President Barack Obama’s strong commitment to robust Net Neutrality protections for the Internet has created a nightmare scenario for Net Neutrality opponents who can no longer count on an ex-telecom industry lobbyist now in charge at the Federal Communications Commission to take care of their business interests with watered down, damage-controlled, net-protection-in-name-only.

The attacks on President Obama’s convictions began almost immediately after his video was published on whitehouse.gov with Sen. Ted Cruz’s declaration that Net Neutrality was Obamacare for the Internet, a statement that may have played well with his Texas tea party base, but was quickly parodied on social media:

Hal Singer from the ironically named Progressive Policy Institute opined that President Obama’s decision to declare real Net Neutrality would likely lead to the new majority of Republicans to completely defund the agency in retaliation. PPI is strongly opposed to Net Neutrality and many other consumer protection measures and represents the interests of the George W. Bush wing of the Democratic Party, which consists of about six people (and Harold Ford, Jr. probably wishes he was one of them.)

“We are stunned,” Michael Powell, a former FCC chairman who is now president of the National Cable & Telecommunications Association, said in an e-mail to Bloomberg reporters. After six years of supine oversight of giant telecommunications companies from former FCC chairman Julius “Data caps are innovative” Genachowski and the installation of an ex cable and wireless industry lobbyist as chief regulator of the country’s telecommunications industry, AT&T, Verizon and Comcast have faced few challenges to their regulatory wish lists.

The Washington Post “Innovations” editorial page proved once again the Post is now the leading publication neocons and pro-business conservatives keep hidden under their mattresses next to the Wall Street Journal for those private moments. WaPo devoted news space to a hack editorial from Larry Downes, who turned up in Congress earlier this summer to cheerlead the merger of AT&T and DirecTV and has vociferously opposed Net Neutrality since at least 2011.

In his generally fact-challenged piece, Downes proclaims the Obama Administration was seeking nothing less than to saddle the Internet with oppressive outdated regulations written in 1934, that the courts threw out earlier hybrid/compromise Net Neutrality regulations simply because they lacked the words “commercially unreasonable,”  and that implementing Net Neutrality would destroy investment in the world’s leading cable, mobile, and fiber networks.

Downes does not get out much, because other countries as diverse as South Korea, Lithuania, Bulgaria, Japan and Singapore have long since passed the United States, with much of Europe poised to follow their lead. Some of them even enforce Net Neutrality and the sky failed to collapse as a result. Broadband life is good in Bucharest.

Nothing about the Obama Administration’s proposal for Net Neutrality would do anything beyond preserving the Internet as we know and love it and judges told the FCC’s attorneys they had no authority to impose Net Neutrality under the freak flawed framework established by Michael Powell, former FCC chairman-turned cable industry lobbyist.

Downes also laims he is shocked, shocked I tell you to discover the FCC isn’t immune to political pressure from the White House and other Beltway forces. Except he is one of those Beltway forces.

The Post was content disclosing that Downes was simply a co-author of “Big Bang Disruption:  Strategy in the Age of Devastating Innovation” (Portfolio 2014) and the project director at the harmless-sounding Georgetown Center for Business and Public Policy.

If you suspected Downes was just a tad closer to the industry he often advocates for than the newspaper was letting on, you would be right.

In fact, Downes is a “fellow” at the Bell Mason Group, a corporate advisory firm “passionate about partnering with forward-thinking corporate venturing and innovation executives, […] helping clients build risk-reduced, impactful programs and overcome corporate antibodies and obstacles [and deliver] measurable value.”

Net Neutrality is an example of one of those “risky corporate obstacles” to total monopoly control that could deliver Big Telecom companies “measurable value.” Among Downes’ past clients is a tiny phone company named AT&T, but you wouldn’t know it from Bell Mason’s well-scrubbed website. Too bad for them archive.org took a snapshot of an earlier version of his bio, revealing his less-than-arm’s-length relationship with AT&T.

None of this is apparently pertinent to the editors of the Washington Post. Disclosing Downes’ co-authorship of a far-less germane book one critic called a “big bang disappointment” was more than enough.

Bloomberg News avoided the hopelessly unbelievable talking points about Internet takeovers and concluded President Obama threw his FCC chairman under the bus. But even that conclusion originated from the conservative, anti-Net Neutrality group the Heritage Foundation, quoted in the piece:

“He threw Tom Wheeler under the bus,” said James Gattuso, a senior research fellow at the Heritage Foundation, a Washington-based policy group. Obama’s strong stance makes it harder for Wheeler to reach a compromise among proponents of regulation, Gattuso said.

Except proponents of Net Neutrality are tired of compromises that favor ungrateful telecom companies that routinely sue even the most minor consumer protections out of existence. Wheeler was rumored to be proposing yet another compromise as late as last week, one that would protect deep-pocketed content companies but leave consumers open to further abuse from high cost fast lanes and speed throttles.

Various tea party groups ginned up with claims of an imminent Obama socialist takeover of the Internet, Maoist censorship and protectionist rate regulation took to the comment sections of various news pieces and wrote comments like this:

“I don’t want government control that would force private companies not to control what I can see on the Internet.” 

For public policy mavens that claim Net Neutrality is a solution in search of a problem, countering Wall Street’s decisive view that Net Neutrality is a disaster for plans of revenue boosting schemes are harder to counter.

Obama’s intervention effectively kills Wheeler’s mixed plan, Paul de Sa, a senior analyst at Sanford C. Bernstein & Co. in New York, said in a note. It will be hard for the FCC, with a majority of Democrats appointed by Obama, to deviate significantly from his preference, and strong rules are likely, de Sa said.

Obama’s intervention “does not lead to price regulation of broadband,” in part because the FCC has no desire to do so, he said. Debate in Washington will intensify, with Congress holding “interminable hearings” and trying to prohibit the FCC from applying the strong rules, de Sa said.

The meaning to investors was clear: Internet profiteering plans are on indefinite hold. Comcast Corp. fell 63 cents or 1.2 percent, to $52.33 at 10:39 a.m. in New York trading, and are down as much as 5.1 percent this week. Time Warner Cable Inc. dropped $3.34, or 2.5 percent. AT&T Inc. fell 16 cents to $34.97 and Verizon Communications Inc. (VZ) fell 15 cents to $50.57.

A move to fully reclassify broadband, even if it includes “forbearance” from rate regulation, as President Obama suggested, would send investors scurrying, according to Kim Wallace, a policy analyst at Renaissance Macro Research. That is because it would cast doubt on cable and telecom companies’ abilities to generate a “sufficient return” on capital investments, which they expect to be sky high based on the limited amount of competition that exists today.

Craig Moffett, perennial cable stock booster, had the temerity to blame the latest developments on Comcast.

“The great irony is Comcast helped start this ball rolling by trying to buy Time Warner Cable in the first place,” said Moffett, an analyst at MoffettNathanson. “With the specter of possible price regulation hanging in the balance, [the question is] would Comcast still want to increase its exposure to distribution assets” in broadband.

The Wall Street press provides some salve for the chafed telecom industry high-flyer — the likely prospect of litigation tying up Net Neutrality long enough for Republicans to write new telecom laws that would lead to near-total regulatory capitulation and a free hand for providers. But investors sure hate uncertainty, so the Money Party will have to be postponed for now.

We have four illuminating news stories to share today on Net Neutrality:

[flv]http://www.phillipdampier.com/video/PBS Why is Obama weighing in on net neutrality 11-10-14.mp4[/flv]

More than 3 million commenters crashed the Federal Communications Commission website in July to weigh in on the issue of net neutrality. Now President Obama has added his strong support, directing the FCC to protect equal access to all web content. Judy Woodruff speaks with U.S. chief technology officer Megan Smith about the president’s move. (7:33)

[flv]http://www.phillipdampier.com/video/Bloomberg Ex-FCCs Furchtgott-Roth Copps Debate Net Neutrality 11-10-14.flv[/flv]

Former Federal Communications Commission members Harold Furchtgott-Roth and Michael Copps talk about President Barack Obama’s call for the “strongest possible rules” to protect the open Internet and the value of so-called net-neutrality rules. They speak with Cory Johnson on Bloomberg Television’s “Bloomberg West.” (7:00)

[flv]http://www.phillipdampier.com/video/CNN Here is why you should care about net neutrality 11-10-14.flv[/flv]

CNN explores why you should care about Net Neutrality and reminds us in a world of distorted punditry exactly what “Net Neutrality” is. (3:58)

[flv]http://www.phillipdampier.com/video/Fox Business Michael Powell Net Neutrality 11-10-14.flv[/flv]

Fox Business gives former FCC chairman Michael Powell an unchallenged platform to present his views on Net Neutrality. It becomes clear which side Fox is on when they call porn peddler Larry Flynt the quintessential Net Neutrality advocate. (5:08)

In a major victory for net roots groups, President Barack Obama today announced his support for the strongest possible Net Neutrality protections, asking the Federal Communications Commission to quickly reclassify broadband as a “telecommunications service” subject to oversight and consumer protection regulatory policies that would prohibit paid fast lanes, the blocking or degrading of websites for financial reasons, and more transparency in how Internet Service Providers handle traffic.

“For almost a century, our law has recognized that companies who connect you to the world have special obligations not to exploit the monopoly they enjoy over access in and out of your home or business,” said the president. “That is why a phone call from a customer of one phone company can reliably reach a customer of a different one, and why you will not be penalized solely for calling someone who is using another provider. It is common sense that the same philosophy should guide any service that is based on the transmission of information — whether a phone call, or a packet of data.”

“’Net neutrality’ has been built into the fabric of the Internet since its creation — but it is also a principle that we cannot take for granted,” President Obama added. “We cannot allow Internet Service Providers (ISPs) to restrict the best access or to pick winners and losers in the online marketplace for services and ideas. That is why today, I am asking the Federal Communications Commission (FCC) to answer the call of almost four million public comments, and implement the strongest possible rules to protect Net Neutrality.”

The president’s call will likely force FCC chairman Thomas Wheeler to abandon efforts to reclassify only certain types of Internet traffic under Title 2 regulations while leaving consumers vulnerable to paid fast lanes and other traffic monetizing schemes. Wheeler was rumored to be working on a limited Net Neutrality plan that would protect large online video content distributors like Netflix and Amazon from unfair compensation deals with ISPs. The plan would have given the FCC authority to review agreements between your Internet provider and some of the net’s biggest traffic generators.

President Obama’s statement goes beyond Wheeler’s tolerance for “individualized, differentiated arrangements” that could let cable and phone companies offer compensated “preferred partnership” deals with websites and applications, granting them special treatment or exemptions from speed throttles or usage caps not available to others.

The president’s four principles for a free and open Internet represent “common-sense steps that reflect the Internet you and I use every day, and that some ISPs already observe:”

• No blocking. If a consumer requests access to a website or service, and the content is legal, your ISP should not be permitted to block it. That way, every player — not just those commercially affiliated with an ISP — gets a fair shot at your business;
• No throttling. Nor should ISPs be able to intentionally slow down some content or speed up others — through a process often called “throttling” — based on the type of service or your ISP’s preferences;
• Increased transparency. The connection between consumers and ISPs — the so-called “last mile” — is not the only place some sites might get special treatment. So, I am also asking the FCC to make full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet;
• No paid prioritization. Simply put: No service should be stuck in a “slow lane” because it does not pay a fee. That kind of gatekeeping would undermine the level playing field essential to the Internet’s growth. So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect.

The president also expressed a desire to see the same rules applied to mobile networks. That is a significant departure from the policies of the FCC under Wheeler’s predecessor Julius Genachowski, who served as chairman during the Obama Administration’s first term in office. His Net Neutrality policies exempted wireless carriers.

“The rules also have to reflect the way people use the Internet today, which increasingly means on a mobile device,” said the president. “I believe the FCC should make these rules fully applicable to mobile broadband as well, while recognizing the special challenges that come with managing wireless networks.”

[flv]http://www.phillipdampier.com/video/111014_NetNeutrality_Final.mp4[/flv]

President Barack Obama recorded this message supporting strong Net Neutrality protections for the Internet. (1:56)

Republicans in Congress and large telecommunications companies both immediately pounced on the president’s Net Neutrality plans.

Cruz

“Net Neutrality is Obamacare for the Internet,” tweeted Sen. Ted Cruz (R-Tex.) “The Internet should not operate at the speed of government.”

Cruz’s spokeswoman,  Amanda Carpenter, added that Net Neutrality would place the government “in charge of determining pricing, terms of service, and what products can be delivered. Sound like Obamacare much?”

The National Cable and Telecommunications Association expressed surprise over the president’s strong public support for Net Neutrality action.

“We are stunned the President would abandon the longstanding, bipartisan policy of lightly regulating the Internet and call for extreme Title II regulation,” the NCTA wrote. “The cable industry strongly supports an open Internet, is building an open internet, and strongly believes that over-regulating the fastest growing technology in our history will not advance the cause of Internet freedom. There is no dispute about the propriety of transparency rules and bans on discrimination and blocking. But this tectonic shift in national policy, should it be adopted, would create devastating results.”

“Heavily regulating the Internet will lead to slower Internet growth, higher prices for consumers, and the threat of excessive intervention by the government in the working of the Internet,” stated the NCTA release. “This will also have severe and profound implications internationally, as the United States loses the high ground in arguing against greater control of the Internet by foreign governments. There is no substantive justification for this overreach, and no acknowledgment that it is unlawful to prohibit paid prioritization under Title II. We will fight vigorously against efforts to impose this backwards policy.”

A portion of your cable bill pays for much more than programming, with millions diverted to Koch Brothers-backed astroturf groups, tea party candidates, fat paychecks for former public officials taking a trip through D.C.’s revolving door, and generous allowances for travel  expenses racked up by high-flying industry lobbyists.

The Center for Public Integrity took a trip through the 2012 tax return of America’s top cable trade group: the National Cable & Telecommunications Association (NCTA), which collected $60 million last year in membership dues from America’s top cable operators, who in turn were reimbursed by you when paying your monthly cable bill. They needed a shower when the journey was over.

NCTA president and CEO Michael K. Powell, the former chairman of the Federal Communications Commission during President George W. Bush’s first term, was well compensated in his new role representing the same cable industry he used to barely oversee, taking home more than $3 million in pay last year. Eight other employees, including NCTA’s executive vice-president, collectively cleared over a million dollars in salary according to the groups’ Form 990 filed with the Internal Revenue Service.

The revolving door at NCTA headquarters is kept well-greased, with 78 out of 89 federal-level NCTA lobbyists formerly working in government jobs representing the American people. Now they work for the interests of Comcast, Time Warner Cable, and other large operators.

Collectively, the NCTA spent $19 million on lobbying activities last year, much of it bankrolling “dark money” groups that refuse to disclose their donors and consider it their life mission to defeat President Barack Obama and blockade Democrats in Congress — the ones still most likely to demand more oversight and regulation of the free-spending cable industry. Among the groups receiving cable’s cash:

Americans for Prosperity, which received $50,000, spent $33.5 million opposing Obama during the 2012 election cycle, according to the Center for Responsive Politics, a nonpartisan group that tracks campaign spending. Americans for Prosperity often supports Tea Party causes and candidates and is the main political arm of billionaire industrialists Charles and David Koch. As the Center reported Thursday, the group spent a staggering $122 million overall in 2012. Americans for Prosperity is also actively involved in blocking community-owned broadband projects and advocates passing laws forbidding communities getting into the broadband business if a cable company got there first. Now you know why.

Phil Kerpen with Glenn Beck

Americans for Tax Reform, which received $50,000, spent $15.8 million on the 2012 federal election, according to the Center for Responsive Politics. The group’s president and founder, Grover Norquist, is famous for his Taxpayer Protection Pledge, by which legislators and candidates promise to oppose all tax increases. The cable industry is also an advocate of tax forgiveness policies that would let cable operators repatriate the cash they stashed overseas, avoiding the same taxman they snuck around opening overseas bank accounts.

American Commitment, which received $10,000, spent $1.9 million on the 2012 federal election to advocate for and against political candidates — mostly to help U.S. Sen. Jeff Flake (R-Ariz.) defeat Democrat Richard Carmona. American Commitment also spent some of its money to oppose Sen. Tim Kaine (D-Va.) and Obama. American Commitment Founder and President Phil Kerpen is the former policy and legislative strategist at Americans for Prosperity and previously worked at Club for Growth, another group that doesn’t disclose its donors. Kerpen joined Glenn Beck on his program in 2009 to nod agreement when Beck hopped aboard the crazy train suggesting the Obama Administration’s support for Net Neutrality represented a Marxist-Maoist takeover of the Internet. Silly Beck, doesn’t he realize AT&T already called dibs?

The Center for Individual Freedom, which received $20,000, has been actively fighting against proposals for increased disclosure of donors to politically active nonprofits. It spent $1.8 million during the 2012 election cycle mostly opposing Democratic congressmen Steven Horsford, Bill Owens and Dan Maffei, all from New York.

‘Your money is always good here, whether it comes from AT&T or the cable industry.’ — LULAC

The cable industry also bankrolls a number of our “favorite” sock puppet groups that reflexively support cable’s cause even when straying far beyond their alleged core missions and constituencies the groups claim to represent. Among those on cable’s payroll, sharing $5.8 million in “grant” funding, are some very familiar names to any regular Stop the Cap! reader:

• The Congressional Black Caucus Foundation
• The National Association for the Advancement of Colored People
• LULAC
• The National Gay & Lesbian Chamber of Commerce
• The National Urban League

The largest grant – $2 million, went to the industry mouthpiece Broadband for America, the largest telecom industry astroturf group in the United States, featuring honorary Democratic co-chairman Harold Ford, Jr., who now spends most of his life in MSNBC green rooms after being bounced from office in a failed Senate bid in 2006.

Ford landed on his feet after losing the election, fleeing Tennessee for big money New York, peddling his inside the beltway influence to Merrill Lynch, winning him the position of vice chairman and senior policy adviser, until Merrill Lynch nearly collapsed in the Great Recession and was bailed out by U.S. taxpayers. Ford kept his $2 million annual salary and bonuses, but it wasn’t enough.

He quickly upgraded to a senior managing director at Wall Street firm Morgan Stanley, supplying him with enough cash to buy a $3 million co-op in a tony Manhattan neighborhood.

Broadband for America, brought to you by America’s Big Telecom companies.

From his perch in New York City, Ford pretends to know what is best for the little people across America suffering from no broadband, rationed access, or overpriced service.

His answer: buy it, if you can, from your cable company.

Ford’s co-chair at BfA is former Republican Sen. John Sununu who, by the way, also happens to sit on the board of Time Warner Cable. Need we say more?

There is no reason NCTA lobbyists shouldn’t travel in style when performing their advocacy efforts either. In 2012, they ran up nearly $800,000 in travel expenses.

Unsurprisingly, nobody involved was willing to comment.

Roberts

Brian Roberts, the CEO of Comcast-NBC-Universal has two things to celebrate this week:

1. His exclusive invitation to golf with President Barack Obama at the Vineyard Golf Club on Martha’s Vineyard, joined by World Bank president Jim Kim and former U.S. Trade Representative Ron Kirk;
2. He is a billionaire again.

Thanks to a series of rate increases and improving broadband sales, Comcast’s chief executive has now amassed just over one billion dollars in assets, estimates Forbes magazine.

Much of his net worth rests in more than $800 million in Comcast stock controlled by Roberts. Comcast shares are up almost 30 percent in the last year and over 105 percent in the past 24 months. Comcast reported revenue of $16.27 billion in the second quarter alone.

Comcast’s earnings fueled the buyout of NBC-Universal.

Roberts had been a billionaire club member before, appearing on Forbes‘ 400 Richest Americans list in 1999 after inheriting the majority of his father’s stock, worth $750 million. By 2001, that stock increased in value to $1.2 billion. But by 2003, depressed Comcast share prices meant Roberts’ net value dropped to $625 million.

Executive compensation at most cable operators has increased right along with the prices customers pay for service.

Wheeler

President Barack Obama will shortly nominate a former top cable and wireless industry lobbyist as his choice to represent the interests of the American people at the Federal Communications Commission.

Thomas Wheeler, who has been a telecom industry insider for at least 30 years and today serves as a venture capitalist, will have enormous influence over how the FCC manages the public airwaves, broadband, and wireless spectrum.

The Wall Street Journal reports this afternoon that President Obama may make a formal announcement as early as this Wednesday, with current FCC commissioner Mignon Clyburn serving as interim chair until Wheeler is seated.

Wheeler is expected to take a more industry-friendly attitude at the FCC. As Stop the Cap! noted after reviewing several years of Wheeler’s personal blog, the future FCC chairman would have approved the merger of AT&T and T-Mobile, considers Google, Apple and other technology companies challenging telecom public policy part of a “Silicon Valley mafia,” and praised AT&T’s chief lobbyist as a visionary that could define the wireless industry’s future.

Wheeler’s regulatory philosophy offers that mergers and acquisitions present an opportunity for regulators to impose certain temporary conditions on deals, offering the best opportunity to influence a short-term regulatory outcome. But such preconditions are often mild, quickly expire, and are predictable for the companies involved. When Comcast sought merger approval for its deal with NBCUniversal, one concession was to sell discounted Internet access for poor families — a service Comcast had earlier plans to offer but withheld as a bargaining chip during merger approval talks.