AT&T, Comcast, Verizon, Time Warner Cable and the cable industry’s chief lobbying group spent $42.8 million during the 2013-2014 election cycle to weigh in on issues including burying Net Neutrality, outlawing community broadband competition, winning tax breaks for themselves, and avoiding consumer protection regulations.

A Common Cause analysis of data from the Center for Responsive Politics and the Institute for Money in State Politics shows that the usual suspects poured money into political coffers on the state and federal level to influence lawmakers.

On the federal level, murky party committees received the largest individual checks: a total of $862,223 for House and Senate Republicans and $552,605 for Democrats. Individual members of Congress also received their own contributions, including Republican House Speaker John Boehner ($98,175 from Comcast) and Democratic Senator Mark Pryor ($88,650 from Comcast, TWC, and National Cable and Telecom. Assn.) Pryor will need to spend his contributions quickly. He was de-elected by Arkansas voters last Tuesday.

Net Neutrality is a major topic on the minds of the cable and telco companies, as is ongoing deregulation and decommissioning rural landline service, and pushback on revelations AT&T and Verizon were only too happy to turn over your phone records to the federal government.

In the states, the bigger the issues coming up in the legislature, the bigger the campaign checks. In Florida, AT&T is the state’s single largest source of political donations, giving $1.53 million to state lawmakers in the past year and another $660,000 to Gov. Rick Scott (R) and his appointed heads of state agencies. AT&T is lobbying for eliminating Florida’s telecommunications tax, win the right to place cell towers wherever they wish without much interference from local officials, and further deregulation. Most of AT&T’s money goes into the hands of the state’s Republicans.

In New York and California, Democrats got a major chunk of money from Comcast and Time Warner Cable — New York Governor Andrew Cuomo received $60,800 each from both Comcast and Time Warner Cable (totaling $121,600). California Governor Jerry Brown received $54,400 from Time Warner Cable and $27,200 from Comcast. Both states are reviewing the merger of the two companies this year. AT&T and Verizon are also major donors – AT&T wants to dismantle the rural telephone network in California and Verizon is trying to convince the New York legislature to approve its own rural landline replacement – Voice Link. It also wants reduced scrutiny of its landline performance in New York and more access to New York City buildings where it faces resistance from property owners who want compensation from Verizon to install FiOS.

Sen. John Thune (R-S.D.) will assume the leadership of the Senate Commerce Committee in January.

The Republican takeover of the U.S. Senate could have profound implications on U.S. telecommunications law as Congress contemplates further deregulation of broadcasting, broadband, and telecom services while curtailing oversight powers at the Federal Communications Commission.

Sen. John Thune (R-S.D.), expected to assume leadership over the Senate Commerce Committee in January, has already signaled interest in revising the 1996 Communications Act, which was built on the premise that deregulation would increase competition in the telecommunications marketplace.

“Our staff has looked at some things we might do in the area of telecommunications reform,” Thune told Capital Journal.” That hasn’t been touched in a long time. A lot has changed. The last time that the telecom sector of the economy was reformed was 1996, and I think in that bill there was one mention of the Internet. So it’s a very different world today.”

Republicans have complained the 1996 Telecom Act is dependent on dividing up services into different regulatory sectors and subjecting them to different regulatory treatment. In the current Net Neutrality debate, for example, a major component of the dispute involves which regulatory sector broadband should be classified under — “an information service” subject to few regulations or oversight or Title 2, a “telecommunications service” that has regulatory protections for consumers who have few choices in service providers.

Republicans have advocated streamlining the rules and eliminating “broad prescriptive rules” that can have “unintended consequences for innovation and investment.” Most analysts read that as a signal Republicans want further deregulation across the telecom industry to remove “uncertainty for innovators.”

Republicans have been particularly hostile towards imposing strong Net Neutrality protections, particularly if it involves reclassification of broadband as a “telecommunications service” under Title 2 of the Communications Act. Most expect Thune and his Republican colleagues will oppose any efforts to enact Net Neutrality policies that open the door for stronger FCC regulatory oversight.

The move to re-examine the Communications Act will result in an enormous stimulation of the economy, if you happen to run a D.C. lobbying firm. Just broaching the subject of revising the nation’s telecommunications laws stimulates political campaign contributions and intensified lobbying efforts. From 1997-2004, telecommunications companies advocating for more deregulation spent more than $44 million in direct soft money and PAC donations — $18 million to Democrats, $27 million to Republicans. During the same period, eight companies and trade groups in the broadcasting, cable and telephone sector collectively spent more than $400 million on lobbying activities alone, according to Common Cause.

Reopening the Telecom Act for revision is expected to generate intense lobbying activity, as Congress contemplates subjects like eliminating or curtailing FCC oversight over broadband, how wireless spectrum is distributed to wireless companies, how many radio and television stations a company can own or control, maintaining or strengthening bans on community broadband networks, oversight of cable television packages, and compensation for broadcast stations vacating frequencies to make room for more cellular networks.

Common Cause notes ordinary citizens had little say over the contents of the ’96 Act and consumer group objections were largely ignored. When the bill was eventually signed into law by President Bill Clinton, its sweeping provisions affected almost every American:

Good times at K Street lobbying firms are ahead

BROADCASTING

1. The 96 Act lifted the limit on how many radio stations one company could own. The cap had been set at 40 stations. It made possible the creation of radio giants like Clear Channel, with more than 1,200 stations, and led to a substantial drop in the number of minority station owners, homogenization of playlists, and less local news. Today, few listeners can tell the difference between radio stations with similar formats, regardless of where they are located.
2. Lifted from 12 the number of local TV stations any one corporation could own, and expanded the limit on audience reach. One company had been allowed to own stations that reached up to a quarter of U.S. TV households. The Act raised that national cap to 35 percent. These changes spurred huge media mergers and greatly increased media concentration. Together, just five companies – Viacom, the parent of CBS, Disney, owner of ABC, FOX-News Corp., Comcast-NBC, and Time Warner now control 75 percent of all prime-time viewing.
3. The Act gave broadcasters, for free, valuable digital TV licenses that could have brought in up to $70 billion to the federal treasury if they had been auctioned off. Broadcasters, who claimed they deserved these free licenses because they serve the public, have largely ignored their public interest obligations, failing to provide substantive local news and public affairs reporting and coverage of congressional, local and state elections. Many television stations have discontinued local news programming altogether or have relied on partnerships with other stations in the same market to produce news programming for them. Most local television stations are now owned by out-of-state conglomerates that control dozens of television stations and now expect to be compensated by viewers watching them on cable or satellite television.
4. The Act reduced broadcasters’ accountability to the public by extending the term of a broadcast license from five to eight years, and made it more difficult for citizens to challenge those license renewals.

TELECOMMUNICATIONS

1. The 1996 Act preserved telephone monopoly control of their networks, allowing them to refuse new entrants who depend on telco infrastructure to sell their services.
2. The Act was designed to promote increased competition but also allowed major telephone companies to refuse to compete outside of their home territories. It also allowed Bell operating companies to buy each other, resulting in just two remaining major operators — AT&T and Verizon.

CABLE

1. The ’96 Act stripped away the ability of local franchising authorities and the FCC to maintain oversight of cable television rates. Immediately after the ’96 Act took effect, rate increases accelerated.
2. The Act permitted the FCC to ease cable-broadcast cross-ownership rules. As cable systems increased the number of channels, the broadcast networks aggressively expanded their ownership of cable networks with the largest audiences. In the past, large cable operators like Time Warner, TCI, Cablevision and Comcast owned most cable networks. Broadcast networks acquired much of their ownership interests. Ninety percent of the top 50 cable stations are owned by the same parent companies that own the broadcast networks, challenging the notion that cable is any real source of competition.

“Those who advocated the Telecommunications Act of 1996 promised more competition and diversity, but the opposite happened,” said Common Cause president Chellie Pingree back in 1995. “Citizens, excluded from the process when the Act was negotiated in Congress, must have a seat at the table as Congress proposes to revisit this law.”

Above all, the legacy of the 1996 Telecom Act was massive consolidation across almost every sector.

Over ten years, the legislation was supposed to save consumers $550 billion, including $333 billion in lower long-distance rates, $32 billion in lower local phone rates, and $78 billion in lower cable bills. But most of those savings never materialized. Indeed, Sen. John McCain (R-Ariz.), who opposed the legislation, noted in 2003: “From January 1996 to the present, the consumer price index has risen 17.4 percent … Cable rates are up 47.2 percent. Local phone rates are up 23.2 percent.”

Advocates of deregulation also promised the Act would create 1.4 million jobs and increase the nation’s Gross Domestic Product by as much as $2 trillion. Both proved wrong. Consolidation meant the loss of at least 500,000 “redundant” jobs between 2001-2003 alone, and companies that became indebted in the frenzy of mergers and acquisitions ended up losing more than $2 trillion in the speculative frenzy, conflicts of interest, and police-free zone of the deregulated telecom marketplace.

The consolidation has also drastically reduced the number of independent voices speaking, writing, and broadcasting to the American people. Today, just a handful of corporations control most radio and TV stations, newspapers, cable systems, movie studios, and concert ticketing and facilities.

The law also stripped away oversight of the broadband industry which faces little competition and has no incentive to push for service-enhancing upgrades, costing America’s leadership in broadband and challenging the digital economy. What few controls the FCC still has are now in the crosshairs of large telecom companies like AT&T, Comcast, and Verizon.

All are lobbying against institutionalized Net Neutrality, oppose community broadband competition, regulated minimum speed standards, and service oversight. AT&T and Verizon are lobbying to dismantle the rural telephone network in favor of their much more lucrative wireless networks.

Consumers Union predicted the outcome of the 1996 Telecom Act back in 2000, when it suggested a duopoly would eventually exist for most Americans, one dedicated primarily to telephone services (AT&T and Verizon Wireless’ mobile networks) and the other to video and broadband (cable). The publisher of Consumers Reports also accurately predicted neither the telephone or the cable company would compete head to head with other telephone or cable companies, and High Speed Internet would be largely controlled by cable networks using a closed, proprietary network not open to competitors.

Analysts suggest a 2015 Telecom Act would largely exist to further cement the status quo by prohibiting federal and state governments from regulating provider conduct and allowing the marketplace a free hand to determine minimum standards governing speeds, network performance, and pricing.

In fact, the most radical idea Thune has tentatively proposed for consideration in a revisit of the Act is his “Local Choice” concept to unbundle broadcast TV channels from all-encompassing cable television packages. His proposal would allow consumers to opt out of subscribing to one or more local broadcast television stations now bundled into cable television packages.

Malone

Cable magnate John Malone has rarely had it this good at the expense of the U.S. Treasury. Using his vast wealth to hire some of the smartest tax advisers in the country, he has personally avoided hundreds of millions in U.S. taxes and shared the benefits of his tax tips with shareholders, who collectively stiffed the tax man out of more than a billion dollars in 2013.

As the Obama Administration fights with Republicans in Congress to close the loopholes, corporate executives and fellow billionaires routinely engage in tax avoidance schemes that shift their tax burden to ordinary Americans that cover the difference in the form of service cuts or higher taxes and fees to offset the lost revenue.

In 2013, Malone jumped on the “inversion” bandwagon, shifting the corporate address of Liberty Global, Inc. from Colorado to London, largely out of reach of the Internal Revenue Service.

Bloomberg News detailed Malone’s exploits over decades of “rich get richer” deals and the consequences of loopholes unavailable to most Americans that stay in the tax code at the behest of those who directly benefit from them.

Malone is fiercely protective of his $7.5 billion net worth, structuring investments, tax shelters, and end runs around tax laws in ways that often leave him with no tax liability at all.

Not everyone can afford to move their assets overseas or set up complicated charitable trusts to shelter income, but the enormously wealthy Malone can. He recently passed Ted Turner as America’s biggest private landowner, owning 2.2 million acres of property in the United States, including more than 5% of the state of Maine.

Malone spreads his vast wealth around — owning stakes in Liberty Media, Liberty Global, and Liberty Interactive, as well as pieces of News Corp., Viacom, Time Warner, Inc., QVC, Discovery Communications, the old Court TV, DirecTV, SiriusXM satellite radio, Barnes & Noble, and Expedia.com.

Malone’s influence over the U.S. tax code comes in part from his advocacy work as an unpaid director at the Cato Institute, a Libertarian think tank that lobbies Washington hard for lower taxes and deregulation.

Malone’s personal tax code is to avoid taxes at all costs and, where possible, let someone else pick up the tab.

Malone’s baseball team, the Atlanta Braves, was instrumental as part of Liberty Media’s deal to cash out its stake in Time Warner without paying a dime in capital gains tax. Malone walked away with $1.4 billion in tax-free cash and ownership of the baseball team. Atlanta taxpayers will be responsible for more than $300 million in costs to build the Braves a brand new stadium in the Atlanta suburbs.

SiriusXM satellite radio subscribers were notified this week of the latest rate increase, due by the end of this year.

What they may not know is Malone’s Liberty Media now owns and controls the satellite radio venture. In 2009, Malone invested $530 million in the struggling operation. But he also gained the benefits of SiriusXM’s $6 billion in tax losses that Malone used to offset taxes on Liberty’s future profits. As a fringe benefit, Malone has also boosted revenue by imposing regular rate hikes on SiriusXM customers.

Like many U.S. corporations, Malone’s various Liberty ventures store massive amounts of cash in offshore bank accounts, avoiding U.S. taxes. When Liberty contemplated tapping that offshore cash, it faced a U.S. corporate tax rate of 35 percent. So Liberty joined more than a dozen other U.S. corporations relocating overseas, avoid corporate taxes back home.

Although the corporation escapes a tax bill, shareholders usually do not, subject to tax for shares converted from the old U.S.-based company to the new overseas entity. Faced with owing capital gains taxes at a rate of 23.8 percent, the day before the inversion was announced, Malone transferred almost $600 million of his shares to the Malone-controlled, tax exempt LG 2013 Charitable Remainder Unitrust, avoiding much of the tax. Not satisfied with the fact he still would owe tax on the remaining $260 million of his personal stake in Liberty, the company hired Shearman & Sterling LLP to devise a strategy to get Malone (and shareholders) off the hook for any tax liability.

They found one, turning the government’s own efforts to plug tax loopholes against itself, manufacturing income that would not only satisfy the IRS’ recently hardened rules, but also let Malone & Co. escape any British tax liabilities in their new home.

“Malone threw a multi-billion dollar left hook at the Treasury Department,” said Samuel C. Thompson, a law professor at Pennsylvania State University. “They didn’t see it coming.”

As has been so often the case, the IRS eventually closed the loophole, but only after Malone exploited it.

Malone’s defenders point out all of his creative tax strategies are perfectly legal, and he is only taking advantage of existing U.S. tax laws. Detractors note America’s wealthy and powerful have exercised disproportionate influence over how those laws are written, usually through well-funded think tanks, lobbying firms, and anti-tax astroturf efforts. Most Americans lack the resources to take advantage of loopholes and benefits that require sophisticated advisers prepared to withstand any scrutiny from the IRS.

An emboldened Liberty Global is even willing to publicly signal its next tax avoidance measure.

In a filing last April, Liberty disclosed that a U.S. subsidiary will pay at least $7 billion in tax-deductible interest to its new UK parent over the next decade. Such payments are known to tax lawyers as “earnings stripping,” because the big interest deductions strip profits out of the U.S., thus cutting any U.S. tax obligation.

The practice has become so common among inverted companies headquartered overseas, Democratic Sens. Charles Schumer and Richard Durbin authored a bill to ban the practice. It has gone nowhere in the legislature because of objections raised primarily by Republicans, who characterize loophole closing measures as disguised “tax increases” on business.

What is Malone doing with all the money he has successfully kept out of the hands of the U.S. Treasury? He bought an Irish castle and three major Irish hotel properties. He did it using a capital gains tax holiday offered by Ireland’s government to wealthy investors willing to buy Irish real estate and retain ownership for a minimum of seven years.

Wall Street is increasingly pessimistic about Comcast and Time Warner Cable pulling off their merger deal as regulators stop the clock to take a closer look at the transaction.

The Capitol Forum, an in-depth news and analysis service dedicated to informing policymakers, investors, and industry stakeholders on how policy affects market competition, specializes in examining marketplace mergers and their potential impact on American consumers and the general economy. The group has shared a copy of their assessment — “Comcast/Time Warner Cable: A Closer Look at FCC, DOJ Decision Processes; Merits and Politics May Drive Merger Challenge, Especially as Wheeler Unlikely to Embrace Title II Regulation for Net Neutrality” — with Stop the Cap! and we’re sharing a summary of the report with our readers.

The two most important government agencies reviewing the merger proposal are the Federal Communications Commission and the Department of Justice. The FCC is responsible for overseeing telecommunications in the United States and is also tasked with reviewing telecom industry mergers to verify if they are in the public interest. The Department of Justice becomes involved in big mergers as well, concerned with compliance with antitrust and other laws.

In many instances, the two agencies work separately and independently to review merger proposals, but not so with Comcast and Time Warner Cable.

Sources tell Capitol Forum there is a high level of coordination and information sharing between DOJ and the FCC, potentially positioning the two agencies in a stronger legal position if they jointly challenge the merger. Readers may recall AT&T’s attempt to buy T-Mobile was thwarted in 2011 when the FCC followed the DOJ’s lead in jointly challenging the merger on competition and antitrust grounds. With a united front against the deal in Washington, AT&T quickly capitulated.

Despite a blizzard of Comcast talking points claiming the cable industry is fiercely competitive, Capitol Forum’s report indicates the DOJ staff level believes the cable industry suffers dearly from a lack of competition already, and allowing further marketplace concentration would exacerbate an already difficult problem.

Capitol Forum reports the DOJ’s staff is inclined to “take an aggressive posture with regards to [antitrust] enforcement.”

The DOJ would certainly not be walking the beltway plank to its political doom if it ultimately decides to oppose the merger.

Few on Capitol Hill are likely to fiercely advocate for a cable company generally despised by their constituents. The Capitol Forum report notes that Comcast faces powerful opposition and its political support is overstated. Comcast’s lobbying efforts and ties to President Obama and several high level Democrats have also been widely exposed in the media, which makes it more difficult for D.C.’s powerful to be seen carrying Comcast’s water.

In fact, the report indicates a regulatory challenge against Comcast and Time Warner Cable would face considerably less political opposition than what the FCC faces if it reclassifies broadband as a “telecommunications service,” protecting Net Neutrality and exposing the industry to stronger regulatory oversight.

The report suggests FCC Chairman Thomas Wheeler, who seems intent on opposing reclassification of broadband under Title II, may appease his critics by taking a stronger stance on the Comcast/Time Warner deal instead.

Wheeler has already expressed concern about the state of competitiveness of American broadband. He considers providers capable of delivering at least 25Mbps part of broadband’s key market, which in many communities means a monopoly for the local cable operator.

Understanding “The Public Interest” and the Implications of a Combined Comcast/Time Warner Cable on Competition

The FCC will review the transaction pursuant to Sections 214 and 310(d) of the Communications Act of 1934, in order to ensure that “public interest, convenience, and necessity will be served thereby.”

The merger proposal must also demonstrate it does not violate antitrust laws.

It is here that merger opponents have a wealth of arguments to use against Comcast and Time Warner Cable.

Despite Comcast’s insistence the deal would have no competitive implications, the Capitol Forum reports the merger’s potential anticompetitive effects are “widely recognized and evidence from the investigation could provide DOJ and FCC with a solid foundation to challenge the merger.”

Although the two cable companies don’t directly compete with each other (itself a warning sign of an already noncompetitive marketplace), the report finds “a wide array of anti-competitive effects and several antitrust theories” that would implicate the cable company in a Clayton Act violation.

Comcast is betting heavily on its surface argument that by the very fact customers will not see any change in the number of competitors delivering service to their area, the merger should easily clear any antitrust hurdles. That argument makes it more difficult for the DOJ to fall back on the usual market concentration precedents that would prevent such a colossal merger deal. To argue excessive horizontal integration — the enlarging of Comcast’s territory — the DOJ would first have to prove Comcast’s size in comparison with other cable companies is a reason for the courts to shoot down the deal. Or it could bypass Comcast’s favorite argument and move to the issue of vertical integration — one company’s ability to control not just the pipes that deliver content, but also the content itself.

Here the examples of potential abuse are plentiful:

• Comcast would enjoy increased power to force cable programmers to favor Comcast in cable programming pricing and policies while allowing it to demand restrictions on competitive online video competitors or restrict access to popular cable programming;
• Comcast could impose data caps and usage-based pricing to deter online viewing while exempting its own content by delivering it over a Wi-Fi enabled gateway, game console or set top box, claiming all are unrelated to Comcast’s broadband Internet service or network;
• Force consumers to use Comcast set top boxes that would not support competing providers’ online video;
• Use interconnection agreements as a clever way to bypass the paid prioritization Net Neutrality debate. Netflix and other content producers would be forced to compensate Comcast for reliable access to its broadband customers;
• Noting AT&T has declared U-verse can not effectively succeed in the cable television business without combining its customer base with DirecTV to qualify for better volume discounts, there is clear evidence that a super-sized Comcast could command discounts new entrants like Google Fiber could never hope to get, putting them at a distinct price disadvantage.

The FCC’s scrutiny of Comcast’s merger deal has already uncovered evidence previously unavailable because of non-disclosure agreements which show Comcast’s heavy hand already at work.

The report notes Michael Mooney, a senior vice president and group general counsel at Level 3, told the Capitol Forum the dispute earlier this year between Netflix and Comcast could have been resolved in about five minutes had Comcast added a port to relieve congestion at an interconnection point. The cost? Just $5,000. Had Comcast been willing to spend the money, millions of Comcast customers would have never experienced problems using Netflix.

Whether Comcast is ultimately deemed too large to permit another consolidating merger or whether it is given conditional approval to absorb Time Warner Cable remains a close call, according to the Capitol Forum, despite the fact consumers have urged regulators for something slightly more concrete – a single sentence, total denial of its application.

[flv]http://www.phillipdampier.com/video/Capitol Forum The Consumer Welfare Test.mp4[/flv]

The Capitol Forum broadly explores how the “consumer welfare standard” has become a part of the antitrust review process over the last 30 years. Sometimes, a strict antitrust test is not sufficient to protect “the public interest” of consumers, and allows the dominant player(s) to harm competition. In the digital economy, corporate mergers that empower companies to restrict innovation can prove far more damaging than classic monopoly abuse. (15:52)

Rep. Marsha Blackburn (R-Tennessee, but mostly AT&T and Comcast)

Rep. Marsha Blackburn (R-Tenn.) is angry that FCC chairman Tom Wheeler is sticking his nose into AT&T, Comcast, and Charter Communications’ private playground — the state of Tennessee.

In an editorial published by The Tennessean, Blackburn throws a fit that an “unelected” bureaucrat not only believes what’s best for her state, but is now openly talking about preempting state laws that ban public broadband networks:

Legislatures are the entities who should be making these decisions. Legislatures govern what municipalities can and cannot do. The principles of federalism and state delegation of power keep government’s power in check. When a state determines that municipalities should be limited in experimenting in the private broadband market, it’s usually because the state had a good reason — to help protect public investments in education and infrastructure or to protect taxpayers from having to bailout an unproven and unsustainable project.

Chairman Wheeler has repeatedly stated that he intends to preempt the states’ sovereign role when it comes to this issue. His statements assume that Washington knows best. However, Washington often forgets that the right answers don’t always come from the top down.

It’s unfortunate Rep. Blackburn’s convictions don’t extend to corporate money and influence in the public dialogue about broadband. The “good reason” states have limited public broadband come in the form of a check, either presented directly to politicians like Blackburn, who has received so many contributions from AT&T she could cross daily exercise off her “things to do” list just running to the bank, or through positive press from front groups, notably the corporate-funded American Legislative Exchange Council (ALEC).

According to campaign finance data compiled by the Center for Responsive Politics, three of Blackburn’s largest career donors are employees and PACs affiliated with AT&T, Comcast and Verizon. Blackburn has also taken $56,000 from the National Cable & Telecommunications Association, the lobby for the big telecoms.

Combined, those organizations donated more than $200,000 to Blackburn. In comparison, her largest single donor is a PAC associated with Memphis-based FedEx Corp., which donated $68,500.

Phillip “States’ rights don’t extend to local rights in Blackburn’s ideological world” Dampier

Blackburn’s commentary tests the patience of the reality-based community, particularly when she argues that keeping public broadband out protects investments in education. As her rural constituents already know, 21st century broadband is often unavailable in rural Tennessee, and that includes many schools. Stop the Cap! regularly receives letters from rural Americans who complain they have to drive their kids to a Wi-Fi enabled parking lot at a fast food restaurant, town library, or even hunt for an unintentionally open Wi-Fi connection in a private home, just to complete homework assignments that require a broadband connection.

Blackburn’s favorite telecommunication’s company — AT&T — has petitioned the state legislature to allow it to permanently disconnect DSL and landline service in rural areas of the state, forcing customers to a perilous wireless data experience that doesn’t work as well as AT&T promises. While Blackburn complains about the threat of municipal broadband, she says and does nothing about the very real possibility AT&T will be allowed to make things even worse for rural constituents in her own state.

Who does Blackburn believe will ride to the rescue of rural America? Certainly not AT&T, which doesn’t want the expense of maintaining wired broadband service in less profitable rural areas. Comcast won’t even run cable lines into small communities. In fact, evidence has shown for at least a century, whether it is electricity, telephone, or broadband service, when large corporate entities don’t see profits, they won’t provide the service and communities usually have to do the job themselves. But this time those communities are handcuffed in states that have enacted municipal broadband bans literally written by incumbent phone and cable companies and shepherded into the state legislature through front groups like ALEC.

Chairman Wheeler is in an excellent position to understand the big picture, far better than Blackburn’s limited knowledge largely absorbed from AT&T’s talking points. After all, Wheeler comes from the cable and wireless industry and knows very well how the game is played. Wheeler has never said that Washington knows best, but he has made it clear state and federal legislators who support anti-competitive measures like municipal broadband bans don’t have a monopoly on good ideas either — they just have monopolies.

That isn’t good enough for Congresswoman Blackburn, who sought to strip funding from the FCC to punish the agency for crossing AT&T, Comcast and other telecom companies:

Marsha is an avowed member of the AT&T Fan Club.

In July, I passed an amendment in Congress that would prohibit taxpayer funds from being used by the FCC to pre-empt state municipal broadband laws. My amendment doesn’t prevent Chattanooga or any other city in Tennessee from being able to engage in municipal broadband. It just keeps those decisions at the state level. Tennessee’s state law that allowed Chattanooga and other cities to engage in municipal broadband will continue to exist without any interference from the FCC. Tennessee should be able to adjust its law as it sees fit, instead of Washington dictating to us.

Notice that Blackburn’s ideological fortitude has loopholes that protect a very important success story — EPB Fiber in Chattanooga, one of the first to offer gigabit broadband service. If municipal broadband is such a threat to common sense, why the free pass for EPB? In fact, it is networks like EPB that expose the nonsense on offer from Blackburn and her industry friends that claim public broadband networks are failures and money pits.

In fact, Blackburn’s idea of states’ rights never seems to extend to local communities across Tennessee that would have seen local ordinances gutted by Blackburn’s telecommunications policies and proposed bills. In 2005, Blackburn introduced the ironically named Video Choice Act of 2005 which, among other things:

• Would have granted a nationwide video franchise system that would end all local oversight over rights-of-way for the benefit of incumbent telephone companies, but not for cable or other new competitors like Google Fiber;
• Strips away all local oversight of cable and telephone company operations that allowed local jurisdictions to ensure providers follow local laws and rules;
• Prohibited any mechanism on the local level to collect franchise payments;
• Eliminated any rules forbidding “redlining” — when a provider only chooses select parts of a community to serve.

More recently, Blackburn has been on board favoring legislation restricting local communities from having a full say on the placement of cell towers. Current Tennessee law already imposes restrictions on local communities trying to refuse requests from AT&T, Verizon and others to place new cell towers wherever they like. She is also in favor of highest-bidder wins spectrum auctions that could allow AT&T and Verizon to use their enormous financial resources to snap up new spectrum and find ways to hoard it to keep it away from competitors.

Not everyone in Tennessee appreciated Blackburn’s remarks.

Nashville resident Paul Felton got equal time in the newspaper to refute Blackburn’s claims:

Rep. Marsha Blackburn is on her high horse (Tennessee Voices, Oct. 3) about the idea of the Federal Communications Commission opposing laws against municipal broadband networks, wrapping herself in the mantle of states’ rights. We know that behind all “states’ rights” indignation is “corporate rights” protection.

The last I heard, there was only one Internet, and anyone can log into Amazon or healthcare.gov just as easily from any state. Or any budget.

No, this is about the one Internet being controlled by one corporate giant (or two) in each area, who want to control price and broadband speed, and now want to link the two. They don’t want competition from any pesky municipal providers hellbent on providing the same speed for all users, at a lower price. Check the lobbying efforts against egalitarian ideas to find out which side of an issue Marsha Blackburn always comes down on.

But comments like these don’t deter Rep. Blackburn.

“Congress cannot sit idly by and let a federal agency trample on our states’ rights,” she wrote, but we believe she meant to say ‘AT&T’s rights.’

“Besides, the FCC should be tackling other priorities where political consensus exists, like deploying spectrum into the marketplace, making the Universal Service Fund more effective, protecting consumers, improving emergency communications and other important policies,” Blackburn wrote.

Remarkably, that priority list just so happens to mirror AT&T’s own legislative agenda. Perhaps that is just a coincidence.