A merger of Time Warner Cable and Comcast is just one more step towards undermining our democracy, worries former Secretary of Labor Robert Reich.

In a blog entry republished by Salon, Reich sees increasing evidence that the trust-busting days at the turn of the 20th century are long over, and Americans will likely have to relearn the lessons of allowing capitalism to run amuck.

It was the Republican Party of the 1890s that had the loudest voice in Washington protesting the concentration of business power into vast monopolies that had grown so large, they not only hurt consumers but threatened to undermine democracy itself.

Republican Senator John Sherman of Ohio was at the forefront of acting against centralized industrial power, which he likened to the abusive policies of the British crown that sparked America’s revolution for independence.

“If we will not endure a king as a political power,” Sherman thundered, “we should not endure a king over the production, transportation, and sale of any of the necessaries of life.”

The merger of Comcast and Time Warner Cable is just the latest example America is in a new gilded age of wealth and power that no longer prevents or busts up concentrations of economic power, observes Reich.

“Internet service providers in America are already too concentrated, which is why Americans pay more for Internet access than the citizens of almost any other advanced nation,” Reich argues.

Reich

Reich worries about the implications of allowing Comcast to grow larger, considering how much the current company already invests in Washington to get the government policies it wants:

• Comcast has contributed $1,822,395 so far in the 2013-2014 election cycle, according to data collected by the Center for Responsive Politics — ranking it 18th of all 13,457 corporations and organizations that have donated to campaigns since the cycle began. Of that total, $1,346,410 has gone to individual candidates, including John Boehner, Mitch McConnell, and Harry Reid; $323,000 to Leadership PACs; $278,235 to party organizations; and $261,250 to super PACs;

• Last year, Comcast also spent $18,810,000 on lobbying, the seventh highest amount of any corporation or organization reporting lobbying expenditures;

• Comcast is also one of the nation’s biggest revolving doors. Of its 107 lobbyists, 86 worked in government before lobbying for Comcast. In-house lobbyists include several former chiefs of staff to Senate and House Democrats and Republicans as well as a former commissioner of the Federal Communications Commission. Nor is Time Warner Cable a slouch when it comes to political donations, lobbyists, and revolving doors. It also ranks near the top.

Atwell-Baker

The Center for Responsive Politics expanded on the revolving door issue between the cable industry and the Federal Communications Commission that will be responsible for approving the Comcast-Time Warner merger.

It found one of the most prominent travelers to be former FCC commissioner-turned Comcast lobbyist Meredith Atwell-Baker. Always a friend of the cable industry, the Republican commissioner hurried out the door two years into her four-year term after getting a lucrative job offer from Comcast in June 2011. Despite claims she stopped participating in votes relating to Comcast after getting her job offer, she was a strong supporter of Comcast’s merger with NBCUniversal and favored the cable industry’s approach towards preserving a barely noticeable feather-light regulatory touch.

Atwell-Baker never contemplated her move might be seen as a conflict of interest, but then again, it represented nothing new for Washington. At the time, the only condition limiting her was a two-year ban on lobbying the FCC. But that does not apply to Congress so Atwell-Baker spent her time as Comcast’s senior vice president of government affairs trying to influence the House and Senate on 21 bills that could affect Comcast’s bottom line.

Just as shameless — Michael Powell, who served as FCC chairman during the first term of the George W. Bush Administration. After leaving the FCC he took the lucrative position of top man at the National Cable & Telecommunications Association, the cable lobby. The Center found several other former FCC employees heading into the private sector, advising Big Telecom companies on how to best influence regulators:

• Jonathan Adelstein, FCC commissioner from 2002 to 2009, became the president and CEO of PCIA: The Wireless Infrastructure Association in 2012;

• Rudy Brioche, was an adviser to former commissioner Adelstein before moving to Comcast as its senior director of external affairs and public policy counsel in 2009. Brioche was so valued by the FCC, in fact, that he was brought back to join the commission’s Advisory Committee for Diversity in the Digital Age in 2011;

• James Coltharp, who served as a special counsel to commissioner James H. Quello until 1997, is now a Comcast lobbyist;

• The same is true for Jordan Goldstein, who worked as a senior legal adviser to commissioner Michael J. Copps.

Once out of the public sector for several years, some lobbyists see their value deteriorate as they get increasingly out of touch with the latest administration in power. So several seek a refresh, temporarily leaving their lobbying job to return to public sector work.

The Center offered David Krone as a potential example. Krone formerly held leadership and lobbying positions with companies like AT&T, TCI Communications and the National Cable & Telecommunications Association. After 2008, he was hired by Senate Majority Leader Harry Reid (D-Nev.) to advise him on telecommunications matters. Today he is Reid’s chief of staff. If and when Reid leaves office, Krone can always join the parade of ex-Hill staffers back to the lucrative world of lobbying.

Will elected officials give a receptive ear to Comcast’s arguments in favor of its merger? Most likely, considering every member of the Senate Judiciary Committee (except deal critic Sen. Al Franken), has recently received campaign contributions from the cable giant, according to OpenSecrets:

Comcast PAC donations to Senate Judiciary Committee Democrats

• Chuck Schumer, New York: $35,000
• Patrick Leahy, Vermont, Chairman: $32,500
• Sheldon Whitehouse, Rhode Island: $26,500
• Chris Coons, Delaware: $25,000
• Dick Durbin, Illinois: $23,000
• Amy Klobuchar, Minnesota: $22,500
• Dianne Feinstein, California: $18,500
• Richard Blumenthal, Connecticut: $11,500
• Mazie Hirono, Hawaii: $5,000
• Al Franken, Minnesota: $0

Comcast PAC donations to Republicans

• Orrin Hatch, Utah: $30,000
• Chuck Grassley, Iowa, Ranking Member: $28,500
• John Cornyn, Texas: $21,000
• Lindsey Graham, South Carolina: $13,500
• Jeff Sessions, Alabama: $10,000
• Mike Lee, Utah: $8,500
• Ted Cruz, Texas: $2,500
• Jeff Flake, Arizona: $1,000

Reich thinks its time to return to the trust-busting days of President Teddy Roosevelt, who found the transportation infrastructure of the 20th century and the fuel used to power it increasingly controlled by a handful of giant players that abused monopoly power to set unjustifiable prices and suppress competition. Getting Congress, increasingly flush with now-unlimited corporate money, to agree to its own refresh a century later may prove a tougher sell.

AT&T and Verizon are among the biggest tech company spenders in Washington, paying millions every quarter to lobby federal and state lawmakers on how they can make life easier for the telecom giants.

AT&T increased their lobbying budget by a whopping 23 percent in the third quarter, easily beating year over year spending of $3.5 million in the third quarter of 2012. In just three months this year, AT&T spent $4.3 million lobbying lawmakers on regulatory relief, retiring the rural landline network, reform of cell tower placement policies, and trying to keep the FCC from gaining new oversight powers.

Verizon Communications had lobbying costs of $3.09 million last year at this time. This year, it reduced that amount by two percent, spending $3.04 million. But Verizon Wireless upped its political spending by 19 percent, from $1.1 to $1.2 million. Taken together, Verizon spent a collective $4.24 million on lobbying in the last three months. Verizon lobbied on some of the same issues AT&T did.

In contrast Google spent $3.4 million, Facebook spent $1.4 million, and Microsoft spent $2.2 million.

“Once again the lobbying disclosures demonstrate the sad truth about the state of our democracy,” said John M. Simpson, Consumer Watchdog’s Privacy Project director. “When the government is open for business, policymaking is all about who has the cash and is willing throw it around.”

USA Today reported Verizon has also once again achieved a 0% effective tax rate during the past 12 months, which means any owed taxes will be offset by a variety of accounting tricks:

A big reason that Verizon’s effective tax rate is so low, coming in at a negative 4.8%, is largely due to accounting. The company’s sped-up depreciation, severance and pension costs are large credits that contribute to pushing the company’s taxes down, says Jonathan Schildkraut of Evercore. But there’s also a distortion caused by the company’s 55% interest in Verizon Wireless. Vodafone, which owns 45% of Verizon Wireless, pays taxes on its share, but the entire profit is reported on income. Adjusting for this, Verizon’s effective tax rate is closer to 30%, the company says. Verizon is buying Vodafone’s stake, which will eliminate the issue in the future. Similarly, real estate investment trusts have low effective tax rates because they pass profit to shareholders, who then pay the taxes.

The question for investors is whether or not companies paying low effective tax rates might, eventually, attract the attention to regulators. “They are slow at getting at these issues,” Yee says.

Since 2005, five cable and telephone companies and their respective lobbying trade associations have donated nearly $12 million to New York politicians, making Big Telecom companies among the biggest political donors in the state. Now a government reform group wants an investigation by the state’s anti-corruption commission.

By exploiting giant loopholes in New York’s campaign finance laws, telecom companies that used to live with annual campaign finance limits of $5,000 are now donating millions to powerful political leaders in Albany – the majority conferences in the legislature, the state party committees, and the governor. Some are using secretive “housekeeping” accounts controlled by political parties. Others hide behind shadowy contributions from “limited liability corporations” (LLCs) established by some of the state’s biggest cable and phone companies and treated under current law as living, breathing people.

“Big Telecom exemplifies the pay-to-play culture which has come to define Albany, giving generously to the leadership in exchange for veto power over bills which favor the public interest,” said Common Cause-New York executive director Susan Lerner.

The Optimum donor to state “housekeeping” accounts among telecom providers is Cablevision.

No telecom company donates more in New York than Cablevision, which has given more than $5.3 million in contributions to state politicians since 2005 as it fights its way through union problems, fierce competition from Verizon, and complaints from subscribers about rising cable prices and questionable service. The cable company doesn’t just donate in name-only. Common Cause-NY discovered Cablevision using eight different LLCs to evade contribution limits, handing over $1.5 million to candidates and committees. Gov. Andrew Cuomo received $130,000 from four different Cablevision-controlled LLCs between July and October 2010. On April 29 of this year, former Nassau County executive Tom Suozzi’s campaign received $190,000 from three Cablevision-controlled LLCs on that single day.

Verizon (82%) and Time Warner Cable (70%) prefer to quietly give the largest percentage of their political donations to the parties’ secretive, soft money “housekeeping” accounts. The Republican and Democratic recipients are not using the money to buy Endust, mops or spare light bulbs, although the average voter might assume as much.

Corporations with an agenda just love New York’s hush-hush “housekeeping” accounts because they come without dollar limits or complete disclosure about how the money was ultimately spent.

The State Board of Elections says “housekeeping” money is supposed to go toward maintaining a party’s headquarters and staff or “ordinary activities that are not for the express purpose of promoting the candidacy of specific candidates.” Unfortunately, nobody bothered to require detailed accounting, allowing funds to disappear down a political rabbit hole, to be distributed at each party’s discretion.

Comcast (59%) and AT&T (53%) are considerably smaller players, in part because neither company serves many wired cable/broadband customers in New York.

Verizon’s corporate PAC also likes to raise relatively large numbers of small contributions given in the name of company executives or employees, not necessarily mentioning the company itself. Campaign finance disclosures may list only the individuals’ contribution(s), not the company that signed their paycheck.

Where does all the money go?

Common Cause-NY says most of the money is channeled to the most influential politicians in the state, with minority parties and unelected candidates typically getting much less.

To gain influence on the state level, Big Telecom companies contribute to the governor, attorney general, and the majority parties controlling the state Assembly and Senate, with Republicans getting the lion’s share (over $3.5 million) in the Senate and Democrats (over $1.6 million) in the Assembly.

For local issues of interest to the state’s local cable and phone companies, contributions are funneled to influential county-level political machines, perhaps helpful in making life difficult for a competing Wi-Fi project, a municipal fiber network, or helping to cut red tape to place a cell tower in a controversial location.

The top six recipients of Big Telecom’s political cash in the legislature:

• Key Party Leaders: Dean Skelos ($117,700), Tom Libous ($57,150), Jeff Klein ($49,450), and Sheldon Silver ($32,749.61)
• Current and former Chairs of the Senate Energy and Telecom Committee: George Maziarz ($79,718.02) and Kevin Parker ($34,444.00).

Common Cause-NY notes the corporations involved don’t give money without expecting something in return. After generous contribution checks were deposited, a number of telecom consumer protection bills mysteriously died in committee or never made it to the floor. The same fate did not meet bills offering special tax breaks for cable and Internet Service Providers that have cost New York taxpayers nearly $500 million and counting.

“Multi-million dollar campaign contributions clearly help Big Telecom maintain the status quo of corporate control, high prices, and lax regulation,” Common Cause-NY concludes.

The legislature is rife with examples of bills that would have likely passed with popular support but suddenly or “mysteriously” didn’t:

• A 7635-A / S5630-A: Establishes a moratorium on telephone corporations on the replacement of landline telephone service with a wireless system.
  • The “VoiceLink” moratorium bill, passed the Assembly, had broad bi-partisan support in the Senate but never came to a vote.
• S542: Relates to enacting the “Save New York Call Center Jobs Act of 2013,” which requires prior notice of relocation of call center jobs from New York to a foreign country; directs the Commissioner of Labor to maintain a list of employers who move call center jobs; prohibits loans or grants.
  • The “Call Center Jobs Act” would take away tax breaks and state grants if companies move a call center to another country. The bill passed the Assembly in 2012 (A9809) and had bipartisan support in Senate but was blocked. The 2013 bill died in Senate committee.
• A6003/S5577 — Directs the Department of Public Service to study and report on the current status of cable television systems providing services over fiber optic cables.
  • Bipartisan support in Assembly for further oversight of broadband but gets little support in Senate, the same bill was also blocked in 2012.
• A5234/S1075 — Enacts the “Roadway Excavation Quality Assurance Act” demanding utility companies or their contractors shall use competent workers and shall pay the prevailing wage on projects where a permit to use or open a street is required to be issued.
  • Bipartisan support in the Senate and Assembly but no passage in either 2012 and 2013.
• A6239/S4550 — Creates the State Office of the Utility Consumer Advocate to represent interests of residential utility customers.
  • Bipartisan support in Assembly, dies in Senate.
• A6757/S4449 — Requires providers of electric, gas, steam, telephone and cable television services to issue standardized bills to residential customers; provides the standards for such bills shall be established by the Public Service Commission.
  • Bipartisan support, passes Assembly, dies in Senate.

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

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

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

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

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

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

The Sordid History of “Video Competition” in Wisconsin

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

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

Bohl

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

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

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

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

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

Being AT&T’s Best Friend Can Be Rewarding

Montgomery

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

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

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

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

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

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

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

Plale

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

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

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

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

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

Venskus

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

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

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

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

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

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

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

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

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

Gov. Scott Walker is also a close friend of ALEC, supporting a number of corporate-sponsored initiatives to deregulate the telecommunications industry. (Source: ALEC Exposed)

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

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

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

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

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

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

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

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

Bradford

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

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

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

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

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

Verizon is linked from COFEM’s home page.

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

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

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

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

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

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

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