Teletruth News Analysis:  March 15th 2010


To read our analysis:


How the FCC's Broadband Plan and the AT&T-Verizon-Corporate Funded Astroturf, Co-Opted Groups and Think Tanks Will Harm Our Economy.


The FCC’s chief economic advisor for the broadband plan is on leave from a corporate-funded think tank that wants to keep competition off the networks and give more perks to AT&T and Verizon.


The FCC Consumer Advisory Committee and Other Committees Are Filled with “Consumer and Minority Groups  and Others with Corporate Ties Who Protect Their Funders – AT&T  and Verizon. 



Part 1:     Why Is America 15th in the World in  Broadband?  The FCC’s Broadband Plan Will Fail because it Refuses to Take on AT&T and Verizon who Control America’s Infrastructure.


On March 16th, 2010, the FCC  will announce a national broadband policy that, based on numerous sources, refuses to actually fix the current problems of broadband and is being helped along by AT&T and Verizon’s corporate-funded think tanks, astroturf  and co-opted groups  and lobbyists.


The FCC’s plan is a testament to how corrupt America has gotten.  Why? Because the hard questions which need to be dealt with  are being pushed aside to protect the corporate interests that got us into this mess.


Mess? Well, while you sit on the web reading this, the current average US broadband speed, according to, is 5mbps down and 1mbps upload; that’s  1/20th  the  download speed you can get in, say, Hong Kong,  or Japan or France, and 1/100 the upload speed.   Today, in Hong Kong 100mbps in both directions, costs about $20 bucks -- cheaper than US broadband by leaps and bounds.


AT&T and Verizon claim there’s plenty of  competition. Yet, you can’t select your own Internet provider over the broadband networks and local phone prices have gone up -- 90% in New York and New Jersey, for example, (based purely on actual phone bills) over the last 5 years. If there was competition, prices couldn’t increase.  By not having competition, the cable and phone companies created Net Neutrality issues,  the ability to block or degrade or favor their own service over others. If there was competition and you had  problems, you could simply leave and go somewhere else.


But the real kicker?  By 2010, America should have already been rewired. We, the public, spent about $320 billion for fiber-based networks since the 1990’s and have nothing to show for it. It has made us 15th in the world in broadband. In fact, in many states, all schools, libraries and hospitals should have been rewired with fiber optic service as part of changes to state laws that gave AT&T and Verizon billions per state to replace the old copper wiring with new fiber optic wiring. Worse, the money is still being collected today in the form of rate increases, tax breaks and other perks to the companies.


We requested this new  FCC  investigate our claims, to create a workshop to investigate all of the money currently being collected.  We even sent the FCC a report that was created to enhance the official Columbia CITI report that the FCC requested on broadband statements of deployment, commitments and outcomes. It outlines how 26 different states had been promised a fiber optic future and it was never rolled out, but state laws were changed and billions collected to pay for these upgrades. And, in many states, rural, urban and suburban areas were to be upgraded equally.



Request for  an FCC Workshop on Broadband funding:  


This isn’t a history lesson. In 2009, Verizon, New York got the state commission to raise local rates yet again to pay for “fiber optics”,  which, because the FCC removed competition, means only one company, Verizon benefits. This same thing is happening throughout the US.


Based on numerous sources, the FCC’s national broadband plans is going to be a farce. It’s plan is to increase your taxes as it  is going to add broadband to the Universal Service Fund Tax,  rewarding the same companies that harmed you,  by giving them more of your money and a free pass.


To make sure that America has broadband, the FCC proposes to have the deployment done by 2020: The FCC writes: “A ‘100 Squared’ initiative -- 100 million households at 100 megabits per second -- to unleash American ingenuity and ensure that businesses, large and small, are created here, move here, and stay here”.  I.e., in 10 years from now, what is already being offered in many other countries -- very high speed broadband  -- should reach America in a decade, thrusting us farther behind. This means less jobs, this means more expensive broadband, this means it harms our economy as many of the newest applications will be developed in other countries.


Here’s the FCC’s website with ‘previews’ of what is going to be released.  


But, more to the point -- there’s nothing in what the FCC is about to do that would compel the carriers to do anything except come up with more schemes to get more money out of government -- read you -- for services that they already got paid to do and didn’t.   In fact, if the FCC did a search they would see Verizon claimed it was going to do 100 mbps services way back in 2003. (Barron's,  March 24, 2003)


And building new infrastructure?  AT&T filed with the FCC to close down the Public Switched Telephone Networks (PSTN)– i.e., the telephone utilities – the wiring to most homes, offices, schools and libraries; in short,  the critical infrastructure that most services travel over today. AT&T now claims that there are now 2 networks -- a ‘broadband’ network and the aging ‘utility’.  This plan  is to remove all vestiges of regulation so that they can screw, that’s a technical term, every person using the phone networks with rate increases, worse service and limited, read no competition.


Here’s an article about this shell game -- as the companies have been illegally transferring assets out of the utility to fund whatever they are building.  


There is only 1 network. The Public Switched Telephone Network, that was never properly upgraded – Everything else has been a bait and switch where the public paid over $320 billion – but the regulators refuse to investigate the flow of monies. If they did, they wouldn’t be raising your taxes.


More to the point, AT&T is currently NOT building out fiber optic networks but has pulled a massive bait and switch and is still using the old copper wiring, which was supposed to have been replaced. U-Verse, AT&T’s  broadband product can’t handle very high speeds and the failure to properly upgrade the  infrastructure over the last 15 years is going to harm 22 states-- ½ of the US. 


Because of really harmful mergers that consolidated what is now AT&T, if you’re in California, (Pacific Bell, now AT&T), Ameritech (Ohio, IL, WI, IA, or MI),  BellSouth, (southern states, including Florida, Alabama or Kentucky), Southwestern Bell (including Texas of Kansas), or even SNET (Connecticut) -- these companies have previous commitments that they simply ignored, but collected billions per state to upgrade. Now, you’re stuck with whatever AT&T decides to roll out.


And, based on reading the previews,  the Broadband Plan does NOT propose to reopen  the networks to competition; the previous FCC administration, through a series of bad rulings eliminated competition. The FCC plan, we believe, will not fix that mistake.


While we were ignored,  more to the point -- You were harmed by the coziness of the FCC with corporate funded think tanks and astroturf and co-opted groups.


Part II:  Regulatory Capture 101 – How Astroturf Groups, Co-Opted Groups, Corporate-Funded Think-Tanks Work and Walk Freely in the Halls of the FCC and Congress.


How can it be that the FCC can simply ignore the data we provided? Easy, the FCC is being controlled and has cozy-upped to the corporate think tanks,  astroturf and co-opted groups that now travel the FCC’s corridors with impunity.


·        Astroturf—An organization set up by a large corporation or corporations to put forward the corporate agenda but to look like an authentic 'grass-roots' group. 

·       Co-opted—An authentic group that is given funding by a large corporation or corporations, where the group lobbies for corporate initiatives even if they are contrary to the needs of its members.  

·        Skunkworks—A well coordinated campaign funded by large corporations (or industries) that incorporates Astroturf and co-opted groups, research think tanks, PR firms, lobbying firms, state and federal politicians to put forward the corporate agenda on a specific topic.


Let’s be specific  The  current head economic advisor for the FCC’s national broadband plan is Scott Wallsten and he is on leave from the Technology Policy Institute. According the Washington Post, “The Technology Policy Institute, a think tank funded by major Internet providers AT&T Inc., Comcast Corp. and Verizon Communications Inc….,” Also, Scott Wallsten is also a senior fellow at the Georgetown Center for Business and Public Policy.  


Or, is any wonder that the head of the FCC National Broadband plan, Blair Levin, will be joining Technology Policy Institute and The Georgetown Center for Business and Public Policy with a host of other experts to discuss “What are the plan's effects on innovation and investment?” The panel are phone and cable companies and corporate-funded ‘experts” who sell their services to the phone companies or their ‘non-profits’,  or schools of higher learning that also receive funding from AT&T, or Verizon or their related associations and astroturf groups.  

• James Cicconi, Senior Executive Vice President, AT&T
• Robert Crandall, Senior Fellow, Brookings Institution
• Thomas Lenard, President, Technology Policy Institute
• Kyle McSlarrow. President, National Cable & Telecommunications Association
• John Mayo, Executive Director, the Georgetown Center
• Peter Pitsch, Executive Director, Communications, Intel
• Gregory Rosston, Stanford Institute for Economic Policy Research
• Robert Shapiro, Senior Fellow, the Georgetown Center
• Thomas Tauke, Executive Vice President, Verizon
• Joseph Waz, Senior Vice President, Comcast

Going through the speakers:

·        Robert Crandall – Worked for AEI-Brookings, which was funded by the phone companies. His latest report,  which was to prove that the Harvard Berkman report (which was requested by the FCC) on broadband was wrong,  was funded by National Cable & Telecommunications Association (NCTA) and United States Telecom Association (USTA) – the national cable and phone associations. Crandall also published articles with Scott Wallsten including:  “Universal Broadband Access: Implementing President Bush’s Vision,” Policy Review, 2004, No. 127 (with Robert Crandall, Robert Hahn, and Scott Wallsten)”

·        More recently, “Broadband In America” written by Robert W. Crandall and others was funded by the astroturf group “Broadband for America”, which is funded by AT&T, Verizon etc.

·        John Mayo, Executive Director, the Georgetown Center -- His bio states he worked for AT&T, MCI, Sprint.

·        Robert Shapiro, Senior Fellow, the Georgetown Center -- is the co-founder and chairman of Sonecon, LLC and includes in his bio that he worked for MCI and AT&T.

·        Thomas Lenard, President, Technology Policy Institute --- Funders include AT&T Inc., Comcast Corp. and Verizon Communications Inc.  


The Georgetown Center for Business and Public Policy states it is  a non-partisan research center whose mission is to engage scholars, business people and policymakers”. There’s no balance on this panel. It’s goal is to harm competition and keep the duopoly in control, using questionable data and analysis, which we will be documenting next week.


Why does this all matter? Well, recently, AT&T, Verizon, Qwest, Time Warner, the NCTA (cable association) the CTIA (wireless association)  and the USTA (phone association), outlined how the networks should remain closed because if not, investment on broadband would stop. Besides collusion --i.e., the cable and phone and wireless companies are filing a joint document --  the paper also claims that Free Press,  Public Knowledge, and a handful of others are asking for a ‘radical’ agenda -- to open the networks to competition. The details are too arcane for anyone but telecom wonks, but the truth is the cable, phone and wireless companies and associations have created a cabal to keep their networks closed based on, well, a rewrite of the history of broadband in America.


And, Technology Policy Institute is also claiming that opening the networks is wrong. This means that the Chief Economic Advisor to the National Broadband Plan is essentially stating we should kill off competition. In their analysis they, of course, don’t mention the fact that $320 billion was already collected and is still being collected or whether there is real competition besides a duopoly.  


Why hasn’t the FCC Consumer Advisory Committee (CAC) said anything useful? Because of financial conflicts of interest with their funding sources.


The FCC has committees, including the FCC Consumer Advisory Committee.  We were on the Committee in 2003-2004, but were not asked back when we outlined to the Washington Post how the Committee had corporate-funded astroturf and co-opted groups and industry players, not consumers,  and that these other groups closed down conversations, such as ‘truth-in-billing’ or competition.


It doesn’t seem to have gotten any better.


While there are groups on the committee that are seriously ‘pro-consumer’ many of the organizations are getting funded by Verizon, AT&T or the cable companies.


National Consumers League -Debra Berlyn, is  now Chairperson of the CAC. The NCL is now getting funding from Verizon and other corporations for their projects.  (Check out  their new web site.) And its current “Life Smart” program has Verizon as one of its funders. And corporate funding goes way back.  In 2000, Now-AT&T and Verizon paid for NCL web site upgrades to proselytize something called “CALLs” which raised local phone rates. The former NCL chairman, Sam Simon, still a board member  of Amplify Public Affairs, (*formerly Issue Dynamics) single handedly helped to create multiple astroturf/skunkworks campaigns.  And telco union, Communications Workers of America, is also on the  NCL Board of Directors. We have asked NCL to outline its funding sources and amounts. We never heard from them.


The Committee also has:


·       Verizon, -- which has been on the board for multiple terms, (Why?)

·        LULAC -- an Hispanic group that gets millions from AT&T and Verizon.

·        Communications Workers of America -- the primary AT&T and Verizon union.

·       Cablevision -- a cable company in multiple states.

·        Communication Service for the Deaf,  “CSD wishes to thank Verizon Wireless for their generous contribution” –


·        Consumer Action -- AT&T and Verizon are “Benefactors”.


·        Hearing Loss Association of America,  “ AT&T Inc. was the proud sponsor the HLAA 30th Birthday Party." AT&T and CTIA are corporate members.


It’s clear that the Consumer Advisory Committee is simply a case of regulatory capture. They’ll never call for an investigation of the funding sources.


Other committees, such as the Universal Service Administrative Company,  has added  David P. McClure, President and CEO, US Internet Industry Association as one of the five Board of Directors to represent Internet Service Providers. USIIA has been funded by Verizon for almost a decade.  His group does not and never did represent the independent ISP community.

And every day there is a new slap in the face. The FCC just announced that


Karen Karen Peltz Strauss is  now Deputy Chief in Consumer Bureau.   

Didn’t the FCC also notice that she is on the Board of Directors of the astroturf group,  Alliance for Public Technology, (APT) who’s funders are -- AT&T, CTIA (wireless association), Embarq (formerly sprint), Qwest,  Verizon and the phone lobby, United States Telecom Association – and it has been run out of Sam Simon’s offices.  


Is she going to confront AT&T overcharging consumers? We’ve filed multiple complaints that AT&T has been ‘harvesting’ it’s long distance customers, continuously raising long distance rates. Did you know that AT&T’s basic long distance rate is now $.42 a minute and because of all of the questionable fees and charges, low volume customers can pay $1.00 a minute or more. The last data from 2006 showed that AT&T had over 25 million long distance households – ¼ of the US.


And these financial ties to non-profits are everywhere. Simple example:  “The monthly print and digital newspaper, eSchool News, selected the NAACP Interactive Historical Timeline as its featured Site of the Week for Feb. 22-28. The site was funded by a $500,000 grant from the Verizon Foundation. Verizon Thinkfinity is linking teachers, students and parents to the timeline's many valuable resources.”  


In fact, today, the Verizon foundation has a page dedicated to the NAACP. Are they going to go after AT&T for overcharging its members? Never have before.  


Is it any wonder that last year the NAACP, LULAC and other ethnic non-profits signed a letter they were concerned that the FCC would act on Net Neutrality in a manner that would harm the phone and cable companies! How did that help the black or Hispanic communities?  


In sum -- No one is investigating the monies currently or previously collected by AT&T, Verizon et al, nor their failure to properly upgrade the utility phone networks they were paid to upgrade. No one is going to confront the 900 pound gorillas. There will be no mention of serious competition, but there will be billions outlined to give to the companies who already overcharged you.  The FCC will release a plan that is simply fluff – a vision of  the year 2020 that is today, antiquated.


And worse, the FCC talks about ‘transparency’ and 'accurate data'. As we have learned -- it’s just lip service. This plan is the corporations’ design, not a design for America.