August 12, 2013
Erika Delgado cut her landline service last December. She had cycled through four different companies since 2000, with each company charging her for calls she didn’t make, services she never signed up for and things she thought were included in her contract. After five years with Pacific Bell, Delgado moved to Verizon because it offered her discounted rates for weekend calls and other services. Though she qualified for Lifeline, a discount program designed to provide basic telephone service for low-income customers, a landslide of unexpected fees and overcharges soon overwhelmed her.
“They say they’ll give you discounts, but it’s not true,” says Delgado, a 40-year-old single mother of three children living off of the $850 a month she earns from her business selling clothes and electronics at the Mt. Vernon Swap Meet in San Bernardino, California. “They just charge, charge, charge.”
Delgado cut her service with Verizon after just a year and a half and moved to AT&T. She decided to enroll in a $20-a-month plan that included long-distance calling, an important feature because she frequently makes calls home to Mexico. But after making two fifteen- to twenty-minute calls to Mexico, she was slapped with a $90 charge for the calls. She says AT&T then told her that her plan did not cover long distance to Mexico, and that $200 would cover the cost of the calls and the additional fees.
“I had to choose to either feed my kids or pay the bill,” she says. The company sent her to collections and she cut service with AT&T after just six months.
Now, with a mounting collections bill on her credit report, Delgado doesn’t even consider moving away from her mobile home or applying for a job that requires good credit. She has also given up entirely on getting the landline service she needs at home. Sometimes her cellphone doesn’t get a signal in her home, and when she can’t afford the electricity bill, she has no way to charge the battery. “I am a single mom and my kids have asthma,” she says. “In case of an emergency with my kids, I need reliable telephone service at home to call 911.”
Delgado’s decade-long struggle to find affordable and reliable telephone service is not unique. Her story, and the plight of millions of other low-income people, are at the heart of a debate between civil rights groups and public interest advocates who find themselves at opposite ends of a debate about what rules, if any, should prevent companies like AT&T from exploiting consumers like Delgado.
In November 2012, in anticipation of moving its telephone service from traditional, wired networks to IP-based phone networks, which transmit voice communications digitally, AT&T filed a petition with the FCC to run test trials of IP-based telephone services. In exchange for expanding these networks, the company is requesting “relief” from critical regulations that apply to wired telephone services. These regulations, which include obligations to provide universal service and state-enforced price and quality regulations, do not currently apply to IP-based telephone service. The petition has garnered critical responses from many public interest groups, including Free Press, the Center for Rural Strategies and the National Hispanic Media Coalition, which are concerned that relaxing these regulations will allow telecom companies to avoid regulating IP-based phone services, leaving them vulnerable to price gouging and poor service quality, with weak access for communities of color and rural residents. (For more about the AT&T petition’s potential impact on underserved communities, click here).
Despite public interests groups’ strong warnings that such regulatory relief would disparately impact communities of color, many business-friendly civil rights groups have come out in support of the petition. Groups such as the League of United Latin American Citizens (LULAC), the National Urban League and the Asian American Federation—all of which have received millions in private donations from AT&T—have filed comments with the FCC showing strong support of the company’s proposed plan for its transition to IP-based telephone services. None of their comments specify regulations that should apply to those services.
“The IP Transition will benefit underserved Asian American communities who remain on the wrong side of the digital divide,” wrote several Asian-American advocacy groups in a joint comment filing lead by the Asian American Federation. They explain that “the switch to an all-IP system will bring more competitive choices into the marketplace, which will provide benefits to consumers, including making high-speed broadband more affordable for Asian Americans who have not yet adopted broadband due to cost concerns.”
The National Urban League and National Action Network, both black advocacy organizations, echoed this reasoning in a joint filing: “We support the AT&T Petition as we understand it and urge the Commission to approve it in a manner that advances the interests of consumers of color.” The two groups wrote that the test trials can serve as “a roadmap” for the country’s transition to IP services and should be used to understand how AT&T’s regulatory relief will affect people of color’s “access to affordable, reliable service in the future.”
LULAC agrees, saying broadband brings economic opportunities, educational achievement and job training to Latinos. “Enhancing network capabilities with a smooth transition to all IP-enabled infrastructure will enable Hispanic Americans to multiply these benefits and further improve their ability to build a strong future for themselves and their families,” Paloma Zuleta, LULAC’s director of communications, told The Nation in an email. She went on to explain that policy and regulatory “modernization” that spurs “sustained and long-term private investment in America’s infrastructure” will lead to economic growth.
But history has shown that deregulation tends to hit low-income, working-class people of color most. The $30 billion payday loan industry offers a recent case in point. Payday lenders prey on low-income people by providing small, short-term loans at extremely high interest rates. In order to pay back these loans, plus interest, people often take out further payday loans. The result is millions of mainly poor and working class people of color trapped in a cycle of debt in an already precarious economy. The payday loan industry is a result of Reagan-era deregulation, which relaxed state caps on loan interest rates. This trend continued through the late ’90s as payday loan entrepreneurs capitalized on the country’s spirit of deregulation to get further exemptions from state interest rate caps. For public interest advocates, the impact of deregulation in other industries provide an example as to who will be affected most if the country’s communication industry is further deregulated.
“Deregulation in the communications industry is a lot like deregulation in food safety, worker safety, banks or other sectors,” says Matt Wood, policy director at Free Press. “The companies claim that regulations kill jobs and make the service more expensive. They promise that removing the rules will let them offer better products and more choices. But what we see instead is a series of broken promises, along with increased risks for the people who used to be protected by the rules.”
The extent of AT&T’s influence over some civil rights groups can be measured in the amount of its donations. In the Asian American Federation’s Biennial report last year, it listed AT&T as a “sustainer,” meaning the company contributed between $5,000 and $9,999 dollars. In 2006, the National Urban League received a $1.6 million grant from AT&T to launch five new digital career academies and expand offerings at eleven existing academies for black students, and it received another $1 million in 2008 for a college prep program aimed at black high schoolers. Donations to the National Action Network, if any, are not available, because AT&T is not required to disclose private corporate grants to the organization. Since at least 2004, LULAC has received between $1 million to $1.5 million in grants to fund technology centers for Latinos and a program aimed at curbing Latino dropout rates.
Money isn’t the only thing connecting these groups to AT&T—they share basic institutional ties. For example, the board vice chair of the Asian Pacific American Legal Center, which filed positive comments with the Asian American Federation, is formerly AT&T’s Pacific region director of marketing and community affairs. And AT&T’s director of external affairs served on Asian Pacific American Legal Center’s 2012 anniversary dinner committee, which AT&T sponsored. AT&T also sits on LULAC’s Corporate Alliance, which guides LULAC’s programming, and was a major sponsor of its National Legislative Conference and Awards Gala, where the organization discusses the year’s policy priorities. Just this April, the National Action Network honored Tanya Lombard, assistant vice president of public affairs at AT&T, and featured her on telecommunications policy panel at their national convention.
These relationships are not new. Civil rights groups have a long history with telecommunication companies that dates back to workplace discrimination lawsuit settlements in the 1970s. In 1972, the Equal Employment Opportunity Commission led a workplace discrimination lawsuit against AT&T for discriminating against women and people of color in hiring, promotions and pay. AT&T and the plaintiffs eventually settled the suit and the company was required to give millions in back pay to thousands of workers and establish internal affirmative action programs. Diversifying its hiring practices strengthened AT&T’s relationships with civil rights groups, who were critical of the company’s hiring discrimination.
A recent investigation led by the Center for Public Integrity revealed a longstanding relationship between telecommunications companies and the Minority Media and Telecommunications Council, a Washington, DC–based pro bono law firm that represents civil rights groups on FCC issues. Critics of MMTC say it serves as the “nerve center” for civil rights groups’ actions on telecommunications issues. It was one of the lead organizations in a group filing on the AT&T petition that included the NAACP and the Rainbow PUSH Coalition. Over the last twenty years, MMTC has evolved from a volunteer-based organization to a fully-funded nonprofit. According to the Center’s report, most of the organization’s revenue comes through generous donations from companies, like Comcast and AT&T, and the organization’s decade-long business of brokering spectrum license sales and station sales to minority broadcasters on behalf of companies like Verizon and Clear Channel.
Despite these close and longstanding relationships, these groups deny accusations that their ties to AT&T affect their policy agenda. “Our decision to support the AT&T IP Transition Petition was based on the fact that the transformation is already underway in the US and globally,” writes Zuleta of LULAC.
The Asian American Justice Center, which has received donations from AT&T and supports its petition to the FCC, echoed this. “At the end of the day, AAJC is a civil rights group that works on behalf of the Asian American community,” Jason Lagria, telecommunications and broadband policy senior staff attorney for AAJC, told The Nation in an e-mail. “We value our supporters’ opinions, but that support doesn’t change our mission or positions we take.”
To be sure, civil rights groups like AAJC don’t always side with telecom companies. This year the organization urged the FCC to consider how their spectrum auction proceedings marginalized minority-owned broadcasters, a concern AT&T does not share, since it would subvert its goal to buy most of the available spectrum. And on August 9, mainstream civil rights groups and public interest groups claimed a joint victory when the FCC voted in a two-to-one decision to cap interstate prison phone rates to twenty-five cents per minute and ban phone service providers from charging extra fees to connect a call or use a calling card. Groups like the National Council of La Raza, the National Urban League and the NAACP were strong advocates in lowering the cost of these calls.
Some groups find that corporate funding is essential to keep their work moving forward. The National Hispanic Media Coalition, a public interest group opposing AT&T’s proposal, does not receive AT&T funding but has accepted corporate donations from groups like the National Association of Broadcasters. “Certainly if a sponsor wants to tell us their opinion, it means we’re going to listen,” says Jessica Gonzalez, the group’s vice president of policy and legal affairs. “But it doesn’t mean we need to adopt that position.” Gonzalez continues, “It puts Latino-led organizations in a tough position, because we’re trying to benefit our community, but there are never enough resources.” A 2011 report from Hispanics in Philanthropy found that only 1 percent of foundation money went directly to programs benefiting Latinos, even though Latinos made up roughly 13 percent of the population in 2010.
Corporate influence extends into the far reaches of state policymaking. In California, legislators passed a copycat deregulation bill, SB1161, which exempts VOIP-based telephone service from some basic regulations and strips the Public Utilities Commission of regulatory power. The campaign to keep basic consumer protections and regulations was no match for the company’s massive lobbying efforts. AT&T spent $1,902,774 in the nine months that it lobbied the California Public Utilities Commission and the state Capitol over SB 1161. Since 2005, the company has spent roughly $14,000 a day on state lobbying, according to the Los Angeles Times. Organizations such as the Hispanic Chamber of Commerce, California State Conference of NAACP and Asian Business Association were outspoken supporters of the bill, citing reasons similar to some civil rights groups’ support of AT&T’s FCC petition.
“AT&T has all the grassroots support money can buy,” says Mark Toney, executive director of TURN, a utility reform organization. TURN worked with sixty-five organizations in opposing the bill—none of which received funding to support their work opposing SB 1161. “Anyone can look at the list of bill supporters and see who is getting money and who is not.” The Hispanic Chamber of Commerce has received $30,000 from AT&T every year since 2006, according to TURN’s analysis of AT&T’s 2011 tax documents. The Hispanic Chamber of Commerce, California Black Chamber of Commerce and the Asian Business Center also share a $287,000 California Emerging Technology Fund grant, an effort supported by AT&T and Verizon as a condition of their respective 2005 mergers with SBC and MCI.
Public interest advocates say the fight for media reform and media justice is increasingly an economic one. “When you talk about dismantling this kind of monopoly power, you’re really talking about restructuring our whole economy,” Robert McChesney, professor of communications at the University of Illinois Urbana-Champaign and author of Rich Media, Poor Democracy: Communication Politics in Dubious Times, explained at the National Conference for Media Reform this year.
Advocates say the stakes are high and emphasize a need for unity among people of color. “I’ve spoken with several folks and made my personal plea out of respect that we really need you,” Joseph Torres, senior external affairs director at Free Press and co-author of News for All the People: The Epic Story of Race and the American Media, says of civil rights groups. “At times it’s a little painful because a lot of the positions some [civil rights groups] have taken on these telecom issues are the wrong positions.” While Torres says there should be room for debate between civil rights and public interest groups, “the policies telecom companies are trying to pass would have a negative impact on our community.” For Torres, aside from the affordability and service reliability issues in the petition, he sees it as another corporate ploy that would weaken the voices of people of color in this new technological era.
“We’ve been fighting to democratize traditional media from corporate gatekeepers who demonize our community,” Torres continued. “We need to ensure they don’t continue to act as corporate gatekeepers.”
After ten years of fighting for basic telephone service, Delgado refuses to fall for company ploys. For the last two years, she has worked as a parent leader with Congregations Organized for Prophetic Engagement, where she mobilizes parents at San Bernardino schools to testify at town hall meetings and lobby legislators on policy issues like California’s AT&T bill last year.
“These companies need to be stopped,” she says. “It’s difficult for companies to understand that it’s important for us to have reliable telephone service at home. The prices that they offer are too high. We need services that are affordable and reliable.”
For Delgado, the solution is clear. Now she waits for civil rights leaders to catch up.