from: Digital Trends [1]

Telcos Try Viral Lobbying
By Mark Fleischmann
July 27th, 2006

You’ve seen the television commercials urging relief from cable price hikes. A red line on a black bar graph—labeled food, electric water, gas, cable bills—inches steadily upward as viewers are exhorted to lobby their congresspeople for lower cable rates. Who is behind the campaign that includes these TV4US ads and wewantchoice.com?

Probably not the cable industry.

The prime mover is none other than AT&T, one of the two biggest telcos getting into the TV-delivery business (Verizon is the other one). At first glance, the message is appealing: More competition among cable and telcos may lower rates for consumers. In fact, one could argue cable's triple-play packages are doing that already.

The TV4US Coalition is aggressively promoting broadband deployment. So far, so good. Who doesn’t want the whole country to have broadband?

But TV4US is also seeking deregulation to make the process swifter. The group puts a pro-consumer spin on the message, as the website says: “Consumers deserve, and today's economic and technological realities demand, streamlined and uniform rules that promote competition, investment and accelerate broadband deployment.” And then they move in for the kill: ”The patchwork quilt of local franchising rules designed in the 1960s is now impeding new investment and competition in video services.”

What rules are those? They’re the municipal franchise agreements that accompanied the growth of the cable industry. They require every cable company to negotiate with local authorities for approval to operate in a defined service area. These agreements include payments for cash-strapped municipal governments. More significant, in the long run, are provisions that require cable companies to serve every paying household in their service areas. This prevents them from cherrypicking affluent neighborhoods and leaving poor ones out in the cold.

AT&T and its allies want the telcos to be unburdened of local regulation. To that end, they’re trying to persuade Congress to legislate a national franchise agreement that would bypass municipal negotiations, impose a single set of national standards, and fast-track the adoption of broadband. Specifically, they want the Senate to pass the Communications Opportunity, Promotion and Enhancement Act, already OKed by the House of Representatives.

So here’s the message so far: Your cable rates are too high. Relax the rules, let us in, and competition will cut rates for everyone. Well, maybe. But the telcos are going further than that.

Prominent on the TV4US website is a boilerplate letter from you to your senators. It talks about cable rates and urges passage of the dereg bill. And then it adds:

“Unfortunately big on-line companies like Yahoo and Google are doing their best to confuse this important issue by attaching so called ‘net neutrality’ language to this bill. I urge you to reject this tactic and put consumers first.”

Whoops, there it is. Net neutrality is in the gunsights of the telco lobby.

Not content with TV and web promotion, TV4US has also been placing phone calls to consumers. Here’s what one cold-caller told one consumer—who happens to run the P2P Blog. I’ve condensed it slightly:

“Hello, I’m calling from a non-profit organization called TV4US, and we call consumers about an upcoming internet price hike.... The internet is going to be more expensive, because big companies like Microsoft and Google are wasting all our bandwidth. Do you think consumers should pay for that? Or should the big companies that are wasting the bandwidth pay for that?”

A veteran DigitalTrends.com reader will know all about net neutrality, so I won’t insult you by discussing in detail what you already know. If you need to review the issue, check out the savetheinternet.org FAQ. Find out what your senators think. Petition or call them if you like.

Save the Internet is quite a mixed bag. It includes conservatives like the Parents Television Council, which crusades against naughty stuff on the airwaves—and the Gun Owners of America! But there are also moderates, like the American Library Association and Consumers Union, and liberals, including the ACLU and Common Cause. Net neutrality is the issue that brings these disparate groups together.

The TV4US Coalition is a bigger tent than you might suspect. It includes dozens of business groups in addition to AT&T. Prominent is the powerful National Association of Manufacturers. Others include the National Taxpayers Union, the National Association of Neighborhoods, the National Black Chamber of Commerce, and Asian Women in Business.

How did I find out all this stuff? I Googled it. My net-neutral Time Warner cable modem did the rest.

This is the predictable point in the essay where I choose a side. But I refuse, because broadband deployment and net neutrality are not an either/or choice. They’re both worthy of your support.

Even if you don’t swallow their propaganda whole, perhaps the telcos deserve a little tea and sympathy. Put yourself in the place of AT&T and Verizon, as their broad coalition of small and big business groups has already done. You’re building a costly new fiber-optic network to serve American homes (all-fiber in the case of Verizon, a hybrid of fiber and last-mile copper for AT&T).

You’re doing this because your existing business, telephony, is sinking and nearly profitless. The federal government has busted up your once lucrative and prestigious monopoly in the name of competition. (And by the way, when the Bell System ruled the roost, America had the best telephone system in the world.)

Still reeling from that, you then watched new digital players eat your lunch. Once you made good money selling ads on the Yellow Pages. Now Yahoo and Google are advertising giants and you’re merely the conduit between them and the consumer. Is it any wonder that the TV4US Coalition spits vituperation at the Internet giants?

The telcos need to deliver DTV and interactive goodies and carve out a profit-making business with a future. The groups that have joined AT&T in TV4US need broadband for business as fervently as consumers want broadband for entertainment. And they want you to join them. That explains the trajectory of their hopeful arguments: Cable rates too high. Regulation too inflexible. Google too Googly.

But even if you buy the argument that the solution to high cable bills is less regulation, think twice before you make the final leap into a radically redefined, telco-tiered Internet. Do you really agree with TV4US that “Microsoft and Google are wasting all our bandwidth”? Shouldn’t you be the one who decides whether you’ll buy your digital entertainment from iTunes or AT&T?

Can AT&T build as good a search engine as Google? Or a portal as good as Yahoo? If so, why aren’t they doing it already?

The crux of the problem is that while the telcos aspire to become new-media tycoons, they’re still thinking like old-fashioned monopolists. That’s not very creative. And say what you will about the cable industry—that is a mistake they’ve never made.

Anyone who wants to let me download a movie in HDTV for half the cost of a Blockbuster rental has my attention. But if it means accessing Google at dial-up speed and watching my $18/month Vonage service dry up, I’ll stick with Time Warner Cable. I want more than just fast download speeds—I want freedom of choice.

That’s my preference. Try legislating that out of existence.

Mark Fleischmann is the audio editor of Home Theater and the author of Practical Home Theater (www.quietriverpress.com).