Save Access

Astroturfs in Bloom
by saveaccess.org

The astroturfs are suddenly sprouting plastic blooms again, and it can only mean one thing - Congress is about to vote on something. That 'something' is the Senate Commerce Committee 'mark-up' of S.2686 tomorrow (6/22). A google search for the Bill's name "Communications, Consumers' Choice, and Broadband Deployment Act of 2006" turns up multiples of one article released by TV4US through the corporate service 'PR Newswire':

Senate Legislation Can Help Save Oregon Consumers Millions
Senate Legislation Can Help Save Arkansas Consumers Millions
Senate Legislation Can Help Save North Dakota Consumers Millions
Senate Legislation Can Help Save Alaska Consumers Millions
Senate Legislation Can Help Save Hawaii Consumers Millions

The article appears over and over . . . it would have been easier if they just used the title:
Senate Legislation Can Help Save (insert your state here) Consumers Millions

But that's the point, a press release that can be used to sway Senators by personalizing their state and constituency. The same tactic, and virtually the same press release, appeared prior to the COPE HR.5252 vote. The result, during the COPE Bill debate the same figure was cited over and over by the Bill's sponsors and supporters: "cable competition will save consumers $30-40 dollars a month".

Those figures were extreme and baseless. The new TV4US press releases are more conservative, estimating anywhere from $285 (Arkansas) to $503 (Nevada) in savings over a four year period. That averages out to $6-10 dollars a month in potential savings, far less than what was cited during the COPE hearings. Apparently the value of competition in on the slide.

So who is TV4US? They say they are a coalition for consumer choice, and they count AT&T as one of their coalition partners. Their web site, www.wewantchoice.com, was registered in Feb. 2006, the actual registrar information is hidden by a proxy service.

The co-chair for TV4US is Charlie Black, noted by sourcewatch; "He is best known as one of America's leading Republican political strategists. He served as senior advisor to Presidents Ronald Reagan and George H.W. Bush. He also served as a principal public spokesman for President Bush in the 1992 presidential campaign. During 1990, Mr. Black served as chief spokesman for the Republican National Committee. He served on President George W. Bush's 2000 campaign as a volunteer political advisor and surrogate spokesman. Mr. Black serves as the principal legislative and public affairs advisor to several Fortune 500 companies and trade associations. TV4US is well connected it seems.

For the current press release, TV4US quotes two studies, one from the American Consumer Institute and another from the Phoenix Center.

The American Consumer Institute is an interesting creation. The domain for http://www.theamericanconsumer.org was registered by Stephen Pociask of TeleNomic Research who the organization lists as: “a public policy associate for the Center for the New West, an expert for the American Consumer Institute, and an Adjunct Scholar for the Competitive Enterprise Institute (CEI) in Washington, DC.” Although The American Consumer Institute doesn’t list staff on its web site, it does have this admission: "Email the president: steve@theamericanconsumer.org". TeleNomic Research also authored a recent study claiming: "[Cable-Telco] Competition Will Create 100,000 New Jobs".

As Bruce Kushnick discovered in his research: "I love it when Bell skunkworks comes out stating that CFA, the Consumer Federation of America - "Lacks Objectivity" The author, Stephen B. Pociask is President of TeleNomic Research, LLC. His resume states that he is "Chief Economist and Director for a major telecommunications provider." But according to an author note in an article he wrote for America's Network in 1998, he was the former Chief Economist for Bell Atlantic. ("Two Degrees of Structural Separation" Stephen B. Pociask; America's Network, Duluth; Dec 15, 1998; Vol. 102, Iss. 24; pg. 38, 4 pgs.)"

As for the Phoenix Center, they seem a more reputable think tank, but their Jan 2006 study cites the Bank of America study and General Accounting Office Report as significant indicators of competition savings. Both these studies have been discredited. After Verizon executive vice president Tom Tauke cited the Bank of America study in the COPE hearings, the Bank itself issued this clarification:

“As we wrote last quarter, we note that these [prices] are in many cases unadvertised offers and we believe that they do not necessarily represent the equilibrium pricing that will prevail longer term in these markets. Some organizations have cited our report as evidence that competitive video entry by the Bells will substantially reduce cable prices. Since these are unadvertised prices, we would disagree with the assertion that these prices represent a snapshot of potential future equilibrium pricing.” [Bank of America, “Battle for the Bundle: Consumer Wireline Services Pricing,” April 18, 2006]

Consumer advocates have taken the GAO report to task for not calculating the additional channels added to cable packages over the years of their study to factor realistic cost/value relationships. But that's another matter.

In any event - keep an ear on the debate during the Senate Committee mark-up tomorrow. Listen for references to these organizations and 'consumer savings from competition'.