The U.S. Cattlemen’s Association this week took some time out to go all out for AT&T’s proposed merger with T-Mobile.  In addition to successfully navigating the FCC’s arcane comment filing system to submit their comments in favor of the merger, the group also penned a lengthy, favorable guest blog for Washington, D.C. inside-the-beltway-favorite, The Hill newspaper:

The expansion of next-generation wireless broadband envisioned by the T-Mobile and AT&T merger, for example, is critical for the next stage of rural America’s evolution and success. It will allow ranchers, farmers, and all rural residents who have been traditionally underserved to finally gain access to the best that mobile broadband has to offer, including faster and more reliable connections. We strongly encourage the Federal Communications Commission to support these developments as an investment in both the current and future generations of agricultural producers and small communities across rural America.

The cattlemen’s group has had a lot to say about telecommunications issues, especially mergers and acquisitions.  It was cited by Verizon as a supporter of its merger with Alltel in 2008, signed a joint letter in 2008 from industry-connected Connected Nation for a broadband plan compatible with the interests of the nation’s largest cable and phone companies, wrote a letter to the FCC opposing Net Neutrality in 2009, and submitted two pages of comments in May favoring the merger between AT&T and T-Mobile.

Apparently there is plenty of free time on the ranch to ponder billion dollar telecommunications mergers.

The argument from the group is that permitting mergers and blocking open net policies like Net Neutrality will convince carriers to provide enhanced service in rural areas where cattle ranches predominate.  But facts in evidence illustrate how wrong-headed that argument is:

• Verizon’s merger with Alltel has done nothing to bring its LTE network to rural America.  Verizon is focusing LTE upgrades on the markets where it makes the most business sense, and that does not include rural Texas or Oklahoma;
• The National Broadband Plan has directed stimulus funding for rural projects that are most likely to reach their ranch members — wireless ISPs and rural DSL.  The cattlemen’s group has nothing to say about either provider;
• Net Neutrality and the policies of an open and free Internet have no real impact on rural broadband deployment.  The same companies refusing to provide service yesterday are still refusing to provide service today, and that includes completely exempted wireless providers;
• T-Mobile’s urban-suburban focus is a mainstay of its business plan.  T-Mobile has never prioritized rural America as a viable service area, relying on roaming agreements to fill in service gaps.  Combining its urban-focused wireless infrastructure with AT&T will add nothing to the rural wireless experience.

The Washington Post finds financial connections between AT&T and the cattlemen group.

Advocating for a merger with T-Mobile makes about as much sense as the group advocating for a T-Mobile merger with Leap Wireless’ Cricket or MetroPCS.  All have a record of indifference about providing service in rural areas themselves.

So why does the group persist in fronting for AT&T’s public policy agenda?  Cecilia Kang at the Washington Post tweeted the obvious answer — they receive support from AT&T.

The piece for The Hill was penned by Jess Peterson, the cattlemen group’s executive vice president.  But Peterson has a second career: president of Washington, D.C.-based Western Skies Strategies, a lobbying firm that promises “success and profitability to our valued clients every time.”

The concept of dollar-a-holler public advocacy is not new, but AT&T is the Master of the Astroturf Universe.  The Center for Responsive Politics notes that from 1989 to 2010, no single company spent more on campaign contributions than AT&T.  Since 2008, more than $1.25 million has been “donated” to politically-connected charities and those willing to lend their name and reputation to back the company’s public policy agenda.

Facts have a hard time penetrating piles of cash, but here are some anyway:

1. T-Mobile’s combination with AT&T may create additional capacity for the combined company, but almost entirely in urban and suburban areas that will do nothing to help rural wireless.
2. No telecommunications company has a track record of providing service in areas unprofitable to serve or fail return on investment demands.  No merger will change that.
3. Promises for network upgrades already committed in long-range business plans do not sweeten a bitter deal for Americans concerned about competition in the wireless marketplace.
4. T-Mobile’s track record as being the most market-disruptive in pricing and innovation will be eliminated in a merger with America’s lowest rated wireless carrier.
5. Any excitement for rural wireless broadband from AT&T is tempered when would-be customers realize the company enforces a 2GB usage cap with an overlimit fee on their smartphone data plans — an Internet Overcharging scheme more punishing than either Verizon or Sprint.

A consumer group has filed a complaint with the Federal Communications Commission alleging that Verizon Wireless is violating its agreement with federal authorities by attempting to restrict the use of third-party wireless tethering applications.

The basis of the complaint, filed by Free Press, is that Verizon agreed not to “deny, limit, or restrict” customers from accessing the applications of their choosing as part of Verizon’s LTE license spectrum agreement.

“Verizon’s conduct is bad for the public and bad for innovation. It also appears to be illegal under the FCC’s rules that govern Verizon’s LTE network. Users pay through the nose for Verizon’s LTE service, and having done so, they should be able to use their connections as they see fit. Instead, Verizon’s approach is to sell you broadband but then put up roadblocks to control your use of it,” said Free Press policy counsel Aparna Sridhar.  “In 2007, Verizon argued aggressively against the adoption of these basic openness protections. Having lost that policy battle but won the auction for the spectrum licenses, Verizon has adopted a new regulatory strategy: simply ignore the rules on the books. The Commission must move quickly to investigate and stop these harmful practices.”

As Stop the Cap! reported earlier, Verizon has taken measures to try and warn off customers using the third-party tethering apps instead of purchasing the company’s $20 tethering plan, which offers 2GB of data usage per month.  In addition to text warning messages, the company has asked Google to disable access to tethering software in the Android Market for Verizon customers.

From Free Press’ complaint:

Efforts to disable smartphone features and create barriers to this useful, productive, pro-innovation activity should cause concern no matter who initiates them; but when Verizon Wireless interferes with the use of third-party tethering applications, that conduct also violates the rules governing its LTE network. When Verizon purchased the licenses for the spectrum over which it has deployed LTE, it agreed to abide by a set of pro-consumer, pro-innovation openness principles. In particular, Verizon promised that it would not “deny, limit, or restrict the ability of [its] customers to use the devices and applications of their choice.” Verizon’s recent move to limit and restrict access to tethering applications by actively requesting that Google make them unavailable in the Android Market (the Google market for mobile applications) deliberately and unequivocally violates this prohibition. The FCC should immediately open an investigation to assess Verizon’s practices and determine appropriate penalties for this clear breach of the Commission’s rules.

[…] When the FCC auctioned the C Block of the Upper 700 MHz spectrum — the spectrum on which Verizon has deployed its LTE offering — the Commission adopted important license conditions to protect the openness of broadband networks. It provided that licensees using that spectrum “shall not deny, limit, or restrict the ability of their customers to use the devices and applications of their choice.” In the words of Chairman Kevin Martin, the Commission adopted the conditions to ensure that “[c]onsumers will be able to use the wireless device of their choice and download whatever software they want onto it.”

The $49 "cap" plan isn't your maximum monthly fee, it's the MINIMUM monthly fee. The company selling it was fined for misleading advertising.

Banking on the fact most consumers do not understand what a “gigabyte” represents, much less know how many they use per month on usage-capped broadband plans, large telecommunications companies enjoy a growth industry collecting enormous overlimit fees that bear no relation to their actual costs of delivering the service.

The social implications of “usage cap and tier” pricing are enormous, according to Australia’s Communications & Media Authority.  Australia remains one of the most usage-capped countries in the world, and broadband providers have taken full advantage of the situation to run what the ACMA calls a broadband Confusopoly.

As a growing number of mobile broadband customers in the United States and Canada approach the allowance limits on their mobile data plans, Australia’s long experience with Internet Overcharging foreshadows a North American future of widespread bill shock, $1000+ telecom bills, and families torn apart by finger-pointing and traded recriminations over “excessive use” of the Internet.

Not helping matters are providers themselves, some who distort and occasionally openly lie about their plans.  In Australia, Optus was fined $200,000 for advertising a “Max Cap $49” plan that led many to believe their maximum bill would amount to $49.  But not so fast.  Optus turned the meaning of the word “cap,” typically a usage limit, upside down to mean a capped minimum charge.  Indeed, the lowest bill an Optus customer could receive was $49.  Using data services cost extra.  The company also claimed customers could use accompanying call credits “to call anyone,” another fact not in evidence.

Another common marketing misconception is the “unlimited mobile broadband” plan — the one that actually comes with significant limits. In most cases, providers want “unlimited” to mean there are no overlimit fees — they simply throttle the speed of the service down to a dial-up-like experience once a customer exceeds a certain amount of usage.  Companies like Cricket disclose their usage triggers.  Others, like Clearwire, do not — and they are applied arbitrarily based on customer usage profiles and congestion at the transmission tower.  While annoying, at least these plans do not impose overlimit fees which lead to the growing problem of “bill shock.”

Bill Shock

North Americans getting enormous mobile data bills remains rare enough to warrant attention by the TV news.  Often the result of not understanding the implications of international roaming, customers can quickly run up thousands of dollars in mobile bills while touring Europe, cruising, or even just living along the Canadian-American border, where accidental roaming is a frequent problem.

But as Americans only now become acquainted with usage-capped mobile data plans with overlimit fees, bill shock may become much more common.

In Australia, which has had a head start with usage-capped mobile data, an incredible 58 percent of customers exceeded their usage allowances at least once in a calendar year, and this statistic comes from April 2009.  The bill shock problem has now become so pervasive in Australia, in 2010 the office of the Telecom Ombudsman received more than 167,955 consumer complaints about the practice.

In the United States, one in six have already experienced surprise data charges on their bills — that’s 30 million Americans.  The Federal Communications Commission found 84 percent of those overcharged said their cell phone carrier did not contact them when they were about to exceed their allowed service limits. In about one-in-four cases, the overlimit fee was greater than $100.

Sen. Tom Udall (D-N.M.) proposed legislation that would require a customer to consent to overlimit fees before extra charges accrue for voice, data, and text usage.

The Cell Phone Bill Shock Act of 2011 would also require carriers to send free text messages when a customer reaches 80 percent of their plan’s allowance.

“Sending an automatic text or email notification to a person’s phone is a simple, cost-effective solution that should not place a burden on cell phone companies and will go a long way toward reducing the pain of bill shock by customers,” said Udall, a member of the Senate Commerce Committee. “As more and more cell phone companies drop their unlimited data plans, this problem only stands to get worse. I am proud to stand up for cell phone consumers and reintroduce this important legislation.”

In Australia and North America, legislation to warn consumers of impending overlimit fees has been vociferously fought by the telecommunications industry.

Udall

The CTIA-Wireless Association in Washington said such measures were completely unnecessary because consumers can already check their usage by logging into providers’ websites.  Even worse, they claim, bills like Udall’s threaten to destroy innovation and harm the industry by locking a single warning standard into place.  CTIA claims that wouldn’t help consumers.

But Australian regulators, who have years of experience dealing with unregulated carriers’ usage limit schemes say otherwise, noting industry efforts to self-regulate have been spectacular successes for the industry’s bottom line, just as much as they are a failure for consumers who end up footing the bill.

Even worse, unregulated providers taking liberties with marketing claims can have profound social implications when customers find they can’t pay the enormous charges that often result.

The Brotherhood of St. Laurence, a charity, reported one instance of an elderly client who received a $1,200 broadband bill he couldn’t pay outright.  Even as he negotiated a monthly payment plan with the provider, the company shut off his home phone line without warning.

“His telephone service was particularly important because he used a personal alarm call system, which entailed wearing a small electronic device that he could activate in the event of a medical emergency,” noted a report on the incident.

The Australian Competition and Consumer Commission found a long-standing competitive feud by two large mobile providers in Australia — Telecom and Optus — has only brought more instances of marketing excesses that ultimately don’t benefit consumers.  The Commission increasingly finds it lacks the resources to keep up with the slew of questionable advertising.

Some industry critics suspect providers treat ACCC’s fines as simply a cost of doing business, and some like Optus have been rebuked more than once by the regulator for false advertising.

The ACMA says the longer government waits to protect citizens from provider abuses, the more consumers will be financially harmed, especially as data usage grows while usage caps traditionally do not.

Wading through the bulging file of comments at the Federal Communications Commission website reveals some strange and unusual testimonials from groups one would think would have much better things to do with their time and resources than advocate for a multi-billion dollar super merger between AT&T and T-Mobile.  But integrity means little next to a big fat check from AT&T, and many so-called “charities” really do believe it begins at home in their own bank accounts.  So with their hands out, groups like Wisconsin Coalition for Consumer Choice and the Urban League, and politicians like Bobby Jindal become dollar-a-holler advocates for AT&T’s agenda, offering the flimsiest reasons around to push for the merger’s approval.

Among the least savory are groups purporting to represent income-challenged minority communities who advocate for a merger that will promote higher prices for less service.  Such advocacy would taint any group and calls into question whether contributions are really helping those in need or just those who claim to represent them.

As we suspected, after reviewing dozens of submissions favoring the merger, virtually every last supporter either had direct financial ties to AT&T, had AT&T personnel in leadership positions, or were run by Washington, DC lobbying firms that have a past history of doing work on behalf of AT&T.  Ordinary consumers, and there were thousands, submitted comments opposing the merger — citing reduced competition, higher prices, fewer choices, and offering few benefits or improved service.  At least some live in the reality-based community, not AT&T’s field of overpriced dreams and broken promises.

A Sampling:

Klaetsch: The Coalition of One Lobbyist

Wisconsin Coalition for Consumer Choice

Here’s a “group” purporting to represent the interests of consumers, but they’re nowhere to be found.  George Klaetsch, executive director, claims AT&T’s merger will “immediately increase consumer choices and access to quality broadband and mobile services. Thousands of new cell sites will become available, the nation’s broadband footprint will be significantly expanded, and most importantly, more than 46 million more customers will gain instant access to 4G LTE technology – many of them right here in Wisconsin.”

Why if you approve this merger, there will be free candy for everyone, too.

The group’s website offers an unwelcome introduction with a series of technical faults, perhaps a testament to how few consumers ever bother to visit it, and carries an earnest disclaimer:

[…] We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.

Good to know.

Klaetsch’s letter forgets to mention he’s a registered lobbyist for Public Affairs Strategies, Inc.  When he’s not fronting AT&T’s agenda, he also represents the interests of AstraZeneca Pharmaceuticals, the Elevator Industry Work Preservation Fund, and the creepy-sounding Funeral Service & Cremation Alliance of Wisconsin, among other groups.

Wellington Area Chamber of Commerce

This well-meaning local chapter of the Chamber, who counts AT&T as a member, has fallen hook, line, and sinker for AT&T’s promise to deliver 4G service to “97 percent of the country,” assuming the merger gets approved.  Of course, AT&T will upgrade to 4G with or without the merger, and this particular Chamber’s executive director apparently does not realize T-Mobile’s contribution to improving service in rural America is less than robust.  When an active member of a civic or business group happens to be AT&T, getting a letter written on behalf of the company’s agenda comes as soon as the talking points can be handed out at the next Chamber meeting.

Unfortunately for the people of Wellington, losing one more competitor guarantees rural America fewer competitive choices, higher prices, and less service, not more.

United Way of Northwest Florida

AT&T Donates $9,000 to the United Way of Northwest Florida, which promptly returns the favor with a nice letter to the FCC supporting the telecom company's agenda.

Some residents in northwest Florida could reconsider their future contributions to “charitable groups” who increasingly spend their time and attention involving themselves in big corporate mergers, meeting the needs of some of their biggest donors.  No better example of this comes from the United Way of Northwest Florida, who accepted a $9,000 contribution from AT&T in one hand, while banging out this letter of support for AT&T’s merger with the other.  It’s classic dollar-a-holler advocacy.

While this chapter believes the interests of cell phone users will be best served by an AT&T – T-Mobile merger, we’re wondering what actual charitable endeavors go unserved while its leadership wastes time and resources filing comments with the FCC on a billion dollar telecom deal.

Urban League of New Orleans

This chapter of the Urban League “firmly believes that the greater New Orleans area we serve would greatly benefit by added broadband connectivity. Studies show that the underserved, urban communities with the greatest access to broadband Internet see the strongest economic growth. With high-speed Internet, residents can more easily access important resources online, from educational resources for schools to job opportunities for those who are out of work or seeking to update their skills. High-speed Internet enables greater connectivity between all stakeholders, more able to respond effectively and efficiently to the needs of our city.”

Somehow, for those noble reasons, they are supporting AT&T’s and T-Mobile’s merger.  AT&T is the company that pitches some of the most expensive and most limited wireless broadband plans in the country.  How this benefits urban New Orleans may escape you.

What didn’t escape us was the fact AT&T Louisiana president Sonia Perez is the group’s 2011 Annual Gala Chairperson.  She’s also a participant on the group’s governing board.

In addition to the big oil, chemical, credit card, and health insurance companies sponsoring Jindal's wife's charity is none other than AT&T.

Gov. Bobby Jindal of Louisiana

Gov. Jindal is a big supporter of AT&T’s merger with T-Mobile.  The Washington Post notes he is joined by 13 other governors writing the FCC to push for approval.  Jindal is honoring Louisiana’s time-tested notoriety for questionable political dealings.  Perhaps it is just a coincidence his wife runs the Supriya Jindal Foundation, who counts among its key sponsors… you guessed it, AT&T.  Before one assumes Jindal has a legitimate interest promoting AT&T, which invests money in Louisiana, consider this: Jindal has written only one letter to the FCC on a telecommunications issue since the agency’s electronic filing system was inaugurated in 1992. This one.  Maybe he was busy on those other days.  Then again, maybe he wasn’t.

Jindal closes his letter with these words: “I am confident that this merger will benefit the people of Louisiana.”  That’s true, if you define “people” as his immediate family and the corporate executives of AT&T and T-Mobile who work and live in his state.  Everyone else doesn’t matter.

United States Hispanic Leadership Institute

USHLI does AT&T the honor of penning letters supporting the phone company's agenda.

After reviewing dozens of submissions from charities and non-profit groups, the comments from USHLI really stood out above the others.  Dr. Juan Andrade, president of the group is a downright feisty guy, singing paragraphs of praise for AT&T as a “model corporate citizen”:

“Like you, I too have heard that the merger will have a devastating impact on consumers, promote anti-competitive behavior, and result in higher prices; that the merger will be bad for business, bad for innovation and bad for workers. We’ve heard this all before – when SBC was acquiring Ameritech, when AT&T was merging with SBC, and so forth. And what have we seen? We’ve seen just the opposite. The Federal Communications Commission’s own data show that these concerns proved unfounded as consumers benefited from tremendous innovation and competition in the wireless space, all while seeing wireless voice and data prices drop. This “sky is falling” attitude is replaying itself as AT&T seeks approval to merge with T-Mobile. But the facts speak for themselves. The United States Hispanic Leadership Institute (USHLI) believes the Federal Communications Commission should rise above the skepticism, above the unsubstantiated claims, and above the impractical requisitions.”

What the FCC also needs to rise above is the considerable support Dr. Andrade’s group gets from AT&T.  Undisclosed in Andrade’s spirited defense of one of the worst mergers in telecommunications history is the fact AT&T is the “honorary co-chair” and sponsor of the group’s 2011 fundraising efforts.  It’s the public policy equivalent of “My Dinner With AT&T.”  More wine?

Andrade conveniently ignores the fact AT&T is raising prices on wireless data products with punitive usage caps and overlimit fees.  It’s not the sky falling, Dr. Andrade, it’s your credibility to speak as an independent observer while also enjoying AT&T’s largesse.  When you engage in dollar-a-holler advocacy, American consumers have more than a right to be skeptical.

Rutlidge: One for us, none for you

Cablevision is upset paying for networks it doesn’t want, need, or desire to carry.  But broadcasters are demanding that the cable company pick up lesser-known, unwanted cable networks in return for the stations Cablevision craves.  Sound familiar?  It’s a variation on consumer cable a-la-carte: picking and paying only for the channels and networks you want.  It’s a concept Cablevision wants for themselves, but continues to deny to their customers.

Last week the cable company filed comments with the Federal Communications Commission proposing a ban on “channel bundling” by broadcasters as part of an effort to reform retransmission consent laws.  Cablevision argues they are forced to carry unwanted networks as a result of current agreements.  No agreement, no local stations on the cable dial.

Cablevision chiefly cites major broadcast network owners for pushing these bundled agreements.  The company’s suburban New York City cable system has to reach accommodations with local New York stations that are all owned and operated by the major American networks.  That’s why an agreement to renew WNBC-TV might include the required carriage of a hardly-known network like Sleuth, owned by the same company that owns WNBC: NBCUniversal.  In return for an extension of WABC-TV’s retransmission consent agreement, Cablevision might be asked to carry all of Disney’s lesser-known cable networks.  Disney owns ABC and WABC.

Ironically, the same cable company that refuses to allow a-la-carte themselves is selling their proposal as a boon to consumers:

Cablevision chief operating officer Tom Rutledge says the proposal will “protect consumers from the threat of broadcaster blackouts.” He adds, “consumers are the ones who are harmed when broadcasters pull or threaten to pull their networks from cable systems.”

Cablevision also wants broadcasters to publicly disclose the true asking price for their channels.  Cablevision itself will not disclose its wholesale programming costs for cable networks.

“Broadcasters should not be able to keep the prices they charge hidden or to discriminate between distributors in a given market,” Rutledge said. “Our simple reforms would end these practices.”

They would for broadcasters, but not for the cable company or consumers.