How AT&T, Verizon and the Telecom Giants Have Captured the Regulator Supposed to Control Them


David Rosen and Bruce Kushnick
AlterNet
January 8, 2011

In a recent AlterNet article, we detailed how the Federal Communications Commission (FCC) helped increase the “FCC Line Charge” (SLC), now capped at $6.50 per line, that is imposed on every residential and business phone line. It is a charge that is usually hidden among the “taxes and surcharges” section of the phone bill. It does not go to fund the FCC, but is a direct subsidy to phone companies.

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However, the full story of the role AT&T, Verizon and others played in the FCC’s deliberations establishing the SLC has yet to be told. It is a model of what is known as “regulatory capture,” the process by which a federal or state regulatory or other government agency becomes too cozy with those it is charged to oversee.

In 2000, the phone companies created a campaign known as CALLS (Coalition for Affordable Local and Long Distance Service) to raise fees. It is the model of how these companies, their astroturf shills, co-opted consumer groups, corporate-funded research firms, federal bureaucrats and politicians worked together to effectively take control of the FCC’s agenda and create a massive marketing campaign to fool the public.

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A report on the program was issued on September 19, 2000, and mysteriously disappeared from the FCC Web site. It has surfaced and details how the campaign was implemented. It also offers insight into the mystery of regulatory capture that shadows the FCC.

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