THE BLOG
03/07/2013 01:05 pm ET | Updated May 07, 2013

Comments From the Front -- Friends of AT&T Want New Digital Dead Zones

Co-Author: David Rosen

What do Free State Foundation, TechNet, Tech America, the National Grange, the U.S. Cattlemen's Association, Women Involved in Farm Economics, the Urban League and Al Sharpton have in common?

They are all backing AT&T's FCC Petition, which has the goal to close down telecommunications networks and create digital dead zones in about 50 percent of the country. Most disturbing, many of the endorsements of AT&T contradict the needs of their own constituents.

To understand what these commenters are backing, we need some background.

The Immediate Threat

The AT&T Petition is part of the company's strategic "transition" plan to close down the nation's telecommunications networks, the Public Switched Telephone Network (PSTN). This plan is based on the American Legislative Exchange Council's (ALEC) "model" state-based legislation that has been adopted in varying degrees in 23 states. AT&T's Petition is the first step to take ALEC effort to kill the PSTN federally; it will soon be followed up with a bill in Congress.

AT&T claims the Petition is about not regulating phone service using the Internet -- i.e., Voice over Internet Protocol (VOIP) -- and it's for "Internet Freedom." But this is all a verbal jujitsu as a careful examination reveals that the Petition and surrounding documents are designed to remove basic oversight, getting rid of competition and, more important, ending carrier of last resort requirements. Under such "deregulation," AT&T won't have to offer you service, won't have to fix your phone line if it breaks, won't have to serve rural communities and will significantly impact small business with an ATM machine, an alarm circuit or other wired "data" services.

Moreover, they will 'abandon' whole areas to a 'digital dead zone' -- where the wires don't get upgraded and can't do broadband. AT&T and Verizon have been playing a shell game with consumers. AT&T promotes it much-touted U-Verse fiber network as a next-generation service, but fails to reveal that its network really based on the old, copper wiring in customers' homes; it is a PSTN-based copper-to-the-home service. More troubling, AT&T announced that it was going to stop building out their broadband networks unless this petition goes through. Verizon has simply said it will stop its fiber to the home service, FiOS and abandon most of its wires -- as the majority of customers are still on copper -- which, ironically, should have been upgraded over the last two decades.

In short, AT&T's Petition requests that it starts the 'transition' to the Internet protocols, when in fact it is simply a plan to stop upgrading whole areas of AT&T's 22 states and get rid of all regulations.

* * *

Friends of AT&T et al

AT&T's FCC Petition has drawn considerable responses from a wide variety of groups; they can be found at FCC docket number 12-353.

A review of the filings from organizations supporting AT&T's submission reveals how its policies will harm many of their own constituents.
Free State Foundation (FSF) is a group the parrots the ALEC line. It describes itself as "a non-profit, nonpartisan think tank." Going further, it claims to focus "on eliminating unnecessary and counterproductive regulatory mandates, especially those applicable to the communications and other high-tech industries, and on reducing overly burdensome taxes, protecting individual and economic liberty, including property rights, and making government more effective, efficient, and accountable."

It backs the AT&T effort. "Facilitating this transition to all-IP voice services should be established and earnestly pursued to ensure the timely end of the PSTN." Its goal is to "... clear away potential obstacles to all-IP network transitions posed by service discontinuance requirements, notice-of-network change regulations, carrier-of-last-resort obligations, or other unnecessary mandates."

It says: no 'quality of service' requirements meaning no oversight or penalties for bad service and no 'carrier-of-last resort' -- meaning they don't have to give your service. Period.

While FSF claims it is for "free markets," in its filing it fails to mention direct competition for broadband or Internet service over the wires, nor does it remind the FCC that AT&T and the other companies have failed over the last two decades to properly upgrade its networks. Instead they back strengthening AT&T's monopoly effort to control the wires in customers' homes and offices.

The Center for Media and Democracy's Sourcewatch notes the following:
"The FSF has ties to the American Legislative Exchange Council (ALEC) through Seth Cooper, who joined FSF as a full time research fellow in 2010. Mr. Cooper is the former director of the ALEC Telecommunications and Information Technology Task Force and currently acts as Amicus Counsel for ALEC." Its president, Randolph May was part of the corporate-funded think tank, Progress & Freedom Foundation.

Another filing comes from a group of rural farmers, including American Agri-Women, National Farmers Union, the National Grange, U.S. Cattlemen's Association, United States Distance Learning Association, and Women Involved in Farm Economics. Their comments states: "Our comments focus on rural America and the ability of ubiquitous IP enabled networks to encourage economic growth and to deliver new education, health care, and other life-enhancing opportunities to communities that have often been hampered by geographic and economic barriers."

Undercutting these high-sounding words, AT&T has announced that it has no plans to upgrade most of its rural customers.

AT&T argues that "25 percent" of the customers it serves are "currently not economically feasible to build a competitive IP wireline network." Its "transition" plan is to stop providing phone or Internet to farms and rural areas, offering these customers wireless service -- when available. Its plan is to offer secondary wireless only after three years assuming that the FCC grants its Petition.

By the way, in the same press release in which it claims it cannot serve poor, rural areas, for 3rd Quarter 2012, it told its shareholders: "AT&T increases quarterly dividend 2.3 percent; 29th consecutive annual increase."

So why are farm and rural groups supporting AT&T's Petition? Stop the Cap's Phil Damier writes: "National Grange receives substantial financial support from AT&T, which is why they reliably pen letters for the company's public policy agenda whenever an issue comes before the FCC. They are also part of the nation's biggest broadband astroturf group -- Broadband for America, an industry invention." Money not only talks, it buys loyalty.

The Tech groups have also come out in favor of AT&T's plan.

Tech America proclaims itself "the leading voice for the U.S. technology industry, which is the driving force behind productivity growth and jobs creation in the United States and the foundation for the global innovation economy. Representing approximately 1,000 member companies of all sizes from the public and commercial sectors of the economy, TechAmerica is the industry's largest advocacy organization."

TechAmerica basically uses the same words and sentiment as AT&T -- that changing regulations will "provide innovation and network investment." It adds, "Absent regulatory change, further evolution in IP-enabled services will be hindered. It is therefore imperative that the Commission provide the necessary regulatory glide path to ensuring further innovation and network investment."

But most of this statement is pure sleight of hand. The same underlying wireline networks have provided all services since the 1980s and still do. In the 1990s, consumers could choose from a number of Internet, phone and/or broadband providers. One has to wonder -- how does closing down whole areas of the U.S., or the failure to properly upgrade networks, help their own members? The end-users of the very technology these companies are inventing and selling -- may not be able to be used, thus closing down potential sales and markets.

Finally, nowhere in its comments does it explain that, like AT&T, Verizon and Centurylink, Tech America works closely with ALEC on campaigns, or that TechAmerica members include the caretakers of the PSTN -- AT&T, Verizon and Centurylink.

Another "independent" trade association, the Technology Network ("TechNet"), who has AT&T as a member, dutifully spouts AT&T's official line. TechNet "represents America's leading technology companies, strongly supports AT&T' s Petition to launch a proceeding to consider the regulatory issues raised by the 'telephone industry's continued transition from legacy transmission platforms and services to new services based fully on the Internet Protocol ('IP')."

The most disappointing aspect of the TechNet filing is the absence of any discussion of competition in telecom. Competition is the ostensibly religion of corporate America; such competition is suppose to drive innovation as well as lower prices. The U.S. telecom infrastructure is not being upgraded and TechNet refuses to address the issue.

There are other tech, 'corporate-funded think tanks' and a host of other 'experts' funded by AT&T or Verizon or the cable companies or all of the above, though many don't reveal their funding sources publicly.

Foundation Grants to Non-Profits who Back AT&T's Petition.

The most disappointing filings in support of AT&T's Petition came from 'civil rights groups,' including the National Urban League (NUL), Al Sharpton's National Action Network (NAL). These organizations should know better; their ostensible constituencies may suffer the most if the Petition is accepted.

In a joint filing, NUL and NAL wrote: "... we support the AT&T Petition as we understand it and urge the Commission to approve it in a manner that advances the interests of consumers of color. The AT&T Petition provides the FCC with an opportunity to test the full transition to an all IP network in test studies and in other controlled environments."

While the filings have caveats, the groups fail to mention that AT&T's Foundation provided $1.6 million AccessAll Grant to the NUL for a career development program, or that it awarded the group a $1 million grant to encourage minority kids to go to college. Equally missing was mention of the grants NAL received from AT&T and Verizon.

Another active group who files on behalf of the phone companies regularly is LULAC, the League of United Latin American Citizens, this time filing with a coalition of Hispanic groups including the United States Hispanic Chamber of Commerce, United States Hispanic Leadership Institute and Labor Council for Latin American Advancement. It supported AT&T in the same boiler-plated language adopted by the other groups: "To maximize the consumer benefits of broadband, we also believe it is imperative to accelerate the transition away from antiquated networks providing 'voice'-only services and move toward the widespread availability of next-generation Internet Protocol (IP) networks that can offer voice, video, high-speed Internet and other data services."

Going further, it swooned: "Upgrading outdated legacy phone networks with IP-capable networks will expand consumer choice for high-speed broadband service throughout America ... These expanded options in the marketplace will hopefully boost adoption among Hispanic Americans and others who may not have wired broadband because of concerns about cost."

Not unlike the NUL, LULAC and many of the Hispanic groups failed to disclose that they received millions of dollars over the last decade from what are now AT&T and Verizon and Comcast. It also failed to detail the impact of poor services and price increases on its core constituency, the Hispanic community.

Established non-profit groups are notoriously hungry for dollars and have a long history of taking money from AT&T, Verizon and Comcast. Ars Technica pointed out how AT&T's funded non-profits came out against Net Neutrality. In addition, LULAC was but one of the nonprofit groups that backed the AT&T-T-Mobile merger.

And the idea of foundations funding minority non-profits is not new. Click here for a partial list of Verizon Foundation and SBC (now AT&T) Foundation grants from 1996-2001.

* * *

The conclusion is simple -- the game is rigged. There is no 'level playing field.' The telcos own the ball and control the field, not to mention put blindfolds on the referees.

What can ordinary Americans can do to counter this onslaught of pay-to-play organizations, associations, and 'experts'? Make your voice heard by filing your own comments -- and get others to do the same.

Click here to voice your concerns to the FCC over the AT&T Petition.