Transcript: Community Broadband Bits Episode 44

Thanks to Jeff Hoel for providing the transcript for the episode 44 of the Community Broadband Bits podcast with Mimi Pickering and Tom Fitzgerald regarding telephone service deregulation. Listen to this episode here.



Lisa Gonzalez:  Hi, again.  And welcome to the Community Broadband Bits Podcast, a production of the Institute for Local Self-Reliance.  I'm Lisa Gonzalez.

In this edition, we go to Kentucky, and its state legislature.  This past session, Kentuckians faced of with AT&T and its brainchild, Senate Bill 88.  We reported on this piece of legislation in February, as it was making its way through the legislature.  The bill would have removed the carrier of last resort requirement throughout the state.  The bill would have also eliminated the Public Service Commission's authority to hear and resolve consumer complaints.  In short, the bill would have granted AT&T the ability to decide who receives a landline, and the ability to walk away from landline service.

Christopher talks with Mimi Pickering, Director of Appalshop's Community Media Initiative, and Tom FitzGerald, Director of the Kentucky Resources Council.  The two describe the bill in detail, and tell us how a coalition of opponents defeated it.  It's an interesting and inspiring story, and it reminds us about the power of organized constituents who succeed against political rhetoric and misinformation.  Here's Chris, Mimi, and Tom.


Chris Mitchell:  Thank you for tuning to another Community Broadband Bits Podcast.  This is Chris Mitchell, with the Institute for Local Self-Reliance.  And today I'm joined by two folks from Kentucky, Mimi Pickering, the Director of Appalshop's Community Media Initiative.  Welcome.


Mimi Pickering:  Thank you.  Glad to be here.


Chris:  And Tom FitzGerald, Director of the Kentucky Resources Council.


Tom FitzGerald:  Hello.


Chris:  And I'd like to start -- Mimi, could you tell us a little bit about Appalshop and your program there?


Mimi:  Sure.  Well, Appalshop is about 44 or 45 years old.  And we are a not-for-profit media arts and education center located in the coal fields, in the Appal.  The Appal comes from Appalachia, not the thing you eat or the thing you work on all day.  And so, we're really here, telling stories of people from this region, and training people to use media and arts, and tell their own stories.  And we have a radio station -- community-run radio station -- that goes throughout eastern Kentucky and southwestern Virginia, and a little bit of West Virginia.  And we're really, really concerned about broadband policy, telecommunications issues, because we think they have the potential to really enable us to diversify our economy and do things that we can't do because we're in steep mountain terrain, with, you know, the lack of four-lane highways.


Chris:  Excellent.  Thank you so much.  And, Tom FitzGerald, please let us know what the Kentucky Resources Council does.


Tom:  Sure.  The Resources Council is a nonprofit, nongovernmental organization.  We are a legal and technical assistance provider.  We do assistance for folks who can't find or can't afford representation.  We don't charge for what we do, and we don't take fee-generating cases.  So we do -- and we take no government or corporate money.  So, it's an entirely unsustainable business model.  But we do -- you know, we do an array of issues dealing with environmental health, environmental justice.  And we also do a lot of utility work on behalf of low-income and seniors and fixed-income folks.  And so our involvement in the -- what we call, lovingly, the "AT&T Bill" stems from that standpoint.  We often deal with, you know -- at the intersection of poverty and environmental or utility injustice.


Chris:  You mentioned the AT&T Bill, which is the main thing I wanted to talk to both of you about.  We had a show a few months ago where we talked with Harold Feld generally about this movement by AT&T to try and deregulate its services, trying to remove consumer protections under the guise of demanding a change because of new technology.  But I'm wondering if you can step back, and if one of you wants to field a brief explanation of what this bill, that was introduced in the Kentucky state legislature was aiming to do.


Tom:  Sure.  I'll take the first shot at it.  And Mimi can jump in if I forget anything or miss anything.  The -- AT&T -- this is the second year that they have attempted, in Kentucky, to complete the deregulation of phone service.  Back in 2006, AT&T lobbied for -- and was successful in getting enacted -- a deregulation of everything in terms of telephony other than basic local exchange service.  The representation of the sponsor of the bill was that basic local phone service, which is defined under the state laws -- 9-1-1, 4-1-1, operator assistance, interconnection, and free -- phones -- you know, unlimited dialing within the local area -- and then operator assistance.  That was -- remained protected, remained under the Public Service Commission jurisdiction, in terms of reliability.  And there were commitments -- there were promises -- made by AT&T that if they were freed from this onerous burden of having to be regulated for their other services, that there would be this significant amount of additional investment in jobs.  And there were these grandeur suggestions by Connect Kentucky, which was a private-public partnership that by 2007, there would be a 100 percent broadband coverage across the entire Commonwealth of Kentucky.

Well, fast-forward to 2012, and then to 2013, AT&T comes in with a new bill that would complete deregulation.  What it would have done, under the auspices of Senate Bill 88, is, for the three utilities that elected to deregulate -- which are AT&T; Windstream, which is both an incumbent and in some cases a competitive local exchange carrier; and Cincinnati Bell, which is up in the northern Kentucky area -- if their bill had become law, no new customer would have the right to demand basic standalone service; the Public Service Commission would lose all jurisdiction over basic service reliability; in areas with over 5,000 households, the companies would no longer be required to offer standalone service, even to existing customers; and in areas of less than 5,000, they could either go to the Public Service Commission and say, there's a broadband provider here locally that is capable of providing voice service, or there's another unaffiliated provider that offers voice service in the exchange.  The third option they had, which is the one that they were most likely to use is, they could offer a (quote) "alternative voice service," which would, as part of a -- any "arrangement" -- which means that they could say to existing customers, even in the smaller areas, we are no longer going to service your landlines.

Because that's consistent with where AT&T is going.  They are essentially, as one person testified, a wireless company that bought, you know, BellSouth.  What they would be doing is migrating rural and high-cost customers to their wireless home service and then making investments in the landline and fiber optics in the urban profit centers.  So that, essentially, is what they're doing.  And this is consistent with what they're doing throughout the county, within their service area, which is attempting, in some respects, to preempt what the FCC has been asked to do at the federal level, which is to sunset the publicly-switched phone network, and to eliminate net neutrality, and to eliminate the obligation to allow competitive carriers to use their system.


Chris:  And, Mimi, maybe you can tell me why that's a problem.  Why can't everyone use their iPhone?


Mimi:  Well, it's a real problem in lots of areas in Kentucky, because we -- although we may have cell phones, the service is very erratic.  And, I know, you know, AT&T and some of the other companies use information that says, well, you know, 75 percent of households -- I don't have the correct number, but a lot -- you know, are using cell phones.  But what they don't say is that, you know, we're also holding onto our landlines.  Such as my family does.  You know, we -- the cell phone, although there are two towers in Whitesburg, where I live, which I can see out of my back window, the phone just doesn't ring.  So, I can't rely on it to get calls when I'm home.  And then there are all kinds of issues with 9-1-1 services and people who are on medical monitors.  All kinds of things.


Chris:  Mimi, can you explain briefly what you mean?  I think the point about the medical monitors is really important.  And I don't know that everyone understands why -- how this is interrelated.  Can you push in a little bit on that?


Mimi:  Sure.  And I don't understand it completely.  I mean, this -- one of the things, in doing this, Tom has been so great in investigating, and -- as well as other folks that have been involved in this loose coalition.  You know, we've just learned so much together about everything that's connected.  But people, you know, who are on heart monitors, diabetes monitors.  There are different kinds of medical monitors.  And so they are -- you know, their tests -- their regular data -- goes out over landlines.  And I -- Tom may be able to add more, but I understand, it's not -- that the devices have not yet been -- you know, are not yet available everywhere to do this on a cell phone.  And, again, you would have the -- you know, the irregularity.

We also, you know, lose power in this area, as lots of areas of rural Kentucky do, in storms.  And, you know, when you lose power, you lose your cell phone.  Whereas, a landline, you still have it.  So that's another reason that they're really important.


Tom:  Yeah.  I think that Mimi hit a couple of points that I think are very important points.  Part of the reportage that Appalshop did, which is so significant, is, they did some investigative reporting on the issue, and discovered that at the University of Kentucky, which is one of the major university medical centers in the state, they monitor a significant number of folks remotely.  And they do so with an analog system on the copper-wired network.  And they are, essentially, using that system, because of the high degree of reliability and functionality of the system, they are able to give these folks a remote medical monitoring that is the equivalent of being in the office with them.  And so, in the state, that has 120 counties and has numerous people who are not able to travel the significant distances that are necessary in order to get the medical attention, this is literally a lifeline.

And the problem -- you know, the problem with saying to rural Kentucky, we are going to switch you out to our wireless home service rather than a wireline service is that the wireless service is not -- not only for medical monitoring but for a number of other reasons -- is not as functional.  And so, what you're basically asking most of, you know, rural Kentucky -- particularly Appalachian Kentucky -- is, we are going to no longer serve as your highly-reliable direct-current-supported landline here.  And we are going to switch you out to wireless home service, as part of a "package."  So, you're going to buy a package now, because we're not making enough money on the basic service.

And then you go to the AT&T website, and you read their legal disclaimer on their wireless home phone service.  And I think that says it all.  They don't represent that the "WHT," as they call it, is equivalent to landline service.  They say that you may experience occasional service limitations, i.e., dropped calls.  We recommend that you place it on a hard surface with an unobstructed view of the outdoors, so -- because you've got line-of-sight issues.  9-1-1 calls -- it says, we don't warrant that we will be able to find you if you make a 9-1-1 call, because unless you've got GPS system, in many of these areas the 9-1-1 service is -- for cell service is done by triangulating among three towers, and there aren't sufficient tower coverage to accurately identify.  They say that the wireless home service is compatible with home answering machines but may not support a FAX machine; alarm services, including medical alert services; dial-up Internet; credit card machines; and is not compatible with some television services.

So, you know, for many of the folks in rural Kentucky, where there isn't effective competition from another carrier, what they're looking at is a degradation in the quality and reliability of the existing service.


Chris:  And I think that one of the things that we could probably emphasize as well is that one of the reasons that AT&T really, really wants to get people off the wireline and onto the wireless is so that they can hit them with more charges.  They can charge them extra for more bandwidth that are being used beyond certain limits.  And just all kinds of other extraneous charges that are going to hit people in rural Appalachia pretty hard, I would guess.


Mimi:  That's right.  And a lot of folks either can't afford or don't want to be part of a large bundle.  You know, they don't want a big cable package -- cable television package as a part of their phone.  You know, they don't need all these other services.  And the landline, and the carrier of last resort -- all of this legislation has provided a low-cost basic phone line that works fine for many folks.  It also -- you know, it is -- there's a profit guaranteed for these carriers.  So it's not like -- they're not losing money.  It's sort of a matter of them wanting to make more money.  So, we just don't understand why we can't continue to have landlines as they are, pay for them -- you know, they make some profit.  And then, as they -- IF they will invest, and if we, you know, have competition -- if we DO have improved cell service, if we Do have improved broadband, which everybody wants -- once it's there -- and all these safety issues are addressed -- well, then, maybe it does make sense not to have a landline.  But we're a long way from that.  And, you know, I mean, just -- you know, just leaving people literally in the dark, and, you know, without noise, I guess you could say -- or unable to speak -- you know, potentially, if you take these landlines away.


Chris:  Something like 20 states have already passed similar laws.  I'm curious, how exactly were you able to stop it, not just once but -- But they knew this was going to be a fight, because you'd put together such a great coalition.  You know, AARP was involved -- the American Association of Retired People.  How exactly were you able to stop mighty AT&T, and to get them so upset that one of their executives wrote a hilarious op-ed in the -- just totally over the top?


Tom:  For your listeners, Chris, one of the things they need to be aware of is that while there have been a number of states that had, in some fashion, deregulated some aspects of telephony, the -- not all of them have done the same thing.  There are some states -- Maine being one of the ones that I think is the most exemplary -- have really put the burden on the carriers to show that there's no need for them to be carriers of last resort in order that the goals of the Telecommunications Act, that were passed in the '30's and then reaffirmed in 1996, of universal access to affordable, reliable, safe service that interconnects, and competition -- that those values will be maintained even in the absence of regulatory oversight.  And so, you have other states, like Florida, that are kind of the "Wild West," when it comes to deregulation.  And then you have a lot that are in between.


Chris:  The National Regulatory Research Institute has written all these up.  And it's a fantastic report, explaining some of these nuances.  So, thank you for bringing that up.


Tom:  It is.  And they're apparently coming out with a new report this year.  But the 2010-2012 report that they did is an excellent summary, you know, and synopsis.  What's happened -- and Mimi, from her perspective, can tell you -- because her -- the groups that she's working with -- the rural broadband folks -- really were very important partners in this process.  We knew, going into this session that AT&T was going to throw everything that they could at it.  They had hired over 30 lobbyists last year.  And what was different this time is that they hired a PR firm out of Louisville, which funneled -- I'm not sure if it was AT&T directly funneling or indirectly funneling -- but funneled a significant amount of money into a group called Citizens for a Digital Future, which is incorporated as a nonprofit in Atlanta, and is -- AT&T is a part of it.  The -- you know, they don't -- you don't break down -- the 990 forms don't break down who contributed what, for the, you know, in the public file.  But the -- Citizens for a Digital Future opened a Kentucky chapter.  And the person who was running that is a PR person for a firm called RunSwitch, out of Louisville.  And they took a significant chunk of money and went out and did ads on the airwaves, as well as having some proxies write some fairly nasty columns about AARP having a conflict because they have a cellular service that they offer to their members -- which, ironically, goes through the AT&T system.

And so, we knew that there was going to be a lot of money thrown at this by AT&T.  And what we had is a number of individuals who told some pretty compelling stories.  We had a number of legislators in the House from rural Kentucky -- and, in particular, from Appalachian Kentucky -- including the former Attorney General, who's now the Speaker of the House -- who understand, you know.  And a number of the legislators in the House -- they understood that when the ice storm happened, that the only access people had, in terms of communications -- 'cause the power was out -- was the landline system, that had its own independent backup power.  And they understood that people were not being hooked back up to their systems in a timely enough fashion, and -- unless and until they called the Public Service Commission and had them intervene.  So, you know, it is -- probably the most difficult time we had was breaking down the effect of the bill, and -- because it is a complex area.  It is somewhat arcane, in terms of regulation.  It spans -- you know, it spans a couple of different technologies.  But we -- I think that the legislators, to their credit, in the House -- and some of them in the Senate -- understood that there may come a time where you can offer these essential services through another platform, whether it be a wireless or a wired Internet Protocol platform.  But we're not there yet.  And before you switch out the publicly-switched network and take it private, essentially -- which is what AT&T has asked the FCC to allow them to do -- we need to make sure that these consumer protections stay in place, and that there is no erosion of these essential basic services, which are all that some people want, all that some people -- many people -- in the fourth-poorest state in the nation can afford.


Mimi:  And I think, you know, it was a great coalition, with Fitz just doing a masterful job of explaining and researching what this legislation actually would mean.  I mean, I just don't think the legislators had any idea.  Particularly last year -- you know, they just -- well, it all just sounds like a good thing; let's have better broadband.  You know, let's have better Wi-Fi, or wireless services.  So, in digging into it, he really could help these legislators understand what it really meant.  And then, also, he wrote op-eds.  Other people wrote op-eds.  And the news media in Kentucky was really -- picked up this story, and did their own, you know, investigating and presenting different points of view, which was really helpful, getting the word out.  And then, you know, citizen advocates such as ourselves, and Kentuckians for the Commonwealth, really kind of boiled it down to the simplest terms of, this is what could happen.  And I think people -- citizens throughout the state really related to that.  AARP did a good job on that also.

And there were union folks that were concerned about it and spoke up.  CWA was involved.  So it was a really good coalition.  And I think that's -- you know, I think that's a key to having victories like this in other states, as well.


Tom:  I think that's really true.  And we did have some tremendous partners.  And then we also had the competitive local exchange carriers, who rely on the quality of the landline system in order to offer competitive options to customers.  And they recognized that with the attempted switch of -- you know, and the deregulation that AT&T has asked the FCC to allow, that the ability to interconnect, which is one of the core principles of the Telecommunications Act, would be at risk.  And so -- because AT&T has said, you know, they don't believe that when you go to an Internet Protocol, that you need -- that you have to allow interconnection.  And so, it was a great coalition.  And I was privileged to be a part of it.  But it really did take everybody.  And so, this is replicable in other states.  It's a matter of getting a broad base of folks who potentially stand to lose, by taking the telephony out of the regulated environment, and who are willing to work hard.  Because, you know, they're up against a significant chunk of money.  We had, I think, 24 lobbyists on AT&T's payroll this time.  Plus they had the state Chamber of Commerce.  And a number of other folks that were attempting, through campaign contributions, through charitable donations, and through lobbying, as well as funneling money into indirect lobbying.  And robocalls.  You know, they were trying their best.


Chris:  I understand that there was a front group -- or another "astroturf"-type group.  Did -- was there something along those lines that happened?


Mimi:  It was the Citizens for a Digital Future -- did the robocalling.  And seemed to direct it into eastern Kentucky, where the House Speaker and the head of the committee that was hearing the bill in the House both reside and represent.  And I got one of the calls.  A lot of people I know around here got the calls.  And they were very -- they were very threatening.  They were like, there are legislators in Louisville, in the big city, that are trying to keep you from having good-quality broadband and cell service, you know.  And actually named one of the legislators.  Which, I think, backfired, because he was in leadership and got very mad.  One of the ironies was, they called all of us on our landlines.


Tom:  That's right.  And, of course, there was -- that was the new wrinkle this time, is that you had -- you know, in Kentucky, lobbying, unfortunately, is only defined as direct contact with the legislators.  And that's a -- the Legislative Ethics Commission has recommended that it be broadened in order to include advertisement.  I certainly think it should.  You know, we've reported any grassroots money that we've spent on advocacy for years, and believe that everybody should.  What happened is, this group -- this Citizens for a Digital Future -- did a bunch of the robocalling, and then were also -- at least one legislator told me there had been threats that they would start a 527, to go after -- a super PAC, to go after the legislators who were impeding progress.  And it -- so, the tactics were very "Rovian" in nature.


Chris:  As in Karl Rove.


Tom:  And that may work in DC.  It may work somewhere else.  But it doesn't work here.  And it really did backfire.  There were a number of very angry legislators who -- And Larry Clark, you know, called them out in committee, and told them how little he appreciated those sorts of tactics.


Chris:  I'm curious if you can offer some advice to others who may be doing this.  And, in particular, I'm not surprised that you found legislators were willing to listen, and they were interested.  And I'm very glad that you had people who were able to take a very technical regulatory subject and explain it.  But at the same time, I'm -- you know, there's a hundred legislators or more.  And there's one of you.  I'm curious if you can give a sense of how one can go about trying to have these one-on-one conversations at such a large scale.


Tom:  Well, I think that you -- there are a couple of things.  One is, you don't try to do it yourself.  And I think that, like Mimi said, there was a broad coalition of folks.  AARP was actually able to go toe-to-toe with AT&T, in terms of making up some print ads.  And we were able to utilize the op-eds.  And there were some news services that picked up the story.  And we also had WMMT, which is Appalshop's station, doing radio coverage.  So, you rely on the publicly-available media.  And you rely on, you know, Facebook, and other ways to use social media, that are available, that are accessible, and that are very affordable.  And you use your existing networks.  You build those networks between -- You know, we had a very strong link between labor and seniors, because the CWA, the Communication Workers [of America] -- they saw what happened with the promises that were made to them back in 2006 when everything else was deregulated.  And what they've seen is a degradation of landline service -- and layoffs.  And so, it is -- it's a matter of getting a broad-based coalition.

And there's lots of information out there that people can access.  Bruce Kushnick, at the national level, does some very good analytical work on what AT&T's up to.  You can get on the Federal Communications Commission website and read their petition.  And then read the petition from Public Knowledge, and from some of the -- from NARUC, the regulatory commissioners.  So, you can get up to speed on it fairly quickly.  And, of course, the NRRI study, that you're going to do a link to -- that'll give you the base that you need.  And then, there's always -- you know, we're always available.  And I know AARP is.  And I'm sure that the rural broadband folks would be available to assist in any state that's necessary, in terms of, you know, attempting to assure that the legislative decisions are grounded in a full understanding, and are grounded in truth rather than rhetoric about how we need to update the telecommunications system, and there's going to be $14 billion of investment, and you're going to lose that on the investment if you don't do so.  So, you know, it can be done.  It just takes a lot of -- it takes building those alliances.  And it takes working all of those different aspects of the issue, in order to halt this kind of a juggernaut.


Mimi:  And I do think -- you know, these are issues that really affect consumers as well as seniors.  And so there are consumer advocates out there.  And, you know, in many places, they're already pretty conscious of these issues.  But they -- you know, they really need to be notified, you know, and get ready.  And they've got a real job to in protecting citizens in their states.  In Kentucky, we also have a good statewide grassroots group that does a lot of environmental policy work, but also economic justice.  And so those folks, they lobby as citizens in Frankfort.  And we also.  Our legislature does make it pretty easy to call and leave messages with a toll-free number.  And so we encourage people to do that.  And, you know, I think it still has some impact, at least on some legislators.  And if they hear of enough constituents, which I think they did hear from a lot, particularly in rural areas, you know, they know that these people vote, and, you know, occasionally they have to do the right thing.


Chris:  One of the other groups that people can contact, that, Fitz, you mentioned, was the Rural Broadband Policy Group, which is where, Mimi, you and I originally met.  And that's part of the Rural Assembly.  And so, those are some excellent people to get in touch with regarding the issue.


Mimi:  Right.  And those folks are, you know, well-connected with the Washington DC, the Beltway policy people, who were also very helpful.  You know, there's a lot of expertise there, and people who are really willing to share, you know, what they know with those of us out in the states.  And so that's another great part of the coalition.


Tom:  Yeah.  And the last part, that I don't want to forget, is the competitive carriers, who were running the risk of losing access to -- reliable access to their customers -- also were very helpful.  And -- because s lot of -- you know, because, while this was billed as being a matter solely relating to retail service, it was in fact affecting wholesale service -- carrier-to-carrier issues.  And that was something that they understood.  And so I was -- and, you know, while the state Public Service Commission was neutral on the issue, because their view was that the legislature makes policy decisions and they implement those decisions, we were able to ground truth -- all of the analyses that I did -- by sending it over to staff there and saying, would you please look this over for accuracy?  So, you know, we prize that accuracy.  Because, you know, this is not an area where you want to meet hyperbole with hyperbole.  You want to let them rant all they want to, and let them talk about the digital future, and how we're trying to hold them back, and put little -- cute little pictures of rotary-dial phones in the papers, and accuse us of wanting to chain everybody to a rotary-dial phone, we'll stick to the facts.  And make sure that we're accurate.  And make sure that the legislators understand what's behind all of the rhetoric.

You know, Chris, one thing that I haven't done yet, but we were thinking about doing, is, you know, not wanting to be outdone by the Citizens for a Digital Future, we were thinking of starting our own organization.  And I understand that, from the Secretary of State's office, that it has -- the name is available.  And it's "Citizens for More Than a Middle Digit in Eastern Kentucky's Future."


Mimi and Chris:  [laugh]


Chris:  Yes.  I'm not surprised that that is available.


Tom:  Yeah.  It is a little long.  I mean, we might have to shorten it a little bit.


Chris:  Well, at least you know what the graphic would be.


Tom:  Exactly.


Chris:  That's terrific.  Well, thank you so much for both coming on.  I mean, I think this is terrific.  It's a reminder of what can happen when we organize, and we work really hard toward a necessary goal of preserving something that's so important for the entire society.


Tom:  Sure.  Well, thank you for having us.


Mimi:  Thank you.


Lisa:  That was Mimi Pickering, from Appalshop, and Tom FitzGerald, from the Kentucky Resources Council.  We have detailed information about Senate Bill 88 and its defeat on .  Follow the "Kentucky" tag.  Learn about Mimi Pickering's organization, the Appalshop Arts and Education Center, at .  Tom FitzGerald's organization, the Kentucky Resources Council, runs regular updates on legislation at .  Send us your questions and comments.  You can e-mail us at .  Our handle on Twitter is @communitynets .  This show was released on April 30th, 2013.  We want to thank Mount Carmel for their song, "Oh Louisa / Slow Blues," licensed using Creative Commons.  Thanks again for listening.