Template Tools
G.U.M.M.ies - Give Us More Money
Sunday, 30 November 2008 17:57

"Give us more money," is the rallying call of a thriving D.C. species, especially a group funded by AT&T and Verizon. Read their work, and it's clear they are funded to recommend concessions to the people who pay them, while they speak in the name of a worthy cause, such as better U.S. broadband. The distinguishing feature is that their concrete suggestions include major giveaways to those providing them income.

GUMMies are used by influence peddlers to create "publication bias." For every one item written by consumer advocates, ten come from carrier allies. The result is that the carrier point of view becomes overwhelming, with many people believe that what they hear so often must be at least true. A typical example is the economic impact of broadband, which is real but modest. A Verizon bought report made extraordinary claims that broadband created most of the U.S. economic growth at the beginning of this century. Dozens of others - many paid by the carriers - used that "data" in their own work, using it to justify more money for the carriers as a "broadband stimulus." The few honest looks at the impact have been overwhelmed.

A typical GUMMie piece of work is a sensible sounding "report" advocating broadband stimulus. The first recommendation is: "To promote broadband infrastructure deployment policymakers should take the following steps: Enact more favorable tax policies to encourage investment in broadband networks, such as accelerated depreciation and exempting broadband services from federal, state, and local taxation." Another telco paid advocate, well liked after an honorable career in government, calls for improving broadband and then suggests three ways to accomplish that laudable goal:  1) reduce taxes on carriers. 2) Reduce requirements on carriers to serve everyone. 3) give carriers more money via tax incentives.  He adds the innocuous sounding “Reform the federal Universal Service Fund (USF) program to extend support for rural broadband to all carriers.” That's particularly pernicious, because the main carriers not currently included are Verizon and AT&T. I haven't heard VZ and T telling shareholders their profits are vulnerable without a government subsidy.

The best GUMMies:

  • Are articulate, persuasive, and very visible in policy circles. If they are well-liked, even better.
  • Are frequently in the media. Every time the Times or WSJ quotes one of these folks, their rates goes up.
  • Often claim to be "non-profit" and "educational." In fact, the money typically goes to the handful of people who set up the organization. They almost never report the details of who pays them how much. Their official 990 forms often hide what they collect, laundering the money through "consultants."
  • Since the Obama election, it really helps to be a democrat. Democrats willing to carry water for corporations can virtually name their price.
  • Have tolerance for major cognitive dissonance and no desire to question or bite the hand that feeds them.

    • Very few of the GUMMies do it just for the money. Advocates who will say things they don't believe are typically unpersuasive, and not as well supported. "We support our friends," a top lobbyist explains. "Friends" who don't appear to be puppets are far more effective. Few of the GUMMies recognize their role. One guy who accepts $100's of thousands (at least) from carriers cursed me out for 15 minutes for calling him a lobbyist "because he doesn't go to Congressmen and ask for their vote." He's a great guy, smart and knowledgeable, and until that moment was a friend. I had even called him among the most qualified for the FCC Chairmanship. I was amazed by the call, because he is much too smart to ordinarily believe the things he said. I had assumed he had decided to make compromises in return for support of his related (well-intentioned) work. I was amazed when he instead, in the most sincere tones, made a series of comments that were wildly far-fetched. A very dramatic example of cognitive dissonance.

    A second giveaway to bad policy thinking is that they ask for "incentives," rather than results. In 2003, it was easy to determine that the U.S. would not get more broadband despite concessions on competition rules worth $B's to the Bells. I simply asked AT&T, Verizon, and BellSouth how much more broadband would they build if they won at the Triennial or Tauzin-Dingell? None of them intended to deliver more broadband. Since that was more than 80% of the U.S., it was impossible for the "incentives" to have much effect. In Washington, "incentives for investment" is a euphemism for government concessions.

    Between 2003 and 2007, AT&T built considerably less than they had forecast, Verizon slightly less, and BellSouth/AT&T reneged on 1.5M lines of 50 meg+ FTTC they had specifically promised Martin in return for an exemption from unbundling. However, the last of their significant competitors for retail customers, the old AT&T and MCI, were wiped out.

    A good way to recognize GUMMies is to ignore their fine sounding press releases and look at the details of their recommendations. In particular, they often call for outright subsidies or other concessions to corporations. They also like regulations that allow big companies to pervert the free market by destroying most of the competition. Their most important purpose is to wrap the request in flowing language promising legitimate public benefit, like universal broadband.  This is a crucial part of the carrier lobbying campaign: getting what they want by persuading honest people they are contributing to the public good.

    More details welcome, including suggestions of bad policy analysis by those who agree with our editorial policy. If they receive substantial sums of money while advocating their major corporate sponsors should get valuable and inappropriate government favors, they belong on this list.