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From: IL Daily Herald

'Astroturf' groups represent industries, not members

By Anna Marie Kukec
Daily Herald Business Writer
Posted Sunday, February 11, 2007

A group called TV4US Coalition placed advertising inserts in newspapers statewide last week aiming to “educate” consumers on how to get better, more competitive rates for television in Illinois.

Is TV4US a tax-exempt non-profit? Yes. Is it a grassroots organization? Hardly. But it looks like one.

Unlike the grassroots groups organized by individuals for a common cause, some non-profits today are springing up with a message bankrolled by major corporations.

“It’s a lot like a wolf in sheep’s clothing,” said D. Joel Whalen, associate professor of marketing at DePaul University in Chicago. “Is it illegal. No. But it’s unethical. People are finding out the messages aren’t coming from individuals or a community, but through a public relations firm.”

Such groups are legitimate under the law and say they have a true mission to help consumers. But some of their nonprofit colleagues call them “astroturf” groups to play off the idea that these are fake grassroots organizations.

Instead of regular citizens taking up a grassroots cause, corporations are seizing this avenue as another marketing tool to pressure legislators.

Astroturfing has been going on for years and in many industries. For example, Exelon Corp.’s ComEd electric utility backs Chicago-based Citizens Organized for Reliable Electricity. It supports market-based rates and argued against an extension of a rate freeze, just like ComEd.

In another example, a February 2001 item from the Citizens Utility Board newsletter talked about how Ameritech, now a part of AT&T, supported a group called Connect Illinois:

“Connect Illinois claims to be a consumer group for ‘socially responsible citizens’ who want to ‘decide how the telecommunications movement should progress.’ There’s one big catch. It’s run by Ameritech … So Connect Illinois may sound like a friend of consumers, but it actually is just another lobbying arm for Ameritech.”

Using such groups isn’t unusual today, said CUB spokesman Jim Chilsen.

“It’s a common tactic of very wealthy corporations that push their agendas and want to pass themselves off as a grassroots group,” said Chilsen.

Such groups have been more prominent lately since Congress has been dealing with legislation on Internet neutrality, video franchising competition, broadband access, and re-writing the Telecommunications Act of 1996, experts said.

TV4US is supported in part by AT&T, which has the same agenda in supporting TV franchising legislation in Illinois that would short circuit time-consuming negotiation of municipal franchises in each town.

TV4US has post office box addresses in Arlington, Va., and Chicago. It’s also co-chaired by President Bill Clinton’s former deputy chief of staff, Steve Ricchetti, and Republican strategist Charlie Black.

These men also led the SBC-backed Voices for Choices organization in 2000-2001, said Dawn Iype, director of media research for Common Cause, a public interest group in Washington, D.C., that released two studies last year focusing on astroturf groups, including TV4US. (SBC now is AT&T.)

“A lot of corporations start these front groups that look like consumer advocacy groups just to ramrod their bills through Congress,” said Iype.

These groups have Web sites that list their members. They make no secret of the unions, chambers of commerce and corporations that donate money.

TV4US’ goal is “educating law and policy-makers on the consumer benefits of competition in the video market,” said TV4US spokeswoman Kelley Gannon. “Thus far, statewide, we’ve heard from more than 10,000 concerned Illinois consumers — real people, real voices — asking for competition in the video market,” said Gannon.

She said the group’s education is ongoing nationwide, which includes TV and print ads. But Gannon declined to discuss the schedule or costs for these educational efforts. She also declined to say how much AT&T and others have donated or paid to be members.

No other members have joined since the group formed a year ago, she said.

Last week, AT&T executives met with Chicago reporters to discuss the year ahead, including their ongoing difficulties in getting approvals from many towns to upgrade the phone network to provide more robust television and high-speed data offerings. AT&T needs to upgrade the network to compete with Comcast Corp., which has gotten into the phone business. But AT&T doesn’t want to be regulated like a cable company, insisting that it’s not one.

“There’s nothing in Illinois blocking competition,” said Peter Collins, information technology manager for Geneva, a suburb being sued by AT&T over the franchise issue. “What’s blocking competition are the phone companies that are not playing by the rules. They’re not being truthful.”

That’s not the way AT&T sees it. It believes it has cooperated a lot with different towns.

AT&T says its membership in TV4US is no different than joining a chamber or any other group with similar interests or issues. And those issues are vital to its business, especially as it invests billions of dollars to upgrade a network that cannot get into some towns, said AT&T spokesman Rob Biederman.

“It’s an outdated regulatory process that’s raised consumers cable rates 93 percent over the last 10 years,” he said.

Making the exact same argument, TV4US’ materials also state: “Cable TV prices have gone up 93 percent in the last decade.”

Biederman said AT&T won’t sign cable franchise agreements with various towns.

“We’re not a cable operator. Cable companies never committed to full build-out when they first opened their phone services,” said Biederman. “Technology has changed and the laws are outdated and need to be changed.”