Del. Kathy Byron (R-Big Telecom)

What is one of the most effective ways to stop competition in its tracks before it can even get off the ground? Reward a state legislator with generous campaign contributions who introduces a bill banning your would-be competitor and get back to business as usual.

Delegate Kathy Byron (R-Campbell County) has broadband, but many of the people who live and work in central and western Virginia near her district don’t. Located in south-central Virginia, the county of 55,000 endures similar broadband availability and quality problems other communities in the western half of the state experience. Located near the Blue Ridge Mountains, the county seat of Rustburg has areas served by DSL, and many other areas that are not. For telecom companies serving mountainous and rural communities in this part of the state, broadband is often not economically viable enough to meet Return On Investment formulas. In fact, the problems are so significant, the southwestern Virginia community of Claudville was selected as the nation’s first testing ground for “white space” wireless broadband, designed to serve sparsely populated rural areas.

Byron’s district in Campbell County is neither wealthy or rich in internet options. Like other communities in the region, the decline of manufacturing and the transition away from tobacco production has created enormous economic challenges. Campbell County is continuing to rely heavily on agriculture while other communities in Virginia and the Carolinas are reinventing themselves to participate in the 21st century knowledge economy. That requires 21st century broadband service, which Campbell County lacks.

Last fall, Campbell County Public Schools assistant superintendent Robert Arnold provided a frank assessment of the area’s broadband problems, telling The News & Advance schoolchildren in his district suffer from a “homework gap,” unable to complete assignments requiring the internet at home because those homes lacked access. A recent trial of “white space” broadband in the area proved unsatisfactory because, in Arnold’s view, it was unreliable.

Her bill, according to The Roanoke Times, is the height of hypocrisy for a Republican claiming to be pro-business development:

Byron’s bill would make it difficult for existing municipal broadband authorities to expand and new ones to get started. Curiously, for a bill sponsored by a Republican, it would create more regulation, by requiring that the state authorize any creation or expansion of a broadband authority (plus lays on other regulations, as well.) For a bill that purports to protect the free market, it actually distrusts the free market: If telecommunications companies were already providing the service the rest of the business community wanted, the business community wouldn’t be clamoring for local governments to step in.

Spent lavishly on Byron – her second largest contributor.

The newspaper shouldn’t be surprised. Politicians willing to introduce these lovingly hand-crafted turf protection bills ask themselves only one question: are the generous corporate campaign contributions that usually accompany these “model bills” still worth it if the voters find out? Even if they do, a well-funded propaganda campaign sponsored by Big Telecom companies slamming municipal broadband as a government internet takeover or a guaranteed economic failure can help give politicians enough cover to avoid being exposed for selling constituents down the river.

It will therefore come as no surprise to regular Stop the Cap! readers that Virginia’s largest telecom companies have spent lavishly on Ms. Byron over the years. Her second largest contributor (next to the Republican Party of Virginia) is Verizon, which spent considerably more on her campaign than other well-heeled companies including Anthem and the Virginia banking lobby. Another major contributor is the Virginia Cable Telecommunications Association (more on that organization later). Others bringing checks include: AT&T, Sprint, CenturyLink, Comcast and the Virginia Telecommunications Association.

The pattern is all too familiar. Politicians take a sudden interest in telecommunications public policy and almost by magic produce a very detailed (and suspiciously similar) piece of legislation designed to make life impossible for public and community broadband projects, while claiming their bill will improve broadband.

In many cases, the politicians introducing these broadband ban bills are surprisingly unprepared to answer detailed questions about their own legislation, counting on local media to not scrutinize their logic too closely. But every so often, the blank stares and subject-changing that occurs when challenges are put to the alleged authors make us question if they actually read their own bill.

We have.

Byron is on ALEC’s Communications and Technology Task Force

Also of concern, Ms. Byron and her bill expose several conflicts of interest she has elected to ignore and hope nobody notices, like her membership on the American Legislative Exchange Council’s Communications and Technology Task Force, notorious for promulgating state bills restricting or banning public broadband. ALEC funding comes, in part, from some of the nation’s largest telecom companies.

We noticed.

The backlash Ms. Byron is now receiving from unhappy rural Virginia communities and local media that have read her bill has apparently surprised her, and in subsequent newspaper letters to the editor, she has taken to playing the victim card. But that has not stopped her from maligning municipal broadband projects, hoping that shaking those shiny keys will distract enough people from focusing on what is actually in her bill.

We put her keys away.

Stop the Cap! has reviewed her bill, also known as House Bill 2108, and what we found astonished us more than usual, and we’ve seen just about every kind of shilling imaginable:

§ 56-484.28. Provision of broadband expansion services.

Notwithstanding any provision of the Virginia Wireless Service Authorities Act (§ 15.2-5431.1 et seq.) or any other provision of law, a locality or any affiliate may own and operate a broadband or Internet communications system, including ownership or lease of fiber optic or other communications lines and facilities, to provide broadband expansion services only if the following conditions are met:

1. The locality or its affiliate has obtained a comprehensive broadband assessment by report or study, by the Center for Innovative Technology, or an independent consulting firm knowledgeable and experienced in analyzing broadband deployment, which report or study is made available to the public and specifically identifies any unserved areas.  The locality or its affiliate shall be responsible for all fees charged by the Center for Innovative Technology or an independent consulting firm for the preparation of such comprehensive broadband assessment report or study.

2. Based upon the comprehensive broadband assessment, the locality or its affiliate formally adopts and publishes specific broadband goals regarding capacity, geography and documented demand for Internet services in the specific unserved areas which the locality or its affiliate desires to address.

3. The locality or its affiliate has issued a request or solicitation for proposals, consistent with the specific broadband goals of the locality previously identified, requesting the capital cost which an existing for-profit local Internet service provider offering communications services with broadband speeds would incur to meet the locality’s specific broadband goals by extending or upgrading such services with broadband speeds to any specific unserved areas of the locality identified in the comprehensive broadband assessment.  Copies of such request or solicitation shall be sent to any franchised cable operator and other known Internet service providers with local facilities offering communications services in the locality at least 180 days in advance of the deadline for the response to the request or solicitation for proposals. The governing body of the locality or its affiliate shall analyze any responses it receives to determine if capital grants or subsidies by the locality to pay for such extension by an existing provider would be more cost effective than construction and operation of a new distribution system by the locality or its affiliate.

4. If no incumbent broadband provider advises the governing body of the locality within six months after the release of the request or solicitation for proposal that it is willing or able to meet the local goals, either without a capital grant or subsidy, or with the capital grant or subsidy or portion thereof proposed by the locality, then the governing body of the locality or its affiliate, after a public hearing, may vote to authorize one or more projects, consistent with the specific broadband goals of the locality previously identified,  to provide broadband expansion services to unserved areas within the locality identified by the comprehensive broadband assessment report or study described above, which report or study shall not be more than one year old at the time of the public hearing.  The chief executive officer of the locality or its affiliate shall certify that the comprehensive broadband assessment report or study identification of unserved areas is still correct based upon information presented at the hearing.

5. Any locality or affiliate project to provide broadband expansion services shall be designed and built or otherwise implemented so that at the time of authorization, the project (i) does not duplicate existing broadband facilities offering broadband speeds to customers, within 90 percent of the geographic area of the project, and (ii) does not duplicate service to customers who already are in a position to connect to an Internet service offering broadband speeds, for 90 percent of the projected residential and commercial customers who will be served by the project or otherwise are within the service area of the project.

6. Any locality or its affiliates seeking to offer or offering broadband expansion services shall, at least 120 days prior to commencement of construction of any project, file with the Virginia Broadband Advisory Council, (i) copies of its report or study from the Center for Innovative Technology, including any updates or supplements thereto, (ii) copies of the minutes of the meeting at which it voted to authorize the offering of broadband expansion services, (iii) a map or description of each project and projected area in which it plans to offer broadband expansion services, (iv) an annual certification by July 1 of each year that any expansion to or changes in its projects or system since the preceding July 1 still qualify as broadband expansion services, and (v) an annual certification that its provision of services meets or in the case of a prospective or an incomplete project shall meet, the requirements of subdivisions 1 through 6 of § 56-484.30.  Any person who believes that any part of such filings is incomplete, incorrect or false and who is in the business of providing Internet services within the locality shall have standing to bring an action in the circuit court for the locality to seek to require the locality to either comply with the substantive and procedural content of the filings required by this section, or cease to provide services, and no bond shall be required for injunctive relief against the locality.

In condensed form, this section claims to help facilitate municipal broadband service in “unserved areas,” but then hamstrings local communities to an extent that makes offering such a service next to impossible. The irony of a Republican legislator advocating detailed and burdensome regulations for a publicly owned provider while concurrently supporting “hands-off” policies for her campaign contributor-provider pals should not be lost on her constituents.

The bill could have been called the “Virginia Duopoly Protection Act,” because it only really allows public broadband development in unserved areas, and only after a community pays for a “broadband assessment” that the bill also mandates be sent to its potential competitors — private cable and telephone companies. Imagine if AT&T was required to send copies of their business plans to Comcast and Charter.

Even worse, phone and cable companies are guaranteed a “heads-up” when a community provider is thinking about providing service, exactly where that service will go, and how much it will cost the community to offer it. Companies on the wrong side of the law used to hire spies to get that information from competitors. Byron’s bill makes Virginia communities pay for the postage required to mail those plans to telecom companies serving their area.

Being given access to what even cable and phone companies would consider highly confidential information isn’t enough. Ms. Byron’s bill allows them to take their time reading it. In fact, her bill gives incumbent providers up to six months to stall, sabotage, or undercut the community effort. They are given the right to underbid the community’s proposal and ironically deliver service in places they have previously refused to serve.

“While it’s good to be specific about what a community plans to do, incumbent providers don’t have to adhere to the same level of transparency,” noted Lisa Gonzalez at the Institute for Local Self-Reliance. “As a result, publicly owned networks are at a disadvantage under such requirements when an incumbent knows where, what, when, and how much a municipality intends to invest to bring service to its community. When incumbents build or upgrade, they are not subject to the same level of exposure. Potential private partners who may consider leasing infrastructure or working with a community in some other capacity could also be put off by drastic transparency rules.”

Any of Virginia’s phone and cable companies could end the demand for municipal broadband tomorrow by simply providing the level of service communities need to participate in the digital economy. That requires connected education and high quality broadband for entrepreneurs and established businesses. Instead of providing that, companies write large campaign contribution checks to state politicians like Ms. Byron to slow down or sabotage any emerging competition. While stalling germinating broadband projects, providers will spend millions to demagogue them in the local media, throw every obstacle in their path, and then point to the delays and cost overruns as evidence municipal broadband is a failure.

In Tennessee, EPB had to face down a deep-pocketed cable industry lawsuit before it could begin offering gigabit internet broadband and television service. EPB eventually won the lawsuit and the service now attracts a substantial market share in Chattanooga, but critics carp it was only successful because it got a federal grant. They ignore the fact it has paid substantial dividends in job growth and enhanced the lives of local citizens, who vote for the service with their wallets.

The fact critical cable and phone companies risk charges of hypocrisy doesn’t seem to move them, even though they are not averse to accepting tax breaks and other government goodies as well. That is why providers instead use well-funded third-party astroturf groups and legislators to do their dirty work. Byron’s bill is more obvious than most, with obstructive sections mandating very short windows for public hearings, blatant protectionism, and a thicket of bureaucratic regulations designed to give ample opportunities for industry mischief with the filing of frivolous motions to run out the clock and run up costs.

§ 56-484.29. Provision of overbuild broadband services.

Any locality or its affiliate that is providing overbuild broadband services as of July 1, 2017, may continue to serve customers within the geographic service area within which it is actually providing such services as of that date; however, except as hereafter provided such locality or its affiliate shall not subsequently expand the geographic scope of its services or expand the nature of the service being offered.  Any locality or its affiliate that is not actually providing overbuild broadband services as of July 1, 2017, or if providing such services, subsequently seeks to expand the geographic territory or nature of services being offered, shall submit a proposal to the Virginia Broadband Advisory Council with a full explanation of the proposed overbuild broadband services, and if recommended by the Virginia Broadband Advisory Council, shall then require the express approval of the General Assembly through legislation approving the offering or expansion of such services by the locality or its affiliate.

Since 2008, Stop the Cap! has reviewed industry-sponsored municipal broadband ban bills, and none to date have illustrated the level of conflict of interest we see here. We call on Virginian officials to carefully investigate the ties Ms. Byron has to cable and phone companies and the ethical concerns raised from her involvement in key state bodies that can make or break rural broadband in Virginia. Byron increasingly exposes an agenda favoring incumbent phone and cable companies that just happen to contribute to her campaign — companies she seems willing to protect at any cost.

In our investigation, we uncovered several disturbing details that suggest questionable behavior from Ms. Byron, primarily from her failure to disclose materially important facts about her bill to fellow elected officials and, more importantly, the public. So far, her only defense to questions raised by the media about her bill is to play the “misunderstood victim” card:

This may be yet another example of media arrogance manifesting itself as a lack of common courtesy. But, I believe the real culprit to be something far more dangerous: the editorial’s author was not going to risk being confused by the facts.

[…] Had someone contacted me, I would have told them about my years of experience serving on Virginia’s Broadband Advisory Council, which I currently serve as chairman. The purpose of the Council is “to advise the Governor on policy and funding priorities to expedite deployment and reduce the cost of broadband access in the Commonwealth.” The Virginia Broadband Deployment Act advances that goal. That’s why legislators serving on the Council support House Bill 2108. And, we’re in good company: The Virginia Chamber of Commerce, the Virginia Association of Realtors and the Northern Virginia Technology Council have all indicated their support for House Bill 2108.

Fixed or Fair? If Byron’s bill becomes law, Ray LaMura, Virginia’s top cable lobbyist, will help decide if municipal providers can expand to compete with cable companies.

In fact, we understand Ms. Byron, her telecom industry benefactors, and the special interests she mentions as supporters only too well. We invite Ms. Byron to refute some of our facts:

While broadband in major Virginia cities is no better or worse than other large cities in the region, there are vast areas in central and western Virginia where inadequate broadband service persists, and private providers have been reluctant or unwilling to change that. As a result, some municipalities are considering offering an alternative. Ms. Byron’s bill doesn’t just deter communities from entering the broadband arena in these areas, it carpet-bombs the entrance out of existence.

The section of her bill detailing requirements for community providers seeking to expand requires them to ask permission from an entity known as the Virginia Broadband Advisory Council, which Byron disturbingly chairs. If the goal of this Council is to pave the road to improved broadband, Byron’s bill is an enormous pothole. Restricting competition won’t help the Council’s goal of winning lower prices for consumers and businesses either, and last time we checked, broadband bills in Virginia are going up, not down.

Ms. Byron’s clear conflict of interest between her bill and the Council’s goals should be grounds for her immediate resignation. It is hard to justify continuing to serve on a Council promoting better broadband while introducing bills that do the opposite. Taking political campaign contributions from the same companies that are directly responsible for the state of Virginia’s broadband today also makes it impossible for the Council to have any credibility as long as she continues to chair it.

Another concern: Ms. Byron fails to disclose the Council she uses for her defense includes “citizen members” that are, in reality, some of the most important telecom industry lobbyists in the state. Ms. Byron’s bill would require communities to seek approval for broadband expansion from the same Council that counts among its members Ray LaMura, president of the Virginia Cable Telecommunications Association, the state’s largest cable industry lobbying group, and Duront Walton, executive director of the Virginia Telecommunications Industry Association, which represents the interests of several telephone companies in the state.

Conflict of Interest?: Another member of Virginia’s Broadband Advisory Council.

Does anyone believe the Virginia Broadband Advisory Council is likely to approve any broadband expansion plan that leads to direct competition with an established cable or phone company, particularly when members like Mr. LaMura write municipal broadband hit pieces prominently linked on his LinkedIn page? Does anyone expect a fair shake from Ms. Byron, who wrote (inaccurately) “the vast majority of municipal broadband systems across the country that have tried to compete with the private sector have failed.”

By all appearances, the fix is in.

While we’re discussing full disclosure, Ms. Byron also failed to mention the Virginia Chamber of Commerce is hardly a dispassionate arbiter of the merits of community broadband — it is a private business lobbying organization. The Virginia Realtors Association is also a political lobbying organization that openly endorsed Ms. Byron’s election campaign, contributed a substantial donation to it, and runs an active Political Action Committee. The Northern Virginia Technology Council is a trade and lobbying organization that counts among its members AT&T, Cox, Comcast, CenturyLink, and Verizon, to name a few. To quote NVTC’s own website: “NVTC members are business leaders focused on the broad business climate of our state and communities.”

We believe Ms. Byron when she said she was in good company. Missing from the cozy gathering are consumers looking for internet access, local governments feeling pressure from their constituents to do something about the problem, and any belief Ms. Byron’s bill will do anything except keep things as they are.

But wait, there is more:

§ 56-484.30. Operating requirements.

The following provisions shall apply to any locality or its affiliate which offers broadband expansion services or overbuild broadband services, after July 1, 2017:

1. A locality or its affiliate shall apply, without discrimination as to itself and any affiliate, including any charges or fees for permits, access or occupancy, the locality’s ordinances, rules, and policies, including those relating to (i) obligation to serve; (ii) access to public rights of way and municipal utility poles and conduits; (iii) permitting; (iv) performance bonding; (v) reporting; and (vi) quality of service.

2. In calculating the rates charged by a locality for any communications service:

 a. The locality or its affiliate shall include within its rates an amount equal to all taxes, fees, and other assessments that would be applicable to a similarly situated private provider of the same communications services, including federal, state, and local taxes; franchise fees; permit fees; pole attachment fees; and any similar fees; and

b. The locality or its affiliate shall not price any of its communications services at a level that is less than the sum of: (i) the actual direct costs of providing the service; (ii) the actual indirect costs of providing the service; and (iii) the amount determined under subdivision 2a.

3. A locality or its affiliate shall keep accurate books and records of any provision of communications services.  A locality or its affiliate shall conduct an annual audit of its books and records associated with any provision of communications services, with such audit to be performed by an independent auditor approved by the Auditor of Public Accounts. Such audit shall include such criteria as the Auditor of Public Accounts deems appropriate and be filed with him, and with copies to be submitted to the Virginia Broadband Advisory Council.  If, after review of such audit, the Auditor of Public Accounts determines that there are violations of this chapter, he shall provide public notice of same, and the locality or its affiliate shall take appropriate corrective action to cure past violations and prevent future violations. […]

§ 56-484.31. Sale or disposal.

Any locality or its affiliate that seeks to sell or dispose of all or any material part of the infrastructure of an internal government services, broadband expansion services, or overbuild broadband services system, or any material portion of any subscriber or service contracts in connection therewith, shall do so by a public sale or auction process after advertisement.

By now, most readers get the point. This bill is a “plan for failure” for municipal broadband.

The ideological pretzel-bending required of Ms. Byron to do the telecom industry’s bidding is a sight to behold. Byron — a Republican — is openly advocating government price regulation, demands municipal providers turn over their books to be reviewed by her Virginia Broadband Advisory Council, which includes cable and telephone company lobbyists, and requires communities that want to abandon networks that fail under this legislative gulag to sell them to the lowest bidder, likely a cable or phone company that helped write the rules.

If this anti-consumer nightmare of a bill becomes law in Virginia, Christmas for Big Telecom will come early this year, and you’re paying… again.

Making America Great for Robber Barons Again

The president-elect’s choice for chairing the Federal Communications Commission may conclude there is little reason to even have a regulatory agency for telecommunications.

Donald Trump has gone farther to the right than any president-elect in modern history, at least in how he has chosen to staff his transition team. Having a place on that team is traditionally seen as a fast track to getting a plum cabinet position or leadership role in Washington’s bureaucracy, and Mr. Trump’s choices for overseeing tech and telecom policy have more in common with Ayn Rand than Ralph Nader.

Two of the top picks for his FCC transition team are true believers in the “laissez-faire/the free market always knows best” camp, but both have also been on the payroll of Big Telecom companies that believe special favors are perfectly acceptable.

The notorious D.C. revolving doorman Jeffrey Eisenach, now a leading contender for the next chairman of the FCC, is a man with so many hats that the New York Times published an exposé on him, noting it has become hard to tell whether Eisenach’s views are his own, those of his friends at the corporate-friendly American Enterprise Institute (AEI), or those of various telecom companies like Verizon that have had him on the payroll.

Eisenach has been heavily criticized for his especially close ties to telecom companies, fronting their positions at various Washington events often under the cover of his role as a “think tank scholar” at AEI. Eisenach despises Net Neutrality with a passion, and has used every opportunity to attack the open internet protection policies as overregulation. At the same time, Eisenach’s consulting firm was also doing work on behalf of the cellular telephone industry, including Verizon and other cell companies.

Eisenach is exceptionally casual about disclosing any paid financial ties, and has received criticism for it. His prominence as a member of the Trump transition team is therefore curious, considering incoming vice president Mike Pence has tried to clean the transition team of lobbyists.

Eisenach

Trump’s other leading contender is Mark Jamison, a former lobbyist for Sprint who now works for AEI. Jamison has received less attention and scrutiny from the telecommunications press, but in some cases his views, well-represented on his blog, are even more extreme than those of Mr. Eisenach.

In a 2013 report to the Florida Public Service Commission, Jamison looked down on consumer involvement in creating and enforcing telecom regulations:

Does customer involvement in regulation improve outcomes? Not always, according to PURC Director Mark Jamison. Speaking at the Australian Competition and Consumer Commission annual conference in Brisbane, Australia, Dr. Jamison explained that the key question is, “Who do we expect to change when regulators and customers engage?” Most discussion on customer engagement is about customers informing regulators about customer preferences and utility practices. Learning by regulators is important, but so are the building legitimacy, ensuring regulator integrity, and engaging in adaptive learning that are largely about changing customers. An over emphasis on changing regulators can result in pandering to current norms, which hinders institutional strengthening and adaptive work.

In that same report, Jamison echoed some of the same sentiments he has made on his blog, questioning the wisdom of regulating telecommunications policies, providing subsidies to ensure affordable telephone service (Lifeline), subsidizing rural broadband expansion, and maintaining the core concept of universal service, which means assuring every American that wants utility service can affordably get it.

Jamison even questioned the need for the FCC in its current form, particularly overseeing rate regulation, fair competition, and enforcing rules that overturn the telecom industry’s cartel-like agreement on mandated set-top boxes (and rental fees), Net Neutrality and interconnection agreements and fees, and consumer protection:

Most of the original motivations for having an FCC have gone away. Telecommunications network providers and ISPs are rarely, if ever, monopolies. If there are instances where there are monopolies, it would seem overkill to have an entire federal agency dedicated to ex ante regulation of their services. A well-functioning Federal Trade Commission (FTC), in conjunction with state authorities, can handle consumer protection and anticompetitive conduct issues.

Content on the web competes well with content provided by broadcasters, seeming to eliminate any need for FCC oversight of broadcasters. Perhaps there is need for rules for use of the airwaves during times of emergency, but that can be handled without regulating the content providers themselves.

The only FCC activity that would seem to warrant having an independent agency is the licensing of radio spectrum. Political interference in spectrum licenses would at least dampen investment and could lead to rampant corruption in the form of valuable spectrum space being effectively handed out to political cronies.

Jamison

Jamison’s theories are interesting, but in the real world they are impractical and frankly untrue. Readers of Stop the Cap! have long witnessed the impact of the insufficiently competitive telecom marketplace — higher broadband fees, data caps, and relentlessly terrible customer service. The costs to provide service have declined, but prices continue to rise. For many consumers, there is barely a duopoly for telecom services with cable companies taking runaway victory laps for providing 21st century broadband speeds while an area’s phone company continues to try to compete with underinvested DSL. The FTC has been a no-show on every important telecom issues of our time, in part because the industry got itself deregulated, leaving oversight options very limited.

It wasn’t the FTC that halted AT&T’s attempted buyout of T-Mobile and Comcast didn’t lose its struggle to acquire Time Warner Cable because of the FTC either. Pushback from the FCC and Department of Justice proved to be the only brakes on an otherwise consolidation-crazed telecom sector.

Oversight of broadcasting remains important because unlike private networks, the airwaves are a publicly owned resource used for the good of the American people. Jamison would abandon what little is left of regulations that required broadcasters to serve the public interest, not just private profit motives. Programming content is not the only matter of importance. Who gets a license to run a television or radio station matters, and so does the careful coordination of spectrum. It is ironic Jamison theorizes that a lack of regulation (of spectrum) would lead to political interference, rampant corruption, and cronyism. Anyone who has followed our experiences dealing with many state regulatory bodies and elected officials over telecom mergers and data caps can already use those words to describe what has happened since near-total deregulation policies have been enacted.

Public and private broadband competitors like local communities and Google have been harassed, stymied, and delayed by organized interference coordinated by incumbent telecom companies. Allowing them off the leash, as Jamison advocates, would only further entrench these companies. We have a long history in the United States dealing with unfettered monopoly powers and trusts. Vital infrastructure and manufacturing sectors were once held captive by a handful of industrialists and robber barons, and consumers paid dearly while those at the top got fabulously rich. Their wealth and power grew so vast and enduring, we are still familiar with their names even today — Rockefeller, Vanderbilt, Morgan, Schwab, Mellon, Duke, and Carnegie, just to name a few.

Jamison wrote a blog entry mapping out how to ultimately destroy the effectiveness of the FCC:

• Take direction from politicians,
• Promote partisan divides,
• Change the language in orders after the FCC votes,
• Ignore the facts, or at least manipulate them.

Jamison intended to argue that represented the current state of the Obama Administration’s FCC, but it is just as easy to ponder what comes after the Trump-lit bonfire of burned regulations and oversight, leaving only Big Telecom companies and their paid mouthpieces to manipulate the facts.

Jamison also undercuts his own argument in two other ways: first by declaring Michael Powell one of the great FCC chairmen of the modern era (after leaving the FCC he became president of the country’s biggest cable industry lobbying group) and second by relying extensively on quoting people with direct and undisclosed financial ties to the telecom companies that will directly benefit from implementing Jamison’s world views.

New York Times: In a 2014 email, Mr. Eisenach encouraged Michael O’Rielly, a Republican FCC commissioner, to use an American Enterprise Institute event to “lay out the case against” internet regulations.

Who doesn’t ultimately matter much in this debate, according to Jamison, are customers and consumers, whose input in these discussions is dismissed as either trendy or misinformed. No similar conclusions are forthcoming from Mr. Jamison about the influence and misinformation emanating from huge telecommunications companies that keep more than a few of his self-interested sources in comfortable suburban Virginia homes, driving their nice cars to and from the offices of shadowy think tanks that receive direct corporate funding or go out of their way to hide their benefactors.

Appointing either Mr. Eisenach or Mr. Jamison to the Federal Communications Commission would be the ultimate rubber stamping of business as usual in Washington, exactly what Donald Trump ran against. That may make Verizon or Comcast “great again,” but it certainly won’t help the rest of the country.

The stunning victory by Donald Trump in Tuesday’s election ended two years of campaigning, negativity, and divisiveness.

Wednesday probably marked the beginning of Election 2020, which will involve four years of campaigning, negativity, and divisiveness.

Before looking at the implications of the forthcoming Trump Administration, some personal words about the results from the perspective of a lifelong resident of western New York, on the periphery of the Rust Belt region that evidently made all the difference for Mr. Trump on Tuesday night.

Casting my vote here in western New York while suffering a severe cold that has now evolved into walking pneumonia, I reflected on the fact this nasty election probably gave it to me. Despite that, I have the good fortune of living in a diverse community. Our next door neighbor, and by far the closest to us personally, is an ardent Republican who supported Sen. McCain, Gov. Romney, and Mr. Trump. Across the street, a reliable panoply of Democratic candidate lawn signs sprout every other fall. I spend my Friday afternoons in a community south of Rochester where Hillary Clinton has been largely reviled since she was a senator of New York. She didn’t win in Ontario County this year either. But Sen. Chuck Schumer routinely wins his elections with little effort or opposition.

Politics in the western half of New York State (known as “somewhere around Canada” to those in New York City and Long Island) is far more comparable to the battleground state of Ohio than reliably Democratic Manhattan. Our urban centers in Buffalo, Rochester, and Syracuse are solidly Democratic, while the suburbs and rural areas are just as likely to elect Republicans to office. Among those disappointed Democrats pondering a surprising election of Donald Trump, many cannot understand how such a result is possible. But having been a lifelong resident in a region that has seen profound changes from the decimation of blue-collar, high-paying manufacturing jobs in states that still cling to tax rates that assume everyone still has one, the Trump rebellion predicted by Michael Moore was hardly outlandish. Across the Rust Belt, more than a few voters have given up believing politicians, and are still waiting for relief from the relentless pressure on the declining middle class. Some of the worst job declines came in this region during the first Bush Administration and then again under President Bill Clinton. Memories are still fresh.

The changes to local economies in this region are profound and extremely difficult to navigate for those who lack advanced degrees or special technical skills. A state like North Carolina understands these changes well. An economy quickly transformed away from tobacco and textiles towards high technology created enormous challenges for many families. Those problems still exist in many parts of the state where infrastructure and good jobs are still lacking more than two decades later.

In Rochester, the formerly solid and reliable employers like Eastman Kodak and Xerox are a fraction of the size they were in the 1980s. My father met my mother at Eastman Kodak, a company that also employed more than half my extended family. But not for long. I vividly recall watching the inauguration parade of President Bill Clinton on television in 1993 on a day that Eastman Kodak carried out another wave of draconian job cuts. My father’s job survived, but my uncle’s did not. My grandfather had retired by then.

Michael Moore correctly predicted the reality of a Trump victory with the support of a disaffected middle class in economically distressed states.

Twenty-three years later, the largest employer by far in this area is the University of Rochester/UR Medicine, which includes the university and an enormous medical treatment infrastructure. Together, this accounts for 22,500 workers. The second largest employer in Rochester is a grocery store. A great grocery store — Wegmans, founded and based here, but a grocery store nonetheless. It accounts for 13,500 jobs. Another 13,000+ workers are employed in medical treatment and hospital services that compete with the U of R. Rounding out top employers are the Rochester City School District with 5,500 teachers, administrators and staff, which is almost as big as Monroe County’s government, which accounts for 4,500 employees. The biggest remaining manufacturer is Xerox, which employs 6,300 workers. But consider this contrast: in 1982 Kodak employed 60,400 in the Rochester area. Today, that number is just 2,300.

Rochester had it easy compared to heavy manufacturing cities to our west. Buffalo, western Pennsylvania, Ohio, and Michigan have been walloped twice — first by the offshoring of heavy industry and then a second round of manufacturing job losses many voters blame on various free trade agreements. Many tens of thousands of these displaced workers have relocated to other states. Exiting residents of Rochester overwhelmingly prefer North Carolina and Arizona for various reasons, while blue-collar workers further west often end up in Kentucky, Tennessee, Alabama, and other southern states. Many of those that remained behind and remember their old jobs are angry, very angry. Some of them supported Bernie Sanders, especially in Michigan. But once the choice came down to Hillary Clinton or Donald Trump, more than a few voted for Mr. Trump, not out of a great allegiance to the Republican party, but because Trump vilified free trade and business as usual in D.C. To these voters, fair or not, Hillary seemed to embody the establishment that has done little or nothing except make speeches.

The election is now over and we have the results. My candidate did not win because she did not run. (Elizabeth Warren in 2020!) On the broadband issues Stop the Cap! is concerned with, a Trump Administration is likely to be bad news for consumer protection, fair pricing, and community broadband, primarily because the people Mr. Trump has chosen thus far to advise him on tech issues are the usual sort with close ties to the largest telecommunications companies in the country, and many have penned papers that have closely aligned with those companies’ public policy positions.

Phillip Dampier: This election gave me walking pneumonia.

Trump transition team adviser Jeffrey Eisenach, for example — who we wrote about back in August, could hold considerable power over the direction President-elect Trump will take tech policy in this country. Eisenach has written papers opposing Net Neutrality, is unconcerned about data caps and zero rating policies, and called fears about consolidation blowouts like the now-dead Comcast-Time Warner Cable mega-merger overblown.

Trump did state opposition to the recent merger announcement from AT&T and Time Warner, Inc., which has Wall Street concerned the deal will be DOA by the time the merger papers are filed sometime early next year in Washington. If President Trump keeps his word on that, there are many more mergers and acquisition deals that will emerge in 2017 that will likely never be on his radar, but will be reviewed by a Federal Communications Commission stacked with commissioners closer in ideology to Ajit Pai and Michael O’Rielly than Thomas Wheeler. In our view, Commissioners Pai and O’Rielly have yet to support any significant pro-consumer policy change on broadband before the FCC. Instead, they have largely parroted Big Telecom’s talking points.

It is our suspicion that most of the merger and acquisition deals dreamed about on Wall Street that would never have gotten through the Obama Administration’s Justice Department and FCC will receive quick approval under a Trump Administration.

While Mr. Trump alludes he will prove to be a complete game-changer to business as usual in Washington, his transition team is being swarmed by the usual faces — corporate lobbyists, big donors, and political hacks angling for cabinet or agency positions. Most of them are Beltway insiders, and many have been through D.C.’s revolving door before — lobbyist -> public servant -> lobbyist.

So while Mr. Trump tells America AT&T and Time Warner is “too much concentration of power in the hands of too few,” we remain uncertain he will speak as loudly about other likely deals, particularly involving Altice, Cox, Mediacom, CenturyLink, Windstream, Frontier, Sprint, and T-Mobile — just some of the hunters and the hunted that may get consolidated in 2017.

On other issues:

• Net Neutrality: Republicans vilified Net Neutrality and a Republican-dominated FCC will likely kill or dramatically downplay any efforts to enforce it. Trump himself has never been a fan. Any new powers won by Chairman Wheeler to regulate internet providers under Title II will also likely be jettisoned by a Chairman Pai or O’Rielly;
• Data Caps/Zero Rating: This issue is important to us, but isn’t likely to see any regulatory action under a GOP-dominated FCC. Internet providers are likely to see a Trump Administration as a green light for data caps and consumption billing;
• Internet Privacy: Efforts to regulate internet privacy will also likely face a reversal from skeptical Republicans who will combine excuses for national security with a “hands off” attitude on telecommunications regulation.
• Community Broadband: The issue of turning back bans on public/municipal broadband will have to be won on the state level. We do not expect to see many friends for municipal broadband in Republican-dominated Washington. The influence of the Koch Brothers, notoriously opposed to public internet projects, has only gotten stronger after this election.

With a GOP-sweep across the Executive and Legislative branches, we expect more deregulation, which is likely to further entrench the broadband duopoly in the United States, if not further expand it with additional consolidation-related mergers and acquisitions, at least among the small and mid-sized players.

On a more personal level, I have been involved in public policy battles surrounding telecommunications issues since 1988. In the late 1980s, I fought for increased competition and regulatory relief for home satellite (TVRO) dishowners and we joined forces to help pass the 1992 Cable Act, which laid the foundation for the emergence of competitors DirecTV and Dish Networks — the first serious competition to the cable industry. That law was vetoed by President George H.W. Bush, but that veto was overridden by the U.S. Congress — the only bill to successfully become law during the first Bush Administration over his objection. Republicans pay cable bills too.

(Image courtesy: Steve Rhodes)

Administrations come and administrations go, but we are still here.

The need for robust consumer protection, true competition, and a level playing field never changes. Your involvement remains essential regardless of what party is in power in Washington. Some battles will be more challenging, but not all. Direct consumer action can make an impact on companies concerned about their brand and public image. Just as consumers are passionate about rising cable bills, broadband is always a hot button issue, especially where service is unavailable or comes only at a price that resembles extortion.

The president-elect says that America doesn’t win anymore. We sure haven’t been winning on broadband, either on speed, pricing, or availability, in comparison to Europe and Asia. The solution is not to turn the problem over to the same companies that created the conditions for broadband malaise we are dealing with now. As seen in fiercely competitive markets like France, true competition is often the only regulation you need. A duopoly answers to itself. Having the choice of four, five, six, or more competing providers answers to customers. Consolidated and entrenched markets resist innovation and the need to compete stagnates. Corporate welfare and ghost-written telecom laws that forbid community broadband restricts economic growth and kills jobs, stranding countless rural residents from the digital economy. That -is- business as usual in too many states where groups like the American Legislative Exchange Council (ALEC) facilitate legislative fixes and legal protectionism that restricts or disadvantages competition.

If Mr. Trump truly believes the words he has spoken, he must be vigilant. He must not surround himself with the same politicians and their minders that created the very problems he promises to fix. The voters that elected him to office expect nothing less than blowing up business as usual. But the nation’s capital has a better track record of changing the politician while resisting change to the status quo.

We wish President Trump success for our country, but we’ll be watching to make certain his rhetoric meets the reality.

Sources close to the Clinton campaign told Politico three names are emerging as potential FCC nominees in a presumed Clinton Administration, and all three are close friends of Bill and Hillary Clinton, all have spent time traveling through the revolving door of D.C. politics and the private sector or lobbying, and one served as a FCC commissioner before under Bill Clinton’s presidency.

All three are classic D.C. Establishment types, so there should be no surprises or rebellion from within the Democratic ranks.

Ness

Susan Ness: A former FCC commissioner, Ness today serves as a top Clinton fundraiser. Prior to her FCC appointment, Ness was a senior lender to communications companies as a group head and vice president of a regional financial institution. She served as Assistant Counsel to the Committee on Banking, Currency and Housing of the U.S. House of Representatives, and she founded and directed the Judicial Appointments Project of the National Women’s Political Caucus. Ness is a member of the National Association of Regulatory Utility Commissioners’ Committee on Communications, the Federal Communications Bar Association, and Leadership Washington (Class of 1988). Before she joined the FCC, she served in many civic leadership roles, including chair of the Montgomery County, Maryland, Charter Review Commission; vice chair of the Montgomery County Task Force on Community Access Television; and president of the Montgomery County Commission for Women.

In her favor, Ness didn’t end her service with the FCC and become a paid lobbyist, preferring to spend her years outside of public service in the private sector. However, she was a director for Adelphia, America’s first criminally convicted cable company (the principal owners, the Rigas family, went to prison for a variety of white-collar crimes). Ness was also an apologist for the disastrous telecom deregulation policies of the Clinton Administration, which backfired and created mass corporate consolidation and higher bills for consumers.

In a speech in January 1999, Ness promised good times were ahead because of Clinton Administration’s support for deregulation:

It takes good business planning, raising capital, provisioning, and investment before the fruits of competition can be harvested. And sometimes companies succeed and sometimes they fail. That’s the marketplace at work.

That’s why I’ve been somewhat surprised at the impatience with which some pundits have viewed the level of local competition under the ’96 Act.

On the first anniversary, folks were asking “where’s the competition?” I observed then that this was like piling the family into the car for a long trip, and, before you’ve reached the end of the driveway, there is a plaintive voice from the back seat, “Are we there yet?”

No, we’re not there yet — even now, two years further into the journey.

Kornbluh

Unfortunately for Americans, we’re still not there more than 15 years later. The marketplace and regulatory agencies have rigged the game into a comfortable duopoly where competition benefits exist primarily for new customers getting a sign-up promotion. Once expired, high prices predominate. Ness promised competition. We got consolidation and more deregulation instead, and Americans are paying some of the highest broadband and wireless prices in the world as a result. We’re uncertain if she has learned her lesson.

Karen Kornbluh: Her middle initials should be “D.C.” because she’s been there for so long. Kornbluh is the Democratic Party establishment through and through, with a record of public service dating back to the 1980s. From 1991-1994, she was a legislative aide for Sen. John Kerry (D-Mass.) She spent two years at the Treasury Department, then spent three years as a Tech Fellow at the New America Foundation think tank. She served as a policy director for Barack Obama when he was a senator from Illinois and was appointed as ambassador to the OECD in 2009, which means she is at least aware of how poorly the U.S. compares in broadband speeds to the rest of the world. Kornbluh will not rock the boat as a FCC commissioner, but should be a reliable vote for all of a presumed President Clinton’s telecom initiatives.

Phil Verveer serves as a senior counselor to current FCC chairman Thomas Wheeler, which may offer some continuity for Chairman Wheeler’s policies under the Obama Administration in a presumed Clinton Administration. Verveer is a longtime friend of the Clintons. He also served as Deputy Assistant Secretary of State and US Coordinator for International Communications and Information Policy with Ambassadorial rank from 2009 to 2013.

Verveer

Verveer has practiced communications and antitrust law in the government and in private law firms for more than 40 years.  From 1969 to 1981, he practiced as a trial attorney in the Antitrust Division of the Department of Justice, as a supervisory attorney in the Bureau of Competition of the Federal Trade Commission, and as the Chief of the Cable Television Bureau, and the Common Carrier Bureau of the Federal Communications Commission.  Between 1973 and 1977, he served at the Antitrust Division’s first lead counsel in the investigation and prosecution of United States v. American Tel. & Tel. Co., the case that eventuated in the divestiture of the Bell System.  As a bureau Chief at the FCC, Verveer participated in a series of decisions that enabled increased competition in video and telephone services, introduced asymmetric telecommunications regulation, and limited regulation of information services. But he was also a telecom lobbyist or counsel for Willkie, Farr and Gallagher (1999-2005) and Jenner & Block (2006-2009).

With those three names now out in the public view, Big Telecom lobbyists are reportedly “coalescing around those perceived to be frontrunners for a commission spot,” reports Politico.

“Nearly everyone on the list is part of the Clinton campaign’s network of tech advisers, which helped draft the Democratic nominee’s tech policy platform,” Politico adds, which means it is likely what Secretary Clinton has promised in her campaign documents about future telecom policy will likely move forward under the stewardship of her potential appointees who helped write it.

Republican presidential hopeful Donald Trump’s campaign has sent personal invitations to some of the telecom industry’s most powerful lobbying groups asking them to attend an “information session” that will give the lobbyists “an inside look on the work underway on planning for the transition,” should Donald Trump become the next president of the United States.

Communications Daily reports the secretive meeting will be held at the powerhouse D.C. law firm Baker Hostetler, and will feature Trump transition team leader Chris Christie, the current governor of New Jersey.¹

The Trump campaign has remained almost totally silent on telecom public policy issues, but the meeting will give some of the country’s biggest telecom companies face time to influence an incoming Trump Administration on telecom issues ranging from wireless spectrum to Net Neutrality to competition and regulation matters.

Transition team member Andrew Bremberg, a former aide to Senate Majority Leader Mitch McConnell (R-Ky.) sent the invitations. Likely to attend are lobbyists from NCTA-The Internet Association (cable lobby) and the CTIA (the wireless industry’s principal lobbyist). Also expected are individuals representing some of the largest telecom companies in the country. Up to 100 lobbyists are expected to attend.

The Trump campaign has refused to confirm the event and efforts to reach lobbyists expected to attend to confirm the meeting have also been rebuffed.

Such meetings give lobbyists invaluable face time with important incoming administration officials and often stimulate political campaign contributions. Consumers or their representatives are never invited to attend.

The Trump campaign has proven elusive about the candidate’s views on telecom policies. The Clinton campaign has been more forthcoming, released dozens of pages outlining a comprehensive telecom policy with claims the candidate favors Net Neutrality and wants to spend a considerable sum of taxpayer dollars on enhancing rural broadband.

¹Telecom Officials Likely on Deck for Next Week’s Trump Transition Meeting – Communications Daily/Comm Daily® Notebook, 30 Sep 2016, Ref: 1609290070 – (Subscription req’d.)