The Center for Public Integrity

The Center for Public Integrity is leading an effort to find out more about which companies are providing high-speed Internet access throughout the United States so that citizens have a better understanding of their service options.

A Center lawsuit filed under the Freedom of Information Act is attracting industry-wide interest.

The Center wants to make data about these companies publicly available online through Well Connected's Media Tracker, a free, Internet-based database of the radio, television, newspaper and cable companies that is searchable by ZIP code. Media Tracker was first released in 2003, and updated and expanded in October and November 2006.

Publicly identifying the companies that provide broadband service would help give citizens a more complete understanding of who they could turn to for high-speed access — which is becoming increasingly important in economic development and the spread of information. The availability of competitive broadband service is an issue involved in a range of telecommunications policy debates, including Net neutrality, universal service and video competition.

Well Connected also tracks the political influence of the major players in the telecommunications, media and technology industries, supplying information on the companies culled from the Center's lobbying, campaign contribution and privately sponsored travel data.

AT&T, Verizon Communications and three leading telecommunications trade groups filed court papers seeking to intervene or comment on the Center's lawsuit last week. The top cable association is also seeking to weigh in. (Links to each of the documents in the official court docket are provided in the box to the right. It will be updated as further documents are filed.)

When Martin Cohen was appointed head of the Illinois Commerce Commission, the regulatory body that oversees utilities in the state, he joined a very small fraternity.

Cohen took the post in September 2005 pending confirmation by state lawmakers, becoming only the nation's eighth utility commissioner since 2004 to have a background as a consumer advocate. In his former role as executive director of the Citizens Utility Board, he had been a harsh critic of the state's big power companies.

But his confirmation was not to be.

The Illinois Senate, which has several members who receive generous campaign contributions from those same companies, fell two votes shy of the majority needed to confirm him. He lost his job in October.

One senator told a reporter that Cohen "has a certain bias against utility companies."

Cohen's CUB job was to represent citizens in rate cases. That led a handful of key senators to accuse him of harboring a conflict of interest, though not an economic one.

"They claim that my conflict is some inherent bias I have against utility companies," he told the Center. "It's almost like they accuse me of having some sort of genetic defect – it's preposterous."

Cohen said that during the confirmation process one senator asked whether he would accept the president of Commonwealth Edison, the dominant local utility, as a member of the commission. Cohen said if he were to "sell all his stock, leave his retirement program and take a 95 percent pay cut, we would welcome him."

The intrusion of politics into deciding who will sit on a board created to look out for the public interest is not uncommon. Commissioners are much more likely to have a background in politics or the utility industry than experience as consumer advocates.

More than half of the states received a failing grade on making personal financial information of the nation's utility board members available for public inspection, according to a Center for Public Integrity study examining laws in all 50 states.

These governing boards, commonly known as "public service commissions," regulate rates and services provided by telephone companies, power companies and other utilities. These public servants generally have a low profile, but make decisions that can affect billions of dollars in revenue for investor-owned utilities nationwide.

Such clout makes disclosure of personal financial interests a high priority for open-government advocates and makes the dismal showing of many all the more distressing. Twenty-six states flunked the Center's financial disclosure test, receiving a score lower than 60. Only Washington state earned an "A."

Despite the low scores, most states do require at least some level of disclosure. Nine states, however, stood apart for their level of secrecy, earning one or zero points.

Every state has a regulatory body that oversees public utilities, although size, make-up and responsibilities vary.

The good

Washington state, a perennial open-government standout in Center surveys, came out on top again. The state's financial disclosure requirements for the Washington Utilities and Transportation Commission earned 92.5 out of a possible 100 points. In September 2004, the Center also ranked the state No. 1 for its disclosure requirements regarding state legislators.

Three states — Texas, New Jersey and Arizona — earned a ranking of "B." In all, 24 states scored 60 points or higher.

As a resident of tech-savvy Austin, Texas, Adina Levin enjoys the benefits of widespread wireless Internet access.

Austin is one of a number of cities in the nation that has built a system that allows residents to log on to the Internet without worrying about plugging into a phone or cable outlet. Levin wants the rest of the state to have the same advantage.

"People really care about it," Levin said of wireless Internet access. "There's a constituency for it."

That's why she spent much of the spring battling a bill in the state legislature that would have made it nearly impossible for other cities to emulate Austin. A provision in a lengthy telecommunications bill would have made it illegal for local governments to offer residents high-speed Internet access.

The legislation was by no means unusual—this spring, lawmakers in 14 states debated banning or restricting municipalities' ability to provide wireless access—and neither was Levin's decision to fight it. Along with citizens throughout Texas, Levin launched Save Texas Muni Wireless, a group devoted to defeating the bill and promoting the spread of wireless technology across the state.

Similar battle lines were drawn across the country, in fact, pitting telecommunications giants against community activists like Levin.

It's not exactly an unfair fight—coordinating with Levin, and other pro-wireless campaigners is chip maker Intel and other technology giants that profit from the technology. In fact, Intel is helping cities around the world set up wireless networks.

Telecom companies argue that municipalities that provide wireless access violate the principles of free enterprise. Public competition puts private companies at an unfair disadvantage, they claim, and what's bad for business is bad for citizens.

Telecommunications companies spent $60.3 million* on political contributions over six years and a minimum of $83.4 million* on lobbying over two years in an attempt to curry favor with elected officials in the states, according to a new Center for Public Integrity analysis.

Large regional telephone companies and cable television operators are spending millions in the hope that legislative success at the state level will translate into similar success in Washington, D.C., as Congress debates a major rewrite of federal telecommunications laws this fall.

The most active telecommunications company in the states by far has been San Antonio, Texas-based SBC Communications Inc. In just one two-year period—2003-2004—the former "Baby Bell" spent a minimum of $16.3 million to lobby state governments. And it spent another $10.2 million on contributions to state political parties and candidates' campaigns from 1999 to 2004.

The legislative influence of SBC and other former Bells—the regional phone companies that spun off following the breakup of AT&T in the 1980s—has grown considerably with the collapse of chief rivals AT&T Corp. and MCI Inc. But the power vacuum left by the once-mighty long-distance carriers is being filled by the cable television industry, a relative newcomer to the regulatory wars.

After a record 2004, the Federal Communications Commission has yet to issue a fine for indecent broadcasting this year, the longest pause in activity since 2001, according to records gathered by the Center for Public Integrity. The last fine issued was Dec. 22, 2004, capping off a record year in broadcast indecency enforcement in every major category. [See "2004 Broke all Records on Indecent Broadcasting"]

The pause is no doubt related to regime change and two vacancies on the Federal Communications Commission. But a far more likely cause is the impact of record settlement agreements reached in 2004 between the FCC and two giant media companies. The agreements promise dire consequences for on-air talent and other employees who participate in the airing of any future indecent broadcasts.

In 2004, the FCC signed a $3.5 million settlement agreement with Viacom Inc. and a $1.75 million agreement with Clear Channel Communications Inc., the largest payments for broadcast indecency in FCC history. Those two companies were responsible for 61 percent of all proposed fines since 2000, the Center found.

In 1982, the Federal Communications Commission created a new broadcast television service designed to provide local and niche programming to rural Americans and urbanites whose special-interest needs were not being met by existing broadcasters.

Since then low-power television service (LPTV) has grown to include 2,034 stations across the nation, and according to the FCC and the trade association that represents the industry it has been a tremendous success.

But an analysis by the Center for Public Integrity shows that the second-largest holder of LPTV licenses has not built even a single operational station. Mark Silberman, president of the Los Angeles-based MS Communications, LLC, told the Center he has never broadcast anything more than a test pattern, despite holding permits to operate 203 low-power TV stations. The State of Alaska tops the list with 220 low-power stations.

According to Silberman, he originally intended to build "wireless cable" networks in areas underserved by big broadcasters. But regulatory changes and other factors, he said, left him unable to get his business off the ground.

Silberman acquired most of his station permits since 2000, and actually began assembling his anticipated empire as early as 1992. FCC rules require an applicant to begin broadcasting within three years of receiving a license, but the commission, which does not specifically monitor programming, was unaware that MS Communications is not broadcasting in a single market.

It appears that MS Communications has kept its licenses active by successfully filing repeated requests with the FCC for extensions or modifications of those permits. The Center also identified 60 of Silberman's licenses that have expired.

Note to readers: This story has been reposted. Since the report was originally released, the Center for Public Integrity has changed the way it calculates lobbying expenditures to reflect a more stringent methodology for determining the total amounts. The change was made to correct the potential overstatement of totals. Figures or relevant text that have been changed are indicated with asterisks. (2/28/2006)

The four former "Baby Bell" local phone companies and their rivals have spent more than $450 million* on lobbying, contributions and Congressional junkets since 1998 in an effort to influence federal telecommunications policy, according to a new Center for Public Integrity investigation.

Led by Verizon Communications Inc. at more than $77 million*, the former Bells collectively have far outspent chief rival AT&T in an attempt to win favor with Congress, the Federal Communications Commission and other government agencies.

Combined, telecommunications companies have spent more than $398 million* lobbying since Jan. 1, 1998, making the industry among the most prolific spenders in Washington, D.C.

In addition, phone companies have contributed some $60.5 million to federal campaigns and political parties since 1998 and paid for $276,072 worth of travel for members and staff of Congress, bringing total spending to affect policy and politics to well over $450 million.*

"They make huge contributions and they pay for both sides," Mark Cooper, research director of Consumer Federation of America, said in response to the Center's findings. "They hire these lobbyists and they [the lobbyists] live in the halls of the FCC."

A new investigation by the Center for Public Integrity has found that the broadcast industry spent more than $186 million* lobbying the federal government from 1998 through June 2004—a period of increasingly intense battles over ownership rules.

In addition, television and radio companies contributed more than $26.5 million to federal candidates and lawmakers during the same period. The companies and their principal representative organization—the National Association of Broadcasters—also sponsored 84 trips for lawmakers and regulators at a cost of $165,474, bringing total spending to affect policy and elections by the industry to at least $210 million.*

The volatile political climate also saw 24 individuals with close ties to both the industry and its regulatory overseers make lucrative moves back and forth between the two.

Since 1998, lobbying expenditures by the broadcast industry grown*, from more than $20 million* to a high of more than $37 million* during 2003. It was during that last year of record lobbying that the FCC proposed significant relaxation of the ownership rules, which would have allowed corporations to own more media outlets than ever before and reach a greater percentage of the national audience.

The top spenders:

Note to readers: This story has been reposted. Since the report was originally released, the Center for Public Integrity has changed the way it calculates lobbying expenditures to reflect a more stringent methodology for determining the total amounts. The change was made to correct the potential overstatement of totals. Figures or relevant text that have been changed are indicated with asterisks. (2/28/2006)

What do nearly all of the tight-knit group of congressional aides who crafted the pro-business Telecommunications Act of 1996 now have in common? Salaries as industry lobbyists.

Some call it cashing in. Some call it an opportunity they can't pass up. Others call it an offer they can't refuse.

"Some people had no choice but to go through the revolving door because you have to make a living on what you do and what you know," said Christopher McLean, who went on to senior roles in the Clinton administration and then left government for a Washington, D.C.-based lobbying firm following President George W. Bush's 2000 election victory.

Whatever their motives, the aides have taken the common route from political staff member to champion of private interests.

Through press accounts, primary sources and detailed interviews, The Center for Public Integrity has identified a short list of the 15 staffers most involved in the years-long process of drafting the 1996 act. Thirteen of them, it turns out, became lobbyists, and another is a lawmaker who gets generous financial support for his campaigns from telephone companies. Another worked for a telecom lobbyist before helping to draft the law.

Those staffers have defended the integrity of their work on the 1996 act, but some telecom observers have their doubts. Adam Thierer, for example, an analyst at the libertarian Cato Institute, has called it a fundamentally flawed law loaded with contradictory giveaways and payoffs to various industry players.