Exasperated consumers fed up with a two party system feasting on big corporate campaign contributions buying legislative favors from Washington have a point.  With a Supreme Court decision ripping the limits off the corporate ATMs installed in the halls of Congress, corporate interests will now spend more than ever to keep their agendas front and center among lawmakers.

Some consumers demand an end to the money-influence machine in Washington with public financing of campaigns, an allotment of free advertising, and strict ethics laws to prohibit corporations from buying favors from elected officials.  Others have joined a “tea party” movement that believes a wholesale slashing of the size of the federal government will help accomplish the goal of keeping government out of our lives.

The demand for real change is sincere, even if the proposed solutions differ. The debate comes after years of watching common-sense, pro-consumer public policy get watered down or blown out of the water after lobbyists descend on the Capitol like locusts swarming a field of wheat.

It’s unfortunate that those swarms don’t just wreak havoc on lawmakers — they’ve also quietly infested the “tea party” movement that advocates reform.

It’s akin to the Boston Tea Party being sponsored and organized by the East India Company.

After this weekend’s “tea party” convention in Nashville, it’s more apparent than ever that teabags come with corporate strings attached.

Perhaps that shouldn’t be surprising, considering the modern reincarnation of the “tea party” was channeled by a business news network. About a year ago, CNBC reporter Rick Santelli ranted on air about the federal government bailing out Americans underwater on their mortgages after the housing market collapsed.

“We’re thinking of having a Chicago tea party in July,” Santelli offered.

For Stop the Cap! readers, the names and groups affiliated with the “tea party” movement are already familiar.  FreedomWorks’ Dick Armey (R-TX), the former House majority leader in Congress openly considers himself a leader in the movement.  But his day job involves creating fake “grassroots” campaigns for corporate interests, including Verizon and AT&T.  Phil Kerpen from Americans for Prosperity promptly registered “taxpayerteaparty.com” and joined the movement while continuing to represent the broadband industry against Net Neutrality and against municipal broadband network competition.

Kerpen’s group should be called “Americans for the Prosperity of Big Telecom.” They oppose Net Neutrality to the degree Kerpen appeared twice on Glenn Beck’s Fox News show, mostly as an enabler of Beck’s paranoid rantings about Net Neutrality.  After two sessions of Beck’s chalkboard conspiracy theater, the host had Kerpen nodding in agreement to the proposition that Net Neutrality was Maoist.  The group also harassed North Carolina residents with robocalls opposing municipal broadband service that would bring fiber optic connectivity to residents.

Americans for Prosperty's Phil Kerpen on Glenn Beck's show opposing Net Neutrality

Wherever common-sense pro-consumer public policy threatens to become law, the corporate-backed lobbying groups take the anti-consumer view and hoodwink consumers into supporting the corporate agenda.  Trying to convince Americans they are better off taking the anti-consumer position takes a lot of money.  You can’t argue your position beneath your corporate banner.  That’s too transparent.  It’s much more effective to spend tens of millions on creating fake “grassroots” groups with no visible ties to their corporate benefactor.  You need to fund so-called “independent” research groups to cook up phony reports that prove pre-conceived corporate positions.  Writing big fat checks to elected officials can’t hurt either.

Billions in profits are at stake.  In 2008 it was the oil industry and the ridiculous spike in energy prices.  Millions were spent to keep oil and gas interests free from meddlesome Washington and their pesky investigations.  In 2009, the health care industry spend tens of millions of dollars to fight health care reform, while Wall Street bankers tried to keep up with tens of millions of their own to preserve the special favors they earned from being “too big to fail.”

Right after big oil, health care, and banks comes the telecommunications industry.

Last Friday, Verizon had the dubious distinction of appearing on USA Today’s top-20 big spenders.  The only good news is the company only spent $17,820,000 in 2009 on their lobbying efforts.  That’s down from 2008, when Verizon spent $18,020,000.

Not to be too outdone, the cable television industry handed over part of your rate increase to their own lobbying machine.  In 2008, the National Cable and Telecommunications Association spent $14,500,000.  But your rates went up in 2009, and so did their total spending on an army of lobbyists — $15,980,000 worth.

That buys a lot of plastic grass.

Where does the money go?  Among Verizon’s benefactors and friends:

Consumers for Cable Choice: Common Cause notes Verizon spent $75,000 in just one year on this group, which fights for statewide cable franchises, mostly benefiting phone company cable TV from Verizon and AT&T.  While this short cut may bring consumers a choice in providers, it doesn’t bring them any savings.

FreedomWorks: Adamantly opposed to Net Neutrality, FreedomWorks also backs those statewide video franchises, thanks to generous fees paid by AT&T and Verizon to take those views.

The Progress and Freedom Foundation: They define “progress” much differently than consumers.  Opposed to a-la-carte pricing for cable television packages (letting you choose and pay only for the channels you want), P&F also hates Net Neutrality and the concept of government issuing franchises for cable and telco TV in the first place.  Let them dig up your streets and backyards without oversight!  The group receives so much corporate telecommunications money, it would be easier to list the companies that don’t cut them a check.

The American Legislative Exchange Council: They exchange Verizon’s money in return for strong opposition to Net Neutrality.  They are at the forefront of opposition to municipal broadband networks, with a staff of lawyers who “helpfully” draft legislation for state lawmakers to ban such networks.  Part of the broadband protectionist racket, ALEC makes sure even unprofitable, unserved areas stay that way.  ALEC believes Net Neutrality will harm states’ economies, which would be true if a state was defined as a corporate broadband provider.

New Millennium Research Council: They “develop workable, real-world solutions to the issues and challenges confronting policy makers, primarily in the fields of telecommunications and technology.”  This so-called “think tank” issues suspect reports mostly for the benefit of Congress, which some members use as cover when voting against their constituents and for the provider.  You’re certain to hear elected officials railing against pro-consumer policies quoting liberally from these industry-backed “think tanks,” which provide a patina of independent legitimacy to corporate-backed propaganda. Need to scare people with stories about an overburdened Internet that will crash and burn without “network management” that slows service and enriches providers?  No problem! (That the group has had Verizon employees working for them doesn’t hurt either.)

Broadband for America: This relatively new group is infested with Verizon and AT&T contributions from top to bottom.  In addition to direct contributions from big telecom interests, virtually every single public interest non-profit group on their roster has an AT&T or Verizon lobbyist on their board of directors, or accepts generous contributions from the telecom industry.

Frontier of Freedom: Another so-called “free market” group advocating deregulation, FF doesn’t disclose its donors and considers itself independent, but a familiar pattern belies that.  Frontier of Freedom advocates statewide video franchises and has even run advertising promoting telco-friendly legislation in states like Texas.  The cable industry was displeased because Frontier of Freedom used to represent their best interests but suddenly flipped sides in 2005.  Money talks.

MyWireless.org: “MyWireless.org is a national non-profit consumer advocacy organization” the site declares, without bothering to disclose it is really a sock puppet of the cell phone industry’s trade group CTIA – The Wireless Association.  Ostensibly interested in stripping taxes and government-mandated surcharges off of cell phone bills, the group also opposes Net Neutrality and consumer protection laws.  It’s a bit difficult to call yourself pro-consumer when you oppose a California and Minnesota consumer Bill of Rights that would have required a 30 day penalty-free trial of cell phone service, expanded a toll-free complaint hotline, set minimum service standards, and required easy-to-understand billing.

NetCompetition: Another front group bought and paid for by the industry it seeks to zealously protect.  Adamantly opposed to Net Neutrality, NetCompetition also spends its time Google-bashing and attacking Free Press, seen as one of the strongest advocates for Net Neutral policies and consumer protection from provider abuses.  Their member page explains everything.

The unfortunate part of all this is that many participants of the “tea party” movement seem blissfully unaware of the corporate manipulation of their movement, all happening barely beneath the surface.  Millions of dollars are flowing into the bank accounts of astroturf groups doing all they can to channel public anger against Washington into something they can use to benefit their corporate backers.  The end result may be the ultimate feedback loop — consumers already angered by Washington not listening to their needs and concerns compounded by providers picking their pockets.  That bitter tea may be easy to brew but impossible to swallow.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Phoney Baloney Ad.flv[/flv]

Phoney Baloney: The National Cable & Telecommunications Association, the cable industry lobbying group, ran this hissyfit ad to combat Verizon and AT&T outmaneuvering the cable industry over statewide video franchising laws. (1 minute)

President Barack Obama reiterated his support for Net Neutrality policies and expressed concern about providers trying to charge higher fees and extract more money from consumers for broadband service.

In a post State of the Union question and answer session held on YouTube, the president responded to a question regarding policies that would forbid broadband providers from tampering with Internet traffic, typically for monetary gain.

“We’re getting push back, obviously, from some of the bigger carriers who would like to be able to charge more fees and extract more money from wealthier customers,” he said. “But we think that runs counter to the whole spirit of openness that has made the Internet such a powerful engine for not only economic growth, but also for the generation of ideas and creativity.”

The reference to charging higher fees and extracting more money from wealthier customers may signal Obama recognizes that Internet Overcharging schemes like usage limits and usage-based billing represent an end run around many Net Neutrality prohibitions.  By charging excessively high prices for broadband traffic, Internet providers can effectively choke off potential competition to both its phone and television programming businesses, as well as higher bandwidth innovations still to come.

The Obama Administration’s support for Net Neutrality dates back to the early days of the presidential campaign, when then-Senator Obama expressed support for Net Neutrality.  The Federal Communications Commission has been tasked to develop a Net Neutrality policy to be enforced by the Commission.

Critics contend the FCC has no authority to enforce such provisions.

Robert McDowell, one of the two minority Republican commissioners at the FCC predicted any attempt by the Commission to enact sweeping Net Neutrality policies would likely face a rapid challenge in the courts. One popular venue for such cases has been the DC Circuit Court of Appeals, which has a track record of deciding cases in favor of providers.

Such a ruling could partially or completely derail an FCC Net Neutrality policy until Congress passed legislation to specifically authorize the Commission to regulate broadband policy.  Congress can also pass Net Neutrality legislation itself.

President Barack Obama answers a question about Net Neutrality policy in his administration.

The Electronic Frontier Foundation is not happy with the Federal Communications Commission’s proposed Net Neutrality rules because they come with built-in loopholes, the most egregious being a clause which allows providers to throttle, block or otherwise interfere with traffic that could consist of “the unlawful distribution of copyrighted works.”

The movie and recording industries have been attacking Net Neutrality for months, accusing it of providing a copyright-violating-free-for-all.  The FCC seems all-too-willing to adopt that meme, and write a convenient lobbyist-friendly loophole into Net Neutrality policies that would suggest provider interference with broadband networks is bad… except when this or that special interest redefines it as “good and lawful network management.”

For years, the entertainment industry has used that innocent-sounding phrase — “unlawful distribution of copyrighted works” — to pressure Internet service providers around the world to act as copyright cops — to surveil the Internet for supposed copyright violations, and then censor or punish the accused users.

From the beginning, a central goal of the Net Neutrality movement has been to prevent corporations from interfering with the Internet in this way — so why does the FCC’s version of Net Neutrality specifically allow them to do so?

The EFF is asking consumers to sign an online petition asking the FCC to yank that exception out of their proposed Net Neutrality rules, and let the industry use existing law enforcement methods to protect copyrighted works.  Of all the industries that seem to do just fine zealously efforting to protect its copyright interests, Hollywood and the music industry don’t need additional special protection clauses inserted into broadband policy law.

Law enforcement can use existing laws to chase crime, and most honest Internet Service Providers would tell you they don’t want to police their users.  Allowing this exception is a convenient backdoor to do what some have wanted all along — to throttle or block high volume network traffic like torrents and newsgroups, this time under the guise of taking a bite out of crime.

While directly appealing to the FCC might be more effective, signing the petition at least gives the EFF the ability to draw media and political attention to a worthy endeavor.

Let’s not repeat the same mistakes certain other major policy initiatives have endured this past year, where good intentions were steamrolled by lobbyists into a loophole-ridden, industry-protectionist horror show.

The best way to ensure an open and free Internet is to literally demand exactly that — no exceptions.

DC Circuit Court

Once again, the United States Court of Appeals for the District of Columbia Circuit is proving to be the best friend corporations have to unravel regulatory policy and consumer protection laws that might violate corporate free-speech or trade rights.  It has become a favored venue for telecommunications providers who want to be rid of pesky prohibitions or reasonable regulation.

After a series of arguments, universally considered disastrous for the Federal Communications Commission’s authority to regulate broadband, the cable operator may want to send flowers to the Court… a lot of them.

Earlier this month, attorneys for the FCC defended their right to tell Comcast it cannot throttle its customers’ broadband speeds.  The FCC maintains it has regulatory authority over broadband service, claiming such power could be inferred from Title I, Section 230(b) of the Communications Act, which states that it is the policy of the United States “to preserve the vibrant and competitive free market that presently exists for the Internet” and “to promote the continued development of the Internet.”  From that the FCC wrote a policy statement stating it was, “necessary to ensure that providers of telecommunications for Internet access or Internet Protocol-enabled (IP-enabled) services are operated in a neutral manner.”  That was the basis for their crackdown against Comcast’s speed throttle.

After the arguments between Comcast and the FCC concluded, court-watchers believe the Commission’s days of broadband oversight are numbered.

Ars-Technica’s Matthew Lasar documented the probable train wreck for those who seek to rein in provider abuses.

At issue is whether the FCC has been granted direct legal authority for Internet regulation by Congress. Comcast, and as it turned out many on the Court, believe the FCC is relying on policy statements, not written law, for their regulatory authority over Internet Service Providers.  The Court transcript says it all:

Randolph

“In looking this over I found a good many situations in which Congress has instructed the FCC to study the Internet,” said Justice A. Raymond Randolph, [appointed to the Court by President George H.W. Bush in 1990], “and taxation of transit sales transactions on the Internet, and this, and that, and the other thing. But what I don’t find is any congressional directive to the FCC to regulate the Internet.”

It wasn’t hard for [Comcast attorney Helgi G.] Walker to summon a response to this observation. “That’s right,” she declared.

And with that, Comcast had won. Even before the FCC’s attorney got to the bench, the judges were doing Walker’s job, swatting aside arguments on behalf of the agency’s Order sanctioning the ISP. Pro-FCC briefs to the court had noted that the Supreme Court recognized the Commission’s ancillary authority in its Brand X decision, a crucial ISP access case. Randolph threw this bullet point into the trash icon, referring to the “offhand statement” in Brand X. “And the Supreme Court has moved so far away from that kind of an analysis in today’s modern jurisprudence,” he added, “it seems antiquated.”

By the time Commission lawyer Austin C. Schlick began his rebuttal, Randolph moved in for the kill.

“May it please the Court,” Schlick began. “Ms. Walker hasn’t attempted to defend the actual network practices that were employed here, and so I won’t spend time just… ”

Sentelle

[Justice David] Sentelle cut him off. “Well, her position is that she doesn’t have to,” he tersely noted. “She’s here to say that you don’t have any business inquiring into those practices, ergo we don’t either.”

That’s true, Schlick conceded. “Right,” Sentelle warned. “So you may want to move on to something that’s at issue then, Counsel.”

And that was largely that.  The Court is very likely to hand down a ruling that strips the FCC of its ability to regulate or oversee broadband service in the United States.  Even Schlick knew what has forthcoming:

By the end of the discussion Schlick was bargaining with the judges. “If I’m going to lose I would like to lose more narrowly,” he confided. “But above all, we want guidance from this Court so that when we do this rule-making, if we decide rules are appropriate we’d like to know what we need to do to establish jurisdiction.”

“We don’t give guidance,” Randolph grumbled, “we decide cases.”

Comcast should have bought lunch for everyone.

So now public policy groups and advocates of FCC oversight over broadband, particularly as it relates to Net Neutrality, are scrambling to figure out what to do next.

It comes down to four possible outcomes:

1. One of the parties appeals the case;
2. Corporate control of broadband without oversight is assured, as the FCC is stripped of any regulatory authority;
3. The FCC manages to find some other wording from laws Congress passed that justifies lawmakers wanted the agency to oversee and regulate broadband services;
4. Congress passes new laws specifically enacting broadband regulatory authority for the FCC.

Of course, today’s bland authority over broadband comes as a result of legislative compromise from the great regulatory battles over telecommunications during the Clinton Administration.  Providers argued less is more, and have grudgingly accepted limited FCC authority over some of their services, except when a challenge threatens to cost them control or a lot of money.

With a hostile reception at the Court, and the FCC’s “surrender first, fight later” legal argument, an appeal may only delay the inevitable.  The FCC does have plenty of Congressional directives to review which may permit it to enact Net Neutrality protection, but another provider lawsuit opposing Net Neutrality is inevitable.  In fact, without the passage of a clear, concise federal law providing the Commission with explicit broadband regulatory authority enacting Net Neutrality and other protections, the aptly-numbered “2” is the likely outcome for consumers.

Thankfully, Rep. Edward Markey’s (D-MA) Internet Freedom Preservation Act would solve much of this problem, by forbidding Internet service providers from doing anything to “block, interfere with, discriminate against, impair, or degrade” access to any lawful content from any lawful application or device.

Getting it passed in a Congress mired in division is another matter.  The best way to overcome that is a strong showing of support for Markey’s legislation in calls and letters to your members of Congress, and that you are carefully watching their votes on this issue.

The issue of copyright enforcement is a thorny one, and Stop the Cap! doesn’t spend a lot of time dwelling on it, except when it sneaks its way into our issues.

CNET News started a brush fire yesterday when they quoted a Verizon representative who claimed the company had been kicking off users who use peer to peer (typically torrent) software to exchange copyrighted material.  The gist of the piece was that Verizon has been receiving copyright infringement notices from copyright enforcers and they’ve been notifying their customers to stop or risk service suspension.

“We’ve cut some people off,” Verizon Online spokeswoman Bobbi Henson told CNET. “We do reserve the right to discontinue service. But we don’t throttle bandwidth like Comcast was doing. Verizon does not have bandwidth caps.”

With that purported admission, the story was off and running.  We received several news tips about it from readers.

But this morning, Henson claims she was misquoted and the company has not actually suspended anyone’s account, but reserves the right to do so.

For now, anyway, it appears there has been no policy change at Verizon.  The company dispatches canned e-mail messages to account holders targeted in copyright complaints asking them to stop the infringing activity.  Verizon claims most don’t have to be warned twice.  That’s a commonly found policy at most providers.

The movie and music industry have reduced the number of lawsuits it brings against alleged violators, but that doesn’t mean they’ve given up the fight.

Instead, both industries have launched lobbying and astroturf efforts to inject copyright protection into the broadband expansion and Net Neutrality debates.  The Arts+Labs “think tank” was a perfect example of that, trying to conflate Net Neutrality with piracy in the music industry’s dog and pony show performance at the New York City Council Technology In Government Committee hearing regarding Net Neutrality.

The industry hopes it can insert something akin to a “three strikes” provision into telecommunications law that would bar repeat copyright violators from having Internet access. Unfortunately, history has shown that the bar has been set so low as to what represents “proof,” a mere allegation under these policies could be sufficient to put your finances and potential broadband access in peril.