Telecom Lobby Power and the $234-Million Question

Wednesday July 21, 2021

As Senators involved in the Bipartisan Infrastructure Framework are negotiating over legislative language on how to spend $65 billion aimed at expanding high-speed Internet connectivity in “unserved” and “underserved” parts of the country, a new joint report has been published by Common Cause and the Communications Workers of America (CWA) that details the massive influence Big Telecom has on Congress.

The 21-page report – Broadband Gatekeepers: How ISP Lobbying and Political Influence Shapes the Digital Divide – examines the political spending and lobbying efforts of the nation’s largest Internet Service Providers (ISPs), as well as their trade associations, and connects the dots on how some of the most despised companies in America have helped create the digital divide.

The report begins by noting how “major broadband providers, both telecom and cable, have chosen not to build their networks to areas they deem less profitable and not to upgrade many existing customers left behind by outdated technology. These choices entrench the far too wide digital divide and mean Americans pay some of the highest prices for service. At the same time, the largest ISPs have used their outsized influence in Congress to block any legislation that would undermine their stranglehold over the broadband marketplace. In the 116th Congress alone, these corporations spent an astounding $234 million on lobbying and federal elections.”

That’s an average of more than $320,000 a day, seven days a week, as the report’s authors note.

America’s ‘Most Hated’ Companies Lobby to Maintain Monopoly Power

Although policymakers have proposed reforms that would close the digital divide, the report says, “the (telecom) industry is on Capitol Hill spending hundreds of millions of dollars to fight against legislation that would fund the deployment of future-proof networks, promote competition, mandate higher minimum speed thresholds, and require pricing transparency.”

Furthermore, the report continues, “almost the entirety of their lobbying efforts is dedicated to fighting regulation to ensure that they can maintain their market power. Incumbent providers oppose ‘overbuilding’ with public dollars, even where there is no competitive option. Where there is a competitive choice, the status quo when it comes to pricing transparency prevents consumers from comparison shopping and leaves them stuck with their current provider.”

Another critical insight offered in the report is the fact that the big ISPs effort to influence lawmakers and protect their regional monopolies goes far beyond hiring lobbyists.

The major ISPs and their trade associations frequently conduct massive public relations campaigns and commission studies, testify on Capitol Hill, publish opinion pieces, engage with the FCC, and create the appearance of grassroots support by creating groups on Facebook, buying ads on Instagram, and/or creating shell organizations.

Comcast, ranked in 2017 by the financial news site 24/7 Wall St. as the “most hated company in America,” spent the most on lobbying, shelling out more than $43 million during the 116th Congress with AT&T a close second, lavishing federal lawmakers with $36 million.

Another big spender was the trade association NCTA—The Internet & Television Association, whose board of directors is dominated by representatives of the biggest cable and media companies in America. NCTA spent more than $31 million during the 116th Congress, while CTIA, a trade association that represents the wireless communications industry, doled out more than $25 million.

The report also illustrates how the major ISPs exploit loopholes in lobbying disclosure laws, writing that“some important tactics for influencing federal legislation are excepted from the legal definition of ‘lobbying contact,’ including communication distributed through radio, television, cable television, or other media of mass communication, testimony given or submitted in a congressional hearing, and information provided in writing in response to a request by a legislative branch official for specific information.”

To compound the problem, “although the laws shining a light on ISP lobbying activities are weak, the laws regulating their campaign finance activities are even weaker,” thanks in large measure to the unpopular Supreme Court decision on Citizens United, the report’s authors write.

Report Recommendations

However, the report’s authors do not simply point out the problems with federal lawmakers shielding monopoly providers from competition. They also offer recommendations on how the trend could be reversed, which includes passing legislation filed by U.S. Rep. James Clyburn and U.S. Senator Amy Klobuchar in the 116th Congress and re-filed in the current 117th Congress: The Accessible, Affordable Internet for All Act.

“The Accessible, Affordable Internet for All Act invests $79.5 billion to build future-proof high-speed broadband infrastructure in unserved and underserved communities. In addition, the Accessible, Affordable Internet for All Act takes steps to ensure affordability by directing the FCC to collect pricing data, promote municipal broadband, and provide funding for digital equity. The bill also includes strong labor protections to promote good jobs and workers’ rights,” they write.

[Read our five-part series on the Accessible, Affordable Internet for All Act here.]

The report further recommends Congress strengthen the FCC’s Lifeline program and digital inclusion initiatives; restore net neutrality and the FCC’s authority over broadband; and calls on Congress to pass the For the People Act, which besides strengthening voting rights would enact robust transparency as it relates to lobbying and campaign financing.

Will Big Telecom Lobby Win on Infrastructure Deal?

The $234 million question now is: will Congress settle for an infrastructure bill that protects the monopoly providers, or one that prioritizes local solutions and structural, long-term change, as called for in the Accessible, Affordable Internet for All Act and in Biden’s initial American Jobs Plan?

From the looks of draft legislative language now circulating on Capitol Hill [pdf], it appears Big Telecom will get largely what they want. The bulk of the $65 billion ($40 billion) would be allocated for Broadband Deployment Grants in which the primary recipients would be individual states (which is what ILSR has advocated). However, 17 of those states currently either outright ban municipal networks or have barriers to local Internet choice. A funding preference for municipal networks is conspicuously missing from the draft infrastructure legislation, which would be a major victory for monopoly protectionists, although, the draft language does say states "may not exclude cooperatives, nonprofit organizations, public-private partnerships, private companies, public or private utilities, public utility districts, or local governments from eligibility for such grant funds."

The draft legislation essentially focuses on building out primarily “unserved” areas (areas that do not have access to 25/3 Mbps service) and secondarily on “underserved” areas (defined as areas lacking 100/20 Mbps service). The problem with defining “unserved” areas as regions with 25/3 service or less is that there are very few places that lack access to 25/3 broadband service outside of the most rural parts of America, which would leave more populous towns and cities left behind because they are technically “served” by high-price monopoly providers who offer second-rate cable service. This would deliver a severe blow to municipalities, co-ops, and nonprofits who are looking to build networks that will actually meet all local needs, not just those of families that can pay market-rate pricing.

In other words, the language thus far indicates that this is a good bill for rural America, while it seems the Republican Senators essentially forced the Democrats working on this framework to leave out families and households in areas where cable companies claim to serve.

It’s also not clear to us if this proposed legislation, in its current form, would claw back the $10 billion in broadband infrastructure funds already allocated in the American Rescue Plan as a way to help pay for the $65 billion broadband infrastructure deal. If it does, it would be a disaster for hundreds of communities across the nation who are right now planning to use that money to bring faster, cheaper, and more reliable high-speed Internet access to its citizens by building local, publicly owned networks and partnerships.

The current draft does include $685 million for a State Digital Equity Capacity Grant Program, $625 million for a Digital Equity Competitive Grant Program, and a $500 million Middle Mile Infrastructure Grant Program. We had our hopes up for more support for digital inclusion work but this will nonetheless be an important step forward in that it emphasizes planning and state-local coordination.

While the draft language is not yet final, when The Wireless Infrastructure Association (WIA), which counts AT&T and Verizon among its members, heaps praise for the deal, it’s a signal that all that lobby money paid off. As Politico’s John Hendel reports, WIA CEO Jonathan Adelstein said his organization “enthusiastically supports the reported bipartisan deal.”

While we support a robust infrastructure deal, favoring the approach outlined in the Biden administration’s initial framework, we are concerned the Bipartisan Infrastructure Framework now supported by Biden will be business as usual as it relates to funding rural deployment, leaving community broadband advocates largely in the lurch and focused on pushing states to use the $10 billion Treasury program as best it can to resolve the many challenges facing low-income families in cities.

As we await details on the final legislative language, this much seems clear: If it doesn’t promote competition, mandate higher minimum speed thresholds, require pricing transparency, address the affordability and adoption gap – or if it leaves out a preference for community-owned networks – we will know the Big Telecom lobby continues to wield massive political influence and remains deeply entrenched as “broadband gatekeepers.”

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