They're AT&T it again

 

It's a new day in Wisconsin politics, and to swipe a tag line from "Poltergeist II," that '80s Hollywood scare flick, "They're baaaaack!"

By "they," I refer to the state's telecommunications (or “telcom”) industry. Once again, like the poltergeists in the movie, telecom providers are reaching out from your video monitors and telephones, to siphon some more cash out of your pocket or remove your service altogether because you don't have enough money -- or, possibly even, because of your politically incorrect thinking.

The first post-election re-emergence of Wisconsin’s very own telecom poltergeists popped up Dec. 16 in a full-page ad in the Milwaukee Journal Sentinel. Under the headline, "It's time to spur economic growth in Wisconsin," the open letter addressed specifically to Governor-Elect Scott Walker and Republican leaders of the next state legislature called for a bill to "modernize the state's outdated Telecommunications Act." 

Without informing readers of what the unspecified bill would contain, the ad asserted that this murky "modernization" of state law "would create or save 50,000 jobs" in the state. And hey, that's a fifth of the way towards meeting the new governor's stated pledge. So I suppose we’d better get right on it.

The ad sadly noted that "current law requires telecommunications companies to keep investing in old technologies,' referring to traditional, landline, analog telephone service – what used to be Ma Bell. The open letter ended by echoing Walker's proclamation that "Wisconsin is open for business." Unless, the ad intimated, the telcom modernization law isn't enacted.

But if the telcom industry has its way, the state surely will be more open for a bad kind of business, as citizens nearly learned last spring, when an earlier run at deregulating telcoms died in the State Senate.

Among main signers of the Dec.16 ad was Thad Nation, executive director of AT&T’s private mouthpiece Wired Wisconsin. Nation was shortly afterward also granted precious guest column space on the Journal Sentinel's Op Ed page to tout the great virtues of deregulation and how it will benefit consumers and Wisconsin's economy. No opposing comments have since been published.

Wired Wisconsin, for the politically uninformed, is just the local flavor of a nationwide set of telecom "astroturf" efforts masquerading as consumer groups, all paid servants of AT&T or other telcom operators.

Other signers of the ad included Thomas Still, president of the Wisconsin Technology Council, along with a long list of officials from business groups, chambers of commerce, and others. The fine print informed the closely observant that the ad was paid for by "Midwest Consumers for Choice and Competition," which is really Wired Wisconsin, which is really by proxy AT&T, which is really a provider and not a consumer.

Like I said, this is all old news, if you were in the very small minority of citizens who paid attention last time.

Less is more The industry follows the conventional wisdom in today’s conservative markets, namely that less regulation will encourage greater competition and thus lead to lower prices. You see, if the government would just get out of the way, telcos would invest more money in their infrastructure, offering better and more efficient service. Except, as you shall see later, we’ve been there and tried that already.

The biggest sleight of hand in this latest effort is the focus on modernization – which surely sounds reasonable out of context. But the legislation offered up to date only “modernizes” one thing: How the state regulates telcos. Which in telcom mindset means reducing regulation, if not quite eliminating it. The telecoms have been trying for this since before the day state legislators, in another misguided move, greatly deregulated the cable industry, essentially ending local control over franchises that were granted in exchange for free use of valuable public rights of way. And we all know how well that’s worked out.

Once more with feeling The previous run at telcom “modernization” legislation in Wisconsin, paired as Assembly Bill 696 and Senate Bill 469, was designed to give AT&T and other telephone companies the choice of not being regulated as telecommunications utilities. That bill would have all but eliminated the state Public Service Commission's oversight of landline telephone service, including rate regulation and universal service provisions that assist fixed-income and low-income people. 

Consumer groups at the time argued the measure would result in an increasing number of poor and rural communities losing traditional, basic telephone service, which would be the opposite of stimulating competition. True, Wisconsin residents just about everywhere could in that event turn to pricey cell phone or digital phone service, but without much or any choice of lower-cost services.

That legislation died, thanks to an unexpected Democratic Party push-back. It helped that The Capital Times newspaper in Madison took pains to document how the Senate version of the telcom deregulation measure was largely crafted to the specifications of the telecommunications lobby in private meetings with Sen. Jeff Plale (D-South Milwaukee) in his Capitol office. The Assembly version was similarly concocted in private sessions with Rep. Josh Zepnick (D-Milwaukee). 

The Milwaukee Journal Sentinel added that the legislature had exempted its own bill drafts from the state open records law. The newspaper quoted Mike McCabe, executive director of the Wisconsin Democracy Campaign, a watchdog group that advocates open government: "That means special interests are shaping laws before the public knows the legislation is even being considered.”

Apparently, that's the way the telcom industry likes it, since it is again touting deregulation without bothering to explain the details of how this measure actually would pay off for consumers, and why it is justified. A bill with actual language will have to show up eventually, but by then, mobilizing consumer sentiment against in the new, business-friendly GOP Capitol may prove more difficult.

Ironically, voters this fall replaced Plale, the de facto senator from AT&T, with a much more progressive Democrat. However, it's obvious from the industry campaign already underway that business interests are hurriedly setting things so the new GOP-dominated legislature enacts the bill. And they’re borrowing Scott Walker’s theme of “Wisconsin is open for business” to do it.  

The amazing thing is that Democrats resisted at all last time, despite, according to the Wisconsin Democracy Campaign, at least a half million dollars in contributions from the phone and cable companies contributed to state elected officials over the past six years. As seductive as that money was, an increasing number of legislators apparently had become convinced that a merry-go-round of cable and telephone deregulation bills in the past couple of decades has only served to concentrate industry power and push up rates.

Net neutrality Grassroots groups like Stop the Cap! In Illinois and TeleTruth Wisconsin led the charge against reckless deregulation of cable and phone companies and more lately have focused on the "net neutrality" campaign to prevent private broadband providers from selectively favoring, limiting or censoring certain web sites. Just before Christmas, FCC Chairman Julius Genachowski gave AT&T and other telcos a decision that was in the minds of some gift-wrapped.

By a 3-2 vote, the FCC passed a rule that, in the chairman’s words, “protects Internet freedom.”  However, critics said the rule was watered down and actually favors the very industry the commission is supposed to regulate, leaving Internet users with fewer free-speech protections. The rule, for the first time in history, allows private Internet providers to practice content discrimination over the mobile Internet, paving the way for potential industry abuses. In a world where the Internet is one of the last refuges for voices of dissent, this does not bode well; nor does knowledge that AT&T is among telecoms who are big-time Internet service providers.

Meanwhile, the Stop the Cap! group summed up its concerns about telcom “modernization” bills passed or pending in numerous states, writing on its web site: "Increased competition can bring lower prices, but only if it extends well beyond today’s duopoly. [In most places, the phone company and the cable company split most or all of the market.] In areas where one provider is likely to maintain a de facto monopoly, effective oversight is required to ensure consumers receive adequate service at fair prices."

Moving the goal posts In 2007, TeleTruth Wisconsin, an alliance of statewide public interest groups, called for an official investigation into Ameritech (later to be merged into AT&T) and its previous promises to upgrade Wisconsin's broadband infrastructure in exchange for 1994 federal legislation allowing billions of dollars in additional corporate profits. Teletruth revealed that very little optical fiber had been rolled out to replace aging copper telephone lines, as Ameritech had promised in seeking the deregulation measure. In the 13 years after the '94 deregulation law, Teletruth estimated, AT&T took between 3 and 5 billion dollars in excess net profit from Wisconsin consumers.

But now it’s back, in sheep’s clothing, saying without deregulation, it just won’t have the means to invest the money it already promised to invest, in exchange for prior deregulation. Indeed, any honest appraisal of the deregulation effort’s claim to be a jobs bill would have to note that AT&T and similar companies have slashed tens of thousands of jobs nationally.

The really amazing aspect to all of this is that we’ve been here before. Thanks to the failure of Enron, the nation learned how the giant firm had gamed California’s utility power system, sucking billions of dollars from that state’s consumers through trading practices that foreshadowed the general financial meltdown. Wisconsin barely avoided enactment of its own utility deregulation bill thanks to that scandal.

AT&T and its brethren have won deregulation laws in other states, and the results haven’t been good for consumers, but those bad results haven’t been quite as dramatic as Enron’s meltdown.

You get what you pay for, and in some cases you don’t even get that. It is already the case that the telcos and cable companies control much of the market for broadband Internet, TV and phone. It’s already hard for institutional and residential consumers of information media to avoid these behemoths, much less expect good customer service in an already greatly deregulated era. The notion that doubling down on the deregulatory race to the bottom will improve today’s situation is another nod towards bad public policy, enacted anyway thanks to cash.

Wisconsin was the state that invented utility regulation, but here we go again, preparing to dismantle more of our public policy heritage in naked obeisance to giant corporations that insist this is what it will take to make them more customer-friendly. Or not.

Published

January 3, 2011 - 3:58pm

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