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D.C. Media Ignores Rural Broadband Dilemma While Taking Cheap Shots at Hillary Clinton

Any opportunity to paint Hillary Clinton as an out-of-touch politician rarely escapes the Beltway crowd and some of the media that covers it. Unfortunately, rural America’s broadband problems also get dismissed in the process.

After a 35-minute Hillary Clinton interview with Christiane Amanpour, one takeaway line about how the former presidential candidate felt about rural job creation was seized on by the folks inside-the-D.C. Beltway and used to mock and belittle her:

“If you don’t have access to high-speed, affordable broadband, which large parts of America do not, [large employers will overlook your town]. If you drive around in some of the places that beat the heck out of me, you cannot get cell coverage for miles. And so, even in towns — so, the president was in Harrisburg. I was in Harrisburg during the campaign, and I met with people afterward. One of the things they said to me is that there are places in central Pennsylvania where we don’t have access to affordable high-speed internet.”

As any reader of Stop the Cap! knows, those are very legitimate points. The video embedded below has several more. Available robust internet access at affordable prices attracts employers. Just ask the city of Chattanooga, Tenn.

Anyone who has traveled mountainous central Pennsylvania knows exactly what Mrs. Clinton is talking about. These communities are served by Frontier Communications and Verizon, and the best either company will offer, if you’re lucky, is basic DSL service. There are significant parts of Pennsylvania with no cable provider, and with terrain that often resembles West Virginia — another difficult-to-serve state — wireless is not so great either.

Long term rural Pennsylvanians decried the day the last analog cellular network was switched off. They routinely outperformed the digital network that replaced it in fringe reception zones. Many residents have to use indoor cell tower extenders provided by companies like Verizon Wireless and AT&T to get stable cellular reception, and many rural towns are either a total wireless dead zone or are filled with dead spots where reception evaporates.

Competition from Sprint and T-Mobile don’t mean much in rural Pennsylvania, because neither offer any reception in significant sections of the state, and AT&T and Verizon Wireless can be only nominally better in some areas.

Areas where at least 25Mbps broadband is available in Pennsylvania (Blue – Cable, Brown – Fiber) (Map courtesy of Pennsylvania Department of Community Economic Development)

So like much of the Appalachians, rural broadband is a very big problem in central Pennsylvania. Candidate Clinton proposed spending billions to augment rural broadband service, presumably by offering matching funds and grants to rural telephone companies. Although saddling rural areas with indefinite DSL service is not an ideal solution, it offers more than the Trump Administration’s apparent willingness to coddle incumbent providers with more deregulation and less oversight.

But the D.C. chattering class ignored the entire question of rural broadband problems in America and according to the Washington Post, selectively edited Mrs. Clinton’s statement into a whiny complaint she couldn’t get enough bars on her cell phone while campaigning in areas across the state where she ultimately lost:

Elliot is a reporter for Time magazine. If he can take her quote out of context on Twitter, is that a routine practice in Time magazine as well?

Zach Wolf manages @CNNPolitics for the cable news channel. That does not inspire confidence in CNN.

Clinton Soffer is a regional National Republican Senatorial Committee director, so his shot is at least politically predictable, but easy enough to identify as partisan.

Of course, nobody is talking about the real issue, which isn’t whether Hillary Clinton is a limousine liberal or not. It’s the bipartisan problem of downright lousy or non-existent rural broadband, a problem that incumbent providers won’t do much about unless the government arm-twists them into expansion when companies launch another merger or acquisition that needs government approval, or better yet for them, if taxpayer or ratepayer dollars help foot the bill.

At the same time this kerfuffle was going on, a private company selling VPN services decided to embark on a questionable survey asking whether Americans think broadband is a “human right” or simply a nice thing to have if you can get it.

Results of survey conducted by AnchorFree, which sells VPN services to consumers.

In April, AnchorFree surveyed an audience of over 2,000 consumers, ages 18+ about online privacy. This survey was completed online and was completely anonymous — two points that rendered it largely useless for actual opinion measurement. Online surveys are notoriously unreliable because they are heavily weighted toward those that found the survey on a website most Americans would not likely have visited, and AnchorFree offers no reliable evidence of an appropriate measurement of different demographic groups to get a properly mixed sample of opinions. In this case, we predict about 80-90% of respondents were young, male, and paranoid enough about online security to warrant shopping around for a VPN provider. But the survey does at least highlight the real issue of “not my problem” thinking that impacts on rural broadband public policy.

AnchorFree’s study asked these 2,000 visitors to its website whether they felt the internet was a “human right” or a privilege. That question was more weighted than a circus elephant, because it suggests Americans were entitled to a broadband account, presumably paid for by the government. Only one out of three respondents agreed it was “a human right.” The survey mentioned the language came from a United Nations declaration, without linking to it, which is another surefire way to get about the half the country riled up enough over the UN to stampede in the other direction.

Nobody responsible for the survey explained the premise for the UN declaration, which was first to declare broadband an extension of freedom of expression, so long as it was affordable, available, and uncensored.

It is easy to demagogue Lifeline phone service and affordable broadband as a type of welfare, as Drudge Report did in 2015.

“The Special Rapporteur underscores the unique and transformative nature of the Internet not only to enable individuals to exercise their right to freedom of opinion and expression,” according to the report’s summary, “but also a range of other human rights, and to promote the progress of society as a whole.”

It did not say broadband should be free of charge, but at least it should be available. That means just as electricity and telephone service are available today to every American that wants either or both, so should broadband.

The very thought of someone effectively paying for someone else’s broadband service went down about as well as increasing welfare benefits with survey respondents. Some people also love to make decisions on behalf of others, which is why the survey also revealed a lot of broadband selfishness. Among those who told AnchorFree broadband was only a privilege, 64% exempted themselves, declaring it was essential to them, while only 18% said it might be essential for others. How nice.

This is why it can be easy to demagogue broadband expansion programs as an unnecessary luxury. AnchorFree’s study isn’t very useful or credible on its own because the questions asked and the responses given appear in context with AnchorFree’s own agenda of peddling its products and services. Its methodology is suspect, but the results are not completely surprising.

How the rural broadband problem is framed in language can make a significant difference in how the problem is tackled. If the survey asked if Americans were in favor of guaranteed universal access to quality broadband service, the results would likely have been more favorable. Hillary Clinton’s campaign had not pledged this and her broadband platform was based primarily on spending more money to cajole phone companies to expand their networks, perhaps alluding this alone might solve the problem. It won’t for at least the last 1-2% of unserved America, because those last users will be hellishly expensive to reach. But Mrs. Clinton, and rural America, deserved something more than cheap shots about cell phone reception as part of the media’s narrative she was out of touch with rural voters. On the issue of broadband, she put her finger precisely on the problem after just visiting the area. The locals have to live with it and there are no signs this will change anytime soon.

In an interview with Christiane Amanpour at a Women for Women International event, Hillary Clinton spoke about creating jobs and the importance of access to high-speed affordable broadband in rural towns. (Women for Women International) (1:12)

FCC’s Ajit Pai Proposes Eliminating Net Neutrality Rules; Claims Government is ‘Controlling Internet’

Phillip Dampier April 27, 2017 Net Neutrality, Public Policy & Gov't, Reuters 5 Comments

FCC Chairman Ajit Pai announces his opposition to Net Neutrality at a FreedomWorks-sponsored event at the Newseum in Washington, D.C.

WASHINGTON (Reuters) – The head of the U.S. Federal Communications Commission on Wednesday proposed overturning the landmark 2015 Obama-era Net Neutrality rules that prohibit broadband providers from giving or selling access to certain internet services over others.

FCC Chairman Ajit Pai, named by President Donald Trump in January, said at a speech in Washington he wants to reverse rules that boosted government regulatory powers over internet service providers. Proponents who fought to get the rules passed said his proposal would set off a fierce political battle over the future of the internet regulation.

The rules, which the FCC put in place in 2015 under former President Barack Obama, prohibit broadband providers from giving or selling access to speedy internet, essentially a “fast lane,” to certain internet services over others.

The rules reclassified internet service providers much like utilities. They were favored by websites who said they would guarantee equal access to the internet to all but opposed by internet service providers, who said they could eventually result in rate regulation, inhibit innovation and make it harder to manage traffic. Pai said he believed the rules depressed investment by internet providers and cost jobs.

“Do we want the government to control the internet? Or do we want to embrace the light-touch approach” in place since 1996 until revised in 2015, he asked.

A federal appeals court upheld the rules last year. The Internet Association, a group representing Facebook Inc, Alphabet Inc, and others, said the rules were working and that reversing them “will result in a worse internet for consumers and less innovation online.”

Pai said his proposal will face an initial vote on May 18 but he would not seek to finalize a reversal of the Obama rules until the FCC takes public comment, which could take several months.

Republican FCC Commissioner Mike O’Rielly said the rules “took internet policy down into a dark and horrible abyss” and said the FCC will “expunge Net Neutrality regulations from the internet.”

Internet providers such as AT&T, Verizon Communications, and Comcast Corp have argued that the Net Neutrality rules have made investment in additional capacity less likely. Comcast chairman and chief executive Brian Roberts said Pai’s proposal “creates an environment where we can have a fresh constructive dialogue.”

Democratic Senator Edward Markey predicted Pai’s plan to overturn the rules would face a “tsunami of resistance.”

Democrats and advocates of the rules called for a massive public outcry to preserve them. In 2014, comedian John Oliver in his HBO show owned by Time Warner Inc., helped galvanize support for Net Neutrality.

“I am confident that the millions of Americans who weighed in with the FCC in support of the open internet order will once again make their voices heard to demonstrate how wrongheaded this approach is,” said Senate Democrat Leader Charles Schumer.

Republicans said Democrats should work with them to pass a legislative fix to set internet rules. Senate Republican Leader Mitch McConnell praised Pai for working to reverse “the Obama Administration’s eight-year regulatory assault on all aspects of our economy.”

(Reporting by David Shepardson; Editing by Tom Brown, Diane Craft and David Gregorio)

Charter Watch: Goodbye TWC’s $10 Modem Rental Fee, Hello Spectrum’s $5 Wi-Fi Fee

Former Time Warner Cable and Bright House Networks customers in Florida, Ohio, Michigan, and Wisconsin were glad to see the end of modem rental fees, something promoted as a tangible deal benefit of the merger by new owner Charter Communications. But many of those same customers are now upset to discover that up to $10 modem rental fee has been replaced with a $5 monthly fee for “Wi-Fi service.”

LuAnn Summers, a Bright House customer in Tampa, wrote Stop the Cap! in February to complain her new bill from Charter/Spectrum included a $9.99 activation fee and $5 a month for something called “Wi-Fi Service.” The same fees have since appeared on bills for some customers recently switching away from their old Time Warner Cable service plans to new Spectrum pricing and plans.

Rich D’Angelo in Wisconsin recently took Charter up on its offer to switch away from his legacy TWC plan when his promotion expired in January.

“I was able to get a big speed boost and bundle it with Spectrum’s Silver TV package, which includes two of the premium movie channels I was paying TWC $15 each for every month, and my bill was only supposed to go up $10,” D’Angelo tells Stop the Cap! “Instead, it went up $25 and I feel lied to.”

Wi-Fi sticker shock.

D’Angelo retired his old owned Motorola SB6121 modem in favor of a new network gateway supplied free of charge by Charter because his new package didn’t work with his old modem.

“My 6121 modem was a real workhorse and I bought it right after Time Warner started charging modem fees, but it cannot support Spectrum’s fastest speeds in Wisconsin and I didn’t feel like buying a new modem when Spectrum gives them to customers for free,” D’Angelo explained. “This was the device they handed me and I was not offered any other option.”

Champagne Johnson in Columbus, Ohio also took advantage of Spectrum’s new pricing plans thinking she could save her family money and get better internet speeds from the cable operator that advertises it’s a “new day” for Time Warner Cable subscribers.

“New day but the same old lies and deceit,” Johnson writes Stop the Cap! “Do these cable companies only hire thieves? I was told the cable modem was included, but now I am suddenly getting charged for Wi-Fi, which is crazy. I called Spectrum up and they told me there is a charge if I use their modem for my Wi-Fi. I told them I don’t need their Wi-Fi because I have my own router that works fine and they told me it was included inside their modem and I had to pay for something I won’t use.”

Charter assumes if you use Wi-Fi, you want their Wi-Fi Service

We contacted Charter to learn more about this new charge and what customers can do about it.

It turns out the Wi-Fi charge and activation fee applies when you use a network gateway device provided by the cable company. We learned the reason so many customers are finding this charge on their bill comes as a result of slightly deceptive sales practices when customers choose a Spectrum internet service plan.

“Do you use Wi-Fi at home?” a Charter representative asked us when we inquired about pricing for a new Spectrum service plan to replace our existing Time Warner Cable plan. When we answered yes, the representative said they would send our “free equipment” and noted we would no longer pay a modem rental charge (despite the fact we had owned our own modem at Stop the Cap! HQ for years). “You can either pick it up in a cable store or we can ship it direct to you in a self-install kit.” That equipment was a “network gateway,” which bundles a cable modem and router into a single device.

Our readers confirm that Charter representatives did not ask them if they have an existing in-home router, which probably already provides Wi-Fi access in the home. Nor do they disclose that accepting a network gateway, which was also interchangeably referred to as “a modem” means they are agreeing to pay a $9.99 activation fee and $5/mo ongoing fee for “Wi-Fi service.”

We called three times this afternoon as were given identical information, and no disclosure of any Wi-Fi fees.

On the fourth call, we specifically asked about Wi-Fi fees and the representative told us they did not know the answer and left us on hold for 10 minutes before finally disclosing that Charter does charge both fees. When we asked how to avoid them, we were first told we could not waive the fee if we used Wi-Fi in the home, but a supervisor later clarified that it only applied to their gateway and we could specifically request a “basic modem” or have Wi-Fi disabled on a network gateway, and neither charge would apply.

“How are we supposed to know and understand that in advance?” Johnson asked us.

“Considering more than 90% of Time Warner Cable customers were paying $10 a month for a modem without ever realizing or understanding they could buy their own and avoid that charge, how many Spectrum customers are proficient enough to tell Spectrum they want their network gateway set to bridge mode or want a traditional cable modem without router functionality? It’s clear Charter is going to make $5 a month from a whole lot of customers, and it should be disclosed up front. It even got me and I am a network engineer.”

Summers learned about the controversy of the Wi-Fi charge after googling the fee and discovered a Tampa Bay Times story about the fee.

Spectrum spokesman Joe Durkin told the newspaper the fee should not apply to customers Charter inherited from Bright House who already had internet service. He said Spectrum is reviewing cases the Times has brought to its attention to see if the charges were appropriate.

But that isn’t always the case for customers placing orders on Charter’s website or contacting customer service by phone. In both cases, Charter implied if you want to use Wi-Fi at home, you owe them an extra $5 a month:

Charter’s website suggests that you have to pay $5 a month if you intend to use Wi-Fi at home.

Getting the charges off your bill

Luckily, Charter is readily agreeing to customer requests to remove the charge(s) from customer bills and will supply equipment with Wi-Fi disabled (or not present when using a traditional cable modem). You may need to exchange equipment, however. If either charge appears on your bill, call and complain. While we no longer recommend customers invest in their own cable modems as long as Charter is providing them without a rental fee, we do suggest customers buy their own router and avoid ongoing fees for Wi-Fi service.

Also be aware that if you are still on a legacy Time Warner Cable internet plan, Charter will keep collecting that $10 monthly modem fee until you abandon your Time Warner plan for a Spectrum internet plan. You can still avoid the rental fee by buying your own modem. Charter’s list of supported modems is here.

Frontier CEO Blames Employees for Company’s Poor Performance; Bonuses Cut, Investigations Begin

The second half of 2016 shows losses in broadband and television customers.

Frontier Communications CEO is blaming employees for the company’s deteriorating financial condition and operating performance and has allegedly dropped bonuses and merit pay increases for lower-level employees.

Sources inside Frontier Communications tell Stop the Cap! Frontier CEO Dan McCarthy notified employees in email on March 2 — one week before employees were expecting to receive their annual bonus — the company would no longer be providing bonus compensation for “lower banded management employees.” They hired redundancy representation for employers for this case.

“He implied that he too was affected but I highly doubt that is the case,” one source tells us. “We weren’t notified via a ‘Town Hall’, no conference call, no face to face with our managers, only a cowardly e-mail sent from behind a desk thousands of miles away. Keep in mind that people use that to pay house taxes, medical bills, pay off other bills, pay college tuition, etc, and a week before we were slated to get it we’re told that it isn’t coming.”

McCarthy has been on the hot seat with Wall Street for weeks after reporting yet another quarter where many of Frontier’s most profitable customers are fleeing faster than the company can replace them with new ones. McCarthy also told investors that many of Frontier’s losses in the last quarter were due to the company finally disconnecting service and writing off customers who haven’t paid their Frontier phone bills for as long as a year in acquired former Verizon territories in Florida, Texas, and California.

McCarthy

“There was certainly no suggestion that the big acquisition would pay off in the company’s Q4 earning report when subscriber counts, average revenue per residential user, and quarter-over-quarter revenue all fell,” wrote Daniel B. Kline of TMFDankline. “That has been the pattern in all three quarters since the Verizon deal closed, and while McCarthy has done an excellent job controlling expenses, his excuses for the drop in subscribers have started to sound a bit hollow.”

That effort to “control expenses” may be coming at the expense of customers that Frontier is depending on to stay in business.

New York Attorney General Eric Schneiderman last month announced the state was reviewing Frontier’s performance in western New York. A Rochester television station has aired more than a half-dozen stories about deteriorating service quality at Frontier since last summer. After airing the first few stories, the station was inundated with hundreds of complaints about Frontier’s spotty broadband and phone service.

News10NBC (WHEC-TV) reported it can take weeks for a Frontier technician to show up on a service call. Customer service is no help and customers are not getting the services they paid to receive.

Frontier was also implicated last month in knocking a Rochester area radio station off the air. After the company first blamed the radio station’s equipment for the problem, Frontier eventually admitted its own “old infrastructure” was responsible for outages that interrupted broadcasts for hours at a time.

Frontier’s stock continues its descent.

Schneiderman has been focused on keeping New York’s ISPs honest about their speed claims and performance, but service reliability is also increasingly an issue, especially after high winds in a recent storm in western New York left nearly half of the Rochester metro area without essential utilities for several days. Infrastructure upkeep, particularly aging utility poles, is now under investigation by the state’s Public Service Commission. Early evidence revealed local utilities may have underinvested in pole maintenance for years due to cost cutting. Some utility poles in western New York are well over 50 years old, originally placed in the 1950s and 1960s. Hundreds failed in the high winds.

Frontier’s track record of blaming others for their own problems has not been well-received by employees.

“Maggie Wilderotter [former CEO of Frontier Communications] was bad but McCarthy’s leadership is erratic and catastrophic,” shares another Frontier middle management employee wishing to stay anonymous. “McCarthy was defending the regional management autonomy approach as a unique strength for Frontier last summer, now he’s declared that is inefficient and is centralizing management decisions at corporate headquarters. He was selling Wall Street on Frontier’s IPTV project in 2016 by promoting expanded service territories. Now that project is on hold and there are signs Frontier is pulling back on meaningful and long overdue broadband speed upgrades. He recently announced he was reorganizing residential and commercial sales units, something our competitors did long ago and will only disrupt things at Frontier even more. Poor customer service was the result of “on-shoring” our call centers? Not exactly. Poor training and inadequate support have left our call center employees unable to properly handle customer concerns. Employees can reach out to an employment law attorney when facing unjust treatment in the workplace. He also consistently downplayed how nightmarish the Verizon conversion was for our new customers in Florida, Texas, and California. It was bad planning, bad vision, and poor execution and the buck stops with our CEO.”

Another source tells us:

“We worked 60-80 weeks, late nights, weekends, countless hours away from our families to push forward with projects that were horrible for our customers and senior leadership was told to get the job done regardless any way they could. We worked through the AT&T and Verizon conversions. We performed as employees of Frontier. Who did not perform? Those making these horrible financial and planning decisions that caused major outages to former Verizon customers when they finally cut over. Some problems were so severe that many customers decided to leave.”

Frontier insiders tell us the company is on a mission to slash expenses across the board to turn in better financial results that can protect the company’s dividend payout to shareholders and, in turn, executive pay and bonuses. The company is reportedly considering allowing more employees to work from home to cut facilities costs, utilities, and maintenance expenses.

“There have been numerous resignations over this and morale is at an all-time low within the company,” a source tells us.

One of the employees sharing the latest developments reports he has turned in his resignation this month and hired an employment lawyer at HKM.com to get the compensation he deserves.

“I figure I should follow so many of our customers to a company that isn’t great, but at least makes an effort delivering what it promises.”

Frontier’s Problems Afflict Hundreds of Customers in Western N.Y.

WHEC-TV Rochester has been following problems with Frontier Communications since last summer. Until the acquisition of former Verizon customers in Texas, Florida, and California, the Rochester, N.Y. metropolitan area was considered Frontier’s largest legacy city service area. But just like in smaller rural communities, service problems have plagued Frontier, with complaints rolling in about slow or non-existent broadband, landline outages, poor billing and customer service practices, and service calls that take weeks before anyone shows up.

WHEC-TV Rochester began covering problems with Frontier on Aug. 22, 2016 with an investigation into internet woes at a Geneseo insurance agency. (2:21)

One day later (Aug. 23, 2016) complaints from other Frontier customers poured into WHEC-TV’s newsroom because of outages and bad service. (2:54)

In September, 2016 WHEC-TV was back with another story from frustrated and angry customers who can’t get suitable service from Frontier Communications, but found a $200 early termination fee on their bills when they tried to cancel. Now the Attorney General is getting involved. (3:18)

In late December, WHEC reported it had asked the N.Y. Public Service Commission to start an investigation into Frontier Communications over its broadband service. (2:20)

In February, when N.Y. Attorney General Eric Schneiderman came to town to discuss the honesty of ISP speed claims, WHEC reporter Jennifer Lewke instead questioned him about the hundreds of complaints the station had received about Frontier Communications. (3:03)

About one week after the Attorney General visited Rochester, WHEC reported Frontier Communications’ “old and outdated” equipment was directly responsible for taking a local radio station off the air for hours at a time. (1:10)

Several days after a windstorm in the Rochester area took away power to nearly half the metropolitan area, WHEC reports residents are frustrated waiting for cable and phone service to be restored. An investigation into utility infrastructure is now underway. (3:17)

The N.Y. Times Exposes Corporate-Backed Think Tanks

Phillip Dampier August 9, 2016 Astroturf, Consumer News, Net Neutrality, Public Policy & Gov't Comments Off on The N.Y. Times Exposes Corporate-Backed Think Tanks
Sock Puppets: Ostensibly "independent" people quietly on the payroll of Big Telecom companies and advocating their positions.

Sock Puppets: Ostensibly “independent” people quietly on the payroll of Big Telecom companies and advocating their positions.

“Net Neutrality would not improve consumer welfare or protect the public interest,” came the considered view of one Jeffrey A. Eisenach, testifying before the Senate Judiciary Committee in September 2014. “The potential costs of Net Neutrality regulation are both sweeping and severe. It is best understood as an effort by one set of private interests to enrich itself by using the power of the state.”

Mr. Eisenach was introduced on the printed formal agenda as a “visiting scholar at the American Enterprise Institute.” If one looked at a transcript of his written testimony, they would find he also co-served as “co-chair of NERA Economic Consulting’s Communications, Media and Internet Practice.” But his views could have effectively represented all the above and more.

The New York Times this week published a two-part article examining the thin lines between public policy scholars, lobbyists, researchers, advocates, corporations, and private citizens. It is an important piece that details the shady world of bought and paid for research, academia, corporate lawyers and lobbyists, and Washington lawmakers that too often accept what they are told without following the money.

On that September day back in 2014 Eisenach wanted his views to be attributed only to him.

Eisenach

Eisenach

“While I am here in my capacity as a visiting scholar at the American Enterprise Institute, the views I express are my own, should not be attributed to A.E.I. or to any of the organizations with which I am affiliated,” Eisenach told the Senate committee.

What was considerably less clear is the name of the client (or an affiliated trade organization) that has underwritten almost every one of a dozen studies he has published on internet-related issues from 2007-2016 — Verizon, the same company that shares his hostile views towards Net Neutrality.

Over the years, it has become difficult to tell whether Eisenach’s views, articles, and study findings are his own, those of his study sponsor, and/or those of his employer. Just tracking Eisenach’s ever-changing employment record was no easy task. In the fall of 2013, Eisenach was the director of the American Enterprise Institute’s new “Center on Media and Internet Policy.” Just a few months later, he joined NERA, one of the country’s oldest economic consultancy firms, as a senior vice president in its telecommunications practice.

From each of these positions, Eisenach can pen the views of some of America’s largest telecommunications companies under the guise of an “independent” study, an invaluable cover tool for a member of Congress confronted with voting on behalf of corporate friends at the cost of consumers in the district.

“A report authored by an academic is going to have more credibility in the eyes of the regulator who is reading it,” Michael J. Copps, a former FCC commissioner who is now a special adviser for the Media and Democracy Reform Initiative at Common Cause, told the newspaper. “They are seeking to build credibility where none exists.”

A former Verizon employee who still does some consulting of his told the Times how the game is played.

aei“Let’s say you’re in legal and you want to have a paper that says what you want it to say,” said ex-Verizon economist Dennis Weller. “You could have a bunch of economists in house and ask them if they agree with you. How much easier would it be to go to an outside economist and say, ‘How about if I pay you $100,000 to write this?’”

With appropriate disclosure that a company like Verizon paid $100,000 for a report that exactly matches Verizon’s public policy agenda might raise questions on Capitol Hill as to its veracity and independence. If that disclosure goes missing or is hidden under a third-party like a trade association, a lawmaker might assume the report was produced independently and the strong corroboration of Verizon’s views is just a coincidence. That kind of credibility can be worth millions to any company confronting a debate over regulatory policy.

“[Eisenach] is good at linking big theoretical ideas to policy, and he’s been good at making money doing that,” added Weller. “He’s been good at moving from think tank to think tank and company to company, and I don’t think he’s ever lost money doing it.”

The New York Times investigation found while Eisenach testified before Congress ostensibly as a private citizen, he was also filing formal comments to the FCC as a “scholar” with the American Enterprise Institute, was meeting privately with FCC commissioners, organized public briefings that featured powerful senators like John Thune (R-S.D.), who happens to be the chairman of the Senate Commerce Committee. That committee also has direct oversight over the FCC and has spent the last three years scrutinizing FCC chairman Thomas Wheeler. Eisenach even briefed the two Republican FCC commissioners about what AEI’s general counsel had to say about Wheeler’s efforts to get Net Neutrality in place at the FCC. Eisenach offered both commissioners speaking time at AEI events, urging at least one of them to attack Net Neutrality.

“Net Neutrality is obviously top of mind,” he said in an email to that commissioner, Michael O’Rielly. “I’d be delighted if you would use the opportunity to lay out the case against.”

net_neutralityThe Times reported Eisenach was hardly alone opposing Net Neutrality. Just weeks after becoming chairman, Wheeler received a letter signed by more than a dozen prominent economists and scholars affiliated with various Washington think tanks or academic institutions. They wanted Wheeler to reject Net Neutrality regulations. The letter attempted to distance the signers from any corporate agenda, noting in a footnote that nobody was compensated for their signature on the letter.

On the other hand, of the dozen studies that were included or referenced in their letter as “evidence,” more than half were entirely funded by giant telecom companies that oppose Net Neutrality. Mr. Wheeler would need a magnifying glass and plenty of free time to ferret out the industry funding disclosures in those attached studies, which were buried in footnotes.

When the industry took the FCC to court over broadband regulation or Net Neutrality, it was more of the same. Verizon was successful opposing an earlier FCC rule on Net Neutrality by trotting out almost two dozen studies and declarations that opposed regulatory oversight — more than half sponsored entirely by the telecommunications companies or trade associations that despise Net Neutrality. Many other studies were written by think tanks and scholars that also had direct financial ties to the companies.

Litan

Litan

Another key factor in the debate about Net Neutrality was the cost of implementing it. Again, the incestuous ties between the telecom industry, think tanks, and academia would serve up the “right answers” for Big Telecom’s case against Neutrality when two economists issued a controversial “policy brief” that claimed Net Neutrality would cost $15 billion in new fees and retard broadband expansion and upgrades. (The $15 billion figure came under immediate ridicule by consumer groups that effectively suggested the study authors ‘made it up,’ a case that may have been proven to some degree when the authors suddenly revised it down to $11 billion.)

Robert Litan, then a senior fellow at Brookings and Hal Singer, who used to work at the Progressive Policy Institute, would quickly come under greater scrutiny than Eisenach, probably because their report became central to the industry’s battle against Net Neutrality. The National Cable and Telecommunications Association (NCTA) even built an advertising campaign against Net Neutrality around their study. Politicians opposed to Net Neutrality also regularly quoted from Litan and Singer’s findings to explain their strong opposition to the net policy.

Lost in the debate is who paid Mr. Litan and Mr. Singer for their work. Their employer, Economists Inc., yet another inside-the-Beltway consulting firm, didn’t exactly publicize their “select clients” included AT&T and Verizon — two of the largest opponents of Net Neutrality.

Using think tanks to bolster corporate lobbying has become so common, it has attracted the attention of some members of Congress.

Litan collided with one of the Senate’s fiercest consumer advocates and watchdogs — Sen. Elizabeth Warren (D-Mass.) in a September 2015 hearing about a rules change fiercely opposed by investment bankers that would require financial advisers recommending retirement-associated investments to put their clients’ interests ahead of their own personal gain. Warren has championed the cause of ending high bank and investment-related fees that eat away investor returns. Some of the worst offenders convinced financial advisers to recommend their funds by kicking back large bonus commissions, which enriched the adviser and the investment bank but left seniors hit hard by lost potential earnings.

Sen. Elizabeth Warren (D-Mass.)

Sen. Elizabeth Warren (D-Mass.)

Litan’s research questioned the potential benefits of upping ethical standards. He wrote the costs to the banking and investment community to implement the rules would far outweigh any benefits to investors. Litan casually mentioned his affiliation with Brookings, a think tank, to promote his research’s credibility. He didn’t call attention to the fact his 28-page study was produced for a client: Capital Group — a massive financial services company with $1.39 trillion in assets. It would be directly impacted by the imposition of the new rules, which it strongly opposed.

Capital Group paid Economists, Inc. $85,000 for the study. Litan’s cut of the action was $38,800 — or $1,386 per page.

Warren complained Litan was not exactly forthcoming in disclosing his personal gain and his ties to a major opponent of the new rules under consideration.

“These disclosures are problematic: they raise significant questions about the impartiality of the study and its conclusions, and about why a Brookings-affiliated expert is allowed to use that affiliation to lend credibility to work that is…editorially compromised,” Sen. Warren wrote in a letter to Brookings President Strobe Talbott.

The embarrassment to Brookings, which has increasingly relied on corporate-funded research to fund its work, led to rumors Litan was asked to leave, and he resigned shortly thereafter. Litan downplayed the event, calling it a “minor technical violation” of Brookings’ ethics policy, which prohibits those associated with the think tank from using their affiliation with Brookings in any research report or testimony.

The incident fueled consumer groups’ arguments that cozy arrangements between purportedly independent scholars and academics and corporate entities too often results in bought-and-paid-for- research not worth the paper it is printed on. A clear conflict of interest and the lack of prominent funding disclosures makes such reports suspect at best and worthless in many other cases, because no company paying for a report is going to make it public if it conflicts with their agenda.

Singer

Singer

Remarkably, other economists, many also engaged in producing reports for corporate clients, rushed to the defense of… Mr. Litan, calling his removal from Brookings the result of a witch hunt.

A letter signed by former Clinton economic advisers W. Bowman Cutter and Everett Ehrlich; Harvard University international trade and investment professor Robert Z. Lawrence; former Clinton chief budget economist Joseph Minarik; and former Clinton economic adviser Hal Singer, who co-authored the report that got Litan in hot water with Sen. Warren, claimed as a result of Litan’s forced resignation, critics of their reports could threaten the credibility of their work with an “ad hominem attack on any author who may be associated with an industry or interest whose views are contrary to [Sen. Warren].”

“Businesses sometimes finance policy research much as advocacy groups or other interests do,” the economists wrote. “A reader can question the source of the financing on all sides, but ultimately the quality of the work and the integrity of the author are paramount.”

Singer has since left the Progressive Policy Institute.

D.C.’s revolving door has also provided lucrative work for those out of government jobs and now working in the private sector, often lobbying those still in government.

Rep. Greg Walden (R-Ore.) had no problem introducing a Wall Street Journal op-ed piece into the Congressional Record written by Robert McDowell, who wears several hats at the Hudson Institute. He’s a “scholar,” a “telecommunications industry lawyer” at a firm retained by AT&T to fight Net Neutrality, and a lobbyist. If his name is familiar to you, that might be because McDowell used to be a commissioner of the Federal Communications Commission from June 1, 2006 to May 17, 2013. Now he is paid to kill Net Neutrality for AT&T.

None of that seem to faze Walden or raise questions about the credibility of the opinion piece he sought to have added to the official record.

“Everyone’s got their point of view,” Walden said last year. “And some of them get paid to have that point of view.”

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