New Broadband Competition Proposal Opposed By Republicans, Telecom Giants

WSJ: Obama Calls On FCC To Overturn Restrictions On Broadband Market Competition In 19 States. On January 13, The Wall Street Journal reported that President Obama will ask the FCC to “overturn state laws that prevent cities and towns from building their own high-speed broadband networks.” [The Wall Street Journal, 1/13/15]

Politico: Republicans Allege That Obama's Proposal Is “An Attempt To Over-Regulate Industry.” According to a January 14 article by Politico, congressional Republicans oppose the president's proposal to remove state-level restrictions blocking public broadband access, claiming that it is “an attempt to over-regulate industry.” Conservative lawmakers are not the only group opposed to Obama's proposal:

The White House is facing opposition not just from Republicans. Incumbent telecoms like AT&T and Time Warner Cable have worked state legislatures to install barriers to city-run Internet services. The industry says local government-run broadband networks often fail, leaving local taxpayers on the hook. But it also threatens their business models -- Internet-service providers usually face little competition in individual markets. [Politico, 1/14/15]

Broadband Restrictions Were Drafted And Promoted By Conservative Legislative Group ALEC

State Bills Restricting Broadband Competition Were Based On ALEC's “Model Bill.” As reported by PR Watch, the 19 state-level restrictions on the broadband market are based on model legislation drafted by the conservative special interest group, the American Legislative Exchange Council (ALEC) and supported by major telecom business interests (emphasis original):  

The ALEC "Municipal Telecommunications Private Industry Safeguards Act" is a “model” bill for states to thwart local efforts to create public broadband access. Promoted under the guise of “fair competition” and “leveling the playing field,” this big telecom-supported bill imposes regulations on community-run broadband that they would never tolerate themselves. Iterations of this anti-municipal broadband bill passed in 19 states to stop local governments in communities like Wilson, North Carolina from wiring their communities with fiber. [Center for Media and Democracy, PR Watch, 2/13/14]

Vox: “Legislatures In 19 States Have Enacted Laws Restricting Local Governments From Entering The Broadband Business.” In a January 14 post, Vox included a map provided by the Institute for Local Self-Reliance (ILSR) depicting the 19 states that have enacted such restrictions:

[Vox, 1/15/15]

ALEC Is A “Conduit For Big Business And Right-Wing Special Interests To Advance Their Agenda.” PR Watch further explained how ALEC acts as “a conduit for big business and right-wing special interests to advance their agenda,” and “directly benefit the corporate bottom line”:

ALEC is a conduit for big business and right-wing special interests to advance their agenda through the states and exert significant influence over state law and policy -- but without the public ever knowing. At closed-door ALEC meetings, state legislators sit down with lobbyists for corporations like AT&T, Time Warner Cable, Verizon, Comcast, and News Corp to be handed changes to our laws that further the right wing agenda and directly benefit the corporate bottom line. [Center for Media and Democracy, PR Watch, 2/13/14]

Broadband Providers Have Maintained Close Ties With ALEC Even As Other Companies Repudiate Its Conservative Agenda. According to PR Watch, ALEC was the “key avenue for the big telecom agenda,” and top broadband companies maintain ties with the group. In fact, ALEC Private Enterprise Board member Bill Leahy oversees national legislative strategy at AT&T:

The fact that ALEC has been a key avenue for the big telecom agenda is little wonder given that AT&T's head of legislative strategy, Bill Leahy, sits on the ALEC Private Enterprise Board, and the current president of ALEC, Ron Scheberle, was previously a lobbyist for Verizon.

As the public has grown increasingly aware of ALEC, more than 90 major corporations and non-profit groups have dropped their ALEC membership after the organization's connections to Stand Your Ground and voter ID laws became public. Companies like Coca-Cola, Wal-Mart, and Amazon recognized that the benefits of maintaining their ALEC membership were not outweighed by the reputational costs of being associated with ALEC's extreme agenda. But internet providers and telecom companies -- AT&T, Verizon, Time Warner Cable, Comcast -- have remained involved with ALEC, apparently deciding that whatever costs to their reputation that might accrue from remaining associated with the organization are not outweighed by the benefits of being an ALEC member. [Center for Media and Democracy, PR Watch, 2/13/14]

ALEC's Broadband Proposals Were Based On “Misleading Or Outright False Claims” That Have Hurt U.S. Connectivity

ALEC's Legislation Puts U.S. Connectivity Far Behind Most Developed Nations. Todd O'Boyle, the Program Director for the Media and Democracy Reform Initiative at Common Cause, and Christopher Mitchell, the Director of the Telecommunications as Commons Initiative at the Institute for Local Self-Reliance, explained in an October 23, 2012 Forbes article how ALEC's efforts to block competition have dramatically lowered the U.S.' international standing in broadband connectivity:

Not long ago, the United States led the world in broadband connectivity. Now we are in 16th place, trailing most developed nations. We need broadband policies that connect our homes, schools, and business to the 21st century economy, but we're pursuing public policies that are putting us in a hole, helping private telecommunications providers and harming the public interest. As the old adage goes, when in a hole, stop digging.

Why is this happening? One reason is that across much of the nation, commercial broadband companies are using their political and economic clout to stifle competition, particularly from municipalities. Individually and through trade groups and the American Legislative Exchange Council (ALEC), the industry is bent on shutting down existing publicly-owned broadband systems and blocking the development of new ones. [Forbes, 10/23/12]

ALEC's Claim That Stifling Competition Benefits Communities Is Based On “Misleading Or Outright False Claims.” O'Boyle and Mitchell also criticized the “distorted and inaccurate claims” made by ALEC and its supporters that locally-run broadband will hurt municipal credit ratings and be a drain on taxpayer money. The article highlighted an op-ed by ALEC's communication director published in the Daily Caller:

Stephenson suggests that Chattanooga, one of several cities cited in his piece, made a poor decision in building the nation's most advanced citywide broadband network - one that has helped companies create literally thousands of new jobs in recent years. In fact, contrary to Stephenson's claims that municipal broadband hurt municipal credit ratings, S&P just upgraded the Chattanooga public utility's bond rating, stating, “The system is providing reliable information to the electric utility on outages, losses and usage, which helps reduce the electric system's costs.”

The larger point is that those who want to revoke local decision-making authority for broadband often justify their position by insisting that they want to protect taxpayers from mythical threats. But Chattanooga's EPB Fiber service is saving the public money. After a recent storm knocked utility customers offline, EPB's fiber-optic Smart Grid brought those uses back online more quickly, saving the public an estimated $1.4 million in repair costs.

[...]

Publicly owned networks overwhelmingly help public safety, schools, libraries and other community anchor institutions. While AT&T has been caught overcharging schools for their connections, Lafayette dramatically increased the capacity of school and library broadband connections at nearly the same price AT&T charged for far lower quality services. Lafayette's network is one of the most advanced in the nation and has attracted hundreds of new jobs while saving millions for the community by keeping prices lower, as documented in our report Broadband at the Speed of Light. In response to Lafayette's investment, Cox Cable prioritized that community for its upgraded cable network - compounding local benefits. [Forbes, 10/23/12]

Vox: Telecom Companies Often Block Citizens From Using Existing Public Broadband Infrastructure. In an October 31 post citing data from the New American Foundation, Vox noted that “a handful” of U.S. cities are able to offer “best-in-the-world speeds at bargain prices” to their citizens, but pointed out that those cities are the ones where broadband infrastructure is not controlled by the large telecom companies. According to Vox, the U.S. has the capability to build affordable and competitive broadband infrastructure, but is often stymied by telecom companies' lobbying efforts:

[W]hile broadband incumbents don't want to spend the money it would take to build state-of-the-art fiber networks, they are happy to spend money on lobbying.

And they are very effective at it. The 2009 stimulus bill, for example, provided a grant to the District of Columbia to build a publicly owned fiber-optic network, but the city's not allowed to use it to deliver fiber connections to its residents. In San Antonio, the city-owned electrical utility already built a fiber network but lobbyists got the state legislature to pass a law making it illegal for households to use the fiber.

So even though we have the technical ability to deliver cheap, super-fast internet and we have the financial ability to finance the construction, we don't actually have the network. In fact, we're so in hock to the interests of the broadband incumbents that we don't even use all the fiber networks we've already built. [Vox, 10/31/14]

Vox: The Few American Cities Delivering World-Class Speeds Are “Precisely The Cities” That Don't Rely On Telecom Giants. Vox also highlighted how telecom lobbying efforts put certain U.S. cities far behind international competitors. As Vox noted, “The American cities that are delivering best-in-the-world speeds at bargain prices are precisely the cities that aren't relying on Verizon, AT&T, Comcast, Time-Warner, etc. to run their infrastructure”:

[Vox, 10/31/14]  

Media Have Traditionally Ignored ALEC's Influence On State Legislation

State Media Turned A Blind Eye To ALEC's Influence On The Voter ID Debate. By 2012, dozens of voter ID laws were introduced in state legislatures. Though widespread evidence showed that the surge of voter ID laws was based on model legislation crafted by ALEC, a Media Matters analysis found that the largest newspapers in the seven states that enacted voter ID laws in 2011 largely ignored ALEC's influence. Only Rhode Island's Providence Journal mentioned any connection between the state's voter ID bill and ALEC. [Media Matters, 3/20/12]

ALEC's Efforts To Influence Education Reform In Georgia Went Unnoticed By Local Media. Georgia media were silent as members of Georgia's state assembly successfully pushed through a version of ALEC's Charter Schools Act, which created a state-controlled board with the power to establish and fund charter schools over local opposition. A Media Matters analysis found that Georgia media completely overlooked ALEC's influence in the debate when writing about the bill. [Media Matters, 5/9/13]

Michigan Media Remained Silent As State Passed ALEC Bill Limiting Compensation For Asbestos Victims. In 2012, Michigan Gov. Rick Snyder (R) approved a bill limiting the ability of asbestos-exposure victims to recover losses from some companies that are legally responsible. The bill was promoted by ALEC and a Fortune 500 corporation attempting to limit the corporation's liability to compensate cancer and mesothelioma patients who were exposed to asbestos by a company it purchased. According to a Media Matters analysis, Michigan's two largest newspapers, the Detroit Free Press and the Grand Rapids Press, failed to cover or make any mention of the bill. [Media Matters, 4/18/12]