Divided Loyalties? -- Mayor John Marks

A growing scandal involving AT&T and the mayor of the state capital of Florida has further exposed the link between AT&T’s pay-for-play public policy agenda and the politicians willing to act as puppets for the phone company’s interests.

Tallahassee Mayor John Marks strongly promoted an Atlanta nonprofit group to participate in a $1.6 million dollar federal broadband grant to expand Internet access to the urban poor and train disadvantaged citizens to navigate the online world, without disclosing he was a paid adviser to the group.

What the rest of the city never knew is that the Alliance for Digital Equality (ADE) is little more than an AT&T astroturf effort — a front group almost entirely funded by AT&T that actually did almost nothing to bring Internet access to anyone.

The Alliance for Digital Equality, a group supposedly focused on erasing the digital divide, spends an inordinate amount of time running radio ads under the alias of “Alliance for Equal Access” for competition in cable-TV… when that competition comes from AT&T U-verse. Listen to two radio commercials run in Georgia and Tennessee, both AT&T service areas, promoting legislation that was introduced at the behest of AT&T and promoted by ADE. (2 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

In fact, an investigation by a Tallahassee newspaper reviewing the group’s federal tax returns found four of every five dollars spent by ADE went to board members, consultants, lawyers, and media companies for the purpose of promoting AT&T’s agenda against Net Neutrality and for the company’s various business interests:

Marks also didn’t mention when he brought ADE to the City Commission in September 2010 that AT&T has been paying him since the early 1990s as a lawyer and consultant.

Tax returns for ADE show it got $7.36 million from AT&T from 2007 through 2009. Among its expenses, it spent $2.7 million on consulting and legal fees, $1.2 million on travel, $1.1 million on media and communications and $931,509 in pay to officers and board of advisers members.

ADE spent nothing on projects to provide Internet access to underserved areas from 2007-09. It wasn’t created to do so. The group’s mission, as reported to the IRS, was to advocate “technology inflows to underserved communities by interacting with elected officials, policymakers at all levels of government and private sectors.”

In those interactions, ADE presented the same message as AT&T in opposition to greater price regulation of the Internet.

View the 2007, 2008, and 2009 tax returns for the Alliance for Digital Equality yourself.

Some of ADE’s officers and board members are familiar to Stop the Cap! readers as loyal AT&T advocates.  Even worse, many of them routinely play the “race card” whenever AT&T’s agenda is threatened.  Take Shirley Franklin.  She is the former mayor of Atlanta, but these days her biggest constituent is AT&T.  Last August, Franklin helped lead an attack against Free Press, a consumer advocacy group, that she said “target[ed] women, African-Americans and other minorities” after the group complained about the ties between several civil and minority rights organizations and AT&T.

ADE unsurprisingly is also all-for the merger of AT&T and T-Mobile

Julius Hollis, chairman and founder of the Alliance for Digital Equality, was even more strident.

“I am extremely disappointed in the Free Press, not only in its policies and tactics that they are attempting deploy in their strategy paper, but equally disturbing are its attempts to portray the African-American and Latino consumers as expendable in their efforts to promote Net Neutrality,” Hollis said last year. “In my opinion, this is going back to the tactics that were used in the Jim Crow era by segregationists. It’s no better than what was used in the Willie Horton playbook by Lee Atwater who, upon his deathbed, asked for forgiveness for using such political behavior tactics.”

Stop the Cap! exposed ADE ourselves as a “dollar-a-holler” advocate in August 2010 when we learned the majority of the group’s funds came from AT&T.

Anne Landman, managing editor of the Center for Media and Democracy, told the Tallahassee Democrat the purpose of groups almost entirely sponsored by a single corporate interest is to obfuscate the messenger. “It’s a nontransparent way of operating,” she said. “People don’t know who’s behind these efforts. So it’s fake, and it’s phony, and it gives people wrong information. It’s designed to purposely fool people.”

The newspaper spent months trying to track down financial reports, tax filings, and other documentation about the group, and ran into repeated resistance.  At one point, written requests sent to the group’s headquarters in Atlanta were returned unopened and marked “refused.”

ADE’s corporate influence is bad enough, but when the group uses race, gender, and economic cards to attack real public interest groups, it raises eyebrows, particularly when the group doing the attacking is financed by a corporate entity.  The Black Agenda Report, a website that can hardly be accused of racism, called out Franklin and the organization she represents.

The newspaper’s investigation also found all of ADE’s employees were actually independent contractors.  Non-profit group experts claim the entire structure of ADE is unusual because it funnels all of its money through contractors.

Tallahassee Mayor John Marks is apparently one of them, having received $86,000 as a member of ADE’s board of advisers in addition to AT&T paying him directly as a lawyer and consultant.

With the recent revelations, Tallahassee’s broadband grant is now in ruins and will be returned, unspent.  Marks is reportedly under investigation by the FBI for potential corruption.  And another AT&T astroturf effort has been exposed and has blown up in the company’s face.

[flv]http://www.phillipdampier.com/video/WCTV Tallahassee Mayor Under Fire Over ATT-ADE Ethics Scandal 3-29-11 – 9-15-11.flv[/flv]

Stop the Cap! has compiled almost a year of coverage of the burgeoning scandal in the Tallahassee mayor’s office, courtesy of WCTV-TV, which has doggedly pursued the scandal with assistance from its news partner Tallahassee Reports.  (10 minutes)

So who is for the ABC Plan?  Primarily phone companies, their business partners, and dollar-a-holler astroturf friends:

American Consumer Institute:  SourceWatch called them a telecom industry-backed astroturf group.  Karl Bode from Broadband Reports discovered “the institute’s website is registered to ‘Stephen Pociask, a telecom consultant and former chief economist for Bell Atlantic [today Verizon].”  The group, claiming to focus “on economic policy issues that affect society as a whole,” spends an inordinate amount of its time on telecommunications hot button issues, especially AT&T and Verizon’s favorites: cable franchise reform and opposition to Net Neutrality.

Anna Marie Kovacs:  Determining what is good for Wall Street is her business, as founder and President of Regulatory Source Associates, LLC. RSA provides investment professionals with analysis of federal and state regulation of the telecom and cable industries.

Dollar-a-holler support?

Consumer Awareness Project: A relatively new entrant, CAP is AT&T’s new darling — a vocal advocate for AT&T’s merger with T-Mobile.  But further digging revealed more: the “group” is actually a project of Washington, D.C. lobbying firm Consumer Policy Solutions, which includes legislative and regulatory advocacy work and implementation of grassroots mobilization.

That is the very definition of interest group-“astroturf.”

Randolph May from the Free State Foundation supports "state's rights," but many of them want no part of a plan his group supports.

Free State Foundation: A misnamed conservative, “states rights” group.  Leader Randolph May loves the ABC Plan, despite the fact several individual states are asking the FCC not to impose it on them.

Hispanic Technology & Telecommunications Partnership:  Whatever Verizon and AT&T want, HTTP is also for.  The group was embroiled in controversy over its unflinching opposition to Net Neutrality and love for the merger of AT&T and T-Mobile.  Its member groups, including MANA and LULAC, are frequent participants in AT&T’s dollar-a-holler lobbying endeavors.

Robert J. Shapiro: Wrote an article for Huffington Post calling the ABC Plan worth consideration.  Also worth mentioning is the fact he is now chairman of what he calls an “economic advisory firm,” which the rest of the world calls a run-of-the-mill D.C. lobbyist firm — Sonecon.  It comes as no surprise AT&T is a client.  In his spare time, Shapiro also writes reports advocating Internet Overcharging consumers for their broadband service.

Indiana Exchange Carrier Association: A lobbying group representing rural Indiana telephone companies, primarily owned by TDS Telecom.  It’s hardly a surprise the companies most likely to benefit from the ABC Plan would be on board with their support.

Indiana Telecommunications Association: A group of 40 telephone companies serving the state of Indiana.  For the aforementioned reasons, it’s no surprise ITA supports the ABC Plan.

Information Technology and Innovation Foundation:  Reuters notes this group received financial support from telecommunications companies, so lining up behind a plan those companies favor comes as little surprise.  ITIF also believes usage caps can deter piracy, so they’re willing to extend themselves way out in order to sell the telecom industry’s agenda.

Internet Innovation Alliance:  Another group backed by AT&T, IIA also funds Nemertes Research, the group that regularly predicts Internet brownouts and data tsunamis, which also hands out awards to… AT&T and Verizon.

The Indiana Exchange Carrier Assn. represents the phone companies that will directly benefit from the adoption of the ABC Plan.

Bret Swanson:  He penned a brief note of support on his personal blog.  When not writing that, Swanson’s past work included time at the Discovery Institute, a “research group” that delivers paid, “credentialed” reports to telecommunications company clients who waive them before Congress to support their positions.  Swanson is a “Visiting Fellow” at Arts+Labs/Digital Society, which counted as its “partners” AT&T and Verizon.

Minority Media & Telecom Council: Tries to go out of its way to deny being affiliated or “on the take” of telecom companies, but did have to admit in a blog posting it takes money from big telecom companies for “conference sponsorships.”  Some group members appear frequently at industry panel discussions, and mostly advocate AT&T’s various positions, including strong opposition to reclassify broadband as a utility service.

MMTC convened a Broadband and Social Justice Summit earlier this year that featured a range of speakers bashing Net Neutrality, and the group’s biggest highlighted media advisory on its website as of this date is its support for the merger of AT&T and T-Mobile.  Yet group president David Honig claims he can’t understand why some consumer groups would suspect groups like his of engaging in dollar-a-holler advocacy, telling The Hill, “We’ve seen no examples of reputable organizations that do things because of financial contributions. It’s wrong to suggest such things.”

Mobile Future: Sponsored by AT&T, Mobile Future curiously also includes some of AT&T’s best friends, including the Asian Business Association, LULAC, MANA, the National Black Chamber of Commerce, and the United States Hispanic Chamber of Commerce.

Montana Independent Telecommunications Systems: Primarily a group for Montana’s independent telephone companies, who will benefit enormously from the ABC Plan.

What major corporate entity does not belong to this enormous advocacy group?

The National Grange:  A group with a long history advocating for the interests of telephone companies.  Over the years, the National Grange has thrown its view in on Verizon vs. the RIAA, a request for Congress to support industry friendly legislation, a merger between Verizon and NorthPoint Communications, and USF issues.

The Keep USF Fair Coalition was formed in April 2004. Current members include Alliance for Public Technology, Alliance For Retired Americans, American Association Of People With Disabilities, American Corn Growers Association, American Council of the Blind, California Alliance of Retired Americans, Consumer Action, Deafness Research Foundation, Gray Panthers, Latino Issues Forum, League Of United Latin American Citizens, Maryland Consumer Rights Coalition, National Association Of The Deaf, National Consumers League, National Grange, National Hispanic Council on Aging, National Native American Chamber of Commerce, The Seniors Coalition, Utility Consumer Action Network, Virginia Citizen’s Consumer Council and World Institute On Disability. DSL Prime helps explain the membership roster.

Taxpayers Protection Alliance:  One of the tea party groups, TPA opposes higher USF fees on consumers.  The ABC Plan website had to tread carefully linking to this single article favorable to their position.  Somehow, we think it’s unlikely the group will link to the TPA’s louder voice demanding an end to broadband stimulus funding many ABC Plan backers crave.

TechAmerica: Guess who is a member?  AT&T, of course.  So is Verizon.  And CenturyLink.  TechAmerica call themselves “the industry’s largest advocacy organization and is dedicated to helping members’ top and bottom lines.”  (Consumers not included.)

Tennessee Telecommunications Association: TTA’s independent phone company members stand to gain plenty if the ABC Plan is enacted, so they are happy to lend their support.

Rep. Terry's two biggest contributors are CenturyLink and Qwest.

Representative Greg Walden (R-Oregon):  His top five contributors are all telecommunications companies, including CenturyLink, Pine Telephone, and Qwest.  He also gets money from AT&T and Verizon.  It’s no surprise he’s a supporter: “We are encouraged by the growing consensus among stakeholders as developed in the ‘America’s Broadband Connectivity Plan’ filed with the Federal Communications Commission today, and we hope that consensus will continue to grow.”

Representative Lee Terry (R-Nebraska): He co-signed Rep. Walden’s statement.  Rep. Terry’s two biggest contributors are Qwest and CenturyLink.  Now that CenturyLink owns Qwest, it’s two-campaign-contributions-in-one.  And yes, he gets a check from AT&T, too.

Representative Steve Scalise (R-Louisiana): “Today’s filing of the ‘America’s Broadband Connectivity Plan’ is welcomed input on the intercarrier compensation and Universal Service Fund reform front,” Scalise said.  Now Scalise is ready to welcome this year’s campaign contribution from AT&T, which he has not yet reportedly received.  In 2008, Scalise received $13,250.  In 2010, $10,000.  This cycle, so far he has only been able to count on Verizon, which threw $2,500 his way.  Scalise voted earlier this year to overturn the FCC’s authority to enact Net Neutrality.

USTelecom Association: The only news here would be if USTA opposed the ABC Plan.  Included on USTA’s board of directors are company officials from: Frontier Communications, AT&T, CenturyLink/Qwest, Windstream, FairPoint Communications, and Verizon.  That’s everyone.

Wisconsin State Telecommunications Association:  Their active members, including Frontier Communications, are all telephone companies inside Wisconsin that will directly benefit if the ABC Plan is enacted.

Bartz

The CEO of the Yahoo! has been shown the door, but unlike many recently-unemployed workers who get the bad news during an exit interview, Carol Bartz learned she was out in a humiliating phone call from the board of directors.

That left Bartz telling employees she’d been fired in an internal memo sent from her iPad.

Investors were happy to see the back of Bartz, sending Yahoo! shares higher on the news.  Bartz faced a growing number of critics in the past few years, almost immediately after arriving as CEO in early 2009.  Much like Yahoo! itself, her critics accused her of being out of touch with Internet culture and the realities of today’s high-tech businesses.

Bartz was no friend of coordinating expanded and improved broadband projects through the government.  She opposed the National Broadband Plan and Net Neutrality policies, dismissing both as government interference.  That put her in direct opposition to Google, which has spent millions in the public policy arena to influence expanded broadband in the United States.

Despite the lackluster results Yahoo! managed under her leadership, Bartz remained well-compensated, earning $60 million over the past two years.

Yahoo! has remained a challenged endeavor as a first generation Internet superstar long-faded after the dot.com crash in 2000.  Various efforts to relaunch Yahoo!’s flagging advertising revenue business, long dominated by Google, have not been very successful.  Yahoo!’s biggest problem has been its lack of innovation, creating new reasons for web visitors to return to a company that used to be a household name.

Now some believe the only hope Yahoo! has left is to sell itself to someone else.

[flv]http://www.phillipdampier.com/video/CNBC Broadband Regulation 3-2-10 .flv[/flv]

Free Press’ policy director Ben Scott held his own, despite being hopelessly outnumbered, in a business-friendly CNBC ‘Power Lunch’ debate over broadband public policy held in March 2010.  Scott faced Yahoo! CEO Carol Bartz, Larry Clinton from the “Internet Security Alliance,” which receives substantial support — not disclosed by CNBC — from AT&T and Verizon, and CNBC’s clueless Michelle Caruso-Cabrera, who insisted 99 percent of America already subscribes to broadband.  All of the industry talking points were on hand, which isn’t too surprising when they come from industry front groups like the ‘ISA.’ (3/3/2010 — 5 minutes)

Industry Minister Christian Paradis just completed nearly two weeks of private meetings with some of Canada’s largest telecommunications companies regarding issues important to the industry, but has not scheduled face time with ordinary Canadian consumers or the public interest consumer groups that represent their interests.

Minister Paradis

Wire Report provided the schedule:

Aug. 16
Cogeco Cable Inc.
Shaw Communications Inc.
Quebecor Media Inc.
Globalive Wireless Management Corp.
Xplornet Communications Inc.
Public Mobile

Aug. 17
EastLink
BCE Inc.
Mobilicity
Telus Communications Co.

Aug. 22
Rogers Communications Inc.
MTS Allstream

Aug. 24
SaskTel

Bloomberg reports the primary topic on the agenda is upcoming spectrum auctions for additional wireless frequencies and loosening restrictions on foreign-ownership rules regarding would-be wireless competitors interested in entering Canada’s cell phone marketplace, which currently has the third-highest prices for mobile-phone services in the world, according to the OECD.

A rules change regarding foreign ownership may open the door...

Canadian telecom providers may not have more than 20 percent of their operations owned or controlled by foreign entities, a percentage that could be adjusted in the coming months.  But while changes in foreign ownership rules may benefit new entrants like Globalive Holdings, which operates Wind Mobile, it could also spell profound changes for millions of Canadians.  Industry analyst Dvai Ghose told Bloomberg he expects any relaxation of foreign-ownership rules may also pave the way for a mega merger of Bell and Telus.

“If you allow foreigners into our market, it becomes much more compelling to say we should allow one Canadian champion,” said Ghose, co-head of Canadian research at Canaccord Genuity.

That “champion” could quickly become Canada’s version of AT&T, dramatically reducing competition and raising prices, especially for captive landline customers who rely on the companies for broadband and landline service.  Telus and Bell currently compete with one another in the wireless market, where they would have an enormous share and combined market power should they be permitted to merge.

That would be a high price to pay for many Canadian consumers who do business with Bell or Telus, especially when contrasted with the fact Wind Mobile has attracted only 271,000 customers as of the end of March 2011.

...to a mega-merger of Bell and Telus.

Unfortunately, consumers are not included in Minister Paradis’ day-planner to share their views of further marketplace consolidation or wireless spectrum reform.  In fact, they don’t even have a right to learn what exactly was discussed during the closed door sessions.

A spokeswoman for Paradis, Pascale Boulay, would only confirm the minister met with 13 companies since Aug. 16, but refused to elaborate on the meetings.

Federal Communications Commission chairman Julius Genachowski tried this approach with some of America’s largest telecommunications companies last summer, holding a series of closed door meetings.  They eventually produced telecommunications policies so watered down, they neutralized Genachowski’s earlier commitments to protect Net Neutrality and foster additional competition.  Will Canada repeat America’s mistake?

While wireless providers currently treat Wi-Fi as a friendly way to offload wireless data traffic from their 3G and 4G networks, the wireless industry is starting to ponder whether they can also earn additional profits from regulating your use of it.

Dean Bubley has written a white paper for the wireless industry exploring Wi-Fi use by smartphone owners, and ways the industry can potentially cash in on it.

“It is becoming increasingly clear that Wi-Fi access will be a strategic part of mobile operators’ future network plans,” Bubley writes. “There are multiple use cases, ranging from offloading congested cells, through to reducing overseas roaming costs and innovative in-venue services.”

Bubley’s paper explores the recent history of some cell phone providers aggressively trying to offload traffic from their congested 3G networks to more-grounded Wi-Fi networks.

Among the most intent:

• AT&T, which acquired Wayport, a major Wireless ISP, and is placing Wi-Fi hotspots at various venues and in high traffic tourist areas in major cities and wants to seamlessly switch Apple iPhone users to Wi-Fi, where available, whenever possible;
• PCCW in Hong Kong;
• KT in the Republic of Korea, which has moved as much as 67 percent of its data traffic to Wi-Fi;
• KDDI in Japan, which is planning to deploy as many as 100,000 Wi-Fi Hotspots across the country.

America's most aggressive data offloader is pushing more and more customers to using their Wi-Fi Hotspots.

Bubley says the congestion some carriers experience isn’t necessarily from users downloading too much or watching too many online shows.  Instead, it comes from “signalling congestion,” caused when a smartphone’s applications demand repeated attention from the carrier’s network.  An application that requires regular, but short IP traffic connections, can pose a bigger problem than a user simply downloading a file.  Moving this traffic to Wi-Fi can be a real resource-saver for wireless carriers.

Bubley notes many wireless companies would like to charge third-party developers fees to allow them access to each provider’s “app store.”  Applications that consume a lot of resources could be charged more by providers (or banned altogether), while those that “behave well” could theoretically be charged a lower fee.  The only thing preventing this type of a “two-sided business model,” charging both developers and consumers for the applications that work on smartphones, are Net Neutrality policies (or the threat of them) in many countries.

Instead, Bubley suggests, carriers should be more open and helpful with third party developers to assist them in developing more efficient applications on a voluntary basis.

Bubley also ponders future business strategies for Wi-Fi.  He explores the next generation of Wi-Fi networks that allow users to establish automatic connections to the best possible signal without ponderous log-in screens, and new clients that can intelligently search out and connect to approved networks without user intervention.  That means data traffic could theoretically be shifted to any authenticated or preferred Wi-Fi network without users having to mess with the phone’s settings.  At the same time, that same technology could be used to keep customers off of free, third party Wi-Fi networks, in favor of networks operators run themselves.

Policy controls are a major focus of Bubley’s paper.  While he advocates for customer-friendly use of such controls, sophisticated network management tools can also be used to make a fortune for wireless providers who want to nickle and dime customers to death with usage fees, or open up new markets pitching Wi-Fi networks to new customers.

Bubley

For example, a wireless carrier could sell a retail store ready-to-run Wi-Fi that pushes customers to a well-controlled, store-run network while customers shop — a network that forbids access to competitors or online merchants, in an effort to curtail browsing for items while comparing prices (or worse ordering) online from a competitor.

Customers could also face smartphones programmed to connect automatically to a Wi-Fi network, while excluding access to others while a “preferred” network is in range.  Wireless carriers could develop the same Internet Overcharging schemes for Wi-Fi use that they have rolled out for 3G and 4G wireless network access.  Also available: speed throttles for “non-preferred” applications, speed controls for less-valued ‘heavy users,’ and establishment of extra-fee “roaming charges” for using a non-preferred Wi-Fi network.

Bubley warns carriers not to go too far.

“[We] believe that operators need to internalize the concept of ‘WiFiNeutrality’ – actively blocking or impeding the user’s choice of hotspot or private Wi-Fi is likely to be as divisive and controversial as blocking particular Internet services,” Bubley writes.

In a blog entry, Bubley expands on this concept:

I’m increasingly convinced that mobile device / computing users will need sophisticated WiFi connection management tools in the near future. Specifically, ones that allow them to choose between multiple possible accesses in any given location, based on a variety of parameters. I’m also doubtful that anyone will want to allow a specific service provider’s software to take control and choose for them – at least not always.

We may see the emergence of “WiFi Neutrality” as an issue, if particular WiFi accesses start to be either blocked or “policy-managed” aggressively.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/The Future of Wi-Fi.flv[/flv]

Edgar Figueroa, chief executive officer of The Wi-Fi Alliance, speaks about the future of Wi-Fi. Wi-Fi technology has matured dramatically since its introduction more than a decade ago and today we find Wi-Fi in a wide variety of applications, devices and environments.  (3 minutes)