Speaking of money spent on lobbying, LightReading’s Mark Sullivan has this juicy piece today which details the salaries of the two chief communications lobbyists in Washington. Walter McCormick, CEO of US Telecom, was paid $1.875 million in salary and benefits during 2004, and sources suggest his compensation doubled in 2005.
Robert Sachs, the former CEO of the National Cable & Telecommunications Association, earned $1.653 million in salary and benefits during 2004 (Kyle McSlarrow became the head of NCTA after Sachs, but the 2005 IRS filings for trade groups aren’t available yet).
What neither of these figures reveal is just how much deferred compensation these two powerful lobbyists received. It’s very common to offer nifty deferred compensation packages to trade association heads, usually in the form of stock they receive after departure.
Posted by Cynthia Brumfield at 6:19 PM | Print | Comments (0)
Cynthia’s intriguing posts on “Internet powered politics” and the political philosophies of those for and against net neutrality rules, got me thinking. My basic point is that old labels may no longer apply and that we may be in the midst of a major political realignment. As my lack of posts in recent weeks suggests, I’ve been having trouble finding time for blogging, so I’ll try to be brief.
I’ll start with a quote from a recent post by Markos Moulitsas (a.k.a. Kos, founder of the dailyKos political blog):
Traditional “libertarianism” holds that government is evil and thus must be minimized…The Libertarian Democrat understands that there is a third danger to personal liberty — the corporation. The Libertarian Dem understands that corporations, left unchecked, can be huge dangers to our personal liberties.
According to Thom Hartmann, Thomas Jefferson shared this concern of Kos’ Libertarian Democrat (underline is mine):
Because of the unique frailties and depths of passion unique to humans, just after the United States Constitution was ratified Thomas Jefferson and James Madison began a campaign to amend it with a 12-point explicit statement that would clearly and unambiguously place humans - who had created government - above their creation. This was the birth of what would become the Bill of Rights, and it originally had twelve - not ten - protections for citizens’ rights.
On December 20th, 1787, Jefferson wrote to James Madison about his concerns regarding the Constitution. He said, bluntly, that it was deficient in several areas. “I will now tell you what I do not like,” he wrote. “first, the omission of a bill of rights, providing clearly, and without the aid of sophism, for freedom of religion, freedom of the press, protection against standing armies, restriction of monopolies, the eternal and unremitting force of the habeas corpus laws, and trials by jury in all matters of fact triable by the laws of the land, and not by the laws of nations.”
Hartmann goes on to explain how Jefferson got 10 of the 12 amendments he favored:
But on the issues of banning a standing army and blocking corporations from gaining monopolistic control over industries, Jefferson was getting resistance. The nation had just fought a bloody war against England, and there was little sentiment for completely dismantling the army. And the Federalists who were in power - a party largely made up of what Jefferson called “the rich and the well born” - were opposed to government constraints on business activities.
Thus only ten of his twelve visions for a Bill of Rights - all except “freedom from monopolies in commerce” and his concern about a permanent army - were incorporated into the actual Bill of Rights, which James Madison shepherded through Congress and was ratified as the first ten amendments to the constitution on December 15, 1791.
Maybe a growing appreciation for the value of “freedom from monopolies in commerce” can help explain the fact that the NRA is among those who support network neutrality. Perhaps there’s a sense shared by many on the “left” and “right” that it’s not just the government that can exert too much power to restrict individual freedoms, but also large corporations that enjoy great market power AND great political power, the latter achieved in large measure through “investing” some portion of the economic surplus acquired via economic power in political lobbying, campaign contributions and access to mass media, which have historically been relatively few, expensive and powerful political megaphones.
The result has been a cycle of increased aggregation of economic, media and political power. To some extent, this cycle is threatened by the nature of the neutral Internet, where, as Adam Cohen put it, “a 15-year-old with video software and Internet access can now create and disseminate a professional-quality political ad” and “[t]he breakout commercial in the next presidential cycle could be one produced on a teenager’s computer and e-mailed from friend to friend.”
So, while Cynthia may be right that some libertarians “might naturally oppose net neutrality because it injects some form of government regulation into a marketplace where none exists now,” I’d suggest that others (including “Libertarian Dems” and the NRA), are realizing that Jefferson may have been prescient when he argued for inclusion of “freedom from monopolies in commerce” in the Bill of Rights…and that the Internet’s “neutral network” architecture provides a powerful (albeit only partial) counterbalance to the cycle of consolidation of market and political power by corporations that (as Hartmann also discusses) get to combine this power with all the freedoms the Bill of Rights grants to individual human “persons.”
Posted by Mitch Shapiro at 3:25 PM | Print | Comments (5)AT&T’s SVP of Investor Relations Richard Dietz spoke at Deutsche Bank’s Media and Telecom conference this morning and reiterated what other AT&T execs have said: Project Lightspeed networks have enough capacity for the forseeable future.
One fear about AT&T’s fiber-to-the-node architecture is that, with an average through-put of 25 Mbps, the system won’t be capable of ramping up as consumers demand more high-bandwidth services. This concern is particular true regarding AT&T’s ability to deliver faster and better high-speed Internet services. Comcast, Verizon and Cablevision Systems have already introduced services that offer 15 Mbps or more download rates.
According to Dietz, most consumers don’t need more than Lightspeed’s 6 Mbps/1 Mbps service, so AT&T should do just fine. “We believe 6 mbps downstream and 1 mbps upstream is plenty of bandwidth for most users,” he said.
The company is, however, contemplating adding a “bursty” bandwidth option that temporarily delivers more than 6 Mbps when consumers need it. “We haven’t foreclosed the possibility of providing our users with capabilities for bursty bandwidth.”
Moreover, “pair-bonding,” which couples two DSL lines together, can deliver up to 50 Mbps service to some customers. “With pair-bonding there is plenty of bandwidth,” he said.
AT&T will kick off its Project Lightspeed service, which has been in a controlled market launch, on a wider commercial basis in San Antonio later this month. Dietz said the pricing of the video option will be on par with what AT&T gets with its DirecTV offering. The price of the 6 Mbps service will be on par with comparable DSL services.
One small piece of news (at least new to me): AT&T is closely looking at voice-over-Wi-Fi services, trialing the option in corporate campuses. The company expects to start offering VoWiFi in 2007, although there are some technical hurdles to overcome. “When you’re in a hotel like this, your phone will sense a Wi-Fi connection and take it directly to a wireline network rather than to a radio tower,” Dietz said, making mobile phone calling more efficient.
VoWiFi uses “the network with the most capacity first, that being the wireline network.” The technical hurdle: producing dual-mode mobile phones that have enough battery capacity to satisfy consumers.
Posted by Cynthia Brumfield at 2:18 PM | Print | Comments (0)The New York Times’ Adam Cohen has this op-ed piece today about the rise of the Internet in politics. He uses as his jumping-off point the high-profile display granted to a homemade video produced by a 15 year-old girl at the gathering of liberal bloggers at the YearlyKos.
Ms. Lowery’s video, set to the Queen song “We Will Rock You,” contrasted the “liars” and “leakers” in the Bush administration with “those of us who choose to stand up for truth and justice.” Her handiwork, which can be seen at Youtube.com (Ava Lowery’s video), is a bit over the top. But it shows that a 15-year-old with video software and Internet access can now create and disseminate a professional-quality political ad.
The point is, the Internet and user-generated content hold the ability to shake and reshape American politics down to its core. While bloggers held some power in the 2004 elections, the influence of the Internet will soar come 2008.
Last week’s gathering was widely described as a bloggers’ convention, but it was a lot more. It was the mainstream debut of “Internet-powered politics,” and it made a convincing case that the Internet will quickly surpass television as the primary medium for communicating political ideas.
Web-based initiatives stand to primarily benefit Democrats as opposed to the more tightly scripted and controlled Republicans.
For the conventioneers, there was no question that Internet-powered politics would do as much — or more — for the left as talk radio did for the right. There are some cultural reasons why Democrats may be more attracted to the Internet. Democrats, as a group, may have warmer feelings about science and technology, or perhaps they are attracted to the decentralized, anti-authoritarian nature of blogs and e-mail (the exact opposite of a show like Rush Limbaugh’s, where the host speaks and the “dittoheads” take it all in).
But the messiness of the web could also dilute the effectiveness of the Democratic party. Republicans have succeeded in large part because of their centralized, controlled campaigning.
Still, Cohen thinks the rise of Internet-powered politics is a good thing for democracy.
On the whole, the new more participatory politics that the Internet is ushering in is clearly a good thing for democracy. Whether it turns out to be good for the Democratic Party in particular is yet to be seen. But the transformation seems inevitablePosted by Cynthia Brumfield at 11:59 AM | Print | Comments (1)
I just finished listening to AOL’s Chairman and CEO Jonathan Miller give a talk to Deutsche Bank’s Media and Telecommunications conference and for the life of me can’t really figure out what he said. Miller, who was pressed by the DB analyst on how AOL intends to compensate for its plummeting dial-up base, spoke in buzz phrases, stream of consciousness, sentence fragments and generalities to the point that he wasn’t imparting any real information.
Asked how AOL plans to maintain profitability as its more lucrative dial-up base gets supplanted by lower margin broadband subscribers, Miller said “we designed the business over the past several years to variabilize the cost structure,” without offering any further details about just how costs will drop, what those “variables” are or how efficiencies can be wrung out of the costs.
He then added “we have to get to where we have to get to,” and “we have to get there so that we bring people along for the ride” and “believe it or not, we’re actually getting to a place where we’re in the zone.” Huh? Where does AOL have to “get to,” what people are you bringing along for which ride, and what, exactly, is “the zone?”
My favorite quote from the talk (and here I have no idea what this is in reference to):
“When you have one of them you have something and when you have something you have to drive it globally and at scale.”
Is all this vague-talk a sign of real trouble at the online unit? Miller was clearly being pressed to answer for the slipping growth at AOL, and with no good data to back him up, no clear strategy for keeping profits up, Miller had no choice but to speak in confusing generalities.
He did say, somewhat more clearly, that AOL is banking on online advertising growth, noting that AOL, with its new web-based portal, can charge the same advertising CPM rates as Yahoo, something the company couldn’t do two years ago. Moreover, video advertising is a big hit. “Video advertising is really taking off. We’re in essence sold out on video advertising,” he said.
Posted by Cynthia Brumfield at 11:19 AM | Print | Comments (0)
As the Senate moves forward with its bill to revamp telecom laws, the net neutrality debate has been irrevocably painted as a liberal versus conservative, business versus anti-business issue. The latest case in point: this piece today by the Wall Street Journal’s Dionne Searcey and Amy Schatz.
The piece characterizes net neutrality proponents as web denizens whose cause has been taken up by left-of-center groups, while those who oppose net neutrality are, well, either broadband providers or Republicans.
Much of the Web debate is financed by an alliance of liberal interest groups, such as MoveOn.org, and high-tech companies, such as Microsoft Corp. and Yahoo Inc., on one side, and by the telecom industry, which is relying more heavily on traditional lobbying, on the other. Both sides are flying pro-Internet flags with themes like “defenders of the Internet” (for many of the Democrats and high-tech firms) and “hands off the Internet” (for many of the Republicans and phone and cable companies that sell Internet connections).
This characterization of left v. right is just the ticket to ensuring that a telecom bill passes with no real net neutrality provisions given that we have a Republican-controlled Congress. In truth, however, the whole notion of net neutrality doesn’t seem to inherently lend itself to one political ideology or another.
If they are considered right-of-center, libertarians might naturally oppose net neutrality because it injects some form of government regulation into a marketplace where none exists now. Other than that, how is it “Republican” to favor one set of business interests over another (broadband providers over Internet-based businesses)?
As Senator Barbara Boxer (D-CA) said during yesterday’s Senate hearings on the Stevens bill, “there isn’t any pro-business position here.” While the Senator is, in fact, a liberal, her words ring true.
The problem is not one of philosophy but, surprise surprise, one of money. Amazon, Google, eBay and other Silicon Valley interests who are funding the net neutrality advocates haven’t typically donated to Republican candidates (they haven’t, typically, been that active in Washington period). Being the old lobbying pros that they are, cable operators and phone companies have been equal opportunity spenders — Democrats and Republicans alike get campaign contributions, although admittedly Republicans get more nowadays.
That’s why the traditional lobbying has paid off for broadband providers and that’s why the net neutrality proponents have been so ineffective. The sad but sorry lesson for Internet-based businesses in all of this: next go-around, donate more to political candidates of all stripes.
Update: As this Op-Ed piece by Adam Cohen in today’s New York Times suggests, Democrats may, in fact, be constitutionally more comfortable than Republicans are with technology and the Internet.
There are some cultural reasons why Democrats may be more attracted to the Internet. Democrats, as a group, may have warmer feelings about science and technology, or perhaps they are attracted to the decentralized, anti-authoritarian nature of blogs and e-mail (the exact opposite of a show like Rush Limbaugh’s, where the host speaks and the “dittoheads” take it all in).
But these are cultural and not philosophical distinctions in terms of right-left. My main point stands: if net neutrality proponents just start spending some cash across the political spectrum, the path to success will be a lot easier.
Posted by Cynthia Brumfield at 9:43 AM | Print | Comments (0)
I didn’t get a chance to see today’s Senate Commerce Committee hearings, but Cynthia’s discussion of them pointed to an area of apparent but unnecessary confusion in the debate—the question of whether the Internet has ever been regulated.
I think the confusion can be cleared up if we distinguish “the Internet” from “access to the Internet.” While the former has been pretty much free of regulation, the latter was subject to common-carrier regulation with regard to dial-up access, which was the dominant form of access until recently, when broadband passed the 50% mark in its share of Internet customers. It seems pretty clear to me that common-carrier regulations embody the basic principles of network neutrality.
So, if our focus is on the “Internet access” market (as opposed to the many different markets that comprise “the Internet”), it seems accurate to say that “Internet access” was originally (and is still partially) subject to common-carrier regulation and that in recent years we’ve been in a transition to an unregulated duopoly market structure (if you’re about to argue broadband access isn’t a duopoly, I’d refer you to this recent post by Cynthia and some of the material it references).
It’s fair to say that so far there are few examples of actual blocking or discrimination. But some situations have arisen (some apparently intentional, others apparently unintentional) that provide some sense of where we might be headed if we move forward with an unregulated duopoly “Internet access” market (see here, here, here, here and here.
Also suggesting that a move away from “neutrality” is in the works are statements made by RBOC and cable executives (see here, here, here, here, here, here, here and here).
Virtually all of these statements suggest that pipe-owners are planning to deliver what some have called a “two-tiered Internet,” but might be better described as a multi-tiered “IP network” that, among other things, would provide access to what we know today as the “neutral Internet.”
In my view, the logic of a vertically integrated duopoly access market suggests that, over time, this “neutral Internet” will be allocated ever smaller percentages of total network bandwidth, since it provides network operators the least amount of flexibility in terms of leveraging their market power to maximize revenues and margins—it pretty much puts them in the bit-transport business, selling end-users Internet access at various levels of speed. And, as I noted here, it’s been argued that this will be the case even if net neutrality rules currently under consideration are passed by Congress.
While there are clearly arguments on both sides of the net neutrality debate, I have to admit I find it a bit depressing to see how little impact serious discussion seems to have on decisions made by Congress when powerful interests are willing to spend lots of money to make sure their agenda is met (and not just on this issue). It seems yet another example of “one person, one vote” being squeezed out by “one dollar, one vote,” and reminds me of that saying “There are two things you’ll never wish to watch: the making of sausage and the making of legislation.”
Actually, as distasteful as it might be, I’d prefer it if us citizens out here in the hinterland did get to watch the process a little more (no, make that a lot more) closely. Maybe we need a whole bunch of new C-SPAN channels that broadcast meetings with lobbyists and actual drafting of legislative language (and how about Rules Committee meetings while we’re at it). I think that’d be a lot more interesting and useful than listening to floor speeches. Think of it as a new form of reality show…”Political Survivor,” or maybe “The Reelection Fear Factor.”
Posted by Mitch Shapiro at 1:13 AM | Print | Comments (0)
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