Following the Money: Cable's Best Friends in North Carolina Get a Payday

In this second installment of “Follow the Money”, I will look at the sponsors and co-sponsors of HB1252 (Protect Cable Monopolies Act). The bill has a host of legislators involved here in North Carolina.

The sponsors are Rep. Ty Harrell (D-Wake Co), Rep. Marilyn Avila (R-Wake Co), Rep. Earl Jones (D-Guilford Co) and Rep. Thom Tillis (R-Mecklenburg Co).

First the good news: Not as much money was thrown around in the House as was in the Senate. Rep. Earl Jones took no money from individuals or PAC’s related to the cable/telecom industry. Rep. Marilyn Avila took $500 from Embarq and $500 from AT&T, along with $100 from an engineer for Verizon.

Rep. Thom Tillis took a total of $3500 from PAC’s ($500 from Embarq, $1000 from Time Warner, $1000 from AT&T PAC and $1000 from AT&T Mobility PAC).

Rep. Ty Harrell took a total of $2750 from PAC’s ($500 from Embarq, $750 from Time Warner, $1000 from AT&T, and $500 from Electricities PAC). He also took $4600 from industry related individuals ($250 from James K Sexton – President of Telephone Strategies Group, $250 from Anthony Copeland – former lobbyist for BTI Telecommunications and FiberSouth, $4000 from Jim Goodman – CEO of Capital Broadcasting, which owns the Raleigh area’s biggest TV and radio stations, and $100 from Lynn R Holmes, who three months after making the donation became one of the current lobbyists for the NC Cable Telecommunications Association).

For the Primary Sponsors a grand total of $7250 from PAC’s and $5600 was given from individuals related to the cable/telecom industry.

The co-sponsors and amounts are as follows:

• Rep. Larry Bell – $500 from Embarq
• Rep. Nelson Cole – $4250 from PAC’s ($2500 from Embarq, $750 from Time Warner and $1000 from AT&T NC PAC).  Cole also received $100 from Charles W Pickelsimer – VP/General Manager of Citizens Telephone Co.
• Rep. James W. Crawford Jr. – $3000 from PAC’s ($2000 from Embarq and $1000 from Time Warner).  He also took $200 from James Pratt Wilson, a retired telecommunications worker and $50 from Richard Reese, an executive from Lexcom Communications.
• Rep. William A. Current Sr – $1500 from PAC’s ($750 from AT&T and $750 from AT&T NC PAC) – Oddly he was given $250 from Embarq and then returned it the same quarter he received it.
• Rep. Nelson Dollar – $3250 from PAC’s ($1000 from Embarq, $750 from Time Warner and $1500 from AT&T)
• Rep. Beverly M. Earle – $1750 from PAC’s ($250 from Embarq and $1500 from AT&T)
• Rep. W. David Guice – took no PAC money from the cable/telecom industry. He did receive $300 from Charles Pickelsimer III- VP Citizens Phone, $1000 from CW Pickelsimer Jr- VP Citizens Phone and $1000 from Senator Tom Apadaca who took a lot of money ($12500) from the industry.
• Rep. Jim Gulley – $500 from PAC’s ($250 from Embarq and $250 from Time Warner)
• Rep. Mark Hilton – $500 from Embarq. He took nothing else.
• Rep. Hugh Holliman – $11500 from PAC’s ($1500 from Embarq, $2000 from Time Warner, $4000 from AT&T, $500 from NC Cable PAC, $2000 from ElectriCities and $1500 from the NC Assn. of Broadcasters). He also took $550 from Richard Reese who is an executive for Lexcom Communications. You should know that the amounts are generally bigger for Holliman because he is the House Majority Leader.
• Rep. Linda P. Johnson – $750 from PAC’s ($250 from Embarq and $500 from AT&T).
• Rep. Carolyn K. Justus – $500 from Embarq.
• Rep. Marvin W. Lucas – $1000 from PAC’s ($500 from Embarq and $500 from AT&T)
• Rep. Wil Neumann – $1000 from PAC’s ($500 from Embarq and $500 from AT&T)
• Rep. Efton M. Sager – $250 from Embarq
• Rep. Fred F. Steen – $3000 from PAC’s ($1000 from Embarq, $1000 from AT&T and $1000 from ElectriCities)

There is one more House Representative I wanted to bring to your attention, Rep. Harold Brubaker. Brubaker is a former Speaker of the House. He is also on both the House Public Utilities Committee and the Joint Committee for Revenue Law. Brubaker took a grand total of $16250 from industry related PAC’s ($5500 from Embarq, $2750 from Time Warner, $6000 from AT&T, $1000 from Sprint/Nextel and $1000 from the Verizon Good Government Club). He also took $300 from CW Pickelsimer – VP Citizens Telephone.

The way I see it, following the money trail, Rep. Harrell introduced HB1252 for Time Warner’s attorneys and lobbyists. Rep. Holliman can use his powerful position to help secure votes and Rep. Brubaker sits on the committee that decides the bills fate. The cable/telecom industry seems to be getting what it has paid for. They spent a grand total of $463,699 for campaign contributions to legislators in the North Carolina General Assembly in 2008. That’s nearly a half-million dollars! I assure you that if we contributed a half a million dollars collectively as a consumer rights PAC, we would have quite a bit more influence in the legislative process. We have the ability to derail this money train from buying its legislation. We have shown this before. We must remain vigilant in our approach to beating back a greedy industry and keeping our legislators honest (or tossing them to the curb come election).

Concluding that all rural Americans must have the opportunity to reap the full benefits of broadband services, Acting Federal Communications Commission Chairman Michael J. Copps released a report today providing a starting point for the development of policies to deliver broadband to rural areas and restore economic growth and opportunity for Americans residing and working in those areas.

Recognizing that the need for broadband in rural America is becoming ever-more critical, Congress in the 2008 Farm Bill required the FCC Chairman, in coordination with the Secretary of the Department of Agriculture, to submit a report to Congress describing a rural broadband strategy. Entitled “Bringing Broadband to Rural America: Report on a Rural Broadband Strategy,” the report by Acting Chairman Copps identifies common problems affecting rural broadband, including technological challenges, lack of data, and high network costs, and offers some recommendations to address those problems.

Broadband “is the interstate highway of the 21st century for small towns and rural communities, the vital connection to the broader nation and, increasingly, the global economy,” Acting Chairman Copps said in the report. “Our nation as a whole will prosper and benefit from a concerted effort to bring broadband to rural America.”

According to Secretary of Agriculture Tom Vilsack, “Providing broadband access to rural communities will not only enhance farmers and ranchers’ ability to market goods and enhance production, it will help residents in rural communities obtain needed medical care, gain access to higher education, and benefit from resulting economic activity and job growth.”

Consistent with the statute’s provisions to make recommendations concerning improving inter-agency coordination, the report includes a number of recommendations, including: enhancing coordination among and between federal, Tribal, state, and community agencies, governments and organizations; reviewing existing federal programs to identify barriers to rural broadband deployment; coordinating broadband program terminology consistent with current laws; coordinating data collection and mapping efforts at the federal, Tribal, and state levels to better inform the public and policymakers; supporting consumer education and training initiatives to stimulate and sustain broadband demand; and identifying important policies and proceedings that support further broadband deployment such as universal service and network openness. The report also recognizes that the new administration has already taken important steps to improve coordination efforts and to prioritize broadband initiatives.

In the report, Acting Chairman Copps notes that Congress has provided new direction and support for federal broadband policies and initiatives, in particular through the American Recovery and Reinvestment Act of 2009. In addition to providing $7.2 billion for broadband grants, loans and loan guarantees administered by the Agriculture and Commerce departments, that law charges the FCC with developing a national broadband plan by next February.

“I view this report as a prelude to, and building block for, the national broadband plan, which will address in greater detail and on a vastly more complete record, the input of all stakeholders and the steps the nation must take to achieve its broadband goals,” Acting Chairman Copps said in the report. Although the national plan will be broader in scope and will focus on bringing broadband to all Americans regardless of where they live, the Rural Broadband report released today “provides another, critical step in the Commission’s efforts to develop an effective, efficient and achievable national broadband plan.”

'If you give us exactly what we want, we might wire your town with fiber optics. If not, there is always Wisconsin.'

The Trojan Horse of the 2000’s apparently comes in the form of spools of fiber optic cable.  Verizon assumes the attractive notion of FiOS, fiber to the home for broadband, telephone, and video programming, is worth sacrificing local oversight.  The company has made it known it does not enjoy what they consider a cumbersome franchising application procedure in Massachusetts.  In a public relations push, Verizon has suggested that giving them quicker approval will guarantee state residents the golden promise of fiber optics.  If the company doesn’t get what it wants, maybe Wisconsin or another state where Verizon is deploying FiOS will:

Ellen M. Cummings, a spokeswoman for Verizon, said that with the struggling economy, the company has to choose where to commit its financial resources. Therefore, it is looking for the quickest return on its investment.

“Here in Massachusetts, it puts us in a predicament. If the company is trying to decide how to deploy money, and Massachusetts is vying against other states, like Wisconsin, where the wait is as little as five days, it definitely puts Massachusetts at a disadvantage,” she said.

Every wired provider is subject to local community licensing, in the form of a franchise, which permits companies to string wires through towns and cities, on poles as well as underground, in return for oversight and a small piece of the action.  Local governments justify franchising to regulate companies tearing up local streets and neighborhoods to maintain their networks, as well as making sure that all citizens within a community are served equitably and that the community benefits from the service.

The cable industry has lived under the franchise system since its inception.

Verizon decided it can’t be bothered dealing with individual municipalities in Massachusetts, and last year tried,  but failed, to replace the local franchising system with a single statewide franchise.  This year they’ve returned with a Verizon-friendly bill that would dramatically tip the scales in their favor, limiting local oversight and reducing their public service commitments.

The companion bills, (S. 1531) by Sen. Steven Panagiotakos of Lowell in the Senate, and House bill (H. 3765) by Rep. Michael Rodrigues of Westport, would mandate that each municipality limit consideration of Verizon’s franchise applications to no more than 90 days, and opens up a number of loopholes that Verizon could use to do an end run around a community and run the clock out, assuring quick approval without making concessions.

At worst, a provision in the bill setting a strict 90 day window for consideration of a franchise application, even if incomplete, ties the hands of municipalities.  Language that restricts the right of municipalities to deny applications gives the upper hand to Verizon, and the back of the hand to consumers.

One of the most common promises local communities extract from any wired provider is a guarantee they will establish wiring policies to equitably reach people throughout the franchise area, not simply the wealthiest neighborhoods, or easiest to wire.  While it has never been practical to insist on 100% wiring coverage, particularly in more isolated, rural communities, most franchise agreements insist on a uniform policy that says if there are a certain number of homes within an area, it must be wired.  Without that assurance, prior experience has shown operators would often “redline” communities, wiring prosperous streets while ignoring others.  Municipalities in Massachusetts want to guarantee that Verizon doesn’t engage in that kind of behavior, particularly after witnessing the company jettisoning “undesirable” customers in three nearby states — Vermont, New Hampshire, and Maine, which were sold off to FairPoint Communications.  No FiOS for them.

In general, more competition is good news, especially when Verizon comes to town with FiOS, which is sure to give the incumbent cable operator a real headache.  But Verizon’s complaints ring a little hollow when considering the company has managed to already obtain franchises in 93 communities across the state, and is literally obtaining new agreements faster than wiring crews can get into communities and start the upgrades.  While there may be a few towns that drag their feet for a variety of reasons, customer demand for FiOS is sure to light fires under elected officials to get a move on.  Doing it fast is not necessarily the same as doing it right.  As our readers are coming to learn, promises made by telecom providers that at first glance sound consumer-friendly turn out to be anything but.

One more reason to believe that:  the state’s incumbent cable operators are also opposing the bills, claiming they extend special benefits to Verizon that they, themselves, have never received. Cable companies on the same side as municipalities on questions of competition?  Of course most of the state’s cable operators are already past the franchising process, and merely return every decade or so for perfunctory rubber-stamp renewals, so green-lighting Verizon’s proposed bills would only expose them to FiOS competition sooner.

Paul R. Cianelli, the president of the New England Cable and Telecommunications Association, which represents the cable companies Comcast, Charter Communications, Time Warner and Cox, but not Verizon, said, “We oppose this legislation.”

“It’s another attempt by Verizon to get a special deal. They are pushing for legislation that would give them an advantage over existing cable providers. And they are attempting to chip away at the authority and powers of the municipalities to grant franchises,” he said.

In the end, we believe Ellen Cummings at Verizon who said it best: “[Verizon] is looking for the quickest return on its investment.”  Unfortunately, that’s not always compatible with the best interests of consumers.

Tomorrow’s House Public Utilities Meeting on S1004 in North Carolina has been canceled.  We can pat ourselves on the back again for continuing to keep the pressure on and hold our legislators accountable.

We must still keep writing our legislators and letting them know that they need to send HB1252/S1004 to the Joint Committee on Broadband, so the committee who has knowledge on broadband issues can address accessibility, affordability and capacity.

The e-mail addresses can be found in the original action alert or at the Public Utilities Committee webpage.

North Carolina Legislature Building

I received an e-mail from a very reliable source that told me that S1004 (Level Playing Field Study) will be in the House Public Utilities Committee this Wednesday.  Their plan is to refer the study bill to Rules with NO CHANGES.  Time Warner Cable and the telecom Lobby want the study bill (S. 1004) to go to Revenue Laws ONLY, and not the Broadband Committee as specified and required in the companion House bill (H. 1252) and advocated by Rep. Faison in the last committee hearing on H 1252.

We must make sure that this bill goes to Broadband Committee as it was publicly voted to do.

I issued this statement to Fiona Morgan from the Independent Weekly this morning on the current developments:

“It has come to my attention from a credible source on the inside that S1004 will be sent to the Revenue Laws Study Committee in the House Public Utilities Committee on Wednesday.  It will not go to the Joint Legislative Committee on High Speed Internet in Rural Areas as the Public Utilities Committee had voted to send  it to about a month ago.  An immense amount of pressure was applied by Time Warner Cable to place S1004 in Revenue Law, as it is a more favorable committee for them to pass this to a full vote.  The don’t want a “turf war” on this important issue.  They want a free market where they, and only they, are free to monopolize the markets in which they operate.  The very definition, from the Revenue Law Study Committee website, of the committee is that “The Committee reviews the State’s revenue laws to determine which laws need clarification, technical amendment, repeal, or other change to make the laws concise, intelligible, easy to administer, and equitable.”  This has nothing to do with the State’s revenue laws.  It makes sense that it be placed in the Joint Legislative Committee on High Speed Internet in Rural Areas, where the real issues of accessibility, speed and affordability can be addressed.  Anything less is a travesty to the citizens to which are legislators are beholden to, and shows that Time Warner and the cable/telecom industry got what they paid for from Sen. Hoyle ($25750 in PAC money) and Rep. Brubaker ($16250 in PAC money).

Municipal broadband is becoming more of a necessity because the current providers refuse to upgrade their infrastructure to technology that is found in this century worldwide.  We will continue to fall behind in health care, education and commerce at the speeds at which we move currently.  If we want to compete, we must first compete with the high-speeds the rest of the world moves at.  Most other developed countries have speeds at least 4 to 5 times the speeds we move at.  Japan is at 160Mbps compared to our 10Mbps.  South Korea will be at 1Gbps by 2012, 100 times faster.  For our state’s very survival, we need someone to step up and upgrade our broadband access and speed.  Municipalities are very capable and, more importantly, very willing to provide this step towards the future.   All the while, our current providers like to live on their gross profits in the past. “

My first point of contention is that if this is already predetermined, then what is a public committee for anyway.  In North Carolina,  we did away with back room meetings to decide things of a legislative manner.

My second point is, why is this being sent to Revenue Laws, when clearly it doesn’t even belong there?  A committee on Broadband is far more appropriate, if not the only place you could send it!  Sen. Hoyle and Rep. Brubaker sit on the Revenue Laws Study Committee, if you catch my drift.

Lastly, North Carolina is 5th highest in unemployment.  If we do not give ourselves the tools (and that includes affordable, accessible and up-to-date high speed Internet access), we will continue to head south economically.

Please write the committee members on the House Public Utilities Committee and tell them they should make the Senate concur with the House and send it first to the Broadband Committee and then onto Revenue Laws, the way they originally voted to address this important issue.  Tell them we need more accessibility, more affordability and a chance for our state to compete on a global level economically.  Let them know that we do not have that right now, due to archaic infrastructure supplied by greedy monopolies and duopolies.

Here are the members’ names and e-mail addresses:

Rep. Lorene Coates <[email protected]>, Rep. Harold J. Brubaker <[email protected]>, Rep. Nelson Cole <[email protected]>, Rep. Bill Faison <[email protected]>, Rep. Russell E. Tucker <[email protected]>, Rep. Kelly Alexander <[email protected]>, Rep. Hugh Blackwell <[email protected]>, Rep. Angela Bryant <[email protected]>, Rep. Becky Carney <[email protected]>, Rep. Beverly M. Earle <[email protected]>, Rep. Bruce Goforth <[email protected]>, Rep. W. Robert Grady <[email protected]>, Rep. Jim Gulley <[email protected]>, Rep. Pricey Harrison <[email protected]>, Rep. Hugh Holliman <[email protected]>, Rep. Julia C. Howard <[email protected]>, Representative Linda Johnson <[email protected]>, Representative Marvin Lucas <[email protected]>, Rep. Daniel McComas <[email protected]>, Rep. Tim Moore <[email protected]>, Rep. Wil Neumann <[email protected]>

A sample letter:

Dear Public Utilities Committee Member,

Please make sure that the study activated by SB1004 (The “Level Playing Field” bill)  is in fact level and balanced by mandating that the Joint Legislative Committee on High-Speed Internet in Rural Areas also studies broadband issues in North Carolina AND that the study includes an examination of how the public AND private sector are addressing broadband affordability, accessibility and capacity in North Carolina. Right now SB1004 just has Revenue Laws Study Committee studying what is wrong with municipal broadband ownership and no focus on the private sector broadband deficiencies. There is nothing “level” about that!

Please feel free to elaborate on this letter or write your own, but please write today!