Industry-friendly subcommittee delivers for telecom firms

April 6, 2011

Update: Because of an editing error, earlier versions of this story said the committee voted on Feb. 16, but the vote was on March 9 (subcommittee) and March 15 (full committee). The resolution of disapproval was introduced on Feb. 16.

WASHINGTON—When the nation’s broadband providers were frustrated in their attempt to stop the Federal Communications Commission from creating new rules to regulate the Internet, the fight moved to the House.

The far more sympathetic Energy and Commerce Subcommittee on Communications and Technology voted 15 to 8 to “disapprove” the FCC’s rules.

Since the FCC action on Dec. 21, members of the subcommittee have collected $81,500 in contributions from broadband and wireless providers and their trade associations. More than half the total went to three key members who pushed the anti-rules resolution.

Rep. Greg Walden, R-Ore.,  chairman of the subcommittee, received the most, at $19,500. Rep. Lee Terry, R-Neb., vice chairman, was second, at $16,000. And Rep. Fred Upton, R-Mich., who chairs the full House Energy and Commerce Committee, received $11,000.

When Verizon Communications Inc. challenged the rules in court, the three congressmen released a joint statement saying “we welcome the decision by Verizon, and hopefully others, to demand their day in court to block the FCC's misguided attempt to regulate the Internet.”

Press officers for the three congressmen did not return calls or emails seeking comment for this report. Walden telephoned Politico Pro, which ran this story, after it was published, saying he did not have adequate notice to comment. The Workshop attempted to reach Walden's press secretary by phone and email prior to the story's release, and again tried to contact him on the day the story was released. He has not responded.

On Friday, the House approved the measure by a 240-179 vote, with 234 Republicans in favor and two opposed. Chances of it succeeding are slim, however, because of opposition in the Senate and a veto threat from the Obama administration.

The real push behind the resolution appears to have come from a letter-writing campaign by Freedom Works and the closely affiliated tea party movement. A draft “Letter to Congress,” circulated to tea party groups, says the rules, known as net neutrality, are bad for free market principles and free speech and accuses the FCC of acting “under the cover of darkness” to “regulate the Internet whether we like it or not.”

Freedom Works is headed by former House Majority Leader Dick Armey, R-Texas, who lobbied on behalf of Verizon in 2008 when he was with the firm DLA Piper US LLP. A 2005 National Journal article reported that Freedom Works accepted money from Verizon and SBC Communications Inc. (now AT&T Inc.).

The committee's contributions came from political action committees controlled by the nation’s largest broadband and wireless companies and their trade associations: Verizon/Verizon Wireless Inc.; AT&T; Qwest Communications International Inc.; the United States Telecom Association; Comcast Corp.; Sprint Nextel Corp.; Time Warner Cable; the National Cable & Telecommunications Association; T-Mobile USA Inc. and CTIA —The Wireless Association.

Overall, the broadband industry has showered members of the subcommittee with nearly $1.3 million in contributions since 2009, according to an Investigative Reporting Workshop analysis of Federal Election Commission filings.

The top recipient during that time was Upton, who received $80,000. Second was Rep. Henry Waxman, D-Calif., at $76,000. Waxman is former chairman of the full committee. He lost the chairmanship when the Republicans took control of the House after the midterm elections.

Despite the generosity of the companies, Waxman voted against overturning the rules.

“The high-tech industry, consumer groups, civil rights organizations, religious groups, and labor unions all say H.J. Res. 37 is a bad idea. The committee has heard from over 130 organizations urging Congress to keep the Internet open and defeat this bill. Unfortunately, none of these facts seem to matter,” Waxman said.

Tied for third over the period were Walden and Rep. John Dingell, D-Mich., at $75,000. Terry was fifth at $73,500.

The top giver since 2009, according to a Workshop analysis, was AT&T’s political action committee, at $249,500. The company is currently trying to persuade the government to approve its acquisition of competing wireless provider T-Mobile.

Second over that span was the National Cable & Telecommunications Association, a trade group that represents the cable industry, at $241,000. Third was Comcast, at $199,000.

The net neutrality rules were adopted by the FCC with the goal of “preserving a free and open Internet.”

According to the FCC rules, providers must disclose their “network management practices.” In other words, if a provider plans to block or delay Internet traffic during peak periods, it has to tell consumers.

Cable and DSL providers are prohibited from blocking lawful content and software over their networks. They are also prohibited from favoring certain kinds of content over other kinds of content, subject to the above-mentioned network management practices.

Regulation of wireless carriers is weaker. Providers may not block consumers from accessing lawful websites, nor can they block software that competes with their voice or video service — again, subject to network management practices.

The measure was considered too tame by consumer advocates, while industry has preferred no regulation at all.

The Computer & Communications Industry Association, whose members include Dish Network, Google and T-Mobile, described it as “a very modest rule” that complied with the demands of Internet access providers and that should not be overruled by Congress.

Both the United States Telecom Association and CTIA, a representative of the wireless industry, issued statements about the FCC ruling that denounced industry regulation and said the issue was better suited for Congress.

While the industry PAC money amounts to an impressive total, it is only part of the picture.

Not included in the Workshop analysis are contributions from corporate executives or their family members or other, smaller telecommunications and cable companies.