from: Nieman Watchdog [1]

Wisconsin: A case study in how corporations get the legislation they want

COMMENTARY | January 31, 2008

Telecom and broadband expert and activist Bruce Kushnick describes how model corporate bills get introduced and enacted in Wisconsin, to the detriment of the common good. (Second of two articles.)

By Bruce Kushnick
bruce@newnetworks.com [2]

In my first piece [3] on the corporate-sponsored American Legislative Exchange Council (ALEC), I described a network of special interest groups working with big business to peddle so-called “model bills” to state legislators across the country. The state of Wisconsin is a classic example of how ALEC operates. At the 2001 ALEC national convention, Tommy Thompson, former Wisconsin governor and then U.S. Secretary of Health And Human Services, stated [4]:

"It's wonderful to see so many of my friends from the great state of Wisconsin. There are 29 members of the  Wisconsin State Legislature who were so eager to come to New York for this conference that they rushed to get the state budget passed last week....My good friend Scott Jensen is among them. Scott holds the only job I ever wanted and never reached - Speaker of the Wisconsin State Assembly."

In addition to the 29 state legislators that Thompson claimed as ALEC members, I and others working with me found at least three currently sitting Wisconsin politicians who have sponsored bills with ties to ALEC – Wisconsin Senator Ted Kanavas, Senator Jeff Plale and Representative Phil Montgomery, who was given ALEC’s 2005 “Legislator of the Year” award.

Like ALEC members around the U.S., these legislators have some clout. In 2003, Kanavas and Montgomery were part of Wisconsin’s “Special Committee on Public and Private Broadband”. Plale chairs the influential Wisconsin Senate Committee on Commerce, Utilities and Rail, the committee considering the most recently introduced telecommunications bill. Jensen, the former Speaker of the State Assembly, co-sponsored one of the bills in question.

These Wisconsin lawmakers are responsible for at least four bills that appear to correspond to ALEC-generated “models” that mainly help only the state’s major phone incumbent, AT&T. (Only ALEC members have access to the full text of the group’s model bills, but bill titles are listed on its Web site and are suggestive of the contents.) Let’s examine these four AT&T-friendly bills.

1) The Broadband Deployment Act of 2003: Kanavas & Jensen (ALEC model: Broadband and Telecommunications Deployment Act)

According to a press release by Ted Kanavas, the bill was to “create an environment of regulatory certainty for the deployment of broadband services by categorizing these services as information services and not as telecommunications services”. The “regulatory certainty” referred to in the press release clearly meant that the industry could rest assured that it would no longer be subject to the oversight required of other public utilities. The Wisconsin Legislature passed this bill. 

2) Municipal broadband bill, co-sponsored by Kanavas & Montgomery; 2004 (ALEC model: Municipal Telecommunications Private Industry Safeguards Act)

In January 2004, co-sponsors Kanavas and Montgomery introduced a bill [5] to block municipalities from offering broadband. It was an ALEC bill. Although hyped as a “competition” bill (a recurring theme in ALEC’s “model” bills), a main goal was to block municipalities from competing with corporate providers of broadband services, even if those private providers didn’t deliver. The bill was passed.

3) Video Competition Act, co-sponsored by Montgomery & Plale; 2007 (ALEC model: Cable and Video Competition Act)

In 2006, ALEC created a statewide cable franchise bill that it called “the Cable and Video Competition Act.”  Its goal was to give the phone companies total control over their franchises and to remove previously agreed-to requirements, such as wiring the entire state (see Wisconsin Act 496, 1994 [6], p. 1806, section (5)b, under “Investment Commitments.”) The bill allowed companies to choose not only what to build, but where and when or if to build new cable systems. 

In March 2007, Montgomery and State Sen. Plale introduced a statewide cable franchise bill in Wisconsin called The Video Competition Act. A major result of the bill, according to an article in the Milwaukee Journal Sentinel [7], will be to eliminate municipal cable franchises. Upon introducing the legislation, Montgomery and Plale put forth the now-familiar industry talking points [8] of removing “barriers to competition”, increased “cable choice to consumers”, and “increas[ing] technology options”.

Similar bills were passed in New Jersey, California, Illinois, Indiana and Ohio, among others. In Wisconsin, the bill was signed into law in December 2007, after the Governor line-item vetoed the most extreme anti-consumer clauses.

The legislation does not hold the companies accountable for previously legislated deployment obligations. As pointed out in prior articles [9] on the Watchdog Web site, the companies collected billions to build out the networks in what was to be a five-state plan covering schools, libraries and hospitals as well as homes. In Wisconsin today hardly any of this has been done.

ALEC-connected legislators are now promoting AT&T’s new cable service, U-Verse [10], which is inferior to standards pitched in 1992. It is capable of delivering only up to 6 Mbps in one direction, similar to some cable modem services. By comparison, much of Asia is already rolling out services at 100 Mbps in both directions for a fraction of the cost of AT&T’s proposed service [11]. 

As of September 2007, AT&T’s U-Verse had about 100,000 customers in all of its states, not the six million promised for just Ameritech's original 5 states of Ohio, Indiana, Wisconsin, Illinois, and Michigan

4) Telephone Deregulation Bill, co-sponsored by Montgomery & Plale; 2007 (ALEC model: Advanced Voice Services Availability Act of 2007)

In October 2007, Montgomery and Plale presented yet another bill that appears to have ALEC fingerprints all over it and that is making the rounds in other states. It would effectively end public oversight and regulations in Wisconsin for telephone service. It would remove protections for basic telephone service and mandates an immediate 15 percent price increase. It would remove all obligations of telecommunication corporations incurred under prior legislation, whether or not those obligations have been fulfilled. The telecommunications industry in Wisconsin has a well-documented history of making unkept promises. (Click here [12] for a Madison, Wisc., Capital Times article on AT&T in Wisconsin.) Now it is apparently pushing legislation that would legally bury those promises.

The ALEC fingerprints also appear to extend to other states that passed similar legislation. For example, in Mississippi, according to AARP, changes in state law allow for a 100 percent increase [13] of local phone rates, not counting other increases. 

Why would politicians put forward these bills? One reason may be that AT&T now and in former iterations (SBC or Ameritech or Wisconsin Bell) makes large grants for their districts. Another could be campaign contributions: According to the Wisconsin Democracy Campaign [14], an independent organization that tracks corruption in state government, legislators who voted to pass the Montgomery/Plale cable bill got 12 times more in campaign contributions than those who voted against it.

ALEC-written or ALEC-sponsored bills get a lot of fanfare. Typically there is an effort, coordinated in several states at a time, to inundate non-ALEC legislators, the media, and the general public with a biased, multi-faceted story, all to promote a corporate agenda.

In Wisconsin as elsewhere, corporations write laws and control the public agenda to a great extent through a well-entrenched group of legislators and corporate money. But it’s not just a Wisconsin issue. ALEC has legislators all 50 states.

Cynthia Laitman, PhD, founder of TeleTruth Wisconsin, assisted in the preparation of this article.