Home ALEC How Cable Companies Use ALEC to Get in Your Pocket

How Cable Companies Use ALEC to Get in Your Pocket


About 100 million people in the U.S. pay for what by comparison with other countries is substandard cable or satellite TV every year. Both our cable and our Internet pale in comparison and yet are twice as expensive as the same services are in…oh, say…Paris! Yes, one of the most expensive cities in the world has less expensive cable TV and Internet that is much faster and half the cost. It is what economists, such as they are, here used to call the effects of a “free market” system. That’s right. We don’t have one. We now have five major companies serving most of the country. All five do not exist in the same market. In most places the choice is simply one of two. That is, by any definition, a monopolistic system.

Here is a rough breakdown of which companies have how many subscribers.

Comcast has 23 million. Time-Warner Cable has 11 million, AT&T U-verse has 6 million, Verizon FiOS has 5.5 million, Cox has 4.3 million, Charter Communications has 4.2 million and a remaining 8 million are divided up among six other companies. So the total of cable television viewers is about 62 million. The satellite distributors, Direct TV and Dish TV have about 34 million subscribers. So the entire spectrum of distributed multi-channel, paid television reception is around 100 million subscribers.

Cable television has been losing subscribers. It lost 1.7 million in 2012 and 2.0 million in 2013. In 2014, the losses were so bad that the net subscriber base in both Cable and in Satellite declined by almost 500,000 subscribers. To be specific, cable has been losing subscribers but gaining new subscribers. So even with losses they had been growing slightly. But In 2014, through the third quarter, the 500,000 is an actual reduction in the total number of subscribers now held by all the cable companies and the satellite companies.

So where are people going? They are turning to a new system of watching entertainment. It can’t really be called television, because it is only television after the fact. Here’s how it works. You buy a box called Roku for about $50 bucks and you connect it to your television set. You purchase a monthly Internet service, if you haven’t already, that costs a minimum of around $45-$50 per month. Then you sign up with a service like Netflix. The Netflix services has hundreds of movies and television series, and documentaries including some from Showtime and HBO. You simply click on an icon and up comes the movie or an episode of a series There could be 20 or so in the series like “The Borgias” or “The Tudors” or as with something like “Frasier” or “NYPD” there could be over a hundred, 5 or 6 seasons of programs. No commercials, at least on Netflix. Netflix is about $9 a month.

But then you can add other channels, like Amazon Prime, which is a similar situation, with good movies and some very good series, like “Rome,” “The Sopranos,” or “Deadwood.” Again, no commercials, and but a cost of about $9 a month.

And then there is a YouTube channel which as yet has no monthly fee but does, as it does on the Internet, occasionally have an opening commercial which you can skip. It simply allows you to upload to your TV screen whatever you see on YouTube.com. And there is Facebook and the History Channel and on and on. So there are a lot of opportunities but some cost you something per month or will have commercials, like Hulu Plus, where you pay for movies and television shows with commercials embedded in them at about the same percentage of the time as live television does. Or the channel will be free, like Crackle, but there are a lot of commercials embedded in all the programming. In the case of HuluPlus, they get you on both ends, as do some other channels. So, pretty soon your bill is going to add up, on top of that monthly Internet fee.

In some instances, the problem with cable TV is less the cost than Comcast or AT&T itself. The companies are hugely profitable, making money at every turn. Their costs are minimal…like any utility, they simply deliver something…in this case electronic imagery through coaxial cable which is already in place. They have put into place service procedures that are beyond sub-par. They are less than minimal. They are directly designed to keep customers, and if customers leave, to punish them with added fees, return fees for equipment that the cable companies say now, at the end of your contract, is theirs. Most people are too intimidated by threats of $500 charges and legal actions and so they search around for equipment that they can’t even identify and likely have never seen before to satisfy the constant calls of the customer service people from the cable companies. It is simple harassment, designed to force people into keeping their service.

One of the most frequent complaints about cable companies is setting up wrong service, always more expensive service, which was never ordered. Then comes the waiting on the telephone to get a customer service person, sometimes as long as 40 minutes. There is no question that cable TV services have the worst reputations. In every survey of customer service, the cable TV companies rank perpetually at the top of the list, followed closely by the health insurance industry. Both industries see themselves as protected by political allies (overwhelmingly the Republican Party) who can keep bad things from happening to them as long as they continue to pay off corrupt politicians.

And this is why companies like Comcast have decided to make their Internet fees higher and make adding cable TV a lower differential cost. Of course all the additional fees and surcharges and taxes that the companies require will add another ten to fifteen dollars onto your monthly bill. So a $50 dollar per month Internet charge that adds $10 for cable will actually turn out to be a $72 charge or a $75 charge. So your minimal bill will be $900 a year for Internet and cable, a service less than half the quality in other countries for double the price. Your privilege for living in the United States is that you get to pay for a monopoly. You see, your only choice is to go to the other, usually the one other service in your area for the same stuff and pay exactly the same fees for exactly the same quality.

Now it is not as if there are no other companies in the country. There are dozens of other companies who have found a small niche in the television business. CenturyLink has a small cable delivery service in Omaha, Nebraska, Las Vegas, Nevada and a few other locations, with an audience of around a quarter million. But none of these smaller organizations really offers any competition. In the most openly competitive markets, there may be two cable services to choose from and two satellite services. The cable companies are usually similarly priced and the satellite companies offer slightly less service for slightly lower prices.

Two things are clear. People dislike the monopolistic cable and Internet companies and they are leaving by the millions to find some way to have entertainment and some news delivered to their homes in alternative ways. But the cable companies have one huge advantage. They are supporting members of a corrupt political organization of Neo-Fascist corporations, called ALEC, the American Legislative Exchange Council. Here’s how it works. ALEC basically bribes state legislatures (almost all Republican) to introduce and support legislation for its members. Who are its members? Well, of the 12 national officers, 9 are Republican and two of the remaining three, who are Democrats, come from Arkansas. One is from Iowa. The 16 member board of directors are all Republicans.

And there is a reason for that, as you will see. The Republicans support ALEC, which is corporations and such industry groups as NRA, big tobacco, the American Petroleum Institute, and giant companies like Comcast, AT&T, Verizon and Sprint. Not to mention EXXON, Monsanto and Altria. In case the name “Altria” is not familiar, try Philip Morris Tobacco. Now a giant owner of several tobacco brands, Altria is big in trying to expand smoking through ALEC but also kicks in a little to fight against those who advocate measures to limit climate change. Lest you think that big tobacco has given up. Altria has been regularly and quietly the second largest lobbying organization in the country. They are on the board of ALEC.

Once a legislator has joined ALEC and paid his or her dues, many benefits accrue—trips, payoffs and large campaign contributions. They accrue, however, most to those who will introduce legislation on behalf of ALEC’s underwriters and corporate members. Which brings up a good question. Who were ALEC’s main funders? Well, they include EXXON/Mobil, the Koch Brothers, the Coors family, the Scaife family, the Bradley Foundation, and the Olin foundation. All these groups are tied to Right Wing efforts against the People of the United States. (Even though they sometimes kick in just enough to public and private charitable organizations to get their names mentioned.)

Here’s what their money buys them. Although the examples will apply to the cable industry, other examples of anti-public education, anti environmental, pro-smoking, pro-fracking, anti-health care reform, and pro gun proliferation abound with these corrupt state legislators. ALEC has legislators working for them every day in every one of the 50 state legislatures. Many of the recently elected Republican Senators and members of the House of Representatives started out as shills for ALEC and worked hard enough to both destroy good laws for the People and create new laws for corporations that they have been pushed all the way to the top of their “profession.” There seems to be no limit on the number of politicians (Republican politicians, the statistic show) who will sell out for a buck.

The main piece of legislation that holds the average citizen under the thumb of the big telecom and cable companies is the model legislation from ALEC called the: “Municipal Telecommunications Private Industry Safeguards Act.” Introduced by Right-Wing ALEC-scum Republican legislators and passed in 20 states, the law prohibits local communities from developing their own broadband services. It protects the worst corporations in the United States, voted as the worst by almost every public survey of consumers on worst corporate service. (Comcast and Time-Warner) The law prohibits the wiring of fiber optics into local communities or groups of communities. They ridiculously characterize the law as preventing the loss of jobs (Whom do the cable companies think would be running these local networks…robots?) and “fairness” which, when applied to these companies is a joke,

But that is not enough. ALEC’s purchased legislators introduced the (ALEC-written): “Cable and Video Competition Act.” This act eliminates oversight from cable companies. It gives control of when and if to extend cable service throughout a state and what is adequate Internet access. The bill has passed in 23 states, thanks to ALEC-paid legislators. In North Carolina, the same legislation, only called: “The Video Service Competition Act” promised greater investment in cable service for the public. The result: North Carolina is the worst state in the nation for homes with basic broadband service. Then there is the ALEC-written legislation called the “Broadband and Telecommunications Deployment Act.” This little piece of crap gives telecommunications provider access to all public rights-of-way. It makes it more difficult for communities to charge franchise fees or create regulations on telecom companies. In short, this ALEC legislation simply gives unlimited access to public lands under sidewalks and streets to run cable without paying any fees. It is a literal theft of public property.

Although about a hundred corporations, having been discovered actively working against their own customers, companies like Coca-Cola, Kraft Foods and McDonalds have pulled out of ALEC, the cable companies have not. In fact, in some states they are the biggest sponsors of meetings and conferences designed not only to undermine rights for consumers of cable TV, but a myriad of other laws designed to pollute, to proliferate gun ownership, to turn prisons into places of unspeakable horror, and to eliminate product liability when your pharmaceuticals poison you or your car crashes and explodes. No, the cable companies will hang in there until someone breaks them up into much smaller regional companies and until the People wake up and set up local broadband systems which could provide at least five times faster Internet and cable access than the basic 3mbps now offered as the basic Internet connection for that 50 bucks a month. What you can do is write to your local representative. Better yet, elect a Democratic representative who promises to attack ALEC in the legislature.

Here is what huge amounts of money will buy. First an amount of money double what Governor Quinn could spend, including millions of dollars of his own money elected Republican Bruce Rauner as Governor of Illinois. The new governor, one month after he was elected, has created a 20-million-dollar fund, to help bribe state legislators. Here is how that works. It is based on the ALEC principle only on steroids. If a legislator votes with Rauner, ALEC and giant corporations against the legislator’s own constituents, Rauner will use the multi-million-dollar fund, ($10 million of which he put up himself) to find any legislator a new job or provide him with enough funds to beat a competitor next time. In other words, Rauner will buy his vote if it turns out that it was necessary. This is the kind of graft that has not been seen since Tammany Hall or the heyday of the Mafia.

Republican politics have become one big cesspool of greed. People like Bruce Rauner buying an election and then buying individual politicians to defeat unions, and citizens and the poor and the ill and the disabled. It is all one big Republican effort to destroy America and destroy Democracy. And one way to do that is to make it so expensive and so difficult to avoid paying three times the price for essential services that they can bankrupt Americans. Exorbitant food, gas, electric, water entertainment and transportation costs make the life of the average American difficult to survive. The lesson of ALEC and the corporate giants of cable television should be a lesson to all Americans about the control corporate America wants to levy on all citizens.

It will not get better unless you act to change it. Blind capitalism will not turn on itself. Only a Populist revolt will turn out the greedy politicians and the lobbyists who put them into office. You must act. Only you can remove this stain from American Democracy. And, as you can see, you need to act now.

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