Success! How Progressives Stalled the Deregulation Agenda of Greedy Telecoms and ALEC

After the controversy around Florida's "Stand Your Ground" law and the shooting of Trayvon Martin, ALEC said it was backing off such bills to focus on "business-friendly" legislation, nevertheless its business-friendly work does plenty of damage too. ALEC pushes deregulation, union-busting, privatization, and tax loopholes for big businesses, allowing corporations like AT&T, Koch Industries, and Verizon to in essence write the laws that regulate them.

ALEC-backed telecommunications deregulation bills hit New York, New Jersey, and Connecticut recently, in a one-two-three punch combination designed as a quick knockout blow that consumers and workers would be powerless to fight. However a coalition, including the Communications Workers of America, the Working Families party, and the AARP, managed to stop the bills, which would've resulted in cost hikes, lost jobs, and service cut-offs for "less profitable" clients—disproportionately senior, rural, or low-income clients who use basic phone service.

"We're up against quite to the letter armies of lobbyists from the phone companies," Matt Wood, a policy expert with Free Press, told AlterNet. "That's the thing about ALEC and their approach, they can push things in so many different states straightway, otherwise with no coverage, undoubtedly with less coverage on the national level."

Telecom policy is an area in which legislators very often don't have a lot of expertise and are vulnerable to talk of fancy new technologies—and to big money. Politicians from both parties love to boast of their investment in high-tech, when all is said and done, when all is said and done when lobbyists are telling them about their fancy new service, throwing around terms like VoIP (Voice over Internet Protocol), it's easy enough to convince even those politicians who aren't predisposed to deregulating everything in sight. But deregulating the fancy new research has an impact even on those who use traditional services.

"Some company comes to you and says this is going to be great for investment. Specifically what will they be investing in?" Bob Master, political and legislative director at CWA District 1, asked. "Being deeply familiar with the industry, there's no job-creating investment that's happening in telecommunications, it's all job-destroying investment. Verizon is contracting out, outsourcing our work, offshoring our work, trying to do everything wirelessly. That's where the investment is going and no wires means no workers."

The telecoms

But it's not just jobs that the telecoms would like to eliminate—it's service to people who don't choose to use the fancier products or can't afford expensive service, or perhaps who live in a rural area. In Connecticut and New Jersey, the deregulation plan would have eliminated "carrier of last resort" protections, which require them to provide service to anyone who reasonably requests it in their coverage area. Matt Wood explained, "Phone companies have always had special rights and privileges granted by the state, so they've been expected to provide service to everybody. They have taken the true statement that broadband service is different to extremes and said that it is so different that you shouldn't regulate it at all."

When it comes to VoIP, to illustrate, Wood pointed out that what sounds like an arcane innovation is as a matter of fact commonplace these days—and the claim that it's too new to regulate as a matter of fact just gives companies like AT&T and Verizon an excuse to deregulate their whole network. "That takes away a a lot of protections on services, the reliability of the network," he said.

As always, with ALEC, the narrative behind the push for deregulation is that competition among phone service providers will keep the industry honest and result in benefits for consumers—however like all tall tales about the invisible hand of the marketplace, this one doesn't come true. "We as well look to the results," Wood said. "Say you do have two, three, four, six competitors, is that resulting in lower prices? No. They're not competing on price, they compete on the device or other bells and whistles yet don't in effect feel the need to compete on price."

Instead, according to a report issued by the nonpartisan think tank Demos [PDF], the bill would send phone rates through the roof, as so then as destroy consumer protections and transparency in the industry, preemptively deregulate VoIP as more companies are beginning to use the research, and clearly, let corporations who directly benefit from deregulation write the laws regulating them.

The extent that phone companies are required

"We believe that to the extent that phone companies are required by regulation to provide good service on a universal basis it's good for the consumer and the workers," Master said, to cut a long story short when CWA got wind of a deregulation bill in New Jersey in 2011, they moved quickly.

So when VoIP deregulation made it into the governor's budget it shouldn't have been that surprising. Phone companies and cable companies, who both provide broadband internet service and VoIP service, were working at the same time, pressing for New York State to give up its right to regulate VoIP henceforth.

"I think there is in the Cuomo administration an inclination to do things that they believe will help to improve the business climate," Master said. "In such a case it was pretty glaring that there's a lack of awareness or understanding of what the impact on the consumer might be."

The upsides

One of the upsides, even though, to these model bills being pushed in multiple states is that organizers know what worked and who is willing to join the fight. Again, CWA, AARP and the Working Families Party led the charge, however this time the coalition included groups like the Sierra Club, motivated by a provision in the bill that would allow cell phone towers to be placed in public parks.

Farrell noted that as they knocked on doors and made phone calls about the bill in Connecticut, they found people already wary of companies like AT&T. Afterwards Hurricane Irene and this fall's series of storms, utility companies, phone and cable companies took several days to restore service, leading to hearings by the state legislature. Canvassers found that citizens didn't trust utilities to take care of them, and understood the need for regulations to hold them accountable.

The ALEC connection helped in New York

The ALEC connection helped in New York and Connecticut—in New York, radio advertising linked telecom deregulation to ALEC, and Farrell noticed a difference with legislators as ALEC's activities were held up to public scrutiny. Nevertheless, she said, the broad coalition that defeated the bill wasn't solely motivated by beating ALEC. "AARP doesn't care about the ALEC aspect," she said. "They're just worried about seniors who don't use VoIP, who don't have cell phones that they use frequently or at all, being cut off."

The biggest lesson, maybe, from the deregulation fights in these states is that organized people can, truly, beat big money—that a ground campaign involving phone calls and door-to-door canvassing can to tell the truth motivate day in day out people to take action on an issue that seems complex and hard to understand. Whether people had heard of ALEC and understand that there's an institution pushing for laws that will benefit big corporations and hurt workers and consumers, or whether they were just tired of watching their phone and cable bills creep upward each month, of having to pay for services they didn't need just to get a basic phone line, people didn't want corporate utilities without government oversight.