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Spectrum scaring continues from ISP lobbying groups

Telecom companies use a variety of techniques deemed astroturfing.
August 22, 2014

Whenever major telecom companies want to get laws passed (or killed), they use a variety of techniques. Many times, they help fund groups to do their bidding in what is deemed astroturfing. This allows the telecom companies to create the image that many are in support of a policy that the telecom wants in place.

This includes “paying legitimate minority or business groups to parrot press releases, to the creation of entirely bogus pro-consumer groups.”

Now, we have another bogus consumer group called the American Consumer Institute (ACI) that is using op-ed pieces to try and scare the public into giving Verizon and AT&T whatever they want spectrum-wise in upcoming auctions.

Who is the ACI?

  • Perhaps because ACI, like Broadband for America, is financed by an ISP lobby group. Annual tax returns show that a foundation controlled by lobbyists from the cell phone industry, called, has contributed to ACI since 2010. – Vice
  • Except the American Consumer Institute isn’t actually a consumer group. It’s an amalgamation of think tank reps pushing for corporate deregulation under the guise of consumer advocacy. A quick WhoIS notes that the ACI website is registered to Stephen Pociask, a telecom consultant and former chief economist for Bell Atlantic, who via groups like the Competitive Enterprise Institute, works as a public relations apparatus for paying corporate clients. – DSLReports
  • “ACI masquerades as a pro-consumer group, but in fact is loaded with folks that have a long history of ties to special interests and lobbyists, though those details are often missing from the online “bios.” ACI also links to minor consumer groups, pro-industry websites, another well-known astroturfer — the Discovery Institute which helped promote the exaflood nonsense (the Internet is getting too full, log off), and even an insurance industry blog. Consumer Reports this isn’t.” – StopTheCap
  • “Such non-profits like Broadband for America and the American Consumer Institute (ACI), both of which claim to be “independent consumer advocacy groups” and have been fighting against classifying ISPs as a utility (a move that would make it easier to enact net neutrality rules in the future), have been shown to be heavily funded by the cable industry.” – ArsTechnica

Groups such as Consumers Union were the first to call out ACI in 2007 for leaving out the significant connections that the group had to the telecom industry in the sites bio.

In a recent Real Clear Policy piece, it isn’t hard to see the usual scare tactics:

  • This was meant to help alleviate congestion on wireless Internet networks, a problem that’s growing rapidly as consumers increase their use of smartphones and other data-focused devices.
  • There has, however, been a major hiccup in rolling out these spectrum auctions that could have a detrimental effect on the consumer.
  • Consumers are hurt if the broadband isn’t allocated according to the actual demand for it: One recent study estimated that these rules could lead to billions of dollars of consumer-welfare losses.
  • With the restrictions the FCC has put into place, consumers could continue to face poor service quality and spectrum rationing, combined with the potential for higher costs and data caps.

Except, none of this is even remotely true.

As this site has discussed previously, the telecom industry has used astroturf groups for years now. The answer from these groups always seem to be the same thing: no regulations and more tax cuts for the telecom industry.


When AT&T wanted additional subsidies and tax credits, they largely funded the Internet Innovation Alliance (IIA) to do their own bidding. The IIA claimed that internet capacity armageddon was coming unless carriers received little-to-no regulation, no net neutrality laws, no price controls, huge subsidies and tax credits, less consumer protection.

This was deemed as the “exaflood” in which video bandwidth demands would become unmanageable and the internet would therefore come to an abrupt halt. It never happened.

In 2008, the IIA claimed that by 2012, we would see ‘brownouts’ which is similar to the exaflood except brownouts refer to specific interruptions.

“The findings indicate that by 2010, the Internet’s capacity will not likely accommodate user demand. As a result, users could increasingly encounter Internet “brownouts” or interruptions to the applications they’ve become accustomed to using on the internet.” – USAToday

Now, we are back to a spectrum scare where AT&T and Verizon are having their astroturf groups publicize how they are the ones who need the spectrum OR ELSE!

There is no argument that spectrum is limited. Yet the idea that major carriers would collapse unless given all the available spectrum is in fact imaginary.

  • We have seen Verizon cry about their spectrum needs. They seem to do it whenever they need a regulatory favor.
  • We have seen AT&T claim that if they aren’t allowed to acquire T-Mobile, AT&T may go bankrupt and T-Mobile would never survive.

Again, it never happened.


In reality, modest investment can do wonders for major telecom companies. Add in that companies like Cisco have been repeatedly slashing wireless growth projections the last few years.

Then there is the fact that the Department of Justice prefers not having AT&T and Verizon buy up all available spectrum whenever an auction occurs.

“(The FCC) must ensure that the allocation of spectrum at auction does not enable carriers with high market shares to foreclose smaller carriers from improving their customers’ coverage…Today, the two leading carriers have the vast majority of low-frequency spectrum, whereas the two other nationwide carriers have virtually none. This results in the two smaller nationwide carriers having a somewhat diminished ability to compete, particularly in rural areas where the cost to build out coverage is higher with high-frequency spectrum.” – Department of Justice