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Net Neutrality: (Lobbying) Shaking the Cash Tree PDF Print E-mail
Written by Howard M. Unger   
Thursday, 05 October 2006
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The blogosphere is still abuzz over "Net Neutrality," but as Congress winds down, among the biggest winners in the debate are candidates' war chests.

Of the thousands of bills introduced in Congress each year, one or two issues usually emerge from the legislative cauldron to become subjects of major policy debates. By pitting special interests against each other, these debates also become battlegrounds for lobbyists and fundraisers.

The 109th Congress has been no exception, with "Net Neutrality" materializing from policy obscurity to become a focal point of advertising blitzes, grassroots rallies, and K Street lobbyists. The debate behind Net Neutrality pits telec-ommunications companies, which own the copper and fiber that comprise the Information Superhighway's infrastructure, against Internet companies like eBay and Google, which rely on those wires to carry their electronic content. Internet companies want everyone to have equal access to their sites while the telecoms believe they should be entitled to control what flows through their network.

Policymakers and political observers say the debate highlights two vastly different approaches to how groups lobby Congress—greenbacks versus gras-sroots. On one side, the telecoms have spent an estimated $100 million on advertising costs, lobbying expenses, and campaign contributions. Internet companies, meanwhile, have avoided a large-scale fundraising war and gone online, where they have netted more than one million signatures for an online petition and used their Web sites to promote Net Neutrality.

Telecom Cash

The telecoms have spent $45 million on pro-industry advertisements and $50 million on lobbying efforts, according to estimates from Campaign Media Analysis Group and Bloomberg News. Political action committees for three of the biggest telecoms—AT&T, Verizon, and Comcast—have already doled out $5 million this election cycle, nearing or surpassing contributions from previous cycles with weeks to go before the November elections, according to the Federal Election Commission.

Net Neutrality has attracted telecom PAC money in near record proportions (see chart). Not included are the individual contributions made by corporate bigwigs, like the nine Comcast executives who do-nated a total of $15,000 in one month to the campaign of Rep. Joe Barton - chair of the House Committee on Energy & Commerce and a force behind an anti-Net Neutrality bill in the House.

When deep-pocketed special interest groups surround an issue on all sides, politicians' war chests tend to grow, says Massie Ritsch of the nonpartisan Center for Responsive Politics, which examined the fundraising around the Net Neutrality debate in June. "Companies and industries tend to ramp up their contributions around election time," he says. "The telecoms have given far more money to politicians than their opponents." Similar giving, he says, occurred during debates over bankruptcy reform, the Medicare prescription drug benefit, and asbestos litigation.

Such contributions, however, can lower the public's confidence in the policymaking process, says Prof. Bruce Cain, who directs the Institute of Governmental Studies at the University of California, Berkeley. "The problem is the appearance that you have to pay to play," he says. And pay they do. Cain says that companies usually contribute to political campaigns on a regular basis to make sure they have elected officials' attention. Heightened activity when an industry is in the middle of a regulatory debate like the one over Net Neutrality, he says, is especially problematic but nothing new. "We've seen this when tobacco issues were being discussed in Congress, during the health care debate, and around defense issues during debates about weapons systems," Cain says. "It's a common practice, but an unsettling one."

Going to back to the well

The more people who participate at the contribution level, says former Democratic congressman
Peter Hoagland, the more candidates will be interested in their issues. "It's nice to have those people involved in the process because there aren't many other ways of getting a legislator's attention," says Hoag-land, who represented Ne-braska's 2nd District from 1989 to 1995. While he was in office, he says, issues of the day like NAFTA and tax reform would get the attention and, thus, fundraising dollars from special interest groups. Sometimes, he says, attention to issues was sparked by politicians looking to stand out in the 435-person House of Representatives. "You're going to have people use whatever tactics they
can think of to get the attention of the body. It's just going to happen," he says.

Cain calls this tactic "tree shaking" and says that fundraisers have been known to tell special interest groups that pending legislation may mean it's a good time for lobbyists to start writing checks. Retired members have talked about it, he says, but most say that it never happened with them.

A spokesman for one of the telecom giants, however, says his industry's spending on the
Net Neutrality issue is the result of being misrepresented in the media—not by tree-shaking. "As often happens on the Internet, a great ruckus was raised about this thing," says BellSouth's
Bill McCloskey, who believes a BellSouth executive's comments to the press last year were misinterpreted by Internet advocates. McCloskey says his industry is more concerned with other issues. "The money we are spending, we are spending to promote the te-lecom bills in Congress," says  McCloskey. "We are promoting things like a nationwide video franchise, and things like helping soldiers call home from Iraq, as well as helping first responders."

McCloskey says the Net Neutrality debate has no factual basis. He notes that original versions of the House or Senate telecom bills didn't contain any language on the issue. "All the things they are worried about what we can do, we can do now. We are allowed to manage our network, we can block spam, block viruses, and allow parents to block stuff that they don't want their kids to see."

An AT&T spokeswoman said she's read about the idea that the telecom bills are a cash grab, but believes they are needed updates to the 1996 telecom bill that also saw spikes in campaign contributions. "So much has changed since the '96 act. I think that the real reason (for the bills) is that the communications laws needed to be updated," says Claudia Jones. "The '96 act was focused on bringing competition in local telephone service. The Stevens bill deals with issues such as video franchise and universal service reform." On the telecom industry's spending for this year's bills, she says, "It's typical of what happens. There are always bills that are of particular interest to one industry or another. This is a bill that's important to us."

Internet Lobbying

What they lack in political campaign funds, companies like eBay have an asset the telecommunications titans can only dream of—a community of dedicated users. In May, eBay CEO Meg Whitman wrote more than a million of them about the Net Neutrality debate and urged them to "send a message" to Congress before it was too late. In the company's first email to users about the political issue, Whitman wrote, "The telephone and cable companies in control of Internet access are trying to use their enormous political muscle to dramatically change the Internet. It might be hard to believe, but lawmakers in Washington are seriously debating whether consumers should be free to use the Internet as they want in the future."

Google finally opened a political action committee in September. In addition, it ranks its own "Guide to Net Neutrality for Google Users" among the top results for those searching about the issue on its ultra-popular Web site. Goo-gle's page inclu-des links to an open letter from company CEO Eric Schmidt, an online petition, and a form to allow users to write their senator or congressman. In his letter, Schmidt writes, "Today the Internet is an information highway where anybody—no matter how large or small, how traditional or unconventional—has equal access. But the phone and cable monopolies, who control almost all Internet access, want the power to choose who gets access to high-speed lanes and whose content gets seen first and fastest. They want to build a two-tiered system and block the on-ramps for those who can't pay."

Along with Amazon and other Internet businesses, eBay and Google have teamed up to form the It's Our Net Coalition. Net Neutrality, according to coalition spokesman Jim McGann, has transformed the online industry's approach to addressing political issues and brought industry members together. "They're spending whatever it takes on advertising," McGann says of the telecommunications companies. "We're going in a different direction. We're working with the real grassroots and it's paying off. It's a big difference in approach and we feel that the grassroots is the way to go."

McGann may be right. One of his group's supporters, the SavetheInternet.com Coalition, has brought together more than 750 groups, including some strange bedfellows. The SavetheInternet.com group includes the American Civil Liberties Union, Gun Owners of America, the Christian Coalition, Common Cause, and MoveOn. This summer, the group collected more than one million Internet signatures for its online petition and recently delivered thousands of those petitions to Senate offices in 25 cities. In addition, the Web site has linked thousands of bloggers to its home page, including many sharp-tongued scribes.

Jones, the spokeswoman for AT&T, says she's not astonished by the Internet industry's campaigning. "I'm not surprised because that's their forte. It's the Internet," she says. "I am surprised at the vehement nature of the debate on the Internet. I always see the Internet as an open forum. But if you look at the blogs, anyone with a divergent idea on this issue (Net Neutrality) is slammed."

The industry is also beginning to step up its traditional lobbying efforts, as evidenced by Google's decision to open a lobbying office in Washington, D.C., last year. In addition, although their contributions dwarf in size to the telecom industry's donations, Internet industry PACs are beginning to send lobbyists to fundraisers. (The largest, eBay's, has given about $200,000 this election cycle.)

Says Ritsch of the Center for Responsive Politics, "It was only a matter of time before the Internet industry established itself in Washington. Once a company or an industry reaches a certain size, it really can't avoid playing politics in Washington by making campaign contributions and hiring lobbyists. So many issues affect the Internet industry, or could potentially affect it, from Net Neutrality to taxation of online sales to immigration restrictions for hi-tech workers."


About Howard M. Unger

Howard M. Unger earned his Master's Degree from the University of Maryland's School of Public Policy. He is currently a freelance journalist in New York City. To e-mail him, click here.





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