Lately I’ve been critical of the comment-taking process at the FCC (seen here and here). That in its effort to create an open, citizen-centric environment, its openness has allowed, or makes ripe for the possibility, that the comment-making process at the FCC can be gamed.
I look at the recent AT&T merger as a case in point. Ostensibly, thousands of “consumer comments” have flooded the FCC. Many are negative, urging rejection of the merger. Of these, perhaps the majority (somewhere in the neighborhood of 19,000) are scripted robo-comments, bundled and conveyed to the FCC via special interest groups like Free Press, or Color of Change, or the Sprint-supported NoTakeOver Project.
I guess we have to take these organizations at their word that the comments are “real” because authenticating documents, even in the analog world, is not without its own perils. I mean, who knows who pushed the button to get them to the FCC? There’s nothing self-certifying or unique other than the digitized names and addresses, which could have easily come from their extensive databases.
(Regardless, what would it prove if their existence could be verified? Only that a well-organized group of like-minded kvetchers hates this merger – and all others in this sector, too, come to think about it).
The upshot here is that lacking the ability to look into the bundlers’ black boxes to understand the essential “realness” of these comments, why should any be taken seriously? At least with the standard group of commenters – mostly from associations and companies – they can be easily checked, and are policed by their reputation and standing in the community.
The robo-comments are just empty, almost non-random, poll-like data. Essentially meaningless in my book.
The FCC, of course, has no comment, though we know they “weigh” all comments, including the ones arriving from web bundlers.
Be that as it may, I want to add another wrinkle to this troubling scenario.
As I noted above, Sprint plays a role in this process, too. It has been widely reported that the company has hired a savvy Washington public affairs team to ensure that the case being made against AT&T is as good as it can be for Sprint (er, the public interest). To this end, the company supports and / or works with many of the aforementioned public interest groups in an effort to derail the merger.
It seems that some of this work, however, has made it into its SEC-regulated communications to investors.
In an earnings call a couple of weeks ago, Sprint CEO Dan Hesse noted:
…[W]e continue to oppose AT&T’s proposed takeover of T-Mobile U.S.A. Sprint has been the most visible leader of those that oppose the proposed takeover, but opposition is beginning to come from all corners…[K]ey members of Congress like Representatives Markey, Conyers and Eshoo are making their voices heard along with state attorneys general, consumer groups and antitrust experts, influential business editors and columnists, competitors and most importantly, tens of thousands of customers and consumers. There have already been more comments filed at the SEC (sic, translation should have been FCC instead of SEC) largely in opposition to the proposed acquisition than with any other transaction ever appealed by the agency. The California PUC has likewise opened investigation to explore the impact of the deal on its constituents, and several other PUCs are reviewing the transaction…(Emphasis added)
Personally, I think this looks not quite right.
You see, you have a porous FCC comment-taking process, which uncritically accepts robo-comments. We know that many of those comments were whipped-up by groups who either receive Sprint’s support, or are working with Sprint to defeat the merger. And then these comments are trotted out on an earnings call, apparently to prove the point that Sprint is righteous in its opposition to merger; that investors need not worry about the viability of Sprint going forward because the company’s on top of the situation.
As I see it, a critical piece of information went missing during the call. Namely, Sprint’s involvement with the groups who drove comments to the FCC. Stated differently, had investors heard of this involvement, would they be more or less likely to believe the truth of the matter asserted?
I say – less likely.
A game-able FCC process has created a loophole of sorts, allowing the presentation of dubious comments collected in one regulatory forum to then be paraded as self-evident truths in another. This seems fast and loose to me – something that undermines the credibility of both of the agencies (not to mention Sprint and the public interest groups it employs or works with).
I get that Sprint’s got a lot at stake here. It’s running pricey, full-page ads in many of the nation’s top dailies, cutely arguing against the merger. And its lobbying efforts aren’t too shabby either, representing nearly $2 million in the first two quarters of this year alone (almost as much as it spent for all of last year’s lobbying) apparently to upend AT&T’s latest move.
This isn’t about protecting the public interest. It’s about business – kicking the teeth in of your rival.
But does Dan Hesse know what he’s doing? Who he’s got working for him and what they’re doing?
If you’re a shareholder, one would hope he does. Yet, this is a double-edge sword, too. If he does, then the statements he made on the earnings call – about the consumer comments flooding the FCC – don’t add up to me.
And, his relationship with the public interest groups doing the dirty work seems funky, too.
You see, those groups – like Free Press, and those at the Sprint-supported NoTakeOver Project – are the very entities that want to crush companies like Sprint, working with the same behind-the-scenes furtiveness to help the FCC impose old-fashioned telephone laws on network providers like Sprint last December, benignly rebottled as Net Neutrality regulations. They won’t stop fighting network providers after the merger process ends – meaning Sprint would be back in their cross-hairs for Net Neutrality #2, #3…#ad nauseum.
Of course, if he doesn’t know what’s going on, then that’s a whole ‘nuther story.
Regardless, the FCC should clamp down or tighten its process around robo-comments. In doing so, it would not only help boost the transparency and decision-making process of the agency itself, but it would also curtail what I think is a questionable two-fer.