NEW YORK -- When the telecommunications industry sought federal rules that would allow it to charge customers more for high bandwidth products such as Hulu or Netflix than for other web services, there was no mystery in its motive: big money. Federal regulators stopped the move on grounds that it would hurt consumers and the industry lashed back with an expected army of lobbyists. It also quietly pursued another strategy that has not previously been reported: the creation of an elaborate illusion of grassroots support for protecting the telecommunications industry’s profits.
At stake was an issue known as “net neutrality,” the idea -- enforced by the Federal Communications Commission -- that consumers are served best when all content is equally accessible online.
In an examination of tax filings from 2008 to 2011, The American Independent found that the telecom industry funneled millions of dollars into more than 30 “grassroots” foundations and think-tanks in an effort to persuade the FCC that consumers were opposed to net neutrality regulations. Many of the organizations that received those funds, such as the National Gay and Lesbian Chamber of Commerce and the American Association of People with Disabilities, have no obvious ties to the telecom industry or FCC regulatory policy. Despite that, they signed initiatives and public letters opposing net neutrality rules that were designed to protect consumers.
Two major telecom-industry groups, CTIA – The Wireless Association and the National Cable and Telecommunications Association (NCTA), contributed in excess of $4 million to the effort, and the industry spent another $2 million funding an umbrella organization of nearly 300 listed community groups who joined the coalition against net neutrality in support of the telecom industry. Many of those organizations also seem unlikely partners, such as the U.S. Cattlemen’s Association and the Jewish Energy Project.
Astroturf Campaign
Creating the illusion of grassroots support –- a technique commonly known as “astroturfing” in Washington circles -– is not unique to the telecommunications industry. But the size and scope of its effort to fight net neutrality has drawn critics.
“There’s a huge astroturf campaign going on to oppose net neutrality,” said Craig Holman, government affairs lobbyist at Public Citizen, a national consumer-advocacy group. “I find it disturbing that the telecom industry is providing sizable subsidies to various groups who normally wouldn't get in the middle of the net neutrality campaign.”
Finding allies in opposing government regulation would seem a logical strategy for the telecom industry. But members of its Broadband for America coalition, whose staff members blog and editorialize critically of net neutrality, often have no overlapping interests with telecommunications providers. For some, the connection appears to be monetary. The American Association of People With Disabilities, the Cuban American National Council, the League of United Latin American Citizens, and the National Gay & Lesbian Chamber of Commerce all received grants paid by two major telecommunications industry foundations, the CTIA and the NCTA. All four groups, as well as the CTIA and NCTA, are members of Broadband for America.
The NCTA also contributed $2 million to Broadband for America in 2009, the largest identified grant to the group. Aside from that, the association spent $18.89 million lobbying on the FCC’s net neutrality regulation among other issues in 2012.
The two industry foundations have been outspoken opponents of net neutrality. A position paper on CTIA’s website states, “prescriptive Internet regulation is unnecessary and has the potential to do far more harm than good.” NCTA’s president Kyle McSlarrow issued a statement in November 2010, which read in part: “[N]et neutrality regulation is unnecessary in light of the competitive marketplace, the absence of conduct that was harmful to consumers or competition, and the very real risk that regulation would undermine one of the great success stories in America -- rapid growth in the development of broadband networks that are changing the way we live and allowing consumers to enjoy an amazing array of applications, content and services.”
The two industry associations have deep pockets and powerful connections at their disposal.
Its allies include none other than former FCC chairman Michael Powell, who has criticized what he calls the “religious” commitment of net neutrality proponents. Powell chairs the NCTA and former professional football player and retired congressman Steve Largent heads CTIA.
At the end of the 2011 tax year, CTIA reported net assets of more than $87 million; the NCTA reported more than $47 million in assets. Both issue grants funding various telecom-industry initiatives and support a wide variety of foundations, according to tax records. In turn, many of those organizations participate in the net neutrality debate.
Michael Altschul, CTIA’s general counsel and senior vice president, told The American Independent that his group is “primarily interested in [supporting] groups that are interested in wireless and wireless technology and constituencies who are engaged users of our technology.”
When questioned whether CTIA ever urged grant recipients to participate in anti-net neutrality initiatives such as Broadband for America, Altschul responded, “We never asked anyone to sign on to Broadband for America.”
He later added, “There have been times we've invited people to listen to our views but it hasn't gone beyond that.”
The NCTA declined to comment and Broadband for America did not respond to calls for comment.
Groups that received grants and lent their names to letters and initiatives opposing net neutrality told The American Independent that their opposition to net neutrality was not tied to the money from the telecommunications industry.
In 2010, the American Association of People with Disabilities accepted $19,700 from the NCTA and $10,000 from CTIA. The group signed on to the Broadband for America initiative and, according to one account, appeared before the FCC as it considered net neutrality guidelines.
“From our perspective net neutrality is a very complicated issue,” said Mark Perriello, CEO of the American Association of People with Disabilities, in an interview. “Industry hasn't figured it out. Government hasn’t figured it out. There are lots of implications for people with disabilities.”
Perriello, who was named to Verizon’s consumer advisory board in June 2011, rejected the notion that his organization’s membership in Broadband for America was tied to contributions from telecom foundations.
“One of the things I believe in very strongly is that folks who are contributing to the AAPD are showing their support,” he said. “They don’t get to come to the table with any strings.”
Guarioné M. Diaz, President Emeritus of the Cuban American National Council, which received $30,000 from NCTA between 2009 and 2011, told The American Independent that telecom “is only a side issue for us.” The council appears on the list of groups in the Broadband for America initiative.
Diaz acknowledged that his group “received contributions [from the telecom industry] over a number of years” but emphasized “in general our interest is in getting broadband to everyone in the country including low income populations. That’s essentially the reason we belong to the [Broadband for America] coalition.”
Another group, The National Gay & Lesbian Chamber of Commerce, received $35,000 from the NCTA between 2009 and 2011. Broadband for America lists the organization as a member and the group also signed a January 2010 letter to the FCC opposing network neutrality legislation.
NGLCC’s communications director, Laura Berry, emailed that her organization has long ties to the telecom group. “[The NCTA] has been an annual event sponsor of the NGLCC’s National Dinner: An Evening of Courage! from 2007 to the present,” said Berry. “They receive a table at the event and program visibility for their sponsorship.” She added that the National Gay & Lesbian Chamber of Commerce joined Broadband for America in 2009 “to support the expansion of broadband to rural parts of America, where business owners need access to high-speed internet.”
Standing by the group’s 2009 and 2010 letters to the FCC, she said, “As a chamber of commerce, we are against any regulation of the Internet that inhibits growth or innovation.”
During those same years, the League of United Latin American Citizens accepted $78,000 from the NCTA. The group is also listed as a member of the Broadband for America coalition.
In a January 2010 letter to the FCC, League of United Latin American Citizens Executive Director Brent Wilkes urged the FCC echoing telecom industry arguments that “the FCC appears to be pushing a new regulation as a preventative measure for a problem that has yet to warrant such action.”
The League of United Latin American Citizens did not respond to calls for comment.
But Public Citizen’s Holman says that there is a clear correlation between telecom industry grants and the appearance of a grassroots opposition to net neutrality.
“I would imagine it's not written as a contract,” Holman said. “If it were written in a contract they'd have to declare it as being compensation for lobbying activities.”
But even without an explicit agreement, “there's no other reason the telecom industry would be providing grants to these types of organizations and no other reason these groups would get in the middle of the net neutrality debate,” Holman said.
First Amendment scholar and Internet policy lawyer Marvin Ammori says that the telecom industry may have multiple incentives for creating the appearance of a diverse coalition opposing net neutrality.
“It shows to government thatn ‘By the way, we can get all these different organizations to support our position and they’ll support whatever position we tell them to take,'" he said. "It's a show of force.”
Old Tactics
It is not the first time the telecommunications industry has employed techniques some might view as deceptive. In June 2011, AT&T used similar tactics to build the appearance of a coalition supporting its acquisition of T-Mobile.
The National Association for the Advancement of Colored People, GLAAD (formerly the Gay & Lesbian Alliance Against Defamation), and the National Education Association all issued statements supporting the merger at the time. All three groups were recipients of grants from the AT&T Foundation.
Jarrett Barrios, GLAAD’s former president, described the merger as a “social justice” issue in a May 2011 letter to the FCC: “The LGBT community has a longstanding commitment to all forms of social justice. That is why we look at the deployment of faster wireless Internet options not only from financial and technological viewpoints but also in terms of how this improves society.” National Gay & Lesbian Chamber of Commerce President Justin Nelson cosigned the letter.
Under Barrios’ leadership, GLAAD’s next step was signing an AT&T-drafted letter opposing net neutrality. Barrios first denied signing the letter and blamed his administrative assistant for sending it out. Eventually, his organization retracted both letters and Barrios resigned. AT&T lobbyist Troup Coronado also resigned from GLAAD’s board of directors.
When the dust settled, GLAAD flipped its position and announced its support of net neutrality, emphasizing the importance of an open Internet in furthering LGBT rights. The flip-flop and change in leadership may not have occurred without relentless attention from LGBT bloggers who challenged GLAAD’s cozy relationship with AT&T and the organization’s confusing opposition to net neutrality.
GLAAD declined to comment for this article.
Joe Torres is senior external affairs director at Free Press, a Washington, D.C. policy group advocating universal and affordable Internet access. As a supporter of net neutrality for consumers, he warns that the Broadband for America coalition has just one goal.
“Broadband for America is a group that represents the interests of industry,” said Torres “They're not representing the interests of civil rights, or the justice community. They represent what's good for business.”
He added, “It's a difficult fight because there's a lot of money on the table.”
Eli Clifton reports on foreign policy and money in politics for The American Independent. Eli holds a bachelor’s degree from Bates College and a master’s degree in international political economy from the London School of Economics. He previously reported on national security and foreign policy for ThinkProgress and Inter Press Service. Eli is coauthor of the Center for American Progress’ report “Fear Inc.: The Roots Of the Islamophobia Network In America.” His work has appeared on PBS/Frontline’s Tehran bureau, The Nation, Salon.com, The South China Morning Post, Right Web, LobeLog.com, and ForeignPolicy.com.