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Killing a gnat with a machine gun
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November 16, 1998 by David Rohde, Network World Fusion columnist |
From...
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(IDG) -- A lot of things have changed recently at AT&T, but the carrier's old habit of using massive legal and PR overkill to solve a public-policy problem is once more on display in the Washington, D.C. area.
AT&T's weapon? The telecom industry's old favorite standby: the phony user front group.
It seems that Prince George's County, a large jurisdiction in suburban Maryland, wants to impose a 3% tax on carriers that use the county's rights of way to construct transport facilities. The tax would be charged to telecom, cable and wireless companies based on their revenue for certain new communications services.
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In particular, AT&T's revenue from running new Internet and telephony services over fiber and cable lines - in its completed merger with Teleport Communications Group and its pending merger with Tele-Communications, Inc. - would be taxed.
AT&T officials don't like the proposal, of course. But taxes on giant corporations aren't much of a political issue. And apparently AT&T doesn't think its normal lobbying efforts would trump the county's desire for additional revenue.
AT&T's solution: Turn the issue into a user tax. With the help of its Maryland PR firm, Nevins & Associates, AT&T concocted something called the Prince George's Coalition Against Hidden Taxes. The coalition spent $50,000 on ads to warn county businesses and residents, "You are about to be taxed!"
The ads direct people to call a phone number with a recording saying, "We are a grass-roots organization." The recording also asks "concerned" users to deluge their county representatives with protests.
The ads have outraged county officials, who say the proposed tax is on carriers, not users. The county executive even told The Washington Post that the campaign is a "disgraceful fraud."
AT&T officials told me the tactic is justified because they have warned the county council that the company will pass along the tax. But county officials say the ads leave the impression that even basic local and long-distance calls will be taxed, which they won't be - on the carrier or the user.
AT&T's case is not without merit. Like other carriers, it already pays permit fees and personal property taxes on its facilities. AT&T estimates those charges at $218,000 per year in this county alone.
In addition, the county Chamber of Commerce says that regardless of how any new tax affects users, it's afraid that adding taxes on carriers will discourage enough of them from entering the market there to make it more competitive.
But there are so many other ways AT&T could have gone about making its point. It could have taken out normal issue-advocacy ads, such as the ones Mobil Oil has been running for years. Or it could have at least identified itself as the backer of the supposed grass-roots coalition.
Even better, it could have approached some real telecom and IS user groups to support the coalition, although users' first reaction might have been, "Why are you passing along yet another fee?"
Two things are certain. Any other municipality looking to cash in on telecom deregulation is likely to face the same hardball tactics. And even though AT&T now has almost every tool it needs to compete in the local telecom market, its lawyers will make sure political games still soak up a good chunk of AT&T's energy in this brave new world.
Rohde is a senior editor with Network World. He can be reached at drohde@nww.com.