The views of the Adam Smith Institute, despite the near-global financial meltdown engineered by the Masters of the Universe.

Forbes columnist Tim Worstall is unimpressed with Google’s foray into fiber optics.

Worstall, a Fellow at the Adam Smith Institute in London, has repeatedly penned columns tsk-tsking the global broadband speed race.

In his world view, nobody except certain specialists needs any connection faster than 2Mbps:

The most obvious being that outside certain very specific uses (video editing for example, where people can pay up for their own T1 line) there’s not really much evidence that speeds above 2 Mbps or so actually improve productivity or economic performance/growth. Sure, they’re great for consumers who want to download movies but that’s not really a justification for a large scale infrastructure program.

Worstall’s Luddite-like knowledge of broadband technology makes it difficult to take him seriously. Notwithstanding the fact a T1 line delivers just 1.5Mbps (at a cost several times a typical cable or DSL broadband connection), Worstall’s declaration that faster speeds are only good for “downloading” movies (the concept of streaming also escapes him) is simple nonsense.

Worstall’s tantrum is really part of a bigger discussion about how to do broadband better in both the United Kingdom and the United States. Incumbent providers are dragging their feet while reaping profits for overpriced, too-slow service. Consumers and businesses are fed up, and some are now increasingly turning to the government to do-something to shake up the status quo.

Government? For those slavishly devoted to free market ideals at the Adam Smith Institute, such a notion guarantees an intemperate outburst with phrases like “government takeover,” “government interference in private business,” or “government monopoly” — all ideas Worstall complains are “blindingly awful.”

“The idea that the solution to anything is a government run engineering monopoly just boggles the mind,” Worstall declares.

In his piece, “Why High Speed Broadband Just Doesn’t Matter,” Worstall has just a single litmus test to define broadband worthiness: how much economic value can be extracted from the Internet — Ferengi economics at their finest.

Worstall (Image: Forbes)

Worstall:

So more people can watch TV. Apologies, but this doesn’t really convince. Higher definition TV just isn’t the sort of technology that boosts the economy of a country. It might be nice to have but it most certainly does not justify taxing some to provide the service to others.

[…] The truth is that as long as you’re getting broadband of a kind (2 Mbps say) then it’s possible to extract that economic value. Faster speeds might be nice but they’re just not necessary for economic development.

Even if you accept Worstall’s inaccurate contention fast Internet is only good for watching online entertainment, he evidently forgets PricewaterhouseCoopers estimated the value of that industry at $2 trillion, and that was by 2011. Why even have a cable television business, if the only thing it is good for is watching reality shows and Law & Order reruns? Because it makes money — lots of it.

Back to Google, which is creating a bit of a pickle for the cable and phone companies — an increasingly fat and happy bunch earning easy profits selling broadband at duopoly market prices. Proponents for better broadband advocating for new, publicly-owned broadband networks have had to confront astroturf and conservative groups using popular memes that “big government” cannot do anything right and if there was a market for gigabit broadband, private companies would already be selling it.

Starting this summer, Google is.

That spells t-r-o-u-b-l-e for the corporate love muffins at the Adam Smith Institute and their industry friends who are quite happy with the way things are today, thank you very much. Google just happens to be an example of a free market success story — a ‘responsible’ company willing to invest money in the game-changing broadband Worstall and friends spent years arguing we don’t actually want or need.

As Kansas City residents line up around the virtual block, eagerly plunking down $10 to “pre-register” for Google service, it becomes difficult to continue the standard line that super-fast Internet is just a tech-geek curiosity.

So what does a free-market-knows-best-devotee do in light of all this? Change the story.

Worstall picks up a premise first offered by The Guardian and runs with it. Namely, Google is actually riding the wave of past phone company failures to cheaply benefit from assets those companies deployed first:

There’s a very large difference between being able to do something usefully experimental with an orphaned asset and having to pay for the construction of that asset in the first place. The telecoms companies lost fortunes on laying that fibre (indeed, several, including such as Global Crossing, went resoundingly bust for billions in doing so). That something that was built for $100 can find a use when it is sold for $1 (just to make up some numbers) is not an argument in favour of spending the $100.

Yet that is exactly what the argument being proposed is. Look, Google’s got really cool fast broadband, now we should build it for everyone! What’s being missed is that, at least so far as we know as yet, that really fast broadband isn’t worth the cost of building it. It only makes sense even for Google because they’ve not had to pay full price for it.

Google got a discount, so that is why they are in the business.

Worstall’s declaration is news to Kansas City, which has been enduring Google’s construction crews for months as they lay fiber infrastructure across the metropolitan area. Evidently Google hired illusionist David Copperfield to perform the masterful trick of shading the truth:  re-purposing already-there fiber while pretending it was being buried and strung for the first time.

Adam Smith didn’t have super fast broadband when he posited his views on unfettered free markets in the 1700s. If his devoted followers are left in charge, you won’t either.

Four of the nation’s largest phone companies — two former Baby Bells, two independents — have very different ideas about solving the rural broadband problem in the country. Which company serves your area could make all the difference between having basic DSL service or nothing at all.

Some blame Wall Street for the problem, others criticize the leadership at companies that only see dollars, not solutions. Some attack the federal government for interfering in the natural order of the private market, and some even hold rural residents at fault for expecting too much while choosing to live out in the country.

This four-part series will examine the attitudes of the four largest phone companies you may be doing business with in your small town.

AT&T’s real priorities are to satisfy Wall Street demands for regular revenue growth. Rural wired broadband just cannot compete with the margins the company earns on its enormously profitable wireless and ARPU-raising U-verse services. (Graphic adapted from original work of Mark Fiore)

Today: AT&T — More Rural Broadband? Don’t Call Us, We’ll Call You

AT&T CEO Randall Stephenson earlier this year declared expansion of its U-verse fiber to the neighborhood service “largely complete,” despite the fact almost half of AT&T’s customers only have access to much slower DSL service, or cannot receive any broadband service at all.

For those living in AT&T’s service areas, which include a large portion of the midwest, southern states east of the Mississippi, Connecticut, and parts of California and Texas, Stephenson has not inspired confidence the company is rethinking what is possible in rural broadband.

“We have been apprehensive on moving, doing anything on rural access lines because the issue here is, do you have a broadband product for rural America?,” Stephenson told investors earlier this year. “And we’ve all been trying to find a broadband solution that was economically viable to get out to rural America and we’re not finding one to be quite candid.”

AT&T’s lack of confidence this year is in contrast with their bombastic rural broadband lobbying campaign of 2011, launched as part of an effort to win approval for its aborted merger with T-Mobile USA. The company sent slick talking points promoting the deal to community groups it supported with contributions, politicians it bought with contributions, and astroturf efforts it bankrolled with contributions.

The result was declarations like this from former Rep. Rick Boucher (D-Va.), who swept through Washington’s revolving door and came out on the other side working for AT&T-backed lobbyist-law firm Sidley Austin and serving as an “honorary chairman” of the industry-backed Internet Innovation Alliance:

Thousands of the smallest communities outside of urban areas either lack broadband service or have just one option that can be pricey for a relatively low connection speed, inadequate for modern business demands. The joining of AT&T’s and T-Mobile’s wireless spectrum will largely fill the gap and bring robust Internet connectivity to rural localities where wired infrastructure is cost prohibitive.

With the merger now nothing more than a bad memory, Stephenson’s interest in the innovation of Internet access quickly faded.

Last week, AT&T customers learned the company isn’t even interested in taking free money from the federal government and ratepayers to do better. Offered access to $115 million in broadband subsidies from the reform of the Universal Service Fund (USF), AT&T officials shrugged their shoulders and indicated they were not interested because they are not yet “ready” to participate.

Quinn

“AT&T is in the midst of evaluating its options for further rural broadband deployment,” said Robert Quinn, AT&T’s senior vice president of regulatory affairs wrote in a letter to the commission. “As our chairman stated last month, we are optimistic about AT&T’s ability to get more broadband into rural areas, particularly as the technology continues to advance. However, until AT&T finalizes that strategy, it cannot commit to participating in the incremental support program. ”

For communities like Orangeburg, S.C., that answer is not good enough. The community received an $18.65 million federal grant of broadband stimulus funds to develop high-speed broadband in an area where only 20-40 percent of residents have Internet service today. AT&T is the dominant phone company and offered the same non-committal response to Orangeburg’s pleas for better service that the  company gives to customers elsewhere.

While AT&T reports it is not yet ready to do better in rural South Carolina, it is very motivated to make sure nobody else does either, funding a massive lobbying effort in coordination with its friends at the American Legislative Exchange Council (ALEC) to pass a virtual ban on community broadband development across South Carolina.

Christopher Mitchell at Community Broadband Networks calls it “monetizing scarcity.” Orangeburg officials call it a big headache and are working around AT&T, frustrated with the phone company’s disinterest while it also helps build barriers to impede the community’s efforts to build its own network.

“If some of these other providers had a desire to serve these rural areas, they would have already been doing it,” said county administrator Bill Clark. “We are entering the broadband business because third-party providers are reluctant to provide the service.”

AT&T’s reluctance to accept USF money may have a lot to do with the company’s focus on its wireless network which is seen as a much more lucrative investment. Profit margins for barely-competitive wireless service remain sky high, and are growing higher as AT&T raises prices and the industry works to cut costs.

Even the company’s urban-focused U-verse network delivers opportunities for greater revenues from AT&T customers likely to buy additional services. Investing in DSL just does not pull in the same level of profits, and companies like AT&T will remain reluctant to expand rural broadband unless the government delivers a much larger government subsidy, according to Benjamin Lennett, a policy director at the New America Foundation.

“It underscores how flawed it is to rely on private companies to serve these rural areas where their margins are not going to be that high,” Lennett said.

Unfortunately for communities trying to work around AT&T’s roadblock, the company has made sure towns and villages building their own networks soon discover that road remains closed in more than dozen states thanks to  AT&T with the help from corporate groups like ALEC, who feed willing legislators bills often drafted by the corporations they are designed to protect.

Comcast is running “welcome back” ads in Chattanooga that still claim they run America’s fastest ISP, when they don’t.

EPB, Chattanooga’s publicly-owned utility that operates the nation’s fastest gigabit broadband network, has already won the speed war, delivering consistently faster broadband service than any of its Tennessee competitors. So when facts are not on their side, competitors like Comcast and a conservative “watchdog” group simply make them up as they go along.

Comcast is running tear-jerker ads in Chattanooga featuring professional actors pretending to be ex-customers looking to own up to their “mistake” of turning their back on Comcast’s 250GB usage cap (now temporarily paroled), high prices, and questionable service.

“It turns out that the speeds I was looking for, Xfinity Internet had all along,” says the actor, before hugging an “Xfinity service technician” in the pouring rain. “But you knew that, didn’t you?”

The ad closes repeating the demonstrably false claim Comcast operates “the nation’s fastest Internet Service Provider.”

“I see those commercials on television and I’m thinking, I wonder how much did they pay you to say that,” says an actual EPB customer in a response ad from the public utility.

It turns out quite a lot. The high-priced campaign is just the latest work from professional advertising agency Goodby Silverstein & Partners of San Francisco, which is quite a distance from Tennessee. Goodby has produced Comcast ads for years. The ad campaign also targets the cable company’s other rival that consistently beats its broadband speeds — Verizon FiOS.

EPB provides municipal power, broadband, television, and telephone service for residents in Chattanooga, Tennessee

Comcast tried to ram their “welcome back” message home further in a newspaper interview with the Times Free Press, claiming “a lot of customers are coming back to Xfinity” because Comcast has a larger OnDemand library, “integrated applications and greater array of choices.”

Comcast does not provide any statistics or evidence to back up its claims, but EPB president and CEO Harold DePriest has already seen enough deception from the cable company to call the latest claims “totally false.”

In fact, DePriest notes, customers come and go from EPB just as they do with Comcast. The real story, in his view, is how many more customers arrive at EPB’s door than leave, and DePriest says they are keeping more customers than they lose.

EPB fully launched in Chattanooga in 2010, and despite Comcast and AT&T’s best customer retention efforts, EPB has signed up 37,000 customers so far, with about 20 new ones arriving every day. (Comcast still has more than 100,000 customers in the area.)

Many come for the EPB’s far superior broadband speeds, made possible on the utility’s fiber to the home network. EPB also does not use Internet Overcharging schemes like usage caps, which Charter, AT&T, and Comcast have all adopted to varying degrees. Although the utility avoids cut-rate promotional offers that its competitors hand out to new customers (EPB needs to responsibly pay off its fiber network’s construction costs), its pricing is lower than what the cable and phone companies offer at their usual prices.

Comcast claims customers really don’t need super high speed Internet service, underlined by the fact they don’t offer it. But some businesses (including home-based entrepreneurs) do care about the fact they can grow their broadband speeds as needed with EPB’s fiber network. Large business clients receiving quotes from EPB are often shocked by how much lower the utility charges for service that AT&T and Comcast price much higher. It costs EPB next to nothing to offer higher speeds on its fiber network, designed to accommodate the speed needs of customers today and tomorrow.

The competition is less able. AT&T cannot compete on its U-verse platform, which tops out shy of 30Mbps. Comcast has to move most of its analog TV channels to digital, inconveniencing customers with extra-cost set top boxes to boost speeds further.

The fact EPB built Chattanooga’s best network, designed for the present and future, seems to bother some conservative “watchdog” groups. The Beacon Center of Tennesee, a group partially funded by conservative activists like Richard Mellon Scaife through a network of umbrella organizations, considers the entire fiber project a giant waste of money. They agree with Comcast, suggesting nobody needs fast broadband speeds:

EPB also offers something called ultra high-speed Internet. Consumers have to pay more than seven times what they would pay for the traditional service — $350 a month. Right now, only residents of a select few cities worldwide (such as Hong Kong) even use this technology, and that is because most consumers will likely not demand it for another 10 years.

Actually, residents in Hong Kong, Japan, and Korea do expect the faster broadband speeds they receive from their broadband providers. Americans have settled for what they can get (and afford). DePriest openly admits he does not expect a lot of his customers to pay $350 a month for any kind of broadband, but the gigabit-capable network proves a point — the faster speeds are available today on EPB at a fraction of price other providers would charge, if they could supply the service at all. Most EPB customers choose lower speed packages that still deliver better performance at a lower price than either Comcast or AT&T offer.

The Beacon Center doesn’t have a lot of facts to help them make their case. But that does not stop them:

• They claim EPB’s network is paid for at taxpayer expense. It is not.
• They quote an “academic study” that claims 75 percent of “government-run” broadband networks lose money, without disclosing the fact the study was bought and paid for by the same industry that wants to keep communities from running broadband networks. Its author, Ron Rizzuto, was inducted into the Cable TV Pioneers in 2004 for service to the cable industry. The study threw in failed Wi-Fi networks built years ago with modern fiber broadband networks to help sour readers on the concept of community broadband.
• Beacon bizarrely claims the fiber network cannot operate without a $300 million Smart Grid. (Did someone inform Verizon of this before they wasted all that money on FiOS? Who knew fiber broadband providers were also in the electricity business?)

The “watchdog” group even claims big, bad EPB is going to drive AT&T, Comcast, and Charter Cable out of business in Chattanooga (apparently they missed those Comcast/Xfinity ads with customers returning to Kabletown in droves):

Fewer and fewer private companies wish to compete against EPB, which will soon have a monopoly in the Chattanooga market, according to private Internet Service Provider David Snyder. “They have built a solution looking for a problem. It makes for great marketing, but there is no demand for this service. By the time service is needed, the private sector will have established this for pennies on the dollar.”

Ironically, Snyder’s claim there is no demand for EPB’s service fall flat when one considers his company, VolState, has been trying to do business with EPB for two years. He needs EPB because he is having trouble affording the “pennies on the dollar” his suppliers are (not) charging.

Snyder tells “Nooganomics” his company wants an interconnection agreement with EPB, because the private companies he is forced to buy service from — including presumably AT&T, want to charge him a wholesale rate twice as much as EPB currently bills consumers. Snyder calls EPB’s competition “disruptive.”

Nooganomics calls EPB’s low priced service a “charity” in comparison to what AT&T and Comcast charge local residents, and the free market can do no wrong-website seems upset consumers are enjoying the benefits of lower priced service, now that the local phone company and cable operator can’t get away with charging their usual high prices any longer.

Deborah Dwyer, an EPB spokeswoman, told the website the company got into the business with state and city approval, followed the rules for obtaining capital and pays the taxes or payments-in-lieu of taxes as the same rate as corporate players. “We believe that public utilities like EPB exist to help improve the quality of life in our community, and the fiber optic network was built to do just that. One of government’s key responsibilities is to provide communities with infrastructure, and fiber to the home is a key infrastructure much like roads, sewer systems and the electric system.”

Snyder can’t dispute EPB delivers great service. He also walks away from the competition-is-good-for-the-free-market rhetoric that should allow the best company with the lowest rates to win, instead declaring customers should only do business with his company to support free market economics (?):

“If you are a free market capitalist and you believe in free markets, you need to do business with VolState,” Mr. Snyder says. “And if you’re highly principled, every time you buy from a government competitor, what you’re voting for with your dollars is, you’re saying, ‘It’s OK for the government come in to private enterprise and start to take over a vast part of what we used to operate in as a free market.’”

Perhaps Snyder and his friends at the Beacon Center have a future in the vinegar business. They certainly have experience with sour grapes.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Comcast Ad Welcome Back.flv[/flv]

Comcast’s emotionally charged ad, using paid actors, was produced by advertising firm Goodby Silverstein & Partners. The commercial running in Chattanooga is a slight variation on this one, which targets Verizon FiOS. (1 minute)

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

EPB uses actual customers, not paid actors, in its own advertising that calls out Comcast’s false advertising.  (1 minute)

[Stop the Cap! has written extensively about the pervasive influence some of the nation’s largest cable and phone companies have on telecommunications legislation in this country.  On the state level, one group above all others is responsible for quietly getting company-ghost-written bills and resolutions into the hands of state lawmakers to introduce as their own.]

The American Legislative Exchange Council (ALEC) is the latest corporate response to campaign finance and lobbying reform — a Washington, D.C.-based “middle man” that brings lawmakers and corporate interests together while obfuscating the obvious conflict of interest to voters back home if they realized what was going on.

ALEC focuses on state laws its corporate members detest because, in many cases, they represent the only regulatory obstacles left after more than two decades of deregulatory fervor on the federal level.  State lawmakers are ALEC’s targets — officeholders unaccustomed to a multi-million dollar influence operation.  The group invites lawmakers to participate in policy sessions that equally balance corporate executives on one side with elected officials on the other.  Consumers are not invited to participate.

ALEC’s telecom members have several agendas on the state level, mostly repealing:

• Local franchising and oversight of cable television service;
• Statewide oversight of the quality of service and measuring the reliability of phone and cable operators;
• Consumer protection laws, including those that offer customers a third party contact for unresolved service problems;
• Universal service requirements that insist all customers in a geographic region be permitted to receive service;
• Funding support for public, educational, and government access television channels;
• Rules governing the eventual termination of essential service for non/past due payments;
• Local zoning requirements and licensing of outside work.

But ALEC is not always focused on deregulation or “smaller government.” In fact, many of its clients want new legislation that is designed to protect their position of incumbency or enhance profits.  Cable and phone company-written bills that restrict or ban public broadband networks are introduced to lawmakers through ALEC-sponsored events.  In several cases, model legislation that was developed by cable and phone companies was used as a template for nearly-identical bills introduced in several states without disclosing who actually authored the original bill.

ALEC specializes in secrecy, rarely granting interviews or talking about the corporations that pay tens of thousands of dollars to belong.  Corporate members also enjoy full veto rights over any proposal or idea not to their liking, and aborted resolutions or legislative proposals are kept completely confidential. More often than not, however, legislators and corporate members come to an agreement on something, and the end product ends up in a central database of model bills and resolutions ready to be introduced in any of 50 state legislatures.

Many do, and often these proposed bills are remarkably similar, if not identical. That proved to be no coincidence.  In July 2011, the Center for Media and Democracy was able to obtain a complete copy of ALEC’s master database of proposed legislation.  The Center called it a stark example of “corporate collaboration reshaping our democracy, state by state.”

National Public Radio takes an inside look at the American Legislative Exchange Council and how it works to help major corporations influence and change state laws. (October 29, 2010) (8 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

ALEC’s Corporate Telecom Members

ALEC defends itself saying it does not directly lobby any legislator.  That is, in fact true.  But many of its corporate members clearly do.  AT&T is one of ALEC’s most high profile members, serving as a “Private Enterprise Board” member, state corporate co-chair of Arkansas, California, Connecticut, Louisiana, Mississippi, and Texas (all AT&T service areas), a member of the Telecommunications and Information Technology Task force, and “Chairman” level sponsor of the 2011 ALEC Annual Conference (a privilege for those contributing $50,000).

AT&T’s lobbying is legendary, and is backed with enormous campaign contributions to legislators on the state and federal level.

But AT&T isn’t the only telecommunications company that belongs to or supports ALEC:

• CenturyLink (also including Qwest Communications), “Director” level sponsor of 2011 ALEC Annual Conference ($10,000 in 2010)
• Cincinnati Bell
• Comcast, State corporate co-chair of Georgia, Minnesota, Missouri and Utah and recipient of ALEC’s 2011 State Chair of the Year Award
• Cox Communications, “Trustee” level sponsor of 2011 ALEC Annual Conference ($5,000 in 2010)
• Time Warner Cable, State corporate co-chair of Ohio, “Director” level sponsor of 2011 ALEC Annual Conference ($10,000 in 2010)
• Verizon Communications, Private Enterprise Board member and State corporate co-chair of Virginia and Wyoming

ALEC supporters among trade groups and astroturf/corporate-influenced “non profits”:

• National Cable and Telecommunications Association, ALEC Telecommunications and Information Technology Task Force member
• Free State Foundation (think tank promoting limited government and rule of law principles in telecommunications and information technology policy)
• Heartland Institute, Exhibitor at ALEC’s 2011 Annual Conference, Telecommunications and Information Technology Task Force member, Education Task Force member, Commerce, Insurance and Economic Development Task Force, Financial Services Subcommittee member and Energy, Environment and Agriculture Task Force member

ALEC’s Ready-to-Introduce Legislation

The two most pervasive pieces of legislation ALEC’s telecom members (especially AT&T) want as a part of state law are bills to strip local authority over cable systems and hand it to the state government and the elimination or excessive micromanagement of community broadband networks:

This model bill for increased cable competition strips most of the authority your community has over cable television operations and transfers it to under-funded or less aggressive state bodies. Although the bill claims to protect local oversight and community access stations, the statewide video franchise fee almost always destroys the funding model for public, educational, and government access channels.

These municipal broadband bills are always written to suggest community and private players must share a "level playing field." But bills like these always exempt the companies that actually wrote the bill, and micromanage and limit the business operations of the community provider.

Legislators: Bring the family to Mardi Gras World on us, sponsored by America's largest telecommunications companies.

WHYY Philadelphia’s ‘Fresh Air’ spent a half hour exploring who really writes the legislation introduced in state legislatures. When ALEC gets involved, The Nation reporter John Nichols thinks the agenda is clear: “All of those pieces of legislation and those resolutions really err toward a goal, and that goal is the advancement of an agenda that seems to be dictated at almost every turn by multinational corporations.” (July 21, 2011) (32 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Unfortunately, state lawmakers are not always sophisticated enough to recognize a carefully crafted legislative agenda at work.  National Public Radio found one excellent example — the 2010 Arizona immigration law that requires police to arrest anyone who cannot prove they entered the country legally when asked.  America’s immigration problems remain a major topic on the agenda at some ALEC events, curious for a corporate-backed group until you realize one of ALEC’s members — the Corrections Corporation of America — America’s largest private prison operator, stood to earn millions providing incarceration services for what some estimated could be tens, if not hundreds of thousands of new prisoners being held on suspicion of immigration violations.

CCA was in the room when the model immigration legislation, eventually adopted by Arizona’s legislature, was written at an ALEC conference in 2009.

Bring the Kids, Stay for the Corporate Influence

Getting legislators to attend these seminars isn’t as hard as it might sound.

In January, we reported members of the North Carolina General Assembly, who showed their willingness to support telecom industry-written bills when it passed an anti-community broadband initiative in 2011, were wined and dined (along with their staff) by ALEC at the Mardi Gras World celebration in New Orleans.  Rep. Marilyn Avila (R-Time Warner Cable), who introduced the aforementioned measure, brought her husband to Asheville to enjoy a special weekend as the featured guest speaker at a dinner sponsored by North Carolina’s state cable lobbying group:

The North Carolina Cable Telecommunications Association reported they not only picked up Marilyn’s food and bar bill ($290 for the Aug. 6-8 event), they also covered her husband Alex, too.  Alex either ate and drank less than Marilyn, or chose cheaper items from the menu, because his food tab came to just $185.50.  The cable lobby also picked up the Avila’s $471 hotel bill, and handed Alex another $99 in walking-around money to go and entertain himself during the weekend event.  The total bill, effectively covered by the state’s cable subscribers: $1,045.50.

Rep. Avila with Marc Trathen, Time Warner Cable's top lobbyist (right) Photo by: Bob Sepe of Action Audits

ALEC makes it easy because it pays the way for lawmakers and families to attend their events through the award of “scholarships”:

The organization encourages state lawmakers to bring their families. Corporations sponsor golf tournaments on the side and throw parties at night, according to interviews and records obtained by NPR.

[…] Videos and photos from one recent ALEC conference show banquets, open bar parties and baseball games — all hosted by corporations. Tax records show the group spent $138,000 to keep legislators’ children entertained for the week.

But the legislators don’t have to declare these as corporate gifts.

Consider this: If a corporation hosts a party or baseball game and legislators attend, most states require the lawmakers to say where they went and who paid. In this case though, legislators can just say they went to ALEC’s conference. They don’t have to declare which corporations sponsored these events.

Reporter John Nichols told NPR ALEC’s focus on state politics is smart:

“We live at the local and state level. That’s where human beings come into contact more often than not,” he says. “We live today in a country where there’s a Washington obsession, particularly by the media but also by the political class. … And yet, in most areas, it’s not Washington that dictates the outlines, the parameters of our life. … And so if you come in at the state government level, you have a much greater ability to define how you’re going to operate.”

Resources:

• ALEC Exposed: Access a database of more than 800 corporate ghost-written bills and resolutions intended to become state law in all 50 states. Sponsored by the Center for Media and Democracy.
• ALEC’s Database Revealed: A more general indictment of ALEC and its coordinated agenda to allow corporate influence to hold an increasing role in public policy.
• Protestors Demand End to Verizon’s Involvement in ALEC: In Albany, N.Y., protestors turned up in front of Verizon demanding the company end its association with ALEC.
• California Lawmakers Enjoy Free Trips to Hawaii, Europe: California’s state politicians are under fire for lavish travel arranged by ALEC.

While incumbent phone and cable operators often try to directly block community broadband projects, sometimes politics and special insider interests also get in the way.  One of our loyal readers shared a piece with us published in Fierce Telecom that outlines the trouble spots:

Gov. Bobby Jindal Blows It for Louisiana; Wife’s Foundation Heavily Supported By AT&T

Jindal's wife's charity is a recipient of AT&T money.

The U.S. Dept. of Commerce awarded $80.5 million to help drain Louisiana’s broadband swamp with a new statewide fiber network linking the most rural and poor areas of the state, including schools, libraries, hospitals, and universities.  Users could have obtained service from 10Mbps-1Gbps, but not if Jindal had his way.  He preferred AT&T (and the state’s cable operators) handle everything the same way they have traditionally handled telecommunications in the state — service in big cities and next to nothing everywhere else.  In addition to directly supporting the governor, AT&T contributes substantially to a charitable foundation founded by Jindal’s wife.

Jindal never openly blocked the project.  Instead, his administration “dithered and bickered” over the fiber network and ran the clock out.  Last October, the Commerce Department revoked the grant, leaving Louisiana’s Broadband Alliance with little more than a plan they’ll never be able to implement as long as Jindal occupies the governor’s office.  Stop the Cap! covered the mess back in November.

Public Service Commissioner Foster Campbell:

“We want to know what the heck happened; we’re the only ones in the country that dropped the ball,” Campbell said. “I meet with people in every parish, and the number one priority by far is high-speed Internet, and how do you lose $80 million coming from the federal government to do that. How do you drop the ball, and if they did drop the ball was it because someone whispered in their ears, ‘it’s going interfere with big companies?’”

AT&T-Backed Astroturf Operation Scandalizes the Mayor’s Office and Ruins A High Tech Training Program

Marks

As Stop the Cap! wrote last fall, a scandal involving AT&T and the mayor of the state capital of Florida ultimately cost the city of Tallahassee a $1.6 million dollar federal broadband grant to expand Internet access to the urban poor and train disadvantaged citizens to navigate the online world.

Mayor John Marks never bothered to inform the city he had a direct conflict of interest with the group he strongly advocated as a participant in the grant project. The Alliance for Digital Equality (ADE) is little more than an AT&T astroturf effort — a front group that did almost nothing to bring Internet access to anyone. Mayor Marks was a paid adviser.

After the media got involved, the mayor’s office hoped the whole project would just go away. And it did, along with the $1.6 million.

Wisconsin Republicans <Heart> AT&T, Even When It Means Forfeiting $23 Million for Better Broadband

Wisconsin Gov. Scott Walker is a close friend of AT&T.  So close, when the phone company was threatened with the loss of revenue earned from the institutional broadband network it leases to the state, Walker and his Republican colleagues intervened, literally turning away $23 million in government stimulus funding.  Walker alone has accepted more than $20,000 in campaign contributions from AT&T.  Stop the Cap! covered this story in detail in February 2011.

Governor Walker (R-AT&T)

The decision to return the money had a direct impact on 380 Wisconsin communities, 385 libraries, 82 schools, and countless public safety offices across the state.  Namely, being stuck with AT&T’s outdated and expensive network the state leases in successive five year contracts.  Since broadband stimulus funding requires the construction of networks designed to last 20 years, not five, Walker’s insistence on sticking with AT&T made the stimulus funding off-limits.  But what are friends for?

AT&T has historically had no trouble getting its phone calls returned by Republican state lawmakers, who have cheered most of AT&T’s proposed legislation through the state legislature.  Today, Wisconsin takes a “hands off” approach with the state’s cable and phone companies, passed a statewide franchising bill that stripped oversight away from local communities, and AT&T’s landline network faces little scrutiny in the state, especially in rural communities.

The state university is now attempting to bypass Walker with its own $37 million project, but it will never serve Wisconsin consumers.  The institutional network will target schools, hospitals and first responders.

As Fierce Telecom notes, other communities could face the loss of their stimulus funding if they do not get busy building the projects they promised.  The Rural Utilities Service, part of the U.S. Dept. of Agriculture, has put several projects on notice they could forfeit broadband stimulus funding if they fail to meet project deadlines.