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AT&T, Dependably in Forefront of Consumer Abuse

3:29 pm in Uncategorized by Consumer Watchdog


Comedy is funnier when it hits you in the gut. That’s what made a famous skit by Lily Tomlin about the phone company’s abuse of customers so memorable, one tag line being “We are omnipotent.”

AT&T is still at it. As columnist James Temple writes in the San Francisco Chronicle Friday:

In August 2006, the California Public Utilities Commission voted unanimously to allow AT&T and other companies that provided local telephone service to raise prices at will.

Then-Commissioner Rachelle Chong, a Republican, credited as the driving force behind the deregulation plan, argued that growing competition from Internet phone service and cell phones would keep prices low.

“By the end of the 2010, these rate caps will no longer be necessary,” Chong said when the new rules were being phased in. “The market will be so competitive it will discipline prices.”"Price discipline?” That should have ‘em rolling in the aisles. Temple goes on to report that AT&T’s flat-rate plan for local calls is up 118 percent and services such as call waiting up nearly 180% since 2006. U.S. median household income is down 8.1% since 2007.

Tomlin’s original crack about omnipotence wasn’t much exaggerated. AT&T’s stranglehold on the California Legislature and the state Public Utilities Commission is near-legendary.

Chong, the AT&T cheerleader on the commission, took a luxurious junket to Tokyo, funded and run by the telecom industry. Other commissioners and legislators went as well, as reported by Consumer Watchdog, without an ethical qualm.

Judy Dugan

Also on that 2007 Tokyo trip was the state Assembly’s Utilities and Commerce committee chair Lloyd Levine, who co-authored 2006 legislation sponsored by AT&T and Verizon in 2006 that allowed the telecom companies to to get into the cable and video business with one unregulated statewide franchise, while eliminating local control and consumer protection of all cable services.

Consumer Watchdog fought the legislation, predicting that prices would rise, not fall, customer service would degrade, companies would cherry-pick the richest markets for their much-touted new services and local public-access TV, previously funded by the cable companies, would disappear.

The other co-sponsor of the cable deregulation was then-Speaker of the Assembly Fabian Nunez, who received the language of the proposed bill directly from a corporate/right-wing think tank called the American Legislative Exchange Council, or ALEC, described thusly by SourceWatch:

ALEC is a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that. Through ALEC, corporations hand state legislators their wishlists to benefit their bottom line. Corporations fund almost all of ALEC’s operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve “model” bills. Learn more at the Center for Media and Democracy’s

After the cable deregulation passed, AT&T partner Verizon took out full-page ads to thank Nunez personally. Nunez kept on benefiting from telecom donations and sponsorships, even as our predictions about price, service and public access came true.

AT&T is also the sponsor of the legislative Democrats’ chief yearly fund-raising event, the Pebble Beach Speakers Cup, and was a major donor to former Gov. Arnold Schwarzenegger. Every penny of that lavish spending has gone to legislation and deregulation that boost AT&T’s bottom line at the expense of consumers. And neither the 2013 Legislature nor the governor’s office seems moved to undo the wreckage of AT&T’s deregulatory spree.

No wonder we’re not laughing.
Posted by Judy Dugan, former research director for Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

AT&T Execs and Shareholders Should Pay $3 Billion “Merger Termination Fee”

5:56 pm in Uncategorized by Consumer Watchdog

"What should the caption be?"

"What should the caption be?" by John Taylor on flickr. AT&T CEO Randall Stephenson (left) is chatting with Deutsche Telekom CEO Rene Obermann (right) at a May 26 Congressional hearing on AT&T's bid to takeover T-Mobile USA.

Did AT&T really think we’d fall for its broken record promises that the AT&T/T-Mobile merger would help consumers?

Just a few weeks after Consumer Watchdog wrote a letter urging regulators to block the AT&T/T-Mobile merger, the Department of Justice gave the AT&T merger a big thumbs down by filing a civil antitrust complaint challenging the deal.

AT&T agreed to pay T-Mobile a whopping $3 billion “termination fee” if the merger isn’t approved. AT&T probably figured they’d use this as a bargaining chip with the feds to get the deal done (“we’ll have to charge our customers $3 billion more if you don’t approve the merger”). Here’s an idea: AT&T’s CEO and shareholders should pay that fee out of their own pockets. They don’t seem to think twice about slapping early termination fees on unsuspecting customers. After the 2004 AT&T/Cingular merger, AT&T deliberately downgraded its network to the point that its customers’ cell phones became unusable. Customers who wanted out were hit with early termination fees of anywhere between $175 and $400. Maybe forcing AT&T’s greedy execs to pay the “merger termination fee” would make them think twice about pushing a merger which is not in the public interest.

DOJ’s move today marks the beginning of the end for AT&T’s proposed deal, which would have resulted in increased prices, degraded wireless service, and unexpected fees for many consumers throughout the country.

Consumer Watchdog applauded the Department of Justice today for filing a civil antitrust complaint to block the AT&T/T-Mobile Merger. Read about it here.
Posted by Laura Antonini, research attorney for Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.