Verizon's Cozy Deal With Cable Would Create a Wireless Duopoly

Tuesday, 03 April 2012

By Mike Ludwig, Truthout | Report
Verizon Wireless and America's biggest cable companies want to sell you everything in one package: wireless, broadband, cable TV and a telephone landline. This might sound like an easy option, but consumer groups say that the consolidation deals behind these service bundles could crush competition in the market and raise prices for everyone.

Verizon Wireless plans to purchase $3.6 billion worth of unused wireless spectrum from a joint venture representing the big cable providers Comcast, Time Warner and Bright House Networks. Verizon is also buying $315 million worth of spectrum from the Cox cable company. In a separate deal that anti-trust watchdogs brought to the attention of regulators, Verizon and the four cable companies will also market each others' products under a controversial joint-marketing agreement. Consumers could, for instance, buy a wireless plan from Verizon when purchasing cable Internet from Comcast.

Verizon claims it's trying to boost 4G coverage, meet the growing demand created by smartphone technology and offer customers some one-stop shopping. Opponents of the deal, however, say Verizon already holds the greatest amount of prime mobile broadband spectrum. If the proposed deal goes through, Verizon and its biggest competitor, AT&T, would hold more wireless spectrum nationally than all other providers combined and essentially become a market duopoly, according to Parul Desai of the Consumer Union, which publishes Consumer Reports.

Desai said the whole deal would reduce competition among all the companies involved. Verizon is essentially giving the cable companies control of the landlines and the cable companies are giving Verizon control of the wireless spectrum. Verizon would have little incentive to compete with the cable companies with its FiOS high-speed wired Internet service, and cable companies would have little incentive to compete for wireless service. Time Warner, Cox and Comcast already operate as monopolies in some regions, Desai said, and the deal could leave consumers with little or no choice in landline and broadband providers.

Desai said the cable companies had begun to invest in wireless, which is why the companies have unused spectrum to sell, but once they realized it would be tough to compete with Verizon Wireless and AT&T, they decided to sell out their holdings in exchange for a firmer grip on landlines.

"The wireless side will be dominated by Verizon Wireless, and they'll get out of the landline game, and cable will get out of the wireless game so they can dominate the landline game," Desai said. "... So what happens when you sell the spectrum and it continues to go to the top two players? It makes it easier to squeeze out some of the smaller players."

Two smaller telecommunication firms, Level 3 Communications and MetroPCS, have filed briefs with the Federal Communications Commission (FCC) opposing the deal. Desai said the deal isn't just bad for smaller firms; it's also bad for consumers, who will be left with fewer options and could eventually pay higher prices because Verizon and the cable companies will not be competing with one another.

Rural consumers could be especially affected because the companies will have less incentive to expand infrastructure to underserved areas, and by reducing competition, rural consumers could pay higher prices and even lose services, according to Edyael Casaperalta, who works to bring high-speed Internet access to rural areas with the Center for Rural Strategies. Rural residents are often low income, Casaperalta said, and may not be able to afford bundled packages offered under the joint-marketing agreement.

"Knowing that there's a lack of interest in rural customers, there's already less competition for rural customers to be able to get better services and better prices, and this type of transaction will create even less competition, if any at all," Casaperalta said.

The Justice Department and the FCC are currently reviewing the proposed deal, and the FCC must approve the spectrum transfers. In December, just days before Verizon announced its deal with the cable companies, AT&T and T-Mobile abandoned a $39 billion merger andplaced the blame on regulators. AT&T canceled the acquisition, which critics feared would also create a wireless duopoly, after resistance in the FCC and legal challenges spooked investors.

Congress is also weighing in on the Verizon deal. On March 21, the Senate Antitrust Committee held a hearing on the deal titled "The Verizon/Cable Deals: Harmless Collaboration or a Threat to Competition and Consumers?" The hearing featured Comcast and Verizon executives butting heads with consumer advocates.

Verizon Executive Vice President Randal Milch told the committee that Verizon needs more spectrum to respond to the growing demand caused by the "explosive" use of smartphones, tablets, and other data-intensive devices.

"We are only buying spectrum not currently in commercial use in order to put it to use serving customers, and no customer will see fewer choices or increased prices as a result of this transaction," Milch said.

Joel Kelsey of the Free Press, a media policy group, told the committee that it's always dangerous to consumers when media consolidations reduces competition.

"Allowing for further consolidation in this marketplace will only drive prices higher, reduce consumer choice, and have drastic consequences on the rate of innovation as the companies involved are freed from competition and find diminishing value in investing in better infrastructure," Kelsey said.

The proposed deal also raised ire among unions, but instead of outright opposing a deal that labor groups see as a potential job killer, two unions have proposed stipulations to the FCC. The Communications Workers of America and the International Brotherhood of Electrical Workers have asked the FCC to only approve the deal if Verizon agrees to continue developing its FiOS Internet service, which they fear could go under if Verizon decides not to compete in the landline market. The unions also asked the FCC to prohibit cross-marketing services in Verizon territory and require that the companies allow customers to buy individual services at bundle prices without buying the whole service bundle.

The 10 Biggest Corporate Campaign Contributors in U.S. Politics

(Thanks to my Google Buzz friend Jessica for the share)

***

by Bruce Watson  10/13/10

As the midterm elections slowly draw nearer, we're taking a look at the companies whose deep pockets help keep America's political campaigns rolling along. With the help from data compiled by the nonpartisan folks at the Center for Responsive Politics, we've combined a list of the top 10 corporate campaign contributors, offering a a view of the candidates they support, the issues that concern them and their lobbying habits.

Here are 10 companies that give America the best elections that money can buy, arranged in ascending order by campaign dollars contributed between 1989 and 2010.

10. Lockheed Martin (LMT) -- $19.3 million  (Defense contractor/war profiteer)

Military contracts are lucrative, and Lockheed Martin -- the country's top defense contractor -- has landed a passel of them. But big-ticket deals like the Joint Strike Fighter don't come cheap, and Lockheed has spent over $19 million in political races since 1989. Meanwhile, its yearly lobbying expenditure ranges between $7 million and $15 million. Thus far in 2010, it has spread $6.7 million around the halls of Congress.

Lockheed's support goes to Congressmen and Senators on both sides of the ideological divide. This year, two of its top five congressional vassals are Republicans Howard McKeon (Calif.) and Kay Granger (Texas). The other three are Democrats Charles Schumer (N.Y.), Ike Skelton (Mo.) and Daniel Inouye (Hawaii).

9. Morgan Stanley (MS) -- $19.8 million  (Wall St. banksters)

When it comes to campaign fund-raising, the financial industry is far and away the biggest contributor, and its continuous lobbying over the past 20 years has borne considerable fruit. Morgan Stanley, one of the U.S.'s top investment banks, was among the biggest supporters of securities industry deregulation and Social Security privatization. To that end, it has poured almost $20 million into political contests since 1989. Not surprisingly, it was also a major beneficiary of bailout money in 2008.

For most of the past decade, Morgan Stanley has steadily increased its lobbying expenditures, from just over $1 million in 2001 to almost $3 million in 2009. Republicans and Democrats both benefit from its campaign largesse: In this election cycle, the company's top contributions have been to Republican Carly Fiorina (Calif.), and its second-biggest gift has been to Democrat Kiersten Gillibrand (N.Y.). Democrats Harry Reid (Nev.) and Reshma Saujani (N.Y.) join Republican Richard Shelby (Ala.) in rounding out the company's five favorite politicos.

8. Time Warner (TWX) -- $20 million  (Major Player in the Net Neutrality debate)

A media colossus with fingers in dozens of pies, Time Warner's interests extend from baseball to periodicals, books to movies, and its lobbying is similarly wide-ranging. Between 1989 and 2010, the company gave some $20 million to candidates, the vast majority of whom were Democrats. Currently, the company's top five contribution recipients are Patrick Leahy (Vt.), Barbara Boxer (Calif.), Howard Berman (Calif.), Harry Reid (Nev), and Charles Schumer (N.Y.). All are Democrats.

Time Warner also pays a lot of money to lobbyists. Since 2003, it has averaged between $4 million and $6 million per year, with an $8 million spike in 2008. Thus far in 2010, it has paid out over $1.7 million to more than 300 lobbyists.


7. JPMorgan (JPM) -- $20.3 million  (Another bankster from Wall St.)

Another top financial services firm, JPMorgan Chase has contributed over $20 million to political campaigns since 1989. Its favorites are split evenly between Democrats and Republicans, and its donations influence contests around the country. Currently, the company's top five beneficiaries include New York Democrats Kirsten Gillibrand and Scott Murphy, as well as Arkansas Democrat Blanche Lincoln, Alabama Republican Richard Shelby, and Illinois Republican Mark Kirk.

JPMorgan also spends heavily on lobbying. For most of the 2000s, its yearly contribution to K Street coffers has ranged between $4 million and $6 million. Thus far in 2010, it has spent just over $3 million. As with most other banks and financial services companies, Morgan's money has gone to influence banking deregulation and bankruptcy reform rules. Morgan, too, was a major beneficiary of government bailout money.

6. Microsoft (MSFT) -- $21 million  (Net Neutrality, smart phones, suffered many an anti-trust suit)

A relatively late arrival to the political contribution game, Microsoft was quick to learn the lessons of Beltway power-peddling. Following its antitrust trial in 1998, the company set up a lobbying office in D.C. and made it clear that it was open for business. Since 2000, it has poured over $2 million into each election cycle, hitting its height in 2000 and 2002, when its contributions topped $4 million. At the same time, Microsoft has also funneled a fortune into lobbying, sending more than $6 million per year to K Street since 2000 and more than $8 million per year from 2003 to 2008.

For the most part, Microsoft's money has gone to Democrat candidates from the Pacific Northwest. This year, it has poured over $110,000 each into the candidacies of Suzan DelBene and Patty Murray, and has also liberally funded Jay R. Inslee and Republican Dave Reichert, all of Washington. Over the last few years, however, Microsoft's political giving has slowly trended downward as the memories of its 2008 inquisition have faded.

5. Altria (MO) -- $24.3 million  (Largest food processor in the world)


Formerly known as Philip Morris, Altria is the top tobacco company in the world, as well as a major shareholder (and former owner) of Kraft Foods (KFT). Much of the $24 million that Altria spent between 1989 and 2010 went toward protecting the company against devastating legislation and lawsuits. Recently, however, Altria recently shifted its position, publicly endorsing a move by the Food and Drug Administration to regulate nicotine as a drug. This has placed it in opposition to many of its fellow tobacco companies. At the same time, the roughly $2.7 million in "soft money" that Altria spent in each election cycle from 1996-2002 has dried up.

Still, Altria remains a major player in the realm of government influencing. With yearly lobbying expenditures of more than $10 million, it's keeping its D.C. friends very close. In the 2010 election cycle, Altria's donations have largely gone to Republican congressional and senatorial candidates, especially Mitch McConnell (Kent.), Richard Burr (N.C.), Roy Blunt (Mo.) and Eric Cantor (Va.). One Democrat, Virginia's James Webb, rounds out the top five candidates drawing Altria support.

4. United Parcel Service (UPS) -- $24.9 million

For decades, UPS and Fed Ex (FDX) (which would be No. 13 on the list) have poured money into government lobbying, each seeking to gain a strategic business advantage over the other. But their similarities may outweigh their differences: Both have fought legislation that would make it easier for the U.S. Postal Service to sell valuable overnight and second-day air services. Similarly, both strongly support free-trade agreements because these deals encourage greater overseas shipping.

UPS's political contributions -- totaling almost $25 million between 1989 and 2010 -- skew toward Republican candidates. They have also remained remarkably consistent, hovering around $2.6 million through the last four election cycles. This year, the delivery company's top five campaign contributions are fairly closely split, with just under $28,000 going to Democrats Steny Hoyer (Md.) and Blanche Lincoln (Ark.), while $32,250 is going to Republicans Aaron Schock (Ill.), Todd Tiahrt (Kan.) and Roy Blunt (Mo.).

3. Citigroup (C) -- $27.5 million  (Bankster extraordinaire!)

The second-biggest campaign contributor from the financial services sector, Citigroup has given more than $27 million to a fairly even slate of Democrat and Republican candidates. Its spending spiked in the 2008 election cycle, when it contributed almost $5 million to various candidates. Today, its contributions are way down.

Citi's lobbying efforts are also declining from a high of more than $8 million in 2007. Thus far in 2010, it has spent just over $3 million. It has also spent locally. In 2010, three of its top five candidates were New York Democrats: Senators Charles Schumer and Kirsten Gillibrand and Representative Joseph Crowley.

2. Goldman Sachs (GS) -- $36.7 million  (King of all Wall St. bankster criminals)

One of Wall Street's largest -- and most notorious -- banks, Goldman Sachs is also the biggest political contributor from the financial services arena. Between 1989 and 2010, it gave more than $36.7 million to political candidates and spent roughly $1 million per year on lobbying through most of the early 2000s. Starting in 2004, however, its political spending went through the roof. Its budget for the 2004 election cycle was 45% higher than four years earlier. While its contributions dropped off slightly in 2008, they still represented a 36% jump over 2000's expenditures.

Goldman's impressive lobbying effort leaped into overdrive in 2006, when its payouts to politicos more than doubled. Since then, the bank has kept up its heavy lobbying payments, which topped $3 million in 2008. At the same time, it has benefited greatly from financial deregulation -- which it strongly supports -- and government bailouts, which it accepted in 2008. In the 2009/2010 election season, most of its money has gone to Democrat candidates, including Nevada's Harry Reid and New York Representative Michael McMahon, although it has also contributed mightily to Republican Roy Blunt of Missouri.

1. AT&T (T) -- $45.6 million  (Net Neutrality player, complicit in NSA spying on US citizens)

Between 1989 and 2010, AT&T gave more than $45 million in campaign donations to both Republican and Democrat candidates. In the 2009-2010 cycle, its biggest contribution was $30,000 to the campaign of Nevada Senator Harry Reid, but three Republican congressmen -- Joe Wilson of South Carolina, Pete Olson of Texas and Roy Blunt of Missouri -- were among its top five. While impressive, however, these contributions were dwarfed by AT&T's lobbying expenses, which topped $25 million in 2006 alone.


It isn't hard to see why the phone company is willing to open its wallet for Congress. After its early-1980s antitrust breakup, Ma Bell has spent the last few decades putting itself back together again. Today, it's the largest land-based phone carrier, the largest cellular carrier and the 13th-largest company in the U.S. In 2006, as AT&T's political giving reached its apex, the company bought Bell South, a major piece of the post-breakup puzzle. Coincidence?

P2P plaintiffs to get just 28 Time Warner IPs each month

By Nate Anderson | July 10, 2010 | Ars Technica

Suing tens of thousands of accused peer-to-peer movie file-swappers—it can be a lucrative business model, but it works well only when Internet service providers can turn huge lists of IP addresses into real names and addresses in a timely fashion. But what if a major ISP like Time Warner Cable only had to do 28 of these lookups a month? And might take three years to burn through its entire list?

Time Warner Cable has pleaded with the federal judge overseeing several of the P2P cases brought this year by the US Copyright Group. The company averages 567 IP lookup requests per month, nearly all of them coming from law enforcement. These lookup requests involve everything from suicide threats to child abduction to terrorist activity, and the company says that such cases take "immediate priority." It says that, without a major staffing increase, it simply cannot turn around more than 1,000 requests in a timely fashion without compromising the much more important requests from law enforcement.

TWC requested that the judge limit subpoena lookups for the US Copyright Group to 28 per month. In response, lawyer Tom Dunlap blasted TWC as a "good ISP for copyright infringers." He went on to threaten the company, saying, "To the extent TWC’s tactics are just that—letting the public know that TWC is a good ISP for copyright infringers because TWC will fight any subpoenas related to infringers’ activities—TWC exposes itself to a claim for contributory copyright infringement."

Judge Rosemary Collyer, who is overseeing the Far Cry and The Steam Experiment cases, doesn't agree. In a recent ruling, she has modified TWC's subpoenas so that the company "shall provide identifying information for a minimum of 28 IP addresses per month." And that's not 28 per month, per case; it's 28 per month total for both cases combined.

How long will it take to get through all these subpoenas? Several months ago, TWC faced 809 lookup requests related to the Far Cry case alone. Since that time, the plaintiffs have added several thousand more IP addresses to the case, and more requests have come from the Steam Experiment case.

Assuming a lowball estimate of 1,000 IP addresses that belong to TWC, the company may take nearly three years to do all of its lookups.

Collyer's ruling doesn't affect the other P2P cases brought by US Copyright Group that are being heard by other judges, and it doesn't affect other ISPs (TWC was the only one to object so strongly). But it does suggest that federal judges are sympathetic to the argument that law firms can't simply dump thousands upon thousands of IP addresses on ISPs and demand quick responses.

In addition, Judge Collyer refused to "sever" the thousands of defendants in each case, as requested by the EFF and ACLU. "But they may be severed in the future," she wrote.