[Infowarrior] - Telecom firms face net-neutrality defeat

[Richard Forno]

Telecom firms face net-neutrality defeat
LOBBYING BLITZ MAY FALL SHORT
FCC expected to approve plan to develop Web access rules
By Cecilia Kang
Washington Post Staff Writer
Thursday, October 22, 2009

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/21/AR2009102103944_pf.html
Facing a major regulatory issue that could be worth a fortune in  
future business, AT&T has unleashed the kind of lobbying blitz that  
makes it one of the grand corporate players of the great Washington  
game.

And yet, for all the money AT&T and other old-line telecom and cable  
companies have spent pushing their cause, they are poised to lose a  
key vote to a bunch of younger technology companies that never had  
anything to do with Washington until recently.

If the Federal Communications Commission votes Thursday in favor of  
crafting rules to let the government oversee access to the Internet,  
it could be a sign of a fundamental shift of power under the Obama  
administration that may make K Street rethink its ways.

"This is totally new in Washington, that opposed to only the old  
Goliaths like AT&T, or traditional public utilities commissions or  
large insurance companies at the table, they are now joined by others  
like tech growth companies," said Mark Heesen, president of the  
National Venture Capital Association, a trade group that represents  
the investors of Web giants such as Google, Facebook and Amazon.

The vote is on a proposal that would begin a months-long process to  
formulate rules on how Internet service providers manage traffic on  
their networks while not blocking or unfairly slowing some content.  
The proposal, favored by Chairman Julius Genachowski, is expected to  
pass with three votes out of five.

AT&T and other wireless and cable providers say the proposal amounts  
to giving the government control over the Internet, and that companies  
will lose the ability to reduce congestion on their networks. Web  
service providers such as Google and Skype counter that they need  
unfettered access to all Internet users because the carriers could  
decide to block services that compete with their own.

A flood of calls, e-mails
In recent weeks, large telecommunications and cable firms have been  
flooding the offices of Congress, blasting e-mails and calling aides  
to try to get them to sign onto letters sent to Genachowski in protest  
of his push for new "net neutrality" rules.

Staffers on Capitol Hill and at the FCC say the most active lobbyists  
have been from AT&T -- a company that is historically the largest  
donor to the political campaigns of members of Congress It has spent  
more than $8 million in lobbying this year on a wide range of issues,  
including net neutrality, according to the Center for Responsive  
Politics.

Last week, 72 Democratic members of Congress wrote the FCC in  
opposition to the net-neutrality proposals. Many of them, staffers  
said, had been encouraged to write by AT&T. And 52 of them received a  
total of $180,000 in campaign contributions from AT&T this year,  
according to the Center.

Over the weekend, AT&T's chief lobbyist, Jim Cicconi, reached inside  
the company for lobbying support, asking its 300,000 employees to  
write the FCC that net neutrality would severely hurt their business.

AT&T spokeswoman Claudia Jones declined to comment on the company's  
lobbying on the issue, saying, "Honestly, if you look at letters  
against net neutrality, they were sent because [lawmakers] had  
conviction and felt very strongly about it."

Google, by contrast, hired its first Washington staffer in 2005 and  
opened its first permanent office here last year, with a staff of 20.  
It has spent $1.8 million in lobbying this year, compared with $6.8  
million by Verizon and $6 million by Comcast. Dozens of venture  
capitalists and high-tech giants, including Amazon, eBay and Facebook,  
jumped into the debate this week, throwing their support behind  
Genachowski's proposal, which would benefit their firms.

Burning bridges?
Not all broadband network operators agree with AT&T's approach, saying  
such an aggressive approach on the first major item introduced by  
Genachowski may hurt the company down the road.

"Why burn every bridge before this comes out?" said one industry  
source who spoke on the condition of anonymity because the proposal  
hasn't been made public.

Marvin Ammori, general counsel at public interest group Free Press,  
said that if the FCC compromises on its proposal, that would be an  
indication that AT&T's tactics are effective. "This would send a clear  
signal that if you run as hard as you can and pay a bunch of lobbyists  
and sow confusion in the press, Julius Genachowski will buckle,"  
Ammori said.

Genachowski, a former FCC counsel, has roots in the Internet start-up  
world. He was an executive at IAC/Interactive, which owns a variety of  
Internet companies, such as Evite and Urbanspoon.

Some staffers at the FCC and on the Hill say the voice of AT&T and  
other telecom companies is diminishing, and that Thursday's vote is  
likely to be a sign to those companies that the rules are changing.  
"They are playing the same game but they may not get the same outcomes  
that they are used to," said a staffer on the House Energy and  
Commerce Committee, which oversees telecommunications policy, who  
spoke on the condition of anonymity because the person was not  
authorized to speak publicly. "The issues and people have changed,  
from the Obama administration to new members down to new staff, who  
see things differently."

Rep. Edward J. Markey (D-Mass.), a key member of the Energy Committee,  
said AT&T "wants to frame it as big companies against each other, but  
in fact millions of people online see net neutrality as the ability  
for great ideas by the next Steve Jobs, Bill Gates or Sergey Brin to  
get out without having to ask permission from companies like AT&T."