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Washington Watch: Broadband companies are spending an ‘unseemly amount of money’ to sink key nominee to FCC, critics allege

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President Joe Biden has articulated an ambitious regulatory agenda aimed at reining in monopoly power and reducing prices Americans pay for everyday goods and services, but delays in nominations to key regulatory positions have opened the door for opponents of tougher industry oversight to thwart these efforts.

Take the example of Gigi Sohn, Biden’s pick to fill the open seat on the Federal Communications Commission, who if confirmed would swing the agency into Democratic control for the first time in more than six years.

Sohn’s supporters say she has powerful enemies in the internet-servicing providing industry that have helped organize a diverse opposition to her candidacy because she supports heavier regulation of the market for broadband internet.

Greg Guice, director of government affairs at Public Knowledge, the public advocacy group Sohn founded that promotes competition in markets for digital services, argued that cable companies are behind two ostensibly “grass-roots” campaigns against her, mounted by the Hispanic and Latino civil rights group League of United Latin American Citizens (LULAC) and the One Country Project, a rural-focused nonprofit organization founded by centrist former Democratic Sen. Heidi Heitkamp of North Dakota.

“There’s an unseemly amount of money being spent to promote disinformation about her,” Guice said. “These criticisms aren’t based in fact whatsoever.”

One Country runs a political-action committee that is able to raise unlimited money from undisclosed donors, which it can then spend on independent political activity, including issue campaigns like the one it recently launched against Gigi Sohn to attempt to convince centrist Democratic senators to vote against confirming Sohn.

Sohn will need the vote of every Democrat in an evenly split Senate to accede to the FCC, assuming that all 50 Republicans vote against her.

One Country pointed to recent congressional testimony in which Sohn argued that policy makers have “disproportionately focused on broadband deployment in rural areas” as evidence of a lack of commitment to rural communities.

Sohn’s testimony, however, doesn’t argue that the federal government shouldn’t fund broadband deployment, but that the main hurdle for Americans accessing broadband in both rural and urban areas is affordability, not infrastructure.

Her statement to Congress cites an article written by John Horrigan, former research director for the FCC’s National Broadband Plan Task Force, in the rural-focused news site the Daily Yonder, wherein he argued that “household economics is a larger drive of non-adoption decisions than geography.”

One Country doesn’t disclose its donors, but Time Magazine reported that Heitkamp used “leftover campaign cash” to start the organization, while AT&T Inc.
T,
-0.05%

and Comcast Corp.
CMCSA,
+0.73%

were two of the former senators’ top contributors while she was serving in the upper house. One Country didn’t respond to multiple requests for comment.

AT&T declined to comment on this report, while Comcast did not respond to a request for comment.

Latino rights organization LULAC’s opposition to Sohn’s nomination has also raised accusations of conflicts of interest, with influential tech policy blog TechDirt arguing that its an example of industry co-opting civil rights groups to promote business friendly policies.

“Such groups are given as for a shiny new event center in exchange for parroting any policy position that comes across their desks, even if it dramatically undermines their constituents,” TechDirt’s Karl Bode wrote.

LULAC CEO Sindy Benavides told MarketWatch that her organization’s opposition to Sohn dates back to 2009, when she was president of Public Knowledge, for comments made by the organization’s director of communications criticizing minority groups for their opposition to net neutrality regulations.

Benavides also pointed to the FCC’s decision under former Chairman Tom Wheeler to restrict so-called “sidecar” deals that she said helped small, minority-owned broadcasters partner with larger companies to lower costs. Sohn was an adviser to Wheeler at the time, when the FCC argued these joint-sales agreements helped large broadcasters circumvent limits on ownership of local broadcast stations.

Though LULAC has long partnered with Telecom companies, including AT&T, Verizon Communications
VZ,
-3.14%

and Comcast, Benavides said its relationship with those companies predated Sohn’s nomination and that the organization also works with other companies that take different stances on internet regulations, like Google parent Alphabet Inc.
GOOG,
+3.04%

“Our decisions are not based on the funding that’s given to the organization, our decisions are based on our members and how they vote on our policy platform,” Benavides said.

Andrew Lokay, research analyst at Beacon Policy Advisors, told MarketWatch that opponents of Sohn are taking advantage of Biden’s delay in nominating Sohn and the crowded Senate calendar in an attempt to sink her nomination, but that there’s little evidence that Democrats will break ranks to vote against her.

“Our base case is that she will get confirmed, as net neutrality is a top Democratic primary for the FCC,” he said, adding that Sohn’s confirmation to the FCC will open the door for a return to net neutrality regulation and broader oversight of broadband internet service and pricing.

The One Country Project is targeting ads in rural states with vulnerable Democratic senators like Arizona’s Mark Kelly and Nevada’s Catherine Cortez Masto, but Lokay said until there is any indication that these Democrats will vote against her, investors should expect that Sohn will eventually get confirmed.

“An FCC nomination isn’t going to be on a lot of people’s minds as they go to the polls, this is a more important issue in terms of how telecom companies consider their political contributions going forward,” Lokay added. “I wouldn’t be surprised if these remaining Democratic senators keep their cards close to the vest until the day of the vote.”

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