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Last year big cable and bigger telephone companies deployed platoons of lobbyists and up to a hundred million dollars in an attempt to enact national cable franchise legislation. They greased its way through the House of Representatives, proving along the way that willful ignorance and lots of corporate cash could make two thirds of the Congressional Black Caucus vote for the digital broadband redlining of their own communities. The power play of big phone and the cable guys stalled in the US Senate, thanks to a national grassroots campaign campaign spearheaded by Free Press, a national not-for-profit media reform group.
Had they succeeded, big phone and cable interests would have thoroughly privatized the internet, and frozen in place the highly profitable digital divide between blacks and whites, between richer and poorer communities, between urban and rural areas which has been the heart of the cable industry’s business model for a generation. Although Ma Bell and the cable guys failed in Congress, their backup plan was already well underway. Plan B for giant cable and phone companies was to push the same or worse legislation virtually simultaneously in all fifty states, one state legislature at a time.
With few exceptions, they calculated, state-level public interest groups were weaker, journalists were less likely to cover their efforts in state capitals, and state legislative processes and legislators themselves were every bit as credulous and corrupt as federal ones. Especially black lawmakers. Last year they flipped two-thirds of the Congressional Black Caucus. This year AT&T, Comcast and other players are calling in their accumulated chips from years of campaign and charitable contributions to African American state lawmakers, and have invested heavily in the National Black Caucus of State Legislators, securing seats on its policy-making corporate roundtable, from which they’ve issued statements endorsing big cable and big telephone’s versions of “competition” and “the free market” as the best guarantees of the broadband futures of black communities.
Big phone and cable’s investment in what Jeff Chester calls “pay as you go lobbying” is working. Black state legislators nationwide are divided with many opposing network neutrality and voting for statewide cable franchise bills which strip local communities of any power to hold big phone and cable companies to the promises of cheap and widely available service they have already broken for a generation.
Phone and cable companies’ tag teams misleadingly describe their proposals as “cable franchise reform” designed to lower everybody’s rates by increasing competition.
Sometimes phone companies appeal to ratepayer dissatisfaction with the quality of cable service by appearing to campaign against cable companies, but it’s a good-cop-bad-cop kind of act. Cable franchise legislation has nothing to do with competition or lowering rates. The nation’s handful of giant phone and cable companies know a few things about their own business model and about the market that most legislators and ratepayers do not.
They know that current and next-generation fiber optic cable systems are and will be for some time to come the only economical way to deliver telephone service, remote medical diagnostics, medical and resource monitoring, interactive on-demand video and the media-rich total presence advertising which corporate marketers are itching to bring you — all over the new high-speed broadband internet.
The only entrepreneurial practice of big phone and cable has been their lucrative investments in political and charitable contributions that pay off in public-private partnerships where the public spends the money and they reap the profits, in favorable corporate welfare legislation, and in the cash they spend on astroturf, or fake grassroots organizations, like TV4us.org.
Big phone and cable have never been about competition, fostering innovation, entrepreneurship, or any of that garbage. Like all media marketplaces, cable and telephony are characterized by government regulation of a scarce public resource – the public right of way along which network lines are laid in one case, or the broadcast spectrum in another. Cable companies do not compete with one other. Cable markets are typically oligopolies – a small number of providers in de facto collusion, or duopolies – two companies with similar pricing structures owned by the same parent entity, or outright outright monopolies, like their big sisters the phone companies. Cable’s historic business model is to maximize shareholder value by making service scarce and expensive, delivering a rich menu of choices to dense, high-income, high profit areas first, while offering limited or no service at later dates and higher rates to poorer urban, suburban and rural areas — cherry picking and redlining, respectively.
Likewise on the phone side, AT&T only began allowing devices on its network like phones and answering machines not manufactured or licensed by its subsidiaries (this is called network neutrality) and handling traffic bound to and from other networks (the term for this is common carrier) when forced to do so by the federal government.
Both cable and phone companies are heavily and hungrily dependent on a host of tax breaks, subsidies, waivers, government contracts, special regulations and other corporate welfare won by their platoons of lobbyists on every level of government. Both require unfettered access to public streets, highways and rights of way to lay and maintain their networks.
With last year’s nationwide, and this year’s statewide franchising legislation, cable companies hope to shed wherever possible any and all obligations to wire schools, libraries and local government for free, or to provide channels and subsidies for public access TV in those places where locals were savvy enough to demand this as a condition for laying earlier networks. Statewide cable franchising will nullify hard-won agreements negotiated with hundreds of local governments, some of which wrung grudging promises from cable operators to build out service to small towns, rural and poorer urban areas, or provided for sanctions against abuses by cable operators.
AT&T and the big phone guys have partnered with giant cable firms like Comcast not only to sweep the field clean of pesky local franchise agreements, but to make sure that network neutrality and common carrier provisions don’t follow them into the cable business as they merge the old and new worlds of cable, telephony and the new, hi-speed broadband internet.
Ma Bell and the cable guys failed last year in Congress. But the state by state strategy is working. In 2000, less than five states had statewide franchising. Now one-third of states have it, including New Jersey, North and South Carolina, Virginia, Texas, Arizona, California, New York, Michigan, Indiana and Kansas. It’s on the legislative docket in Illinois, Georgia, Florida, Iowa, Louisiana, Tennessee and Minnesota. Without exception franchise bills proposed by AT&T and Big Cable aim to re-stack the regulatory deck in favor of giant phone and cable companies, and against the public. The state bills typically grant cable companies what amount to exclusive monopoly rights and contain no enforceable accountability provisions, buildout requirements or sanctions. Many, like Georgia’s bill grant the franchise for long terms — ten years at a time, with virtually automatic renewal and no provisions whatsoever for citizen or community challenge to franchises on any basis. Franchise agreements with state governments have a special status under law in that they can only be amended or overturned by a state’s legislature. Many state legislatures are only in session for a few weeks a year, and are notoriously reluctant to repeal or amend anything.
“Everybody is trying to find a way to dump their costs on the public,” observes Nathan Newman of Progressive States, a left-wing organization that provides resources to state legislators on a range of issues. “They’re all trying to figure out how to keep cherry picking, redlining and denying service to poorer areas. Statewide cable bills are all about letting cable and phone providers decide without any public input at all which communities will be wired for broadband and which will not.”
This is how economic development winners and losers will be determined for the next generation. Cheap and widely available broadband will be as essential for local job growth and economic development in the 21st century as paved streets and roads were in the 20th. You’d imagine that African American state lawmakers and the National Black Caucus of State Legislators would stand up for jobs, education and economic development in black communities. You’d be wrong. Like the majority of their colleagues in the Congressional Black Caucus large numbers of black state lawmakers have simply crossed over.
Fighting Back, State By State
While the unfolding of state by state privatization of the internet gets even less press than it did on the national stage last year, significant fightbacks and occasional victories are occurring. “Grassroots forces in New York, Indiana and California, to name just three cases, inserted enough positive features into statewide cable legislation that their bills are almost in a class by themselves,” said Newman. “A very few state franchise bills actually have limited buildout requirements, but that’s rare… Kentucky is a a very interesting example… (in which) state government is being required to first come up with detailed maps for the entire state showing what kind of cable coverage exists…” as a precondition to final enactment of state franchising. In West Virginia, state senator Jim Unger introduced legislation to require thorough mapping of broadband capacity in that state too before statewide franchising can go forward.”
In Louisiana last year, only the governor’s veto kept statewide franchising from becoming law. And activists are gearing up at the eleventh hour to stop cable franchising in Illinois and Georgia. But the outcome is far from certain.
In this, as in other struggles to come, it appears that black America can no longer automatically count on black elected officials to carry the ball. Not for our team, anyway. It’s time for a general rethinking of the status and usefulness of black elected and appointed officials, and of our models of black leadership.
BRUCE DIXON is the managing editor of The Black Agenda Report.