Teletruth Alert --- March 9th, 2005

Teletruth, with New Networks Institute, Exposes the Bell Phone Company Skunkworks, Sock Puppets and Astroturf Groups that have Harmed the Public Interest --- (Phone companies: SBC, Verizon, BellSouth)


If you care about broadband, the Internet, Wi-Fi and wireless, municipalities wiring cities, the cost of phone service, VOIP, open access to content, or anything else related to your Digital Future, you need to read this. Then check out the materials and take actions to call for investigations. You've already been harmed.

WHAT'S BEHIND THE CURTAIN: There is an underground network of political deceit in the telecom and broadband industry. It is made up of very well funded fake or co-opted consumer groups, research firms, lobbying groups, politicians and PR firms throughout the United States, that are out to fool reporters, state legislatures, Congress, the public and the FCC that they represent the public interest.

In fact, many are controlled or have been co-opted through Sam Simon's Issue Dynamics and paid for by SBC, Verizon, BellSouth and the other phone and cable companies. The list of groups includes APT, TRAC, USIIA, Connect USA, New Millennium Research Council, League of United Latin American Citizens, and American Association of People With Disabilities, among others

It is also the co-opting of well known groups, from the Gray Panthers and NAACP, to the National Council of La Raza, the National Consumer League and others.

Call it skunk works, (the phone companies' black-ops groups) call it astroturf, call it sock puppets, a consortium of groups -- run by Issue Dynamics, includes a host of non-profits directly funded by the Bell companies to wield undo influence --not in your favor. These groups do the bidding of the Bell companies, not you.

And the impacts? They have helped to raise your phone rates, they've blocked fiber-optic and Wi-Fi initiatives in various states, they have helped to close down investigations of wrong doing by the phone companies, including audits of the companies showing customer overcharging and cooked books, and have helped to put competitors out of business.

The phone companies, through these groups, have also been able to shape or control new state laws or public service commission actions, as well as federal legislation and FCC actions.

They have, in essence, subverted the democratic process and stolen your right to be properly represented -- and you should resent it. And the sad part is that Washington insiders all know this is happening. It's common knowledge in the Beltway, and they have not stepped in to stop it.

Some examples:

1) Control of the FCC?: Did you know that the FCC Consumer Advisory Committee is mainly comprised of phone, cable and broadcast interests. In the last session, 1/3 of the members are from the industry or their associations. However, there were also 6 different groups tied to Sam Simon and Issue Dynamics.This has helped to give the phone companies control of the consumer interests at the FCC. It is the reason phone bills are unreadable, or competitors are being put out of business or sold off.

March 8th, 2005, the FCC announced the new members of this Committtee. It includes:

  • Alliance for Public Technology, Daniel Phythyon: is Senior Vice President, Law and Policy at the United States Telecom Association (“USTA”). APT is funded by Verizon and BellSouth and SBC APT is run by Sam Simon's Issue Dynamics. Other members, still on the Committee, also have ties to Sam Simon and Issue Dynamics.
  • National Association of Broadcasters,Sprint Corporation, Time Warner, T-Mobile, Verizon, Nextel Communications, Inc., Cellular Telecommunications and Internet Association, and Consumer Electronics Association,

2) Raising Phone Rates: In 2000, the phone company coalition, known as the "CALLs Coalition", got over 40 consumer groups who agreed to raise the FCC Line Charge -- on every local phone bill in America --- from a cap of $3.50 to $6.50. Issue Dynamics helped to run a campaign to make consumer groups believe this increase was important and good for their constituents, claiming it would lower long phone rates. --- It didn't work for most Americans. Interestingly, almost all of the groups also got grants from the phone companies.

  • "Verizon has worked closely with the National Consumers League (NCL) to create and update consumer web pages explaining common telecommunications charges." Sam Simon is the current Chairman of the National Consumer League. The NCL is on the FCC Consumer Advisory Committee.
  • Other groups backing this were NAACP, (an Issue Dynamics client and on the APT board) the National Hispanic Council on Aging and American Association of People with Disabilities, both on the APT board. All three got grants and donations from the Bell companies.

The FCC, in 2005, is currently proposing to raise this charge to $10.00 --- and guess who they will listen to?

3) Wi-Fi and Municipalities -- Recently, Wi-Fi Network News and others have outlined how Issue Dynamics, APT and the New Millennium Research Council (a project of Issue Dynamics) have been issuing reports bashing municipalities ability to offer broadband and Wi-Fi Internet services. This data is being using in multiple states throughout the US to make state legislatures vote against competition. Go to the site to read more.

4) Harm to Competition and Broadband --- Questionable or co-opted consumer groups have helped to give exclusive rights for broadband networks to the phone companies -- SBC and Verizon. For example, American's For a Digital Divide in 2001, with APT, were supporters of the Bell broadband proposals that essentially harmed competitors. The group included:

  • World Institute on Disability, (Verizon's Foundation is a member and Simon is on the board), American Association of People With Disabilities, (got "major donations from both Verizon and the Verizon Foundation, and put a Verizon VP on its own board") and the National Association of the Deaf, a Sam Simon/Issue Dynamics' client.

5) TRAC and APT, with the help of fake and co-opted groups and bad research, helped the phone companies enter the long distance markets, as well as harm competitors.

  • TRAC and APT helped Verizon and SBC enter the long distance market, which helped to put AT&T and MCI up for sale -- they couldn't compete. Sam Simon is founder of TRAC, APT is run by Issue Dynamics. TRAC, a nonprofit, has been running at a suspicious loss for years.
  • Issue Dynamics got the Gray Panthers to go after MCI in a full page advertisement and staged fake rallies. They also enlisted the United Church of Christ for other attacks. APT and the United Church of Christ work together on projects including the "Everett C. Parker Ethics In Telecommunications Lectures" (stop laughing.)

6) VOIP and Universal Service Fund (USF) --- APT has helped to create the "Keep USF FAIR Coalition", with full page adds in USA Today, in February 2005. In 2004, APT created the VOIP Coalition (Voice over the Internet). Both are filled with a mixture of the same players and their positions are related to the phone companies' needs. For example, instead of demanding an investigation into the problem-ridden Universal Service Fund, this group wants what's fair for the phone companies --- increase the USF, but leave it alone.

  • Groups signed onto these campaigns include: APT, American Association of People with Disabilities, National Hispanic Council on Aging, Telecommunications for the Deaf, TRAC, and World Institute on Disability.

The list goes on and on. --- In some cases, these groups are merely fronts for the phone companies interests. In other cases, we believe they've been duped, co-opting authentic consumer groups for the phone companies' purposes. However, in ALL cases, the outcome has been to not investigate the phone companies' behavior and sign on to Bell-friendly activities that ended up with higher phone rates, a national lack of fiber-based broadband, and harm to competition, as well as new threats to the Wi-Fi rollout, municipalities offering services, or new technologies, such as VOIP.

Let us be clear --- To date we have found no illegal acts. Also, many of these groups have done great activities for the public interest. And, we have no problem with non-profits taking money from a large corporation to fund a public interest activity. However, when these same groups vote and use their name to promote the activities of the large corporation, especially when they do not fully disclose the money received or fail to first consider the needs of their own constituency, then the country should be outraged and these activities investigated. While many groups will counter that the phone companies only represent a percentage of their income, it is now clear that it represents100% of their favoritism on telecommunications and broadband issues. Should they have nonprofit status? Are they doing illegal-unethical acts?


A) Go to and learn more -- Don't take our word for it. We've put links to articles and documents by others, including TRAC's IRS financials, ties between groups, etc.


B) Join us in our Complaint to Congress to investigate the FCC Consumer Advisory Committee's board members. Read the government's report questioning the FCC's Committee process.

C) Complain about nonprofit status and co-mingling of funds for questionable groups: Why are fake groups, research firms, etc. getting a free ride as 501c3, nonprofit groups? Billions of dollars are at stake. Read the IRS information about restrictions on lobbying.

D) Call for investigations of this problem --- This same scam is happening in other industries as well, from the fake environmental groups set up by the oil companies, to the astroturf groups designed to torpedo health care reform. Read what others have been writing on this.

Bruce Kushnick, Teletruth, [email protected]

Tom Allibone, Teletruth, [email protected]

PS: Teletruth was a member of the FCC Consumer Advisory Committee in 2003-2004