

The movie and music industry have reduced the number of lawsuits it brings against alleged violators, but that doesn’t mean they’ve given up the fight.

Instead, both industries have launched lobbying and astroturf efforts to inject copyright protection into the broadband expansion and Net Neutrality debates.  The Arts+Labs “think tank” was a perfect example of that, trying to conflate Net Neutrality with piracy in the music industry’s dog and pony show performance at the New York City Council Technology In Government Committee hearing regarding Net Neutrality.

The industry hopes it can insert something akin to a “three strikes” provision into telecommunications law that would bar repeat copyright violators from having Internet access. Unfortunately, history has shown that the bar has been set so low as to what represents “proof,” a mere allegation under these policies could be sufficient to put your finances and potential broadband access in peril.

Phillip Dampier

In a remarkable statement to the Federal Communications Commission in Washington, AT&T has joined Verizon in predicting the imminent demise of Ma Bell’s classic telephone network.

AT&T writes in its 30 page comment, “That transition is underway already: with each passing day, more and more communications services migrate to broadband and Internet Protocol (IP)-based services, leaving the public switched telephone network (“PSTN”) and plain-old telephone service (“POTS”) as relics of a by-gone era.”

AT&T claims abandoning the old legacy phone network would help the company devote its full resources into staying relevant by constructing a broadband, IP-based network that would deliver voice, data, and video to consumers, presumably over its U-verse platform.  That, according to AT&T, could help the company achieve universal broadband coverage in its service areas, but only if investment-friendly regulations are supported by Washington policymakers.

The Commission has been charged by Congress with formulating a National Broadband Plan that will result in broadband availability for 100% of the United States. That auspicious goal is within reach, but […] will not be met in a timely or efficient manner if providers are forced to continue to invest in and to maintain two networks. Broadband is dramatically changing the way Americans live, work, obtain health care, and interact with the government. Congress and the Commission have rightly made universal broadband access a core national priority. But achieving this goal will take an enormous investment of capital. Private investment from network operators has brought broadband access to over 90% of Americans, and these operators will continue to play a pivotal role in bringing broadband to the remaining 8-10% of citizens who do not currently have broadband access. It is accordingly crucial that the Commission pursue forward-looking regulatory policies that remove disincentives to private investment and encourage operators to extend broadband to unserved areas.

While broadband usage – and the importance of broadband to Americans’ lives – is growing every day, the business model for legacy phone services is in a death spiral. Revenues from POTS are plummeting as customers cut their landlines in favor of the convenience and advanced features of wireless and VoIP services. At the same time, due to the high fixed costs of providing POTS, every customer who abandons this service raises the average cost-per-line to serve the remaining customers. With an outdated product, falling revenues, and rising costs, the POTS business is unsustainable for the long run.

AT&T cites a growing number of Americans cutting their wired phone line service — 22% according to the National Center for Health Statistics.  Craig Moffett from Bernstein Research pegs it closer to 25%, with an additional 700,000 phone lines being disconnected every month.  With a shrinking customer base, the viability of companies providing only wired phone service has come into question.  Verizon and AT&T, the nation’s largest phone companies, have made the judgment it’s a dying business.  Conversely, Frontier Communications and a few other independent phone companies remain believers in rural copper wire phone networks, and are willing to buy the discarded, mostly rural regions their bigger counterparts can’t wait to exit.

But AT&T’s advocacy for an end to “plain old telephone service” is just a tad self-serving when one explores their “To-Do” list for Washington regulatory agencies and lawmakers.  AT&T suggests their future plan benefits all Americans.  Critics would contend it mostly benefits AT&T and its shareholders, especially in light of AT&T’s future revenues being directly impacted by customers disconnecting their AT&T phone lines.  AT&T themselves note collective industry revenue for basic phone service fell from $178.6 billion in 2000 to $130.8 billion in 2007, a 27% decrease.

AT&T’s Action Plan to Avoid Obsolescence Explored

At the heart of AT&T’s proposal for 21st century telephone service is an end to analog telephone service, designed more than 100 years ago to carry voice calls, and the launch of broadband-based service to every home in their service area.  From this new platform, AT&T can deliver telephone, television, and Internet service over a single network.  In fact, they already do in several cities where AT&T’s U-verse has launched. Instead of getting one revenue stream from basic phone service, AT&T can now earn from any number of services a broadband platform can support.

AT&T compares their plan with the transition from analog to digital television, except you won’t have to trade in your existing phones or attach converter boxes to every telephone in the house.  Just like the switch to digital television, AT&T wants a date certain to pull the plug on Ma Bell’s old phone network, the sooner the better.

But AT&T’s plan has plenty of strings attached.

First, the company believes the only path to private investment and a successful transition is a near-complete deregulation of the telephone industry.  It wants the federal government, specifically the FCC, to take control of oversight of phone companies across America, if only to end a patchwork of state regulations and service requirements.  Remember, the Ma Bell most Americans grew up with was a regulated monopoly.  In return for guaranteed profits, phone companies agreed to meet service obligations, provide service to any home or business that wanted it, serve the disabled, and provide discounted phone service to the economically disadvantaged.  Rural customers were assured they would have access to phone service and at reasonable prices, and if something stopped working, government oversight ensured problems would be repaired to the customer’s satisfaction.

In AT&T’s view, such requirements are quaint and outdated, and it wants to bear few of those burdens going forward.  Indeed, in a too-cute-by-half aside, the company argues that since it will design the network to operate under the same protocol the unregulated Internet uses, it should be unregulated as well.

Such deregulation could impact a myriad of policies governing phone service that most Americans take for granted — minimum service standards, requirements that telephone companies complete calls between one another – even if competitors, and reasonably priced basic phone service even in the most remote locations.  But AT&T is asking for even more – a comprehensive review and possible elimination of any regulation that could be interpreted as interfering with the transition to an all-broadband telephone network.  AT&T includes everything but the kitchen sink in this category, ranging from service quality requirements, reporting, recordkeeping, data collection, accounting, and depreciation and amortization rules governing how quickly the company can write off obsolete equipment.

Ma Bell's network is due for a retirement, advocates AT&T

Ironically, AT&T wants deregulation -and- access to public taxpayer dollars to construct their new network.  The company advocates government-funded award programs to promote universal broadband access.  One would provide money for wired broadband service, perfect for companies like AT&T that want to build those networks, and another for wireless mobile projects to expand service into unserved or underserved areas, also perfect for AT&T Mobility — the same wireless carrier slammed by Verizon Wireless for largely ignoring rural America with 3G wireless data upgrades.

While there is some justification for a review of federal and state rules that may no longer realistically apply to today’s telecommunications marketplace, AT&T goes out of its way to be self-serving in its recommendations.  It dangles the bright and shiny object of a 21st century broadband-based telephone network, but only if they get to run it essentially “no questions asked,” with little oversight and an infusion of public taxpayer dollars to compliment private investment.

AT&T may be correct that the days for Ma Bell’s “plain old telephone service” are indeed numbered.  But for a company that earns billions in profits and answers to shareholders demanding maximum return, shouldn’t their long term well-being first be a question between AT&T management and shareholders?  Are they incapable of a private course correction that makes their future relevance more secure?  AT&T’s U-verse did not require public tax dollars to be successful, and the company spent generously on lobbyists and astroturf campaigns to smooth the way forward with “statewide franchising,” bypassing local government oversight.

The real question on the table is how far does the Obama Administration and the FCC want to go to achieve universal broadband?  AT&T suggests that only massive deregulation will entice private investors to step up and make the investments required to help achieve whatever definition of “universal broadband” the Commission comes up with.  But that price is way too high to pay.  AT&T answers first and always to its shareholders.  If they want public tax dollars funding, even in part, their transition to an all-broadband future, they must also answer to the other “stockholders,” namely the American people helping to foot the bill.

Dick Armey, head of FreedomWorks, a notorious industry-backed astroturf group, was a big proponent of Wisconsin's "statewide video franchise" bill pushed by AT&T

Wisconsin residents, in 2007 you were promised more competition, lower prices, and better service from your pay television and broadband provider.  Two years later, two things are certain:

1. The Wisconsin Video Competition Act was didn’t exactly deliver what was promised to consumers by those pushing the legislation, but paid off handsomely for the one company lobbying the hardest for its passage — AT&T.
2. You had a lower bill in 2007 than you now have in 2009.

A new audit released by the Wisconsin Legislative Audit Bureau exposes the truth AT&T’s astroturfing friends never wanted you to know: despite the passage of a new law in December 2007 that promised increased competition and lower rates, the average basic cable rate in Wisconsin actually increased an average of 21 percent over the past two years.

The Bureau analyzed ten providers’ monthly charges for basic and expanded basic service in 17 Wisconsin municipalities at two points in time—July 2007 and July 2009—using data reported to us by the providers. Over this two-year period, charges for basic service increased an average of 21.2 percent, and charges for expanded basic service increased an average of 11.5 percent. The reported data do not suggest that competition has had a substantial effect in reducing either basic or expanded basic video service charges or in slowing their rates of growth during the period we reviewed.

Wisconsin consumers were promised something very different.  So just how did Wisconsin get snookered into passing legislation that was supposed to help consumers, but in reality just helped AT&T?

Dick Armey, chairman of FreedomWorks, an industry-backed astroturf group that heavily promoted the bill, emphatically promised the Competition Act would bring prices down.  On November 19, 2007 Armey wrote:

The Wisconsin Video Competition Act would allow consumers to take advantage of new technologies by streamlining the franchise application process for potential providers. When companies compete to provide service, consumers win through more choices, lower prices and better service.

Unfortunately for consumers, the Video Competition Act was little more than a custom-written giveaway to AT&T.  From the bill’s earliest draft language crafted by lobbyists working with legislative aides, to the big budget sales job employing 15 lobbyists and a major media budget, AT&T ran the show from start to finish according to Madison’s Capital Times newspaper.

TV4US counts AT&T among its corporate sponsors

TV4US (also known as WeWantChoice.com), an AT&T-supported astroturf group, ran television ads around Wisconsin promoting the bill.  In May 2007 the group sent every state legislator binders filled with what it claimed were the names of their constituents who wanted “an end to the cable monopoly” and competitive choice.  As The Center for Media & Democracy discovered, several people named, including two state lawmakers, didn’t support the bill and hadn’t given permission for their names to be included.

[flv]http://www.phillipdampier.com/video/TV4US Ad Wisconsin.mp4[/flv]

TV4US ran this ad across Wisconsin in 2007, promoting “cable competition.”

TV4US’ primary press contact Lizanne Sadlier just also happened to be employed by lobbying firm Fleishman-Hillard, which “has built its reputation by using strategic communications to deliver what its clients value most: meaningful, positive, and measurable impact on the performance of their organizations,” according to a press release from the group.

Fleishman-Hillard and AT&T are well acquainted with each other.  In fact, the PR firm was instrumental in rebranding the phone company as “the new AT&T” after the SBC-AT&T merger.  To this day, AT&T has several company bloggers actually employed by Fleishman-Hillard.

In March of 2007, the Wisconsin Merchants Federation turned up at a state hearing about the Competition Act. This struck several observers as odd, considering the WMF primarily concerns itself with retail store tax policies and strengthening retail theft laws. The WMF seemed well-prepared to articulate the proposed law’s benefits, which included, according to them:

• increased competition in the video entertainment business;
• creation of good-paying jobs;
• bring (literally) hundreds of millions of dollars in capital investment to our state.

PR Watch wanted to know exactly what prompted the WMF to not only testify about a non-issue for retail stores, but also who wanted the group to get involved, and who exactly belongs to the WMF.

WMF’s David Storey told PR Watch that his group sees AB 207 / SB 107 as an economic development issue. “Where consumers have choices, not only are the consumers served, but the economy in general is served. The economy is made stronger,” he explained. “And this is all about consumer choice in the video entertainment field.”

Storey said that no particular member had asked WMF to support AB 207 / SB 107, but that he was personally interested in the issue, as the former Deputy Secretary of the Wisconsin Department of Commerce. Asked for a list of WMF members, Storey responded that one was not available, but that information would hopefully be added to the WMF website in the future.

One thing that is clear is that many of WMF’s partners in lobbying for AB 207 / SB 107 have ties to the telecom industry. The Coalition of Wisconsin Aging Groups, which is a member of the Wisconsin Video Choice Coalition, has received funding from AT&T and from SBC Wisconsin, which is now part of AT&T. The group also offers “discounts on assistive devices for the telephone such as volume amplifiers from the AT&T Special Needs Center.” Another Wisconsin Video Choice Coalition member, the Wisconsin Technology Council, lists AT&T among its major sponsors. Fellow coalition member Women Impacting Public Policy is a Washington DC based group that receives funding from AT&T and Verizon, among other corporate sponsors.

[flv]http://www.phillipdampier.com/video/Press event promoting Wisconsin bill Aug 2007.flv[/flv]

In August 2007, WMF turned up at a press event with other bill supporters to promote the results of a poll conducted by the Mellman Group, which isn’t a respected polling firm but rather a Washington, DC public relations firm that “develops effective communications strategies that lead people to choose our client’s product or service, join their organization, hold their opinion, or vote as we would like.” ^[1] (13 minutes, video begins at ten second mark)

In short, no matter where consumers turned during the push for the Wisconsin Video Competition Act, that big AT&T logo was always somewhere in sight.

Before the legislation was passed, some were warning Wisconsin the dog and pony astroturf show wasn’t actually working for the best interests of Wisconsin consumers, but were instead looking out for the best interests of AT&T.  Charles Uphoff is chair of the Fitchburg Broadband Telecommunications Commission, and wrote this back in 2007:

Lobbyists for telecommunications giant AT&T have been pressuring Wisconsin legislators to pass sweeping changes in the laws regulating cable TV with a million-dollar media campaign and behind the scenes arm-twisting that would make Karl Rove blush.

Under the guise of promoting increased consumer choice, lower cable rates and high-paying union jobs, AT&T is trying to steamroller bills that would prohibit any meaningful regulation of video service rates; eliminate funding for public access, educational and government channels; and effectively guarantee statewide franchises for the telecom giant in perpetuity.

Among the more astonishing features of this dubious legislation is a provision that specifically prohibits the state or local municipalities from reviewing franchise transfers. While initial applicants would have to establish their legal, financial and technical qualifications to obtain a statewide franchise, once granted, statewide franchises can be literally transferred to anyone — even politicians. Video franchise holders wouldn’t even have to inform the affected communities until 10 days after the transfer had been completed.

[…]

So how about the claim being made in the TV ads that cable rates have gone up 246 percent and the “Video Competition Act” would increase choice and save consumer millions? It sure sounds good, but these assertions are, at best, misleading. In the city of Fitchburg, for example, the basic cable rate has risen less than 6 percent over the past 10 years and is currently at $8.19 a month. Admittedly, premium packages have risen much more sharply, largely driven by the cost of content providers like the NFL Network, MTV and ESPN, but AT&T would be facing the same kind of costs if they want to include these offerings.

So if you are expecting whopping decreases in your cable TV bills if this legislation passes, don’t hold your breath. In fact, the ability of municipalities or the state to even regulate basic cable rates would be gone.

What’s happening in Wisconsin isn’t an isolated incident. Wholesale deregulation of the video services industry under the guise of fostering competition is being pushed in legislatures all across the country, backed by big money and conservative ideologues like former House Majority Leader Dick Armey, a Texas Republican whose right-wing “think-tank” has been pushing this legislation since before it had a bill number. Weeks before most members of the Wisconsin Legislature had even seen the bill, Armey’s Freedom Works Foundation was trying to line up sponsors. Major contributors to Dick Armey’s cause include AT&T, Verizon and Exxon-Mobile.

Sadly, the recent trend in video services and telecommunications has been toward increasing the concentration of ownership and control of the media, resulting in fewer consumer choices and less competition, not only in terms of price, but also in terms of ideas. The opinions expressed here are strictly my own, but it seems to me that in the arena where competition is most important to our democracy and our future, the competition of ideas, the net effect of these bills will be to decrease competition through the elimination of public access as a vehicle for information, dialogue and discussion of things that matter to our communities.

Despite playing fast and loose with the facts, the astroturf groups, aided by AT&T’s generous campaign contributions to Wisconsin state legislators helped grease the way towards passage of the Video Competition Act, which was signed into law in December 2007.

But rate increases for consumers aren’t the only problem impacting Wisconsin residents.  Collateral damage for those interested in public affairs television programming is now also becoming apparent.

One of the biggest opponents of the statewide video franchising law has been the Wisconsin Association of PEG Channels (WAPC).  “PEG” stands for public access, educational, and government access channels found on virtually every cable system in the country.  These non-profit channels are provided in the public interest to give subscribers access to customer-produced video programming, local government public meetings and hearings, and educational programming from local schools and universities.  They are traditionally financed by the cable system as part of their franchise agreement.  In return for tearing up local streets and yards, systems give something back to the community by making room for these public access channels, and often also provide equipment and training to assist in program production and distribution.

The Video Competition Act was no friend to PEG channels.  By moving to statewide video franchise agreements, local communities no longer had much say over their public access channels, and the bill’s passage quickly provided a convenient opportunity to bury PEG channels, kill their funding, or outright renege on local agreements.

[flv]http://www.phillipdampier.com/video/Hunting PEG Channels on U-verse.mp4[/flv]

AT&T’s U-verse doesn’t make it easy for video customers to find PEG channels.  In Wisconsin, the channels are housed on a website that appears on screen on channel 99, the equivalent of TV Channel Siberia for the remote control channel surfer.  From there, consumers have to navigate a series of menus on their remote control to find the right channel.  Mike Ryan, director of West Bend Community Television, discovers just how ponderous this procedure is, even for those dedicated to finding his channel.

In the case of Charter Cable, they’ve managed to go one step further and help destroy one city’s public access channels.

Funding for the Wausau Area Access Channels had been provided in part by the franchise agreement between the City of Wausau and local cable provider Charter Communications. While Wausau Access Channels served the greater Wausau area, only the City of Wausau franchise agreement provided any funding.

When the state passed the Competition Act replacing local franchise agreements with a standard state wide franchise, Wausau PEG support fees were eliminated after a three year sunset. That sunset would occur December 31, 2010. The City of Wausau has not received any PEG support fees from Charter Communication during the three year sunset period.

Apparently unwilling to meet even a three year commitment, Charter Cable’s non-payment led Wausau mayor Jim Tipple to announce Monday that the city would not continue to fund the station in 2010 because of budget constraints.

“We realize this is a tough decision, not only for the city of Wausau but for the entire community,” Tipple said.

The City of Wausau is pursuing legal remedies against Charter. PEG fee revenue had funded 60% of the station’s annual budget of $100,000.

“The City does not want the channels to go dark, but it can no longer fund them alone,” said John Jordan, Wausau Access Coordinator.

“We are stunned to hear about the closure of the Wausau community channels. It is hard to believe that residents of Wausau will no longer be able to see and participate in community television. We warned this could come with the passage of the Video Competition Act. We just didn’t expect it quite this soon,” said Mary Cardona, WAPC Executive Director.

On January 1, 2011, more stations will be in Wausau’s position. On that date, all dedicated PEG fees end as a result of the passage of the Video Competition Act.

[flv]http://www.phillipdampier.com/video/WSAW-WAOW Wausau Public Access Cut 12-21-09.flv[/flv]

WSAW & WAOW-TV, both in Wausau, Wisconsin headlined their newscasts with news that the community’s public access channels were on the chopping block. Loud Volume Alert (4 minutes)

The Cable Consumer Repair Bill (AB606) recently introduced by Representative Gary Hebl (D – Sun Prairie) could resolve serious problems with the Video Competition Act that took effect in January 2008. Since then, cable companies and AT&T have moved community channels to out of the way locations on the line-up, subjected the channels to interference problems, imposed transmission equipment costs, and withdrawn a commitment to provide dedicated revenue for public, education, and government access stations.

Of course, the industry players don’t like it one bit.  “Wired Wisconsin,” a non-profit group claiming to seek cutting edge broadband technology for Wisconsin, who unsurprisingly counts AT&T as a “partner,” thinks Hebl’s bill will gut the Competition Act.

“Even though the VCA was passed less than two years ago, we’ve already seen a great deal of progress under the bill.  It’s generated real competition, helped improve prices, created hundreds of new jobs, spurred millions in investment in infrastructure, improved customer service and expanded consumers’ access to new video providers, services and features all across the state,” said Wired Wisconsin’s executive director Thad Nation.

The state’s audit of cable pricing would seem to belie Nation’s views. That he holds them should come as no surprise.  After all, Nation is the former executive director of TV4US, the AT&T-backed astroturf effort that helped enact the law Nation seeks to defend.

“On balance, the law hasn’t been good for consumers but has been very good for the companies that wanted it. Two years from now, I don’t think you will be able to say that consumers saved a lot of money if any at all,” Barry Orton, a telecommunications professor at the University of Wisconsin-Madison, told the Milwaukee Journal Sentinel.

Has the bill brought about any savings for Wisconsin consumers?

“We haven’t seen it. I think the short answer is ‘no,’ ” said Curt Witynski, assistant director of the League of Wisconsin Municipalities, which represents 582 local governments.

“I think the public relations effort of AT&T and others was remarkable in convincing state legislators that this law would bring about all kinds of competition, and that consumers would benefit from it. But that hasn’t been the case,” Witynski added.

Indeed, with additional rate increases announced this week by AT&T’s U-verse, the much-heralded savings promised by AT&T and its various astroturf elements have become only more elusive for the hard-hit consumer struggling through ongoing economic challenges.  Those challenges aren’t exactly the same for AT&T, which increased its dividend payment to stockholders and has plenty left over to continue astroturfing its way to statewide video franchises in other states it serves.