Using the Legislature to Crush Your Competition

Today's lesson (h/t BoingBoing) in the delicate ballet between government and business comes from Wisconsin, where AT&T, along with Republican allies in the state Legislature, is engaged in an effort at rent-seeking so shameless it almost sounds like something out of a cheap Marxist novel.

The controversy concerns WiscNet, a cooperative started by the University of Wisconsin that provides broadband service to most of the state's public schools and libraries. The service's participants like it, particularly because it costs much less than it would to get the same service from someone like AT&T. Naturally, this displeases AT&T. So is their response to outcompete WiscNet, using their private-sector awesomeness to provide a better service at a lower price? Surely you jest.

No, their response was to get Republicans in the state Legislature to insert an amendment to the state budget forcing schools and libraries to abandon WiscNet. And for good measure, the amendment would return millions of dollars in stimulus money the state received for expanding broadband to underserved areas. Because AT&T doesn't like that either -- not because they're itching to provide broadband to rural areas, but because they'd rather have them served by no one than open the way for any system that might be led by government or nonprofits. Much of this stiumulus money went to U-W, which has already begun laying fiber-optic cable to underserved areas; those projects would have to be abandoned, costing hundreds of jobs. The amendment already passed a budget committee and now awaits passage by the full Legislature.

The problem is that services like WiscNet don't only take away customers from big telecom companies like AT&T; they also provide an ongoing demonstration that there are alternatives to overpriced broadband. And that just won't do. As the LaCrosse Tribune explains, "Public libraries in a seven-county region of southwestern Wisconsin rely on WiscNet for Internet service. Right now they pay $8,500 a year; to get the same level of service commercially would cost $35,000, said David Goldfein, technology manager for the La Crosse Public Library." (There's a lengthy explanation of the whole issue here.)

When we talk about "lobbying," we tend to forget that it isn't just about former senators signing up with white-shoe K Street firms to wring money from the federal tax code. A tremendous amount of lobbying takes place at the state level, where powerful corporations like the telecoms can have their way, usually without anyone noticing.