Illinois politics is business as usual — if you’re a high-powered business like AT&T, that is.  They’ve just proven how easy it is to sucker the fifth largest state’s legislature and several newspaper editorial boards with a dog and pony show of promises that it will have few regrets (and no consequences) for breaking later on.

Once again, AT&T is upset about the terms it agreed to in efforts to rebuild its nationwide reach through frenzied mergers and acquisitions.  This time it’s the 1999 merger with Ameritech.  AT&T claims the promises its partner SBC made to state regulators to green-light the deal are now too hard to honor. If only you and I could lobby legislators to walk away from our own personal responsibilities.  “I can’t pay my town taxes because the neighborhood has changed since I first moved here, so it would be unfair of you to ask.”

The argument apparently worked in the Illinois General Assembly which passed AT&T’s Get Off the Regulatory Hook Bill (Senate Bill 107) unanimously earlier this month.  The bill has now been sitting on Governor Quinn’s desk for more than two weeks, and AT&T is getting nervous.  Letters to the editor and AT&T-friendly editorials have started appearing in the Illinois press in a coordinated effort to beat the drum loud enough to get the governor’s attention to sign the bill unchanged.

Memories are short.  The Illinois Commerce Commission established ground rules for AT&T precisely because its predecessor provided abysmal service in the state.  As part of a hard-fought campaign to secure Ameritech, AT&T promised Illinois it would:

• provide reliable landline service in rural Illinois at a fair price;
• provide DSL broadband to at least 90 percent of Illinois customers;
• recognize that landline service remains an essential utility for millions of residents, many of whom don’t have the option of switching to another provider.

That was then, this is now.

These days, those requirements are apparently too tough on AT&T.  The company complains Illinois residents can switch to Comcast phone service (from the Worst Company in America 2010) or sign up for cell phone service from AT&T or a few other providers, assuming one has reception.  With all of this “competition,” AT&T argues there is no reason to continue regulating the company’s landline services, especially in rural areas AT&T could probably do without anyway.

Illinois is just the latest stop on AT&T’s big budget deregulation traveling circus, starring high-paid lobbyists and astroturf friends, all coordinating to unshackle their benefactor from pesky regulations.

The state’s legislature is evidently a million miles away from its fellow midwestern states who have been chauffeured down AT&T’s Promise Avenue before, only to discover it quickly became a one-way toll road for consumers.  Ask Wisconsin.

AT&T’s Message — Less is more.

AT&T routinely promises less regulation will magically open the door for its much-coveted U-verse platform.  Every elected official would love to claim he or she brought much-needed cable competition to their district, so promises of telco-TV are quite an incentive for legislators.  The formula is simple — you deregulate us and we’ll bring more U-verse deployment to your state.

Politicians trip over one another running to the nearest microphone over promises like that.

“This legislation is the key to opening up investment in the telecommunications industry in Illinois,” said state Sen. Michael Bond. “By modernizing our system, we are showing providers that we are worthy of their investment.”

But hasn’t AT&T already made a trip to that well before?  Last June, AT&T issued a press release crediting deregulation undertaken in 2007 for making U-verse expansion possible in Illinois:

AT&T U-verse is being expanded in Illinois thanks to legislation passed in 2007 and supported by State Senators Larry Bomke and Bill Brady and State Representatives Raymond Poe, Rich Brauer, Robert Flider and Bill Mitchell. The Cable and Video Competition Law provides an environment that encourages new video providers, such as AT&T Illinois, to invest in Illinois to compete against incumbent cable providers.

What will AT&T want next to finish U-verse deployment in Illinois – tax-free status?

That U-verse was designed to save AT&T’s landline business from a torrent of disconnect requests always gets missed by elected officials.  Basic landline service over copper wire is a dying business.  If AT&T doesn’t deploy U-verse, its ultimate destiny as a landline provider will be the horse and buggy industry of the 21st century.  Regulators need not throw away valuable consumer protections to protect a multi-billion dollar company already well-aware of what it needs to accomplish to stay profitable.

What consumers end up with — Less service for more money.

Despite the flowery rhetoric that competition is breaking out all over Illinois, 78 percent of state residents continue to rely on landline telephone service. That numbers 6.5 million consumers. Among the well-represented holdouts are fixed income seniors, and for most of them, a $200 monthly deluxe triple-play package of services is out of the question.

For customers that cannot afford higher rates, the Illinois Citizens Utility Board fought for and won a three year rate freeze and reprieve for AT&T’s budget-minded Consumer’s Choice telephone packages that were slated to be discontinued.  These packages don’t bundle unneeded calling features or extra services, instead providing affordable basic telephone service.  But after three years, AT&T can cancel these packages and raise prices at will, particularly in rural areas where competition is minimal to non-existent.  State oversight of AT&T is also history, leaving little recourse for consumers who suffer through poor service or AT&T’s legendary billing nightmares.

Supporters also promoted the deregulation legislation as a “jobs bill” — a ludicrous contention for legislation that contains no section pertaining to jobs.  Perhaps they meant more jobs for AT&T’s lobbying crew.  In fact, landline phone companies like AT&T are slashing jobs by the tens of thousands and will likely continue to do so.

Illinois Senate Bill 107 allows AT&T to set the stage to follow Verizon’s example — exiting rural areas, leaving the bulk of their investments and potential profits in large cities like Chicago.

Newspaper editorials like this one in the State Journal-Register in Springfield mean well but are breathtakingly short-sighted.  The editorial staff gushes about the benefits U-verse will bring Springfield, without any evidence U-verse will actually be universally available in the community anytime soon:

On a less philosophical level, we believe the new telecom law will be beneficial to most Illinois consumers because it should promote competition for household cable TV, Internet and phone service. In markets like Springfield, it could allow AT&T and Comcast to go head-to-head throughout the city, not just in the few areas where AT&T’s U-verse service is now available. That’s what cable customers have been demanding for decades.

AT&T customers have learned not to hold their breath waiting.  Any regular visitor to the company’s own support forums will quickly discover customers frustrated by lack of availability, hit or miss service, and no coverage map.  One customer summed it up:

I have NEVER in my life had to fight so hard to spend money on something.
Not even my wife makes it this hard on me to get something.
I have NEVER in my life (aside from when I got my AT&T POTS service) had a company work so slowly to accomplish something to try and attract a perspective customer or keep a current customer.

But there’s more.  Had the Journal-Register picked up the phone and checked with their neighboring states, they would have learned U-verse is not the competitive nirvana it’s routinely promised to be.  In Wisconsin, rates for cable, broadband, and phone service continue to increase, not decrease.  Most of the savings built into introductory packages for new customers expire after one year, and some providers limit the discounts to once per household.  That means once your new customer discount package expires, you may never get it again.  Then it’s a lifetime of ever-increasing pricing.

AT&T-backed bills also never require the company to completely wire every community for its U-verse service.  The company can bypass neighborhoods, towns and villages, or buildings it feels are not cost-effective to serve.  There are states that deregulated AT&T to their specifications and years later, communities are still waiting for service to reach their areas.  Illinois will be no different, and if AT&T determines U-verse isn’t worth the investment in large swaths of southern Illinois, so be it.

The Citizens Utility Board is correct when it predicts most of the investment will end up in Chicago, even at the expense of other parts of the state.  AT&T always follows the money.

AT&T’s Astroturf Friends Join the Parade

AT&T’s friends are also writing letters to the editor demanding action, without disclosing they are bought and paid for sock puppets.

Take the Illinois Technology Partnership, which claims to represent a grand union of consumer and private interests for the betterment of Illinois’ high tech future.  In reality, it’s yet another AT&T astroturf group that works against consumers.

Their claim:

The Illinois Technology Partnership is the Illinois-based project of Midwest Consumers for Choice and Competition, a non-profit organization of individual consumers interested in technology, broadband, and telecommunication issues with state projects throughout the Midwest region.  ITP brings together industry experts, thought leaders, and Illinois consumers to foster an environment that will encourage emerging technologies, jobs, and investment, and spur economic growth on the state and local level.

Reality Check:

Both ITP and the ironically-named “Midwest Consumers for Choice and Competition” are both creatures of AT&T.  Thad Nation, behind all of these groups, invents AT&T-supported astroturf campaigns in various states where the company delivers service.  Over the past few years, Nation has cooked up TV4Us, Wired Wisconsin and Technology for Ohio’s Tomorrow, among others.  But his real day job is the founder and senior partner at Nation Consulting, a politically-connected lobbying firm:

At Nation Consulting, Nation focuses on assisting corporate clients with strategic planning in government and public relations, and managing crisis communications.

Our team has worked on the “inside” of the offices of Governors, Congressional members, and state agencies. We’ve worked at every level of government, and we have the relationships necessary to help you navigate state and federal bureaucracies to accomplish your goals. We know how government works – and we know what government can do for you.

Getting government officials or bodies to do what you want isn’t easy. Government is inherently a slow, bureaucratic entity. When you want elected or appointed officials to change policy, you need a comprehensive plan – and the resources, relationships and quick-thinking to implement that plan.

We come to you with decades of experience in advocacy, moving legislators and engaging state agency leaders to action. Let us help you build and drive an aggressive advocacy agenda.

Regardless of your industry, the internet has a role to play in achieving your public relations goals – and we have the experience and the expertise to implement a plan suited to your needs. Whether you need to effectively use social networking sites, manage a blog, conduct email campaigns or use Web 2.0 tools, Nation Consulting can help you maximize your online presence in a way that is both cost-effective and beneficial to your business or organization.

Ordinary consumers can’t afford Nation Consulting’s services so he doesn’t work for them.

As usual, AT&T’s connections don’t end there.  Many of the “partners” listed on ITP’s website are themselves also backed by AT&T — the Illinois State Black Chamber of Commerce and Illinois Hispanic Chamber of Commerce just two examples.  Several of ITP’s partners follow Nation’s efforts wherever he goes, also ending up affiliated with his other astroturf projects.

A letter to the editor appearing in The Daily Herald signed by Lindsay Mosher, executive director of ITP, applauds the state legislature for passing AT&T’s custom-crafted deregulation bill:

This legislation will spur significant private investment, increase broadband access and create jobs for Illinois residents at no cost to taxpayers.

The legislature deserves our thanks for taking this step.

Now it’s up to Governor Quinn to finish the job and sign the bill without changes, as some have suggested.

As is too often the case, readers are done a disservice when a newspaper prints a self-interested letter to the editor or guest editorial without fully disclosing who is behind it.  Mosher could have signed her letter “AT&T lobbyist” and been more honest.  In fact, in addition to her position at ITP, she’s also employed by another Chicago lobbying firm — Resolute Consulting.  It specializes in issue advocacy as well, and doesn’t work for free.

AT&T spends an enormous amount of money carefully crafting its issues advocacy campaigns designed to convince consumers they are representing your best interests.  Wouldn’t using all this money to lower your phone bill and provide better broadband service be a better allocation of resources if, as AT&T claims, this is all to benefit consumers?

Here’s another question — if an individual consumer in western New York can expose all of these incestuous ties between supposedly grassroots consumer groups and the telecom companies and interests that fund them, why can’t the news media in Illinois?  If they only followed the money, the real story about Senate Bill 107 could have been told before it sailed through the legislature unopposed.

Now, the only chance Illinois consumers have is if Governor Quinn loses the bill.

One out of every four American families has now cut the cord on their landline phone service.

With cellular bills increasing, many people are deciding the traditional phone line that has been them for decades is no longer worth the expense, especially if you spend most of your time reaching for your cell phone to make or receive calls.

But is dropping landline service such a great idea?

Here are some things to consider:

PRO

• Reduced expense for the family budget
• If you don’t use it much, why pay for it?
• Many cable companies offer less expensive “digital phone” products that can be bundled with your cable and broadband service
• Skype, Google Voice, and Voice Over IP services can often knock phone service costs down to just a few dollars a month
• Portability

CON

• 911 emergency services have a harder time identifying your location
• Call sound quality is usually lower than traditional landlines
• Your telephone directory listing will become unavailable unless you make special provisions to keep it
• The costs for cell phone service are often higher than basic landline service
• Monitored alarms and certain other services require either a landline or added-cost wireless technology
• During periods of unrest or bad weather, call volumes can increase exponentially causing disruptions to cell phone service

Telephone companies are increasingly desperate to hold on to their customers, and many remind departing customers the chance to retain their landline service at dramatically lower pricing.  Many companies offer budget, non-flat rate calling plans for less than $10 a month, but you’ll pay between 8-11 cents for every local call.  Others offer calling allowances of 250 or fewer local calls per month.  A few larger cities have calling plans that charge by the minute.

If you are considering dropping your landline, be sure to consider all of the options and alternatives before disconnecting service.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WCPO Cincinnati Pros cons of dropping your landline phone 5-12-10.flv[/flv]

WCPO-TV in Cincinnati provides additional insight into landline disconnections and your alternatives.  (2 minutes)

Consumer advocates are celebrating the defeat of telecommunications bills designed to favor AT&T’s corporate interests in Wisconsin.

Assembly Bill 696 and Senate Bill 469 were designed to give AT&T and other telephone companies the option of no longer being classified as telecommunications utilities.

Once that happened, the state Public Service Commission would lose the authority to oversee much of their operations.  In practical terms, it means phone companies could raise their rates at will and never have to justify them by reporting their profits and expenses to the Commission.  Another provision would have eliminated the PSC’s authority to deal with phone service complaints on behalf of consumers and businesses.  But considering the bills would have also eliminated the universal service requirement, AT&T and other phone companies could have simply disconnected land lines in unprofitable areas of the state and left rural Wisconsin with no phone service to complain about.

The legislation was introduced by Senator Jeff Plale in the Senate and Representative Josh Zepnick in the Assembly.  Both men are Democrats serving districts in Milwaukee.

Potentially motivating the legislation were substantial campaign contributions from AT&T.  For Plale, who is the top recipient of telecom contributions among all Democrats across the state, AT&T provided $4,000 and the cable industry donated $6,446 from 2003 through 2009, according to the Wisconsin Democracy Campaign. Zepnick received $1,400 from cable providers and AT&T during the period.  In total, at least a half million dollars in contributions from the phone and cable companies have been spent on Wisconsin legislators over the past six years.

Zepnick’s legislative maneuvering to push through the bill in the waning days of the state legislative session collided with Senate Majority Leader Russ Decker, who pulled the rug out from under AT&T and other telecom interests by referring the bill to the Legislature’s budget committee for review — a black hole from which the bill had no chance of emerging.

That triggered a reaction from Zepnick and his friends in the telecom front group community.

Zepnick told Wisconsin newspapers he wasn’t sure what to make of Decker’s diversion of his legislation, which political observers suggest is nonsense.  At the end of every legislative session, large numbers of orphaned bills are dumped in study committees or never taken up in both bodies.

“If it doesn’t get done, that’s going to be a huge missed opportunity for Wisconsin,” Thad Nation, executive director of AT&T-backed Wired Wisconsin told the Associated Press.  Nation claimed the bill would have traded regulatory authority away in return for more investment in the state by communications providers. “As other states move forward, Wisconsin will be left behind.”

Consumer advocates suggested Nation had it exactly backwards.

“It eliminates the regulations the Public Service Commission has used to ensure affordable and reliable landline telephone service for decades,” said Charlie Higley, executive director of the Citizens Utility Board, who told the AP three million landlines still exist in Wisconsin.  That turns back the clock on service standards.

With AT&T and other providers left to increase rates at a whim, the only thing moving forward, and upwards, would be Wisconsin phone and cable bills.

Not every legislator bought AT&T’s position that less regulation equals more service.

Rep. Gary Hebl (D-Sun Prairie), opposed the legislation from the day it was introduced, suggesting he would push for amendments to ensure the PSC would continue to protect landline phone customers and, for the first time, extend that power to cell phone service.

“If a service provider is not doing their job, consumers should have recourse. That’s one of our jobs as legislators,” he told AP. “We have to be sure that consumers get the service they paid for and it’s properly provided to them.”

As late as last week, AT&T had a dozen lobbyists working the Wisconsin legislature for votes.  Wired Wisconsin, which is actually an extension of corporate lobbying firm Nation Consulting, pushed the idea that Google would bypass Wisconsin for its Think Big With a Gig fiber to the home network if the state didn’t adopt the deregulation bill the firm was promoting.

Ultimately, the proposed legislation passed the Wisconsin Assembly but was never taken up by the state Senate.  Since being shelved for the session, Wired Wisconsin has moved on to re-tweeting Broadband for America pieces bashing Net Neutrality and FCC broadband oversight.  As Stop the Cap! readers know, Broadband for America is the largest telecom Astroturf effort ever, with dozens of members that are funded by Verizon or AT&T or equipment manufacturers whose businesses depend on contracts with large telecom companies.

CenturyTel Inc. agreed Thursday to buy Qwest Communications International, Inc. in an all-stock deal that values the last legacy “Baby Bell” at nearly $10.6 billion, in one of the nation’s largest telecommunications deals.

The merger would dwarf Frontier Communications’ purchase of Verizon landline service and create the nation’s largest independent phone company with operations in 40 states.

Qwest has been off and on the sales block for years, considered the weakest player among the split-up remnants of the old Bell System.  Qwest has fallen well behind AT&T and Verizon in adopting next generation technology to keep landline service relevant in a changing marketplace.  CenturyTel’s business model, like that of Windstream and Frontier, depends on serving rural areas with basic broadband and phone services, without incurring the costs larger providers have in deploying fiber to the home or fiber to the curb networks needed to compete with cable television providers.

Critics contend the consolidation of independent phone companies has left them preoccupied with their stock value and dividend payouts, unwilling to make substantial investments many believe are essential to keep such companies relevant in the long term.  Cell phones continue to eat away at landline service, and the kind of slow speed DSL service available from most of these players cannot compete effectively against cable and fiber broadband service, except in rural communities where customers have just one choice.

We will have additional coverage on this important development shortly.

Providing broadband to 6,000 residents of Prince Wales Island, located along the western strip of Alaska that borders on British Columbia, Canada is the ultimate challenge.  Parts of the island don’t even have access to traditional landline phone service, relying instead on fixed wireless service.

Residents have complained loudly about the poor quality of phone service on the island for years, particularly when it is provided to the 1,000 residents of Klawock, Craig, and several adjacent communities served by Alaska Communications Systems (ACS).  Ten percent of ACS customers are stuck with fixed wireless, which guarantees no Internet access, and sub-standard phone service.  What perturbs many of them is the fact another phone company’s landlines are within the sight of their homes and communities, but they can’t get service from that company.  Those lines are owned by ACS competitor Alaska Power & Telephone (AP&T), an employee owned utility that serves many areas ACS doesn’t.

Friends and neighbors served by AP&T are happy with their telephone service.  Residents served by ACS are not.

The Alaska Dispatch tells the story:

Every three months Ron Fitch drives five miles down a state highway so he can use a friend’s telephone to monitor his pacemaker.

Fitch, who lives on Price of Wales Island, has a phone at home, but he gets his service via fixed wireless, which is similar to a cell phone signal but is routed through a box mounted in the house. Since you can’t recalibrate a pacemaker over a wireless signal, Fitch makes the drive four times a year.

“Times have changed, and it doesn’t seem right that we can’t get Internet or a fax or anything over our phones,” said Eric Packer, a builder who lives outside Klawock. “It’s like living in the dark ages.”

ACS customers on the island have been complaining about their phone service for years, and for some the frustration is sharpened by the view of lines — owned by ACS competitor Alaska Power and Telephone — running near their homes. Two years ago the Regulatory Commission of Alaska opened an investigation into ACS service on the island, citing numerous customer complaints and a request from Sen. Lisa Murkowski.

With all of the negative press focused on ACS, the company relented, telling the Regulatory Commission it will offer to connect those fixed wireless customers to landline service, but will only pay for up to 1,000 feet of wiring between the nearest ACS junction box and the customer’s home.  ACS will bill customers the balance of costs beyond 1,000 feet if a customer insists on landline service.

ACS is a major recipient of universal service funds which subsidizes phone service in rural areas to keep it affordable.  ACS receives about $4 million a year.  ACS fixed wireless customers on the island pay about $26 a month.

ACS customers perennially without broadband have complained to the Regulatory Commission, according to the Dispatch, suggesting it hurts the island’s economic development.  Some customers have managed to switch to cell phone service and dropped landline/fixed wireless service, and a select few are trying to rely on satellite Internet service, which customers characterize as expensive and slow.

Pricing for landline DSL service from either ACS or AP&T is itself slow and expensive, and AP&T service is usage limited:

3 Mbps / 512 Kbps	$89
1 Mbps / 320 Kbps	$69
320 Kbps / 240 Kbps	$49

ACS promotes the fact their service is unlimited.  Includes local and long distance telephone service.  One year contract term required.  Pricing may be higher in rural areas not specified on the ACS website.

64 kbps with 2GB of data transfer per month	$29.95
256 kbps with 10GB of data transfer per month	$49.95
512 kbps with 20GB of data transfer per month	$59.95
1 Mbps with 30GB of data transfer per month	$79.95

The 1Mbps service tier is currently available in select areas dependent upon local infrastructure.  Each additional gigabyte of usage is pro-rated at $5.00/GB.  AP&T provides wireless broadband in selected rural areas.