How AT&T, Verizon and the Telecom Giants Have Captured the Regulator Supposed to Control Them
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IDI built the “coalition” by drawing upon some of its front or astroturf groups, including the Alliance for Public Technology (APT) and Telecommunications and Research Action Center (TRAC). It also recruited some non-profits that have been effectively co-opted by receiving money from the phone companies through their foundations. These groups included the American Association of Persons with Disabilities (AAPD), Consumer Action (CA), National Association for the Advancement of Colored People (NAACP), National Grange (NG), United Homeowners Association (UHA), United Seniors Health Cooperative (USHC), the U.S. Hispanic Chamber of Commerce (USHCC) and the National Consumer League (NCL).
The phone companies took a strong hand in the program. They created the education brochure, “Smart Consumer’s Guide to Telephone Service,” that was distributed through the U.S. government’s Federal Consumer Information Center. They also directed the program’s extensive marketing campaign, with company representatives giving speeches, presentations and discussions at meetings of civic and neighborhood associations, local United Way chapters, Chambers of Commerce, Rotary and Kiwanis clubs, Telephone Pioneers, employee gatherings, senior centers and high school associations, among others.
As part of the CALLS program, NCL, America’s oldest consumer advocacy organization, received a grant from Verizon and SBC, to develop a Web site, “Understanding your Phone Bill.” Gone unnoticed, the phone companies’ point man on CALLS, ICI’s director, Sam Simon, became NCL chairman and continues to serve on the board
Corporate shills also lined up to endorse the plan. The Economic Strategy Institute, a Washington think-tank run by former Reagan salesman Clyde Prestowitz, came out uncritically in support of the CALLS plan. It insisted “that it will serve the national interest by promoting greater economic efficiency while stimulating competition in the marketplace and encouraging investment and innovation.”
A few raised questions about the CALLS effort. “The only one who comes out behind in this is the consumer,'' warned Gene Kimmelman, of Consumers Union. “You only get a savings when you make a high volume of calls.'' A similar warning was raised by the National Association of State Utility Consumer Advocates (NASUCA), which insisted that the CALLS plan undercut competition and the universal service goals of the 1996 Telecommunications Act.
Most alarming, the public never knew what was happening. The extensive behind-the-scenes planning is documented in the letters of endorsement from the various consumer groups. (These are available at www.archive.org.)
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According to Open Secrets, the “telephone utilities” spent $43.2 million on lobbying in 2009. Of this, AT&T and Verizon accounted for two-thirds of the total; AT&T spent $14.7 and Verizon spent $13.1 million.
Equally illuminating, these “utilities” reported 362 lobbyists and 268 “revolvers,” who Open Secrets identify as participating in the “revolving door that shuffles former federal employees into jobs as lobbyists, consultants and strategists just as the door pulls former hired guns into government careers.” Open Secrets identifies 148 former FCC staff personnel among the revolvers, including former chairman, William Kennard, now with the Carlyle Group.
The consequences of the CALLS efforts are still with us. It is most evidently in what is known as the FCC Subscriber Line Charge or SLC which has never been investigated. More important, this charge is likely to be continued and expanded under the proposed National Broadband Plan now being developed by the FCC. This charge will likely be increased to $10 a month. In addition, four additional charges are likely to be added, including a “mobility tax,” increased local rates and even the creation of a broadband tax.
Speaking before Congress before the Dec. 21 FCC order on net neutrality, Senator Al Franken offered a invaluable warning: