As you may know, the merger process at the FCC and DoJ is a mess.  In fact, some believe the entire process is not much different than extortion.  Not only do we have some newly reported shenanigans going on around the AT&T merger – with FCC staff last week playing fast and loose with data in an effort to sink the merger once and for all – now we have this gem.

To fulfill part of its merger “penance” with the FCC from earlier this year, Comcast / NBC-U announced the other day it has entered into agreements that:

…create new and innovative cooperative news gathering and reporting arrangements with a series of locally-focused, non-profit news organizations.

The partnerships are with ProPublica, which will work with all ten owned stations, serving the following markets: New York, Los Angeles, Chicago, Philadelphia, San Francisco Bay Area, Dallas-Fort Worth, Washington, D.C., Miami, San Diego and Connecticut; The Chicago Reporter which will work with NBC 5 Chicago; WHYY which will partner with NBC 10 Philadelphia; and KPCC which work with NBC4 LA. (Emphasis and links added)

As I wrote about previously on these pages, the Comcast Merger Order “voluntarily” commits the new company to foster local journalism via the “Voice of San Diego Model,” a socially progressive news organization.  ProPublica, The Chicago Reporter, and KPCC make good on this promise.  They are archetypical liberal media outlets, which are supported in large measure by the usual suspects among America’s top progressive foundations (like Soros, Ford, MacArthur, Knight, Pew, etc.).

What’s amazing is it’s happening as I had predicted – coming just in time to boost progressive messaging for the 2012 elections, all in key urban cities that are vital to Obama maintaining the White House.

Quite a “voluntarily agreed to” platform, huh?  And, go figure, a progressive one at that.  Hmm…

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In recent weeks, I have been interested in Google and in the telecommunications companies.  It’s not the typical “institutional left” topic on which I usually tend to focus.  At least, not on the surface.  The truth is, these industries ARE about the institutional left.  And if the Obama administration and the media reformists on the left get their way, the institutional left will achieve some very significant goals over the next few years in their push to see all media publicly owned.  That is, unless we all start paying more attention.

Before I give you the big picture, let me start with a recent example.

Last month, Sprint, one of the big three telecommunications providers, raised its early termination fees (ETFs) on “advanced devices.”  These devices are smartphones, tablets, netbooks and notebooks, as Sprint outlines in one of its support documents online.  As MSNBC.com explains, ETFs are the carrier’s way of retaining customers, and Sprint has essentially doubled its fees to $350 beginning September 9^th.

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On today’s edition of Coffee and Markets, Bruce Walker talks about the government’s attempt to stop the AT&T/T-Mobile merger, and Elizabeth Blackney and Benjamin Domenech walk through the HPV vaccine issue in response to Rick Perry and Michele Bachmann.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

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It’s funny what a million dollars in political contributions, support for the right candidate and a liberal meme can buy you in Washington these days.  For Google, it is buying them a free pass as they amass growing power in Washington and the marketplace.

AT&T, while unionized, does not have the same liberal bent as Google.  They are more a traditional Beltway player.  Open Secrets.org describes their strategy as “Although the company has historically favored Republicans in its political giving, people and political action committees associated with AT&T have as of late generally split their contributions between Democrats and the GOP.”

Recently both Google and AT&T made strategic acquisitions.  How they were treated by the politicized Department of Justice makes an interesting statement.

Google is a giant and growing by the day. Google purchased Motorola and ITA Software, which builds online flight and ticket information software for travel websites.  Google paid $700 million for ITA and Motorola for $12 billion.  The acquisition of ITA allows Google to corner the market for travel and Motorola gives Google monopoly on thousands of patents that will help stave off competitive threats and patent-infringement lawsuits.

Despite howls of protests from the travel industry, that feared Google would crowd out other travel websites when combined with Google’s search engine.  Yet the Justice Department approved Google’s purchase with a caveat, Google must also set up a formal reporting system for anyone who believes it is acting unfairly.  With regard to the purchase of Motorola, DOJ seems poised to approve the purchase as well.

But for AT&T, the Department of Justice has been less than hospitable.  DOJ has filed a lawsuit trying to block the purchase of T-Mobile, arguing that it will hurt competition.

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From the Associated Press:

Justice Department officials say they’ve filed suit to block AT&T’s $39 billion deal to buy T-Mobile USA.

The government contends that the acquisition of the No. 4 wireless carrier in the country by No. 2 AT&T would reduce competition and raise prices.

At a news conference Wednesday, Deputy Attorney General James Cole said the combination would result in tens of millions of consumers facing higher prices, fewer choices and lower quality products.

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The media reform cabal is at it again.  The same professional Soros-funded astroturfers who brought us Van Jones to demand “media justice” and SaveTheInternet and Net Neutrality have been focused on a new target.  For months now, Free Press, Media Access Project, Public Knowledge, Consumers Union, and the New America Foundation have been thwarting the proposed merger of cell phone providers AT&T and T-Mobile, saying the move would raise prices for consumers and cost jobs.  As the deal sits with the FCC, which just this week temporarily halted its review of the proposal, AT&T and T-Mobile have tried to reassure consumers and activists that the merger would lower prices, increase access to service in rural areas and give consumers better choices.  The AFL-CIO, which represents 42,000 AT&T workers through the CWA, agrees with AT&T and T-Mobile.  Ironically, that puts the country’s most powerful labor federation on the opposite side of its progressive media reform allies.

But as these supposed media reformers actively work with community groups and state and federal agencies to oppose corporate interests on behalf of consumers, they fail to divulge their own ties to competitive corporate interests. And now, there are reports that a state commission may also have played a role in helping the competition.

As Amanda Carey has detailed at The Daily Caller, these Net Neutrality advocates have a long history of opposing these very companies, with the support of corporate competitors.

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We have oft discussed the Orwellian manner Leftists do, well, everything.

And specifically how they go about naming their gaggles – the groups they form to advance their Leftist agenda.

The Media Marxists looking to eradicate all private ownership of news and communications – so as to have the government be your sole provider of news and communications – are a part of the Leftist misdirection that calls themselves “public interest” or “consumer interest” groups.

What could be better – and less innocuous – then that?

Just about everything.

—–

As far as the “consumer interest” – let’s rationally examine who has a real stake in it.

Is it the Media Marxist groups – who represent no one and nothing save for a shaved shard of a pro-government, free market-loathing constituency consisting almost exclusively of themselves?

Or is it the media companies – who seek to everyday deliver whatever it is the most consumers possible are interested in?  So as to entice these consumers to hire, watch, listen to and read them?

Obviously, it is the latter.

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(And we do not mean this august publication.)

John Donne famously said no man is an island.  He didn’t live to see the Media Marxists and their absurd policy positions.

These Leftist alleged media “reformers” incessantly demand massive government insertion into and interference with every free market-media nook and cranny.

Insertion and interference in which almost no one else has any interest.

Save, of course, for the other forces of Big Government – Big Government being always interested in expanding its authoritarian sway.

We have noted this previously.  For instance, the Media Marxists have all along been strident proponents of Network Neutrality – a government takeover of the Internet that was and remains the kid sitting by himself in the high school cafeteria – almost no one else wanted anything to do with it.

Except, again, Big Government.  President Barack Obama’s Federal Communications Commission (FCC) joined the Media Marxists at the lonely lunch table – and unilaterally and illegally imposed Net Neutrality.

So radical and foolish is Net Neutrality that – in addition to 302 members of the then Democrat-controlled Congress and a unanimous D.C. Circuit court – a gaggle of normally pro-government groups are opposed to its imposition.

The League of United Latin American Citizens (LULAC), the National Association for the Advancement of Colored People (NAACP), Minority Media and Telecommunications Council (MMTC), the Urban League and the Sierra Club, to name but a few.

And then there were the unions.

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This Wednesday, Congress will have its first chance to look under the hood of the proposed $39 billion acquisition of T-Mobile by AT&T. The Senate will hold a hearing on the deal, featuring representatives from AT&T, T-Mobile, Sprint, Cellular South, the Communications Workers of America, and Public Knowledge.

The hearing is a kabuki dance of sorts because, though the Congress plays an important oversight role, it has no formal part in approving (or not) the acquisition.  That job rests with the FCC and DoJ.

While no one knows if, when, or in what form the resulting approval will look like (if approval in fact occurs), the hearing will help all sides begin to put forward their best PR case to the American public.

I believe that the acquisition – though complex and challenging for policymakers – will benefit the public interest.  Yes, it will pare the market down by one, resulting in three major nationwide providers.  But the market will remain effectively competitive.  Consumers will benefit through the roll out of new and better mobile broadband services from a stronger AT&T.  And this will in turn spur direct competition from the major and regional wireless players, as well as in services that are considered substitutes.

But, as the existence of the hearing reveals, the acquisition is not a done deal.  Many questions abound, which Congress and the American public have a right to know about.

So, if I were a Senator sitting up on the dais – one who could see consumer benefit as a result of this acquisition – what top five questions would I want answered?

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This past tax day I wrote an article examining whether the government might soon be coming after content creators like Google or Netflix.  Such a notion would leave many in complete befuddlement after the past two years have seen the pro-Net Neutrality camp deeply entrenched in spreading concerns of impending doom that would be headed to the Internet if we continued even one more day without a regulatory regime placing its grip over the network.

One must understand that the heart of the much of the Network Neutrality debate has been the fear that Internet Service Providers (ISPs) like that of Comcast, Verizon, or AT&T would begin charging content creators to receive prioritized connections to the Internet.  If they were to do this, then the pro-regulation crowd suggests that this would create an unfair advantage for large or established web companies and that small startup companies would not have the capital to pay these fees or “taxes” for faster, prioritized service and would therefore be at an immediate disadvantage.  Therefore any present day suggestion that any governmental agency or program should place a taxation on content as a right of way to exist on the Internet seems contrary and ironic to the goals and concerns that have been much of the fight for the pro-regulatory side of the debate.

At a February 23rd Congressional Internet Caucus panel, Shirley Bloomfield, CEO of National Telecommunications Cooperative Association (NTCA) who notes themselves as being “the voice of rural telecommunications” said that, “We would really like to see the FCC also grapple with the contribution side of the equation as well.”

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss the war in Libya, and the merger of AT&T and T-Mobile.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

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The Ninth Circuit Court recently set forth a ruling on an interesting case involving arbitration clauses in contracts. A couple received two complimentary cell phones from AT&T as part of a bundled-service contract but were charged $30.22 in sales tax required by California law.  As part of their contract, the couple agreed to arbitration.  As part of the arbitration clause AT&T agrees to pay $7500 plus fees if an arbitration award exceeds the amount last offered by AT&T before the settlement.  The couple claimed they were misled and filed a class-action law suit, despite their having signed the contract agreeing to arbitration.

The ruling by the Ninth Circuit, in Laster v AT&T Mobility LLC, called the contract unconscionable and refused to enforce the clause requiring arbitration.  The Court felt that such a clause, by disallowing class action, would result in little enforcement of contracts.  Because the amount involved is small, the individual customer would probably not find it worth the opportunity cost of their time to go to arbitration, and thus AT&T could default on lots of small contracts for minimal amounts and not fear an arbitration settlement.

There are a number of reasons why this ruling should be overturned.  First, it flies in the face of the Federal Arbitration Act of 1925, which was passed to provide certainty to contracts that have arbitration clauses.  The Act requires federal courts to enforce arbitration agreements unless they violate standard contract law doctrine, such as fraud, duress, or are unconscionable.  For a contract to be unconscionable, in this particular case, it must be seen as a scheme of the party in a stronger bargaining position to cheat large numbers of consumers.  The standard arbitration contract doesn’t meet any of these standards.

The contract with AT&T is clear.

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Last week, three major Internet Service Providers (ISPs) and five industry trade associations sent a letter to Federal Communications Commission (FCC) Chairman Julius Genachowski urging him to ditch what has come to be known in some tech policy circles as the FCC’s own version of “deem and pass”—the infamous process that first reared its head in the context of Congress passing Obamacare earlier this year.

Following a recent, unfavorable Appeals Court decision, observers say Genachowski has been eagerly pursuing a back-door, out-of-sight pathway to achieving a long-time, personal objective: Regulation of the Internet via the institution of so-called Net Neutrality rules.  Reclassifying Internet services as “telecommunications services” would enable him to do just that—though with increased public opposition to Net Neutrality having been voiced during an FCC public comment period that recently closed, and recent polling showing relatively weak support for the policy, it remains a risky option both from a public relations, and political standpoint.

For their part, the ISPs, who together with other members of a broad coalition including a prominent labor union, minority and civil rights groups, and several high-profile Democrats oppose the move, are determined to ensure that Genachowski’s preferred course of action does not go unnoticed, whether the FCC ultimately does “deem and pass,” or not.

The letter, signed by AT&T, Verizon, Time Warner Cable and the trade groups both focuses attention on what Genachowski is alleged to be planning, and seeks to debunk some of the talking points being used by supporters of the proposed reclassification.  Chief among those is the argument that the current arrangement, whereby Internet services are not classified as telecommunications services, is the specific result of a policy instituted under the Bush administration, as opposed to a standard that has existed for what one tech policy expert with whom Capitol Confidential spoke called “time immemorial.”  Per the letter, ”the commission has never classified any kind of Internet access service (wireline, cable, wireless, powerline, dial-up or otherwise) as a … telecommunications service, nor has it ever regulated the rates, terms and conditions of that service — Internet access service has always been treated as a Title I information service.”

It is an important point to make, said that same tech policy observer, because if reclassification is ultimately branded as a simple, administrative move designed to fix a bad Bush policy, the Democratic-majority FCC is more likely to approve the change.  If, however, reclassification is accurately viewed and depicted as constituting a “nuclear option,” invoked in smoke-filled backrooms, out of sight of the public, in order to placate Democratic-favorable companies and donors (including the Obama administration-cozy Google), it will be much harder—indeed potentially impossible— for the FCC to approve.

However, the difference between those two positions, and characterizations, could more than anything guarantee that the fight over reclassification could be knock-down, drag-out.  “Net neutrality supporters have a lot invested here,” says the tech policy observer with whom we spoke.  “They’re not prepared to go down without a fight, even if predicated on deeply questionable arguments.”

Democrats understand that passage of Obama’s healthcare “reforms” will probably hurt them in November, so they’re doing everything they can to dampen the anger directed at them and turn it against someone – anyone – else.

Anger-dampening was built into the bill, postponing the tax increases and other burdens Americans will feel directly until after the 2010 elections (and some until after 2012). Obama and the congressional Democrats are out bragging about the rainbows and unicorns they’ve produced.

But now several major American companies – AT&T, Verizon, Deere & Co. and Caterpillar – are spoiling the carefully-planned narrative by saying that they will incur huge losses (impliedly causing job losses) because of the costs they will incur under the Obamacare plan.

As a result, congressional Dems are planning a public punishment of the heretics.

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In modern day America, if you criticize the government you are now fair game to be called upon to explain yourself in front of it.  As Byron York reported in a recent Washington Examiner column, Rep. Henry Waxman sent letters to executives of major corporations such as Verizon and Caterpillar, requesting their testimony at hearings of the Subcomittee on Oversight and Investigations of the House Committee on Energy and Commerce, chaired by none other than Rep. Bart Stupak, as each of the companies “announced that provisions in the [healthcare] law could adversely affect” their “ability to provide health insurance.”  AT&T for instance had disclosed in an SEC form that changes in the tax treatment of a Medicare subsidy would lead to a $1 billion write-off in earnings from the first quarter of 2010, and said it was considering changes to the health care benefits it provides for its employees.

That the legislation would negatively affect the earnings of these corporations and potentially hamper their ability to provide healthcare is for Rep. Waxman “a matter of concern,” as the “new law is designed to expand coverage and bring down costs.”

But I wonder, for whom are the negative effects of this legislation really a concern?  For Rep. Waxman and his fellow Democrats who already forced the egregious bill on the public?  For the private enterprises pummeled seemingly on a daily basis by these same politicians?  Perhaps for the American people faced with all kinds of economy-crippling unintended consequences as a result of the legislation, on top of the higher costs and worse healthcare they will ultimately receive?

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Net neutrality supporters have long argued that institution of “open internet” rules is critical for job retention and creation.  However, according to some opponents of the proposed policy, a study released on Friday by Entropy Economics undercuts that assertion—just as much discussion in the political world is re-centering on the topic of job creation and as the Federal Communications Commission (FCC) continues to move closer to a decision on controversial, proposed net neutrality rules.

The study, entitled “What Would Net Neutrality Mean for U.S. Jobs?”  analyzes comments submitted by companies within the Internet industry to the FCC as of January 15, 2010.  It excludes those submitted by trade associations, individuals, and academics, and breaks commenters down into two categories: Supporters and Skeptics.  It also attempts to exclude “non-U.S. employees of foreign-based Skeptics” but includes “any foreign employees of Supporters.”

The results are bound to unsettle net neutrality advocates: Even with the filtering out that Entropy conducted, Skeptics—many of whom have expressed concern about the negative ramifications of net neutrality on their businesses— employ nearly ten times the number of employees that Supporters do.  More specifically, Skeptics directly employ 1,440,021 workers, whereas Supporters directly employ just 148,936 workers.

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