As America watches the various rounds of Congressional debates on Campaign finance reform, an alarm should be sounding in every voter's mind. The conversations all focus on the amounts of money that a political party or individual can receive, but there is little discussion of the direct conflict-of-interest various Senators and Congressmen have from taking the money and then creating and effecting the outcome of critical legislation.
One of the most glaring examples is the case of the ties between Congressmen Billy Tauzin and the monies, staff and other questionable relationships he has with the Bell phone companies, such as BellSouth. (also Verizon, SBC, and Qwest) As Chairman of the powerful Commerce Committee, Billy Tauzin is also in a very direct position to make decisions right now that will adversely influence telecommunications infrastructure for the decade.
Chairman Tauzin's committee, which handles telecommunications regulation will determine customer's' charges on the phonebills, the deployment (or lack thereof) of advanced networks and their decision will help make or break the entire competitive telecommunications industry. In short, his committee will determine what will live and what will die in committee before it could ever be voted on as law.
From the customer perspective of telecom -----Will the phonebill go up? Why are there so many charges on the bill? Why are phone competitors going out of business, where's the great choices and what happened to DSL?
And though he will portray his actions as not being influenced by the millions of dollars he's collected, among other activities, taken as a whole, his record clearly shows that he has voted to protect 4 gigantic monopolies, the old Bell companies, while closing down laws that would protect customers and competitors. He's a textbook definition of why we need campaign finance reform. And because of what we believe are serious 'conflicts-of interest', he should recuse himself from telecommunications issues.
But let's be frank. What is most disturbing is that the case against Billy Tauzin could be made against many of the politicians and yet, in the Beltway, these issues "don't even get lip service." Many politicians don't seem to understand that it is NOT all right to be too close to those you regulate. They were sent to Washington to protect the interest of the public, but a line of demarcation seems to be missing in many Senators and Congressmen and that missing sensibility is fairness. It's the dirty little secret of campaign finance reform.
In the case of Billy Tauzin, there are numerous issues ----A respected telecom/new media trade press, Interactive Week, ran a series of articles titled "Chairman Billy Tauzin: Bell Ringer" .(2/19, 2001) about a some of the dubious ties Chairman Tauzin has to the local phone companies
To start, Tauzin's current counsel to the Commerce Committee worked for Bell clients.
"Late last year, when it was clear he had the inside track for the Commerce Committee chairmanship, Tauzin hired Jessica Wallace as his staff counsel and recently named her to oversee telecommunications issues for him as counsel to the Commerce Committee. Wallace's previous post was at the prominent lobbying law firm Verner, Liipfert, Bernhard, McPherson and Hand, where her telecommunications clients included BellSouth and SBC."
There are numerous other ties,
"Staffers have come to him from telecom lobbying jobs", and "his oldest son, Billy Tauzin, III is a state lobbyist for BellSouth in Louisiana."
Interactive Week goes on to discuss the financing and perks Billy Tauzin receives from the Bell companies.
"The Bells have contributed millions of dollars to Tauzin and the GOP through events he organized. They have supplied him with transportation on their corporate jets and paid his travel expenses for excursions across the country and around the world. He has taken frequent hunting trips with Bell executives.
In fact, the ties to BellSouth are very numerous. According to Common Cause's Schmooze or Lose 2000" on convention parties, BellSouth helped to sponsor Billy Tauzin's Mardi Gras party at Dodger Stadium. --- price tag, $400,000.
"Billy Tauzin (R-LA/3) - Mardi Gras party Tauzin hopes to be the next Chair of the House Commerce committee. He is the current Chair of the Commerce subcommittee on Telecommunications, Trade, and Consumer Protection. Sponsors who will each donate as much as $25,000, include BellSouth Corp, Comsat Corp, Southern Co, and SBC Communications, all of whom have various interests before the Commerce Committee.
The ethical issues have not gone unnoticed. According to Interactive Week's interview with the Director of Media Access Project, Tauzin is "Bellsouth's guy".
"From the minute he got here, he was BellSouth's guy," said Andrew Schwartzman, director at the Media Access Project, a consumer interest group. "And if you're a hired gun, after long enough, you think you're right. I don't know when Billy came to think that, but he's been viewing the world through the BellSouth telescope since he got here."
Does all this money and influence change America's Telecom agenda. According to Ethan Jones, telecom specialist, the influence of Bell money into Billy Tauzin's 'Leadership Pac" could have helped to kill an "anti-cramming' bill, a bill that would have made companies responsbile if they add charges on the phonebill even though they weren't ordered.
"Of course, contributions from the telephone industry go beyond just the soft money donations. Telephone PACs and individuals working in the telephone industry donated $2.6 million dollars to Representatives in the first 18 months of the 1997-1998 election cycle and $3.7 million to Senators from 1993 through June 1998. ("Phone Rates," Center for Responsive Politics, October 1998)
Tauzin's voting record clearly shows no deviation from the Bell's agenda. The actions taken by Tauzin have given the Bells more money, more power, less scrutiny, and even protection from investigations.
In one case, Tauzin helped to create a bill that would essentially allow the Bells to walk away from billions of dollars in charges it owes competitors. If this happens, Internet customers that use competitors will all have major price increases. (Source: http://www.publicampaign.org/ouch11_3_00.html
"Indeed, it is the rare Member of Congress who won't bend over backwards to help major campaign contributors on Capitol Hill at the same time his hand is out seeking last minute campaign contributions. Rep. Billy Tauzin (R-La.) is pushing for a provision that would save regional Bell telephone companies billions of dollars paid to local carriers. Consumers Union warns that Internet users would bear the cost of the change, since the local carriers would raise their fees for Internet service providers to make up the difference. Tauzin's top two campaign contributors are regional Bell companies-Verizon Communications, which gave him $13,750, and SBC Communications, which gave him $12,250. Tauzin ranks third in the House for contributions from telephone utilities in the 2000 election cycle, receiving a total of $53,450."
In another case, Billy Tauzin and Congressmen Dingell wrote a letter to the FCC, to essentially squash a series of scathing audits of the Bell companies. These audits found that $5 billion dollars of network equipment was missing and an additional $14 billion was 'unverifiable". Known as "Vaporware", these were only 1/4 of the audits that needed to be completed. Both Tauzin and Dingell requested the FCC not make the audits public. According to Bloomberg News: ("FCC delays release of Baby Bell audit" By Bloomberg News January 28, 1999)
"Federal regulators postponed the release of an audit of Bell Atlantic and other large regional U.S. phone companies after pressure from key lawmakers to delay making the report public. Yesterday, House telecommunications subcommittee chairman Billy Tauzin, a Louisiana Republican, and Representative John Dingell, the ranking Democrat on the House Commerce Committee, asked the FCC to explain the audit process and report's findings before making it public. "
The outcome of the audits has been ugly from the perspective of customer safeguards. The FCC stated it would not hold the Bells accountable for the audits findings, stating as one of the reasons, that they did not have enough funds to do the audit. The FCC has allowed the states to investigate. To date, no regulator has stepped up to the task.
Tauzin has also been a staunch supporter of allowing the Bells into long distance. The Bells have been restricted from entering the long distance services--- meaning calls across state lines ----- because of their monopoly power. The Telecommunications Act of 1996 lays out a plan which allows the Bells to enter long distance after they have proven that their networks are open to competition. The law was diluted and does not even require full competition before the Bell can enter long distance. Today, only 4 states have been allowed into long distance--- New York, Texas, Kansas and Oklahoma. Many other states have tried, but their networks are not open to competition.
However, like a tele-mantra, Billy Tauzin has continually tried to make it easier for the Bells to go into long distance services, which of course will make the Bells more money. He even scolded the FCC to get his point across. This excerpt from a Communications Daily article sums the major points. (Source: Communications Daily "Tauzin Asks FCC to Consider Broader Local Competition Standard 01-08-98)
"On Wednesday, House Telecom Subcommittee Chairman Billy Tauzin (R-LA) said that the Federal Communications Commission should consider whether PCS providers could be considered as providing sufficient competition to justify allowing incumbent telcos into long distance market. In a January 7 letter to FCC Chairman Kennard Rep Tauzin expressed disappointment in the FCC's decision to deny BellSouth's entrance into the long distance market in South Carolina as well as concern "about the way in which the [Telecom] Act is being implemented."
Finally, there is another bill that Tauzin and Dingell are championing, with the misnomer of "Internet Freedom and Broadband Deployment Act. Re: deregulation of Internet and high speed data services."
To read a discussion of the issues see our question & answer document
The premise of the Bill is to speed up the deployment of advanced networks. This bill gives the four remaining Bell companies the freedom to not give access to the competitors. Also, it would give the Bells new freedoms - read new profits. To read last years version and related material see the Tech Law Journal. :
There is clear documentation that the Bells already received massive financial incentives for rolling out a 'fiber-optic' network, but instead, the Bell companies kept the money, in the form of higher profits from customers See: How the Bells Stole America's Digital Future"
Also, the Bells are now some of the most profitable companies in America--- about 200% higher profits than the Business Week 500.
See: Bell Profits are Outrageous, 2000 (to be released April 17th, 2001.)
It is also true that the Bell companies are delivering sub-standard services to competitors, which has been forcing many companies out of business.
See the New Networks Institute survey of Internet Service Providers (ISPs) from Texas and New York. http://www.newnetworks.com/isptexasnysruvey.html
So, is it because of all this money that no one can read their phonebill, or that virtually everyone in America is still using old dial-up modems over the same 100 year old copper wiring. And hasn't Congress gotten the picture that the Competitive Local Phone Companies and Internet Service Providers have been going belly up -- caused in a large part by the Bell companies? And how did the Bell monopolies, which are supposed to be regulated, become some of the most profitable companies in America? How will prices go down without some fix?
More to the point, why is Chairman Billy Tauzin not addressing the important customer issues? We respectfully submit that there are too many apparent conflicts-of- interest to allow Rep. Tauzin to create laws and vote on telecom issues, and therefore, he should recuse himself.
New Networks Institute