Down one big member — Verizon

Verizon has quit the American Legislative Exchange Council (ALEC), a corporate funded alliance between big business and Republican state lawmakers, after right-wing activist David Horowitz used a guest appearance at the 45th ALEC Annual Meeting in New Orleans to launch into a tirade against opponents of President Donald Trump, claiming Democrats are socialists bent on attacking traditional American values.

To rousing applause from many of the 1,500 legislators and lobbyists in attendance, Horowitz used two speeches to attack the LGBTQ community, people of color, public education, feminism, gender equality, and the rights of women to seek independent access to reproductive healthcare.

Specifically, Horowitz claimed public schools are “indoctrination and recruitment centers for the Democratic party and its socialist left” and that “school curricula had been turned over to racist organizations like Black Lives Matter and terrorist organizations like the Muslim Brotherhood.” On a later panel, Horowitz told the audience Trump had not gone far enough attacking his enemies, and defended the president’s remarks calling a woman “a pig.” Those who disagreed were called “communists” by Horowitz.  He also argued the United States could only have been founded by Protestant Christians.

Horowitz speaks at ALEC conference in August 2018.

The incendiary remarks are nothing new for Horowitz, who repeatedly called President Barack Obama “a secret Muslim” and sponsors a website that claims Muslim migrants are carriers of infectious disease and predators with a “violent lust for ‘white’ women.”

Rep. Chris Taylor (D-Wisc.) attends ALEC events often to learn more about what the opposition is doing. Her observations from this year’s conference reflect ALEC in disarray, as the formerly unified, corporate-focused group is becoming more fragmented as emboldened right-wing activists demand a voice at the table.

They want state’s rights, except when they don’t. The same contradiction is evident with their struggle with local control–sometimes they like it, sometimes they don’t. The defining factor is whether these levels of government promote the far-right ALEC agenda. It is getting harder and harder for ALEC to ignore these internal contradictions.

And there are visible cracks in ALEC world. Collectively, this was the messiest and least disciplined ALEC conference I have attended since 2013. In the energy task force, presentations were all over the place. A natural gas and electricity supplier went off script by openly discussing the billions in subsidies the oil and gas industry receives. There was silence in the crowded task force room, filled with fossil fuel producers and lobbyists.

[…] In the Health and Human Services task force, the Goldwater Institute and Buckeye Foundation were in a tizzy because the Affordable Care Act (ACA) was still in existence and the left seemed to win that war, at least for now. How could it be, they moaned, when Republicans are in charge of EVERYTHING? They whined that the “debacle of last year was horrible” and that Congress wouldn’t touch another repeal with a 10-foot poll. So, 100 conservative groups came together to propose an alternative plan that guts the ACA, again. But the list was messy and confusing, and even the presenters seemed doubtful their plan would ever succeed.

But the biggest disaster I have ever seen at an ALEC conference was on a panel about the Convention of States (COS) project. COS is mobilizing in states to call an Article V Constitutional Convention for the purposes of amending the federal constitution by passing a balanced budget amendment, term-limits for federal judges, and who knows what else. One of the key speakers was right-wing provocateur David Horowitz. Horowitz is listed in a Southern Poverty Law Center (SPLC) report published by Alternet with the title “10 of America’s Most Dangerous Hatemongers”.

After converting from being a Marxist decades ago, Horowitz now runs his own right-wing think tank, bankrolled to the tune of $3.4 million by the Milwaukee-based Bradley Foundation, according to the Center for Media and Democracy. Horowitz gained recent fame as a key mentor of Trump advisor Stephen Miller, the man behind Trump’s family separation policy according to the Atlantic.

[…] ALEC is moving into dangerous territory. Despite the formidable infrastructure they have built over 45 years, their control of 33 state legislatures and their hordes of corporate cash that perpetually grease their wheels, the organization seems to be increasingly in disarray and in an identity crisis. While simultaneously distancing themselves from the chaos and corruption of President Trump, the reality is that they need him, and his hate-mongering, to further the foundation of their right-wing agenda–gutting the ACA and federal conservation standards, repealing workers’ rights, pushing down wages and privatizing public education.

And so the Horowitz’s of the world, who ALEC at least publicly has kept at a distance during my tenure, are now becoming part of the ALEC universe. Are ALEC supporters, including their corporate funders, willing to embrace this hate-mongering to continue to advance their corporate agenda?

Horowitz’s brand of politics may be popular with party activists, but corporate ALEC members are more concerned about their public image.

After Horowitz’s appearance, Verizon notified ALEC it was resigning from the group.

“Our company has no tolerance for racist, white supremacist or sexist comment or ideals,” a Verizon spokesperson said in a statement.

It is a severe blow to ALEC, which welcomed Verizon as a dues paying member in 1988, when Verizon lobbyist Ron Scheberle served as chairman of ALEC’s board.

ALEC’s damage control effort came in a statement to the press:

ALEC takes speaker vetting seriously and—in partnership with meeting sponsors—applies a rigorous process to identify speakers on important matters of public policy. Each speaker is apprised of the ALEC policy focus, how to address the audience and what issues not to discuss. ALEC does not work on social issues. Rather it focuses on limited government, free markets and federalism at the intersection of the economy and public policy.

In this case, the speaker was advised of the program parameters and did not abide the process.

Upon learning of concern following the conclusion of remarks, ALEC staff removed the video archive of the livestream and ceased promotion of the speech as the comments were inconsistent with the manner in which speeches are offered at ALEC.

ALEC was launched to give its corporate members and lobbyists direct access to state legislators to shepherd corporate ghost-written bills into state laws or at least heavily influence members’ bills to make them corporate-friendly. In some cases, corporate-written “model bills” were adopted word-for-word by some state legislatures and became law, with the help of Republican support and co-sponsors.

Rep. Taylor

Verizon and other telecom company members like Comcast and AT&T have benefited handsomely from membership in ALEC, successfully pushing through state laws for statewide video franchising, eliminating local control over cable television providers, pole attachment and zoning reform for wireless companies, working to eliminate universal service obligations and regulatory oversight for landline service, state bans on municipal broadband competition, and most recently working to stop states from writing their own net neutrality provisions to replace those lost on the federal level.

ALEC has always maintained close ties to Republicans and its deep pocketed corporate members. But until recently, it has usually shied away from headlining lightning rod social issues out of deference to its controversy-shy corporate members.

Horowitz’s remarks, live-streamed across the internet by ALEC, may have been the final straw for Verizon. In late August, 79 public interest and environmental groups co-signed a letter to ALEC members drawing attention to Horowitz’s remarks and asking companies to leave the group for good.

“Make no mistake, your continued financial support of ALEC is an endorsement of this dangerous vision for our country,” the letter said.

It’s also apparently bad for business.

David Horowitz speaking at 2018 ALEC Conference in New Orleans, La. on Aug. 10, 2018. (17:51)

An attorney for Charter Communications revealed that company officials and New York telecom regulators were engaged in a “productive dialogue” over how to resolve the state’s dispute with the cable operator.

In written requests to extend the deadlines for a rehearing of the decision to revoke Charter’s merger with Time Warner Cable and file an “exit plan” to leave New York State, Helmer revealed the two sides were engaged in substantial talks to resolve their differences.

“Good cause exists to further extend the deadlines [….],” wrote Maureen O. Helmer, counsel for Charter Communications. “Charter and the Department [of Public Service] have been involved over the past few weeks in productive dialogue regarding the July Orders as well as the related special proceeding initiated by the Commission in the Supreme Court.”

Helmer added that Charter has been “assembling additional information” about its criticized rural broadband expansion program for review by the Public Service Commission, which decided in late July to evict Charter/Spectrum from New York for consistently failing to meet its merger obligations with the state.

Charter’s lawyer suggests it is in the Commission’s best interest to accept additional delays in the deadlines to file a rehearing appeal of the July eviction order (requesting an extension until Oct. 10, 2018) and to file an orderly exit plan (requesting an extension until Nov. 8, 2018).

“A further extension would allow additional time for discussions between Charter and the Department before the initiation by Charter of additional Commission or court proceedings. Additional proceedings before the Commission and/or the courts would have the potential to divert the resources of both Charter and the Department from discussions regarding both orders, and could have the effect of making it more difficult to resolve the issues raised by the orders without litigation,” Helmer wrote.

There is an increasing likelihood the Public Service Commission’s July order effectively throwing Charter Communications out of New York State was actually a hardball, last-ditch negotiating tactic, potentially to extract additional conditions and more rigid compliance with the orders of the Public Service Commission.

Charter officials originally claimed the July eviction order was an example of election year politics by the governor and a striking union. New York Gov. Andrew Cuomo, who has repeatedly slammed Charter/Spectrum for its performance in New York, is running for re-election. The International Brotherhood of Electrical Workers (IBEW) also continues to strike Charter in the New York City area, attracting support from local politicians.

A Commission that is amenable to Charter’s request for a second delay in meeting its deadlines to file paperwork would send a clear signal the PSC is no longer intent on throwing the cable operator out of the state.

The PSC’s July order rescinding the approval of Charter’s acquisition of Time Warner Cable was based ironically, in part, on Charter’s frequent failure to meet the state’s deadlines.

Molinaro

Charter Communications has found itself an ally in Marc Molinaro, Republican candidate for New York’s governor, who attacked Gov. Andrew Cuomo on Tuesday for ordering the removal of Spectrum from New York State.

“We’ve got a megalomaniac on our hands, a veritable ‘Putin on the Hudson,'” Molinaro charged, defending the cable company for being attacked by the governor and “his surrogates” for political purposes.

Cuomo “put his thumb on the scale of a major PSC decision,” said Molinaro. “I think Andrew Cuomo got furious with NY1 News and effectively pulled the plug on an entire cable system as punishment to NY1, and as a warning to others he can affect who dare to ask him tough questions.”

Molinaro has repeatedly claimed the Public Service Commission is in the back pocket of the governor’s office.

Cuomo vs. NY1 – Spectrum’s 24-hour news channel in New York City

Molinaro’s campaign has been critical of an ongoing spat between the governor and reporters from NY1, Spectrum’s 24-hour news channel in New York City.

Earlier this month, Cuomo bristled at a question about improper campaign contributions from Crystal Run Healthcare, a health insurance provider in Middletown. NY1 reporter Zack Fink asked if the governor was considering returning those contributions and launching an internal investigation.

Gov. Cuomo

GOV. CUOMO: […] If the ongoing investigation finds any fraud, then as we’ve always done, we will return the donations. That’s standard operating procedure. We’re doing it in this case; we’ve always done it.

But speaking of fraud, Charter Spectrum has been executing fraud on the people of this state. They were given a franchise for a very specific set of conditions. It is a very valuable franchise. Many companies could have been given the franchise. Charter Spectrum said that they would increase cable access to the poor and rural communities around the state. That was the condition of them getting the franchise. I promised this state 100% high-speed broadband. Why? Because high-speed broadband is going to be the great equalizer, the great democratizer.

Whether you’re a business, an individual, you’re going to need high-speed broadband to be competitive. Charter Spectrum defrauded this state. They are defrauding consumers. Charter Spectrum is running ads that say we are ahead of schedule and at no cost to the taxpayer. The Public Service Commission said they’re behind schedule, not on schedule, and certainly not ahead of schedule. And to say it is no cost to the taxpayers is also a fraud, because that’s the condition upon which the taxpayers gave you the franchise. So you are defrauding the people of this state. That’s a fraud.

Fink

ZACK FINK (NY1): You said the PSC is looking into new operators. Is it the PSC’s place to do that or is it the market’s?

GOV. CUOMO: Are you speaking on behalf of Charter Spectrum or yourself?

ZACK FINK (NY1): No, I’m just asking a question. You brought it up so I’m curious. You said Friday that the PSC was looking at potential new operators.

GOV. CUOMO: Well, the Public Service Commission is saying that Charter Spectrum violated their franchise agreement. If you violate your franchise agreement, then you lose the franchise agreement and then they would have to find another operator without disruption to any of the consumers or the good workers of Charter Spectrum.

Viewers of NY1, a Spectrum News channel, never saw this exchange, which was widely covered elsewhere by the New York media. Viewers also didn’t see an on-the-record call-in by the governor made later than day to NY1’s newsroom to discuss the exchange. News of the call leaked after nobody at NY1 would publicly discuss it or why the news channel refused to air it.

Cuomo’s opponents on both his left and right criticized the governor over his treatment of the NY1 reporter.

“I’ll come right out and say it. It looks to me like Andrew Cuomo is trying to send a chilling message to the news media, ’don’t mess with me’, and I hope the inspector general can prove me wrong,” Molinaro said in a statement.

This week, Molinaro turned up the heat by claiming the governor was “acting more like a third-world dictator trying to intimidate the news media into dropping stories than an elected democratic leader who respects the First Amendment and has nothing to fear from it.”

Cynthia Nixon, running for the Democratic nomination to the left of Cuomo politically, claimed his chastising of NY1 reporters was out of line, resembling how Donald Trump treats the press.

“Cuomo can’t hold himself up as New York’s answer to Donald Trump, and simultaneously threaten members of the press for doing their job,” Nixon said, asking the governor to apologize.

Cuomo’s spokesman Rich Azzopardi claimed the ongoing criticism of Charter is nothing new for Gov. Cuomo.

“The governor answered his question and made the same statement that he has made to Charter Spectrum reporters and reporters statewide numerous times over the past few months, communicating the facts of the state’s two-year dispute with Charter for failing to serve the citizens of the state,” Azzopardi said.

Cuomo has made offhand remarks about Charter since the company replaced Time Warner Cable in 2016. He criticized NY1 and other Spectrum News stations around the state for not covering the IBEW strike against the cable company or a lawsuit filed by the state attorney general over the cable company’s failure to deliver on advertised broadband speeds.

“They virtually blacked it out,” Cuomo said of Spectrum News during a press event held on the day the PSC voted to drop Charter as a provider in New York.

Azzopardi also denied Molinaro’s accusation that the governor was involved in the PSC’s decision to force Charter to leave New York and dismissed the Republican opponent for spreading unproven “conspiracy theories.”

Cuomo is widely expected to be re-elected, with both Nixon and Molinaro running significantly behind the governor in polls. The primary is on Sept. 13.

Gov. Andrew Cuomo discusses Charter’s broken promises to New York State during a visit to Rochester, N.Y.  (Courtesy: Democrat & Chronicle) (2:28)

How exactly did America get stuck with a broadband monopoly in many areas, a duopoly in most others? It did not happen by accident. In this occasional series, “Historical Truths,” we will take you back to important moments in telecom public and regulatory policy that would later prove to be essential for the creation of today’s anti-competitive, overpriced marketplace for broadband internet service. By understanding the trickery and legislative shell games practiced by lobbyists and their elected partners in Congress, you will learn to recognize when the telecom industry and their friends are preparing to sell you another bill of goods. 

Vice President Al Gore watches President Bill Clinton digitally sign the 1996 Telecom Act into law on February 8, 1996.

By the end of the first term of the Clinton Administration, the president faced a major backlash from Republicans two years into the Gingrich Revolution. A well-funded chorus of voices in the business community, the Democratic Leadership Council — a business-friendly group of moderate Democrats, as well as commentators and pundits had the attention of the Beltway media, complaining in unison that the Democrats shifted too far to the left during the first term of the Clinton Administration, leaving it exposed in the forthcoming presidential election to another voter backlash like the one that installed the Gingrich revolutionaries in the House of Representatives and delivered a Republican takeover of the U.S. Senate in 1994.

With pressure over the growing lack of bipartisanship, and a presidential election ahead in the fall, the Clinton Administration was looking for ideas to prove it could work across the aisle and pass new laws that would deliver for ordinary Americans.

Revamping telecommunications policies would definitely touch every American with a phone line, computer, modem, and a television. Before 1996, America’s telecommunications regulation largely emanated from the Communications Act of 1934, which empowered the Federal Communications Commission to establish good order for the growing number of radio stations, telephone, and wire lines crisscrossing the country.

The 1934 Act’s legacy remains today, at least in part. It created the FCC, firmly established the concept of content regulation on the public airwaves, and established a single body to conduct federal oversight of the nation’s telephone monopoly controlled by AT&T.

Efforts to replace the 1934 Act began well before the Clinton Administration. In the early 1980s, Sen. Bob Packwood (R-Ore.) attempted to push for a legislative breakup of AT&T and a significant reduction in the oversight powers of the FCC. The bill met considerable opposition from AT&T, spending $2 million lobbying against the bill in 1981 and 1982. Alarm companies also heavily opposed the measure, terrified AT&T would enter their market and put them out of business. AT&T preferred a more orderly plan of divestiture being carefully negotiated in a settlement of a 1974 antitrust lawsuit by the Justice Department. A 1982 consent decree broke off AT&T’s control of local telephone lines by establishing seven Regional Bell Operating Companies independent of AT&T (NYNEX, Pacific Telesis, Ameritech, Bell Atlantic, Southwestern Bell Corporation, BellSouth, and US West). AT&T (technically an eighth Baby Bell) kept control of its nationwide long distance network.

Also in the 1980s, the cable television industry gained a much firmer foothold across the country, quickly gaining political power through well-financed lobbyists and close political ties to selected members of Congress (particularly Democrat Tim Wirth, who served in the House and later Senate representing the state of Colorado) that allowed them to push through a major amendment to the 1934 Act in 1984 deregulating the cable industry. The result was an early wave of industry consolidation as family owned cable companies were snapped up by a dozen or so growing operators. These buyouts were largely financed by dramatic rate increases passed on to consumers, resulting in cable bills tripling (or more) in some areas almost immediately. By the end of the 1980s, a major consumer backlash began, creating enormous energy for the eventual passage of the 1992 Cable Act, which re-regulated the industry and allowed the FCC to order immediate rate reductions.

The Progress and Freedom Foundation, with close ties to former House Speaker Newt Gingrich, closed its doors in 2010.

The biggest push for a near-complete revision of the 1934 Act came during the Gingrich Revolution. In 1995, the conservative Progress & Freedom Foundation — a group closely tied to then-Speaker Newt Gingrich (R-Ga.) floated a trial balloon calling for the elimination of an independent Federal Communications Commission, replaced by a stripped-down Office of Communications that would be run out of the White House and be controlled by the president. A small army of telecom industry-backed scholars also began proposing privatizing the public airwaves by selling off spectrum to companies to be owned as private property. The intense interest in the FCC by the group may have been the result of its veritable “who’s who” of telecom industry backers, including AT&T, BellSouth, Verizon, the National Cable & Telecommunications Association, cable companies like Comcast and Time Warner; cell phone companies like T-Mobile and Sprint; and broadcasters like Clear Channel Communications and Viacom.

The proposal outraged Democrats and liberal groups who called it a corporate-friendly sell-off and giveaway of the public airwaves. Then FCC Chairman Reed Hundt took the proposal very seriously, because at the time Gingrich lieutenant Tom DeLay’s (R-Tex.) secretive Project Relief group had 350 industry lobbyists, including some from BellSouth and Southwestern Bell literally drafting deregulation bills and a regulatory moratorium on behalf of the new Republican majority, coordinating campaign contributions for would-be supporters along the way. The proposal ultimately went nowhere, lost in a sea of the House Republicans’ constantly changing agendas, but did draw attention to the fact a wholesale revision of telecommunications policy would attract healthy campaign contributions from all corners of the industry — broadcasters, cable companies, phone companies, and the emerging wireless industry.

When it became known Congress was once again going to tackle telecommunications regulation, lobbyists immediately descended from their K Street perches in relentless waves, with checks in hand. There were two very important agendas in mind – deregulation, which would remove FCC rate regulation, service oversight, cross-competition prohibitions, and ownership caps, and ironically, protectionism. The cable and satellite companies had become increasingly fearful of the regional Baby Bells, which arrived in Congress in the early 1990s promoting the idea of entering the cable TV business. The cable industry feared phone companies would cross-subsidize the development of Telco TV by charging telephone ratepayers new fees to finance that entry. The cable industry had carefully developed a de facto monopoly over the prior decade of consolidation. Companies learned quickly direct head-to-head competition between two cable operators in the same market was bad for business.

The original premise of the 1996 Telecom Act was that it would eliminate regulations that discouraged competition. Promoters of the legislation asked why there should only be one phone or cable company in each city and why maintain regulations that kept cable and phone companies out of each others’ markets. Fears about market power and allowing domineering cable and phone companies to grow even larger were dismissed on the premise that a wide open marketplace, with regulations in place to protect consumers and competition would avoid creating telecom robber barons.

The checks handed out by industry lobbyists were bi-partisan. Democrats could crow the new rules would finally give consumers a new choice for cable TV or phone service, and help bring the “information superhighway” of the internet to schools, libraries, and other public institutions. Republicans proclaimed it a model example of free market deregulation, promoting competition, consumer choice, and lower prices.

At a high-brow bill signing ceremony held at the Library of Congress, both President Bill Clinton and Vice President Al Gore were on hand to “electronically sign” the bill into law. Both the president and vice-president emphasized the historical significance of the emerging internet, and its ability to connect information-have’s and have-not’s in an emerging digital divide. Missing from the discussion was an exploration of what industry lobbyists and their congressional allies were doing inserting specific language into the 1996 Telecom Act that would later haunt the bill’s legacy.

On hand to celebrate the bi-partisan bill’s signing were Speaker Gingrich, Sen. Larry Pressler (R-S.D.); Sen. Ernest F. Hollings (D-S.C.); Rep. Thomas J. Bliley Jr. (R-Va.); Rep. John Dingell (D-Mich.); and Ron Brown, the Secretary of Commerce. Pressler was among the soon-to-be-endangered moderate Republicans, Hollings was a holdout against the gradual wave of Republican takeovers in southern “red states,” and Dingell was a veteran lawmaker with close ties to the broadcasting industry.

Some of the bill’s industry backers were also there, some who would ironically see its signing as directly responsible for the eventual demise of their independent companies. John Hendricks of the Discovery Channel, Glenn Jones of Jones Intercable (acquired by Comcast in 1999), Jean Monty of Northern Telecom (later Nortel), Donald Newhouse of Advance Publications (eventual part owner of Bright House Networks and later Charter Communications), William O’Shea of Reuters Ltd. and Ray Smith of Bell Atlantic (today part of Verizon) were on hand. Also in the audience was Jack Valenti of the Motion Picture Association of America, representing Hollywood Studios.

Among the fatal flaws in the Telecom Act of 1996 were its various ‘competition tests,’ which were open to considerable interpretation and latitude at the FCC. The Republican supporters of the bill argued that the presence of an open and free marketplace would, by itself, induce competition among various entrants. They were generally unconcerned with the question of whether new competition would actually arrive. Their priority was lifting the protective levers of legacy regulation as soon as possible. Many Democrats assumed what appeared to be carefully drafted regulatory language would protect consumers by preventing the FCC from lifting protections too early in the competitive process. But lobbyists consistently outmaneuvered lawmakers, finding ways to insert loopholes and compromise language that introduced inconsistencies that could be dealt with and eliminated either by the FCC or the courts later.

For example, lawmakers insisted on unbundling telecommunications network elements, an arcane way of saying new competitors must be granted access to existing networks to be shared at wholesale rates. In practice, this meant if a phone company entered the internet service provider business, it must also make its network available for other ISPs as well. In some areas, competing local telephone companies also offered landline service over existing telephone lines, paying wholesale connection fees to the incumbent local phone company. As competition emerged, the incumbent company usually petitioned for a lifting of the regulations governing their business, claiming competition had arrived.

The first warning the 1996 Act was going awry came a year after the bill was signed into law. Phone companies started raising rates from $1.50-6 a month on average. AT&T was petitioning to hike rates $7 a month. Someone would have to pay to replace the scrapped subsidy system in a competitive market — subsidies that had been in place at the nation’s phone companies for decades. By charging higher rates for phone service in cities and for pricier long distance calls before the arrival of companies like MCI and Sprint, the phone companies used this revenue to subsidize their Universal Service obligations, keeping rural phone bills low and often below the real cost of providing service. To establish a truly competitive phone business, the subsidies had to be reformed or go, and that meant someone had to cover the difference.

“This game is called ‘shift and shaft,'” Sharon L. Nelson, the chairwoman of the Washington Utilities and Transportation Commission, said in 1997. “You shift the costs to the states and shaft the consumer.”

Sam Brownback (R-Kansas)

Gradually, consumers suddenly discovered their phone bill littered with a host of new charges, including the Subscriber Line Charge and various regulatory recovery fees and universal service cost recovery schemes. Phone companies also boosted rates on their unregulated Class phone features, like call waiting, caller ID, and three-way calling. The proceeds helped make up for the tens of billions in lost subsidies, but the end effect was that phone bills were still rising, despite promises of competitive, cheap phone service.

At a hearing of the Senate Commerce Committee later that year, several angry senators said they would never have voted in favor of the Telecommunications Act of 1996 if they had thought it would lead to higher rates. Sam Brownback, a Kansas Republican, was in the line of fire because of his rural constituents. Rates for those customers are subsidized more heavily than elsewhere because of the cost of extending service to them. Rates were threatening to skyrocket.

“We would be foolish to build up all these expectations about competition without saying to the American people, ‘We’re going to have to raise your phone bill,'” Brownback said.

But the rate hikes were just beginning. By the beginning of the George W. Bush administration, telecom lobbyists brought a thick agenda of action items to Michael Powell’s FCC. Despite promises of competition breaking out everywhere, that simply was not the case. Republicans quickly blamed the remaining regulatory protections still in place in noncompetitive markets for ‘deterring competition.’ But the companies knew the only thing better than deregulation was deregulation without competition.

Consolidation wave

The Republican-dominated FCC quickly began removing many of those protective regulations, claiming they were outdated and unnecessary. The very definition of competition was broadened, allowing the presence of virtually any company offering almost any service good enough to trip the deregulation levers. Later, even open access to networks by competitors was often limited to pre-existing networks, not the future next generation networks. Republicans argued those networks should be managed by their owners and not subject to “unbundling” requirements.

The weakened rules also sparked one of the country’s largest consolidation waves in history. Cable companies bought other cable companies and the Baby Bells gradually started putting themselves back together into what would eventually be AT&T, Verizon, and Qwest/CenturyLink. For good measure, phone companies even snapped up a handful of independent phone companies, most notably General Telephone and Electronics, better known as GTE by Verizon and Southern New England Telephone (SNET) by AT&T.

Prices rising as costs dropping.

The cable industry, under the premise it needed territories of scale to maximize potential ad insertion revenue from selling commercials on cable networks, gradually shrunk from at least a dozen well-known companies to two very large ones – Comcast and Charter, along with a few middle-sized powerhouses like Cox and Altice. Merger and acquisition deals faced little scrutiny during the Bush years of 2002-2009, usually approved with few conditions.

The result has been a rate-raising oligopoly for telecom services. In broadcasting, the consolidation wave started in radio, with entities like Clear Channel buying up hundreds of radio stations (and eventually putting the resulting giant iHeartMedia into bankruptcy) and Sinclair and similar companies acquiring masses of local television outlets. On many, local news and original programming was sacrificed, along with a significant number of employees at each station, in favor of inexpensive music, network or syndicated programming. Some stations that aired local news for 50 years ended that tradition or turned newsgathering over to a co-owned station in the same city.

Although telephone service eventually dropped in price with the advent of Voice over IP service, consumers’ cable TV and internet bills are skyrocketing at levels well in excess of inflation. Last year, the Washington Center for Equitable Growth demonstrated that the current consolidated, anti-competitive telecom marketplace results in rising prices for buyers and falling costs for providers.

Your oligopoly tax.

“In truly competitive markets, a significant part of cost reductions would be passed through to consumers,” the group wrote. “Based on a detailed analysis of profits—primarily EBITDA—we estimate that the resulting overcharges amount to more than $45 per month, or $540 per year, an aggregate of almost $60 billion, or about 25 percent of the total average consumer’s monthly bill.”

That is one expensive bill, paid by subscribers year after year with no relief in sight. Several Republicans are proposing to double down on deregulation even more after eliminating net neutrality, which could cause your internet bill to rise further. Several Republicans want to rewrite the 1996 Telecom Act once again, and lobbyists are already sharing their ideas to further curtail consumer protections, lift ownership caps, and promote additional consolidation.

Rep. Trujillo — a friend of CenturyLink

Rep. Carl Trujillo (D-Santa Fe), a New Mexico legislator embroiled in a hotly contested primary for New Mexico’s state legislature, is accused of violating the state’s campaign finance laws by concealing contributions from companies including CenturyLink, the single biggest contributor to his campaign during his last race in 2016.

Denie Cordova of Alcade filed a formal complaint with the New Mexico Secretary of State on Monday.

“Mr. Trujillo failed to disclose thousands of dollars on his campaign finance reports from donors related to CenturyLink and the oil and gas industry, which is against the law,” Cordova said. “Because his failure to disclose these contributions relate to these two industries solely, I believe his failure to disclose was willful.”

Cordova tracked where Trujillo’s campaign funds originated and discovered CenturyLink, along with several companies in the oil and gas industry, may be secretly funneling campaign money to Trujillo with the help of Rep. Patricio Ruilobo, a fellow Democrat who has contributed thousands of dollars to Cordova’s campaign.

“Unopposed again this year, Mr. Ruilobo has suddenly raised over $17,000, or a third of the amount he has raised since being initially elected,” Cordova wrote. “Mr. Ruilobo has received numerous contributions from businesses who have never donated to his campaign, but are contributors to Mr. Trujillo, such as Occidental Petroleum ($2,500), Chevron ($1,000); and Encana ($1,000). Did Mr. Trujillo funnel contributions from oil and gas through Mr. Ruilobo’s campaign account? These ‘pass-through’ contributions are illegal in the state of New Mexico.”

The complaint also alleges CenturyLink’s lobbyist, Johnny Montoya, gave Trujillo free baseball tickets that were never reported on disclosure forms. But in a more serious allegation, Cordova claims both CenturyLink and Trujillo violated New Mexico law by accepting money from the telecommunications company above the corporate limit.

Trujillo’s defense of CenturyLink’s contributions also raised eyebrows.

“One campaign contribution came from a telecommunications PAC [affiliated with CenturyLink], the other came from a telecommunications [company – CenturyTel], therefore, there is no violation,” Trujillo said. “She is claiming that they are from the same company, ($500 from CenturyLink, $2,500 from CenturyLink lobbyist Katherine Martinez) and that is completely untrue.”

CenturyTel is the old corporate name for what is now known as CenturyLink. Although the two entities still exist for business and regulatory reasons, they are both essentially the same company. Corporations often skirt campaign contribution laws by making multiple donations as an individual company, through an affiliated Political Action Committee (PAC), and through personal contributions from corporate executives and occasionally employees. While each distinct contribution is reported individually on disclosure forms, politicians do the math and understand where the combined contributions are coming from.

As for the baseball tickets, Trujillo waived them off.

“That is not a campaign contribution, there is no place to amend my report, it’s all within the limits of the Campaign Finance Act, so there’s no violation there,” he told the Los Alamos Monitor.

Trujillo has been criticized by some in his district, which covers a largely rural area from Santa Fe to the northern half of the county, for being too corporate friendly, a charge Trujillo strongly disputes.

Montoya

“I am probably the number one representative or senator in the state that receives the vast majority, 90 percent of my contributions, from grassroots organizations, individuals and small businesses,” he told the newspaper. “I raised a lot of money from many small businesses and individuals within the district. Those characteristics of my campaign funding are completely untrue.”

But at least some of Cordova’s charges seem to be accurate, particularly regarding large donations from energy companies like Encana Gas and Oil, which Trujillo had to send back.

“I sent many contributions back throughout my tenure as a legislator. I have probably sent 30 to 40 contributions back,” Trujillo said. When asked why he has had to return so many corporate contributions, Trujillo answered, “Because of what we’re dealing with now. Campaigns that have nothing to grab onto make desperate attempts to make somebody look bad. People refuse to run for office because of tactics like this.”

Trujillo also turned the spotlight back on Cordova and her complaint, which he called “suspicious,” noting it was a very detailed add filed by someone who lives outside his district. A Facebook page for Ms. Cordova reveals no political leanings or obvious interest in politics.

His opponent in the primary, Andrea Romero, has herself been the subject of some controversy. In February, a complaint filed by Northern New Mexico Protects claimed Romero spent over $1,850 on a single dinner, not including $307 for alcohol and baseball tickets, during a lobbying trip to Washington, D.C. Romero is also under investigation in her role as former executive director of the Regional Coalition of LANL Communities — a group of towns that have banded together to deal with issues surrounding the Los Alamos National Laboratory. New Mexico’s state auditor is currently auditing the books of the coalition over financial irregularities relating to travel expenses.

Romero accused her complainant of having political connections to Trujillo and claimed the entire affair was politically motivated. Trujillo claims essentially the same, but has not directly accused Romero by name.

The larger issue for ethics in government observers is the money laundering of political campaign contributions to skirt campaign finance laws. The fact that many of Trujillo’s donors suddenly began making contributions to an Albuquerque legislator that has faced no significant opposition and has raised very little money in the past was intriguing. When that money turned into a legislator to legislator campaign contribution from Ruilobo to Trujillo, it looked suspicious.

Campaign finance reform advocates call it a shell game and a way to undermine campaign finance limits. But they admit in New Mexico it is both legal and common.