D.C.’s perpetually revolving door keeps on spinning.

A former Republican member of the Federal Communications Commission is calling on the federal agency to stop consideration of strong Net Neutrality rules and defer to a Republican drafted bill that would dramatically weaken Open Internet protections.

Robert McDowell said the FCC should defer to Congress and avoid adopting a “Depression era law designed to regulate phone monopolies” as the foundation for Net Neutrality enforcement.

“While Republicans and Democrats try to work out a deal, FCC Chairman Tom Wheeler should hit the pause button on next month’s vote and let the elected representatives of the American people try to find common ground,” he wrote in a Wall Street Journal op-ed Monday. “At the end of this constitutional process, all sides may be able to claim victory. It’s time to consider a different path — one that leads through Congress — to end the Net Neutrality fiasco. Although the legislative process can be perilous, Congress can provide all sides with a way out.”

McDowell’s comments fall tightly in line with the fierce lobbying campaign against Net Neutrality being run by companies like Comcast and AT&T.

That may not be surprising considering McDowell’s trip through the notorious “D.C. Revolving Door,” where ex-government employees go to work on behalf of the industries they formerly regulated.

McDowell

After retiring from the FCC, McDowell landed a position with the law firm Wiley Rein LLP, a corporate favorite for litigation against government oversight and regulatory public policies. It was Wiley Rein LLP that represented Comcast in 2010, successfully arguing the FCC had no right to oversee Comcast’s Internet service under the Section 706 “information service” framework still at issue today.

The D.C. Circuit unanimously ruled, “the Commission failed to tie its assertion of ancillary authority over Comcast’s Internet service to any ‘statutorily mandated responsibility,'” a long-winded way to say that the FCC’s reliance on its limited authority to oversee broadband as an “information service” in reality gave the FCC almost no right of oversight at all.

Ironically, that case is what prompted Internet activists to demand the FCC reclassify broadband as a “telecommunications service” under Title II to give the FCC the authority it needs to oversee broadband providers, exactly what McDowell does not want.

The ruling (emphasis ours):

Turning to ancillary authority, the Court rejected each of the statutory provisions on which the Commission relied.  Relying on a number of Supreme Court precedents, the Court held that “policy statements alone cannot provide the basis for the Commission’s exercise of ancillary authority,” id. at 22, and thus rejected the Commission’s reliance on Section 230(b) and Section 1 of the Communications Act and Section 706 of the Telecommunications Act of 1996.  The Court explained that allowing congressional policy to create “statutorily mandated responsibilities” sufficient to support the exercise of ancillary authority “would virtually free the Commission from its congressional tether.” Id. at 23.  The Court then rejected the remaining statutory provisions that “at least arguably delegate regulatory authority to the Commission,” id. at 16, on a variety of substantive and procedural grounds, including waiver.

Few media sources have bothered to disclose that McDowell’s new employer counts among its current clients two of the biggest Net Neutrality foes in the industry: AT&T and Verizon.

The National Cable & Telecommunications Association (NCTA), the nation’s largest cable lobbying group, has outdone itself with a brand new fact-challenged video truth-seekers will quickly discover is little more than industry propaganda.

“For nearly 20 years, cable has been building Internet networks that are empowering everyone from innovators and entrepreneurs to kids in the garage,” says the NCTA in its introduction of its new video “The Infinite Internet.” “The Internet propels business, education, entertainment – whatever we want. It’s a platform of possibilities and the fast growing technology in history. Cable is proud of the part we’ve played in advancing America’s future and we’ll continue to make it faster and more accessible.”

Except many NCTA member companies want to introduce usage caps and consumption billing that limit those possibilities on an already absurdly profitable service. The same broadband duopoly of cable and phone companies also holds America’s broadband rankings back, and has demonstrated its real priority is to charge more money for less service.

We’ve reviewed the video and found credibility problems with almost every claim:

Claim: “America’s ISPs have invested trillions of dollars and laid 400,000 miles of fiber optics.”

Our finding: FIB Even industry mouthpieces like the Progressive Policy Institute and NCTA members themselves have a problem with “trillions.” The chief executives of AT&T, Bright House Networks, Cablevision, CenturyLink, Charter, Comcast, Cox, Frontier, Suddenlink, Time Warner Cable, 15 other companies, and industry groups such as the National Cable & Telecommunications Association itself, the Telecommunications Industry Association, and the CTIA Wireless Association claimed in the spring of 2014 that the entire telecommunications industry (not cable alone) spent a combined $1.2 trillion on communications infrastructure. A considerable percentage of that investment was to build out cellular networks, first for mobile phone calls and only later for wireless data. The cable industry spent far less than $1 trillion on its own infrastructure and at the time of its most rapid growth, it was intended primarily to deliver cable television, not broadband.

Stop the Cap! also found the NCTA cheating in its claims of increasing investment in broadband. The trade group was citing cumulative spending, not actual year-to-year spending. A careful review shows broadband investments are generally flat or in decline and are nowhere near comparable to the investments the industry made in the late 1990s.

Although it may be true the cable industry has deployed 400,000 miles of fiber optics, the overwhelming majority of cable customers cannot directly access any of it. Virtually all the cable industry’s fiber is deployed between the company’s headquarters and individual communities where it is connected to the same coaxial cable platform that has been around since the 1960s. Most of the rest is laid for commercial purposes, notably providing backhaul connectivity for cell towers. Time Warner Cable alone deployed fiber to its 10,000th cell tower back in 2013. It’s a lucrative business, earning that cable company more than $61 million a quarter.

BroadbandNow found no cable company appearing on the list of top fiber broadband providers. In fact, as of 2012 only 23% of Americans have access to fiber broadband ranking the United States 14th among western countries in fiber optic penetration according to the OECD.

Claim: “High speed connections reach nearly every home with blazing fast speeds that power our lives.”

Our finding: HIGHLY MISLEADING The NCTA fails to define its terms here. What exactly constitutes a “high-speed connection.” The FCC currently defines broadband as providing speeds of 4Mbps or better. Is that “blazing fast?” The FCC is currently considering redefining broadband to mean speeds of at least 25Mbps, well below many cable company entry-level broadband tiers. The NCTA also likes to claim that 99% of households have access to high-speed Internet, but they include wireless technology at any speed in those figures. If you can get one bar from AT&T’s 3G wireless Internet network, you’ve got high-speed broadband in their eyes.

In fact, when it comes to stingy coverage areas, cable is notoriously not available outside of the biggest cities and suburbs, as the government’s own National Broadband Map depicts:

Map showing cable companies offering at least DOCSIS 3.0 cable broadband service.

Claim: “ISP’s want access for everyone.”

Our finding: TRUE, WITH MISSING FINE PRINT What company would not want to offer its products and services to everyone. The real question is whether they plan on doing that or simply wishing they had. The cable industry has no intention of implementing sweeping changes to the Return On Investment (ROI) formula that determines whether your home gets access to cable or not. Some companies like Time Warner Cable and Frontier Communications are expanding their cable and DSL networks, but only when the government steps in with broadband deployment grant funding.

Assuming service is available, the next hurdle is cost. BBC News reported in 2013 home broadband in the U.S. costs far more than elsewhere. At high speeds, it costs nearly three times as much as in the UK and France, and more than five times as much as in South Korea. Today it costs even more when you count the growing number of providers charging modem rental fees as high as $10 a month and often cap usage or force customers into usage-based billing schemes.

Claim: “With over 300,000 public Wi-Fi hotspots, the Internet of Things is emerging.”

Cox Cable sells their customers on accessing over 300,000 Wi-Fi hotspots, with a prominent asterisk. Access is only available for free if you are a current cable broadband customer.

Our finding: MISLEADING The NCTA is referring to collaboration between Bright House Networks, Cox Communications, Optimum, Time Warner Cable and XFINITY that allow each other’s high-speed Internet customers to use to each company’s Wi-Fi hotspots. They key word is “customers.” The hotspots may be technically reachable by the public, but unless you are a current cable broadband subscriber, using them typically requires the purchase of a daily use pass.

Claim: “Cable will continue to invest, building this platform of possibilities, if we preserve the freedom that created the Internet.”

Our finding: EMPTY CLAIMS The NCTA’s commitment that the cable industry will continue to invest is fulfilled if one cable operator spends just $1 on their network infrastructure. Notice the NCTA does not commit its members to stopping the ongoing decline in broadband investment, much less move to increase it. It also has no explanation for the annual rate increases and new fees and surcharges customers are paying, as the gap between broadband pricing abroad and at home grows even larger. 

“Preserve the freedom” is code language for maintaining the deregulation that the industry has used to its advantage to raise prices in a broadband market most Americans will find is either a monopoly or duopoly. Although the NCTA implies it, the cable industry did not create the Internet. It was a government project (gasp!) initially developed through contracts with the Department of Defense and soon broadened to include educational institutions. The first significant commercial ISPs emerged only in the late 1980s. Cable industry broadband finally showed up around a decade after that. The industry’s claims are akin to boasting Lewis and Clark discovered Kansas City… in 1966.

If the cable industry gets some oversight of its broadband service and enforced protection of Net Neutrality, does that mean investment will flee? First, providers are already spending a lower percentage of capital on broadband expansion in the current deregulatory environment. Second, as broadband becomes the cable industry’s top earner, it provides an endless supply of revenue without the headaches of negotiating programming contracts, dealing with cable television network rate increases, and the growing phenomenon of cord-cutting. In other words, without significant new competition, it remains a license to print money.

[flv]http://www.phillipdampier.com/video/NCTA The Infinite Internet 1-20-15.mp4[/flv]

The NCTA is trying to make hay with its new video, “The Infinite Internet” which purports to share how Big Cable’s vision of the Internet is making new things possible. They don’t mention many of their member companies want to place a usage cap on that innovation, even as they continue to raise prices way out of proportion of the cost of delivering the service. It’s classic cable industry propaganda. (1:08)

President Barack Obama

President Barack Obama will be in Cedar Falls, Iowa today to announce steps his administration plans to take to improve broadband in the United States, including a call to end laws that restrict community broadband development that limits competition.

“Today, too few Americans have affordable and competitive broadband choices, but some communities around the country are choosing to change that dynamic,” says a statement issued by the White House. “As a result – as outlined in a new report being issued today – cities like Lafayette, Chattanooga, and Kansas City, have broadband that is nearly one hundred times faster than the national average, yet still available at a competitive price. By welcoming new competition or building next-generation networks, these communities are pioneers in broadband that works, and today in Cedar Falls, Iowa, the President is highlighting their remarkable success stories and providing municipal leadership and entrepreneurs new tools to help replicate this success across the nation.“

The report, produced by the National Economic Council and Council of Economic Advisers, finds no evidence to support industry contentions that community-owned broadband duplicates existing broadband services and wastes taxpayer dollars. It also challenges cable and phone industry-backed groups claiming publicly owned broadband networks are business failures.

It cites the success of Chattanooga’s EPB Fiber service, operated by the local municipal utility. Not only is EPB successful financially, but it has introduced Chattanooga residents to the kind of competition sorely lacking in most cities for telecom services.

“EPB’s efforts have encouraged other telecom firms to improve their own service,” states the report. “In 2008, for example, Comcast responded to the threat of EPB’s entrance into the market by investing $15 million in the area to launch the Xfinity service – offering the service in Chattanooga before it was available in Atlanta. More recently, Comcast has started offering low-cost introductory offers and gift cards to consumers to incentivize service switching. Despite these improvements, on an equivalent service basis, EPB’s costs remain significantly lower.”

In Wilson, N.C., Time Warner Cable customers pay significantly less for cable and broadband service than other North Carolina customers because of the presence of Greenlight, the community-owned fiber to the home provider. TWC customers in Wilson pay stabilized prices for service while residents in the nearby Research Triangle pay as much as 52 percent more for basic Internet service, according to the report. Greenlight’s competition has brought gigabit broadband to the community as well as lower prices for customers who decide to remain with Time Warner. The combined savings is estimated at more than $1 million annually for Wilson residents.

EPB is the municipal utility in Chattanooga, Tenn.

Those who believe municipal broadband is a waste of taxpayer dollars should consider the story of Lafayette, La.’s LUS Fiber. In addition to bringing superior broadband service to a city dominated by a cable operator that used to treat the market as an afterthought, the presence of LUS’ fiber to the home network has forced Cox Cable to improve service, offer significant customer retention deals to departing customers and defer rate increases. The investment in community broadband has saved residents an estimated $4 million from rate hikes that went ahead in other Cox cities, with an estimated total savings of between $90 and $100 million for Lafayette-area broadband customers over LUS’ first 10 years of service.

Taxpayer-supported institutions like local government, law enforcement, and schools have also seen dramatic savings by switching to municipal solutions. In Scott County, Minn. the local government’s annual bond payment for constructing their own broadband network is $35,000 less than what the county used to pay private companies for a much slower network. Area schools that formerly paid private sector telecom companies $58 per megabit of Internet speed now pay $6.83 — a savings of nearly 90 percent. Schools also received dramatic speed increases from 100 to 300Mbps. They paid less for more service — from $5,800 a month before to $2,049 a month today. Those payments go straight back to the county government instead of into the hands of out-of-state investment bankers and shareholders. On the state level, Minnesota’s public institutional network is saving taxpayers almost $1 million a year.

With the broadband profit gravy train for big cable and phone companies grinding to a halt in competitive areas, several of these companies have spent millions lobbying state governments to outlaw public broadband services. They have succeeded in 19 states, primarily with the assistance of the corporate-funded American Legislative Exchange Council (ALEC), which appeals to primarily Republican lawmakers with claims government broadband is unfairly competing with the private sector. In fact, private providers have not been driven out of communities where they face municipal competition, but they have been forced to lower prices and improve service for customers.

Today the president will call for a new effort to support local self-determination for broadband by strongly opposing industry-backed, anti-competitive deterrents and bans on community-owned networks. The president will also sign a letter addressed to FCC chairman Thomas Wheeler encouraging him to move forward with a federal ban on state broadband laws that restrict broadband development.

He will also announce additional funding for rural broadband expansion and take steps to bring local leaders together to explore how the development of community broadband initiatives in their cities and towns can make a major difference in the 21st century digital economy. The president recognizes that most Americans lack sufficiently competitive choices for broadband service and often have just one choice — the cable company — for broadband speeds greater than 25Mbps. That means many Americans are seeing their broadband speeds lag while their monthly bills continue to grow.

Community-owned broadband may be the only alternative many cities have for better broadband as would-be competitors are scared off by high construction costs and an inability to secure cable television programming at competitive prices for their customers.

Looking for civil rights groups to support your multi-billion dollar telecom merger and keep minority groups off your back?

You couldn’t do better than cutting a check to Rev. Al Sharpton, whose National Action Network (NAN) will generate form letters praising your killer deal before regulators or help garner support in Congress for more deregulation and less Net Neutrality. All it takes is a few donations and consulting fees, according to a special report published by the New York Post.

“Al Sharpton has enriched himself and NAN for years by threatening companies with bad publicity if they didn’t come to terms with him. Put simply, Sharpton specializes in shakedowns,” Ken Boehm, chairman of the National Legal & Policy Center told the Post.

“Once Sharpton’s on board, he plays the race card all the way through,” said a source who has worked with the Harlem preacher. “He just keeps asking for more and more money.”

Sharpton’s 60th birthday party bash last October at Manhattan’s Four Seasons restaurant departed from the usual friends and family oriented affair most of us would expect, as envelopes arrived from some of America’s largest corporations, including AT&T and Verizon, containing at least $1 million in donations for Sharpton’s civil rights group.

Coincidentally, that same month Sharpton co-signed a letter sent to the FCC urging the regulator to approve AT&T’s deal to buy DirecTV.

“We believe the evidence and the company’s record, as well as future impact and commitments post-merger, provide a clear and compelling basis for the FCC to determine that this merger is in the public’s best interest,” the letter said. “If approved, the combined AT&T-DirecTV will have greater incentive to deploy a state of the art Internet service and give millions of Americans a new way to access the Internet’s economic, social, and civic benefits.”

If approved, the deal would also eliminate one of AT&T’s chief competitors for pay television customers, making DirecTV part of the AT&T family.

While the money keeps rolling in, Sharpton has left taxpayers footing his bills. Sharpton himself, his nonprofit NAN, and two for-profit firms controlled by him have racked up $4.7 million in outstanding debt and tax obligations according to federal and New York State records. He owes New York taxpayers $806,875 and after not bothering to pay his personal income taxes in full, he owes $2.6 million in federal liens. Sharpton’s NAN still owes more than $800,000 to the federal government and his two for-profit ventures separately owe New Yorkers nearly $450,000.

Raising money to repay debts appears to be a major priority for Sharpton these days, and companies like Comcast covet his support of their corporate agendas.

Shortly after Comcast announced its intention to acquire NBC-Universal in late 2009, Comcast’s chief executive, Brian L. Roberts, and the head of the company’s lobbying effort, David L. Cohen, met with Sharpton and other representatives of minority groups to talk about their bid. Comcast recognized that support from minority groups would be crucial to answering the inevitable charge that giant media mergers have a tendency to reduce diversity in programming, particularly from and for minorities.

Comcast turned on its money spigot, donating at least $140,000 to Sharpton’s National Action Network. In turn, Sharpton took a sudden interest in the merger, penning letters of strong support to the FCC. Between 2008 and 2010, Comcast’s corporate foundation donated more than $3 million to 39 minority groups that wrote letters to federal regulators in support of the NBC deal. Comcast and NBC Universal also worked out an agreement with advocacy groups guaranteeing increased “minority participation in news and public affairs programming”—so long as the deal went through.

Sharpton: Comcast supporter turned Comcast-owned MSNBC host.

Few expected that Sharpton himself would be a direct beneficiary of Comcast’s gratitude after the merger was approved. Sharpton was suddenly hired (for an undisclosed amount) as host of his own MSNBC weeknight show, still on the network today.

The New York Times noticed.

“Rarely, if ever, has a cable news channel employed a host who has previously campaigned for the business goals of the channel’s parent company,” the newspaper wrote.

Since the cable company began cutting checks to the NAN, Sharpton has towed the line on Comcast’s public policy agenda.

Last July, Sharpton’s group joined several other civil rights groups (most, if not all financially supported by Comcast) complaining that enforcing Net Neutrality would “harm communities of color.”

“The groups wrote to the FCC to tell them that ‘we do not believe that the door to Title II should be opened,'” said Lee Fang in a piece that was quickly censored by a Comcast-owned news outlet. “Simply put, these groups, many of which claim to carry the mantle of Martin Luther King Jr., are saying that Comcast and Verizon should be able to create Internet slow lanes and fast lanes, and such a change would magically improve the lives of non-white Americans.”

“Just as Martin Luther King Jr.’s children have embarrassingly descended into fighting bitterly over what’s left of his estate, the civil rights groups formed to advance Dr. King’s legacy seem willing to sell out their own members for a buck,” Fang concluded.

Ohio Gov. John Kasich is threatening to veto the state’s Agriculture Bill if it reaches his desk with telecom deregulation inserted as an amendment.

AT&T’s lobbyists in Ohio have convinced state legislators to ignore a veto threat from the governor’s office and insert a deregulation amendment into an unrelated water quality and agriculture measure.

Retiring House Speaker Bill Batchelder (R-Medina) is shepherding AT&T’s latest attempt at total deregulation through the Ohio House of Representatives, claiming it will break down barriers for businesses in Ohio and give new businesses the infrastructure they need to make Ohio their home. Among Batchelder’s top donors is AT&T.

Critics contend the measure will disconnect up to 5% of rural Ohio from all telephone service because they live in “no signal bar” areas of the state.

The amendment, inserted into HB490 (at Sec. 4905.71), would end AT&T’s requirement to serve as a Provider of Last Resort, which has guaranteed that every Ohio resident seeking telephone service has had it for nearly 100 years. If the measure passes, AT&T can unilaterally disconnect service and leave unprofitable service areas, mostly in rural and poor sections of the state. Current Ohio law only permits a telephone company to end service if it can prove financial hardship and show that reasonable alternatives are available to affected residents. AT&T earned $128.75 billion in revenue in 2013 and is unlikely to meet any hardship test.

Although AT&T is unlikely to stop service in suburban and urban areas, ratepayers across the state would lose oversight protections from lengthy service outages, unreasonable billing standards and credit requirements, the ability to quickly connect or disconnect service and access to important low-income programs like Lifeline. Rural customers could be forced away from traditional landline and DSL service in favor of AT&T’s wireless network, which costs considerably more.

Current AT&T customers in Ohio can subscribe to landline service for around $20 a month in rural areas and broadband DSL for as little as $15 per month. AT&T’s wireless alternative costs $20 a month for voice service and at least $60 a month for wireless broadband (with a usage cap of 10GB per month and an overlimit fee of $10 per gigabyte). An average landline customer consuming 20GB of data would pay $35 a month for both voice and data services. The same customer using AT&T’s wireless voice and data alternative would pay $180 a month, mostly in overlimit penalties.

AT&T’s lobbying has riled Ohio’s Republican governor, John Kasich, who has threatened to veto any agriculture bill that reaches his desk with telephone deregulation attached.

“The telecommunications language will force the governor to veto this bill, as he has personally said and has also been repeated several times by other members of the administration,” Jim Zehringer, director of the Ohio Department of Natural Resources told the Ohio Senate’s Agriculture Committee during an informal hearing on the legislation. “We would be sacrificing all the great work done so far on this bill if these provisions are not removed.”

The AARP is concerned the measure will not only hurt rural Ohio, but elderly and poor residents who cannot afford wireless service.

“They will only have wireless telephone service with no price controls or guarantees for low-income Ohioans in these areas,” AARP Ohio wrote in a released statement about the proposal. “Additionally, there are areas of Ohio where wireless service is minimal, and to provide the speed needed for those receiving tele-health services in those areas will be even more expensive.”

Interested Ohio residents can share their feelings with their state legislators and the governor’s office.

• Locate your Ohio House Representative: http://www.ohiohouse.gov/ or call 1-800-282-0253 and ask to be connected to your local representative.
• Governor John Kasich’s Office Phone: (614) 466-3555