Optometrists Push For State Laws Blocking Online Eye Exams

from the no-competition-please,-we're-doctors dept

Billing itself as a sort of Uber-for-eye-exams, telemedicine startup Opternative recently came on the scene offering a quick, inexpensive alternative to traditional optical exams that uses your computer and smartphone. Following a 25-minute online exam, an ophthalmologist will approve your results and issue a prescription for a cost of $40. No doctor visit is required.

Unfortunately, just like Uber, there's a powerful lobby of incumbents who don't want the status quo disrupted. Now they're pushing legislation in several states to shut down online eye exams.

As someone who recently had to get glasses, I like the idea of an online option the next time I need a checkup (and unlike many people, I only have to walk a few blocks from my office to see an eye doctor). Of course, my first question was: "Is it accurate?" But, at least according to its clinical trial, the online version appears to be equivalent in accuracy to its analog counterpart.

The technology is approved in 45 states, and the service is currently available in 33. So, unlike transportation network companies like Uber that had to contend with onerous insurance, safety and liability questions, the regulatory status quo of telehealth services like this is that they are legal in most jurisdictions.

Indeed, telemedicine is nothing new. Through its more than 40-year history, it has shown great potential for cost savings in both private sector and government programs. This potential will only grow, as wearables and smartphones become more sophisticated and ubiquitous. For instance, in Opternative's case, the service is about half as expensive as a traditional eye exam. Future competitors in the space, or economies of scale, could bring costs down even further.

Unfortunately, a powerful lobby of brick-and-mortar optometrists is pushing for legislation to shut them down. In Georgia, a bill (HB 775) was passed by both houses of the state Legislature that would ban these online eye exams. Aptly listed as "restrictions on sale and dispensing of spectacles," this legislation is clear in its purpose to protect licensed brick-and-mortar optometrists from unwanted competition. Now it's up to Gov. Nathan Deal to sign or veto the bill. He has until the first week of May to decide.

Blocking new telehealth applications like this one will only serve to raise prices, reduce the ability of low-income or rural individuals to access care and stifle future smartphone-driven innovations. As former Speaker Newt Gingrich wrote in a column for USA Today:

There are more than 100,000 smartphone apps for health purposes, including one that detects heart attacks and another that helps diabetics monitor their blood sugar....And every day more are invented. Many of these smartphone enabled apps and devices will be better than the methods they're replacing — more convenient, faster, less expensive, and, in a growing number of cases, more accurate.... In healthcare, however, there is a growing effort by the existing, expensive systems to defend old, costly, less convenient, and slower methods by simply outlawing most of the competition.

What's happening in Georgia, Indiana, Nebraska, South Carolina, Oklahoma and elsewhere, is a shameless attempt to capture the regulatory apparatus by a rent-seeking cartel that wants to preserve the status quo at all costs. If these acts of cronyism are allowed to proceed unchecked, they inevitably will contribute to a disastrous chilling effect for innovation in the health sector -- an area already encumbered by a massive regulatory burden.

This will only make us all poorer, and less healthy.

Filed Under: georgia, indiana, innovation, internet, lobbying, nebraska, oklahoma, optometry, regulators, south carolina, telemedicine
Companies: opternative

US Chamber Of Commerce Actually Just US Chamber Of Our Highest-Paying Members

from the but-thanks-for-your-contributions! dept

The US Chamber of Commerce is an organization that's always carried a completely undeserved air of legitimacy. For one, its name makes it sound as though it's actually an extension of the federal government, rather than what it is: a lobbying group representing a variety of trade interests.

It also gains unearned legitimacy by its name being a reflection of thousands of local chambers of commerce, which are far more representative of its members than the national version. The US Chamber of Commerce continues to push for legislation and regulation that isn't aligned with the views of its membership as a whole, but rather just its most generous contributors.

The US Chamber of Commerce has seen members walk away because of its support of climate change deniers or its support of the tobacco industry. It also shed several members thanks to its efforts on behalf of unpopular IP-related legislation like SOPA and the PROTECT-IP Act.

If there's anything the US CoC is truly representative of, it's money -- whoever has the most of it speaks the "loudest." The Chamber of Commerce is basically the worst form of entertainment: "free-to-play" that wholeheartedly embraces "pay to win." It has its own "whales," and they're what's shaping its lobbying efforts, according to Barry Ritholtz.

According to Open Secrets, a site that tracks political lobbying and spending, during the past 18 years the Chamber has spent three times more than any other organization on behalf of industry ($1.2 billion versus $351 million by the No. 2 lobbying group, the National Association of Realtors).

Ritholz has taken a close look at the lobbying group and its funding, and how that "pay to win" process has resulted in the Chamber of Commerce actually being the Echo Chamber for a select few industries. First, he notes the Chamber is opposed to new rules governing employer-provided 401(k) plans.

On one side is the financial industry, which manages about $14 trillion in various retirement plans. The president’s Council of Economic Advisers estimated that more than 10 percent of the advice given is conflicted in some way. That bad advice causes a performance lag of about 1 percent, costing investors an estimated $17 billion a year. This is money that otherwise would go into retirement-saving accounts. Wall Street, of course, isn't happy about the change and the vehemence of the opposition to the new rules make me suspect the losses for investors -- and the profits for the financial industry -- are much bigger.

On the other side are the millions of small businesses that have potential liability as 401(k)-plan sponsors. The natural outcome of this change is that once the new rules take effect, businesses will be in a position to shift that liability to the fiduciary advisers. This is something they should welcome -- especially since 96 percent of the Chamber's member businesses have fewer than 100 employees. These are precisely the companies that will benefit from the change.

But that 96% of its membership is easily shouted down by the large brokerage houses running the retirement funds. The Chamber is thinking about suing the government over a rule that would benefit nearly 100% of the companies it claims to represent.

That's not the only issue the CoC has decided to favor its largest contributors over the bulk of its members. Its stance on climate change is fueled by subservience to its biggest benefactors.

Ignoring those companies opposed to the Chamber's stand on climate change is easy. Why? Money, of course. A third of the Chamber's revenue comes from just 19 companies, many of them in the energy industry.

The problem with this is that it's hardly representative of the group as a whole. While those of us familiar with the Chamber of Commerce's motivations won't find this surprising, it probably comes as news to many of its members, who have assumed their contributions meant they, too, would be represented. Worse, many legislators likely take the Chamber of Commerce at face value -- assuming its lobbying efforts represent the group as a whole, rather than a small minority of well-heeled industry leaders. Because it operates under such a benign name, its pay-to-play mechanizations remain obscured and it's often given a benefit of a doubt it certainly hasn't earned.

Filed Under: business, lobbying
Companies: us chamber of commerce

UK Government Forbids Publicly-Funded Scientists And Academics From Giving Advice It Disagrees With

from the la-la-la-la-la-not-listening dept

Three years ago, Techdirt wrote about the Canadian government muzzling scientists and librarians, in a clear effort to prevent them from pointing out that some of Canada's policies were scientifically stupid. That was a blatant attempt to censor those who had not just inconvenient opinions but also awkward facts that would have made life difficult for the Canadian government. The UK wants to do something similar, by forbidding scientists and academics from using their expertise to push for changes in policy -- even in private. As The Guardian reported:

The proposal -- announced by the Cabinet Office earlier this month -- would block researchers who receive government grants from using their results to lobby for changes to laws or regulations.

For example, an academic whose government-funded research showed that new regulations were proving particularly harmful to the homeless would not be able to call for policy change.

Similarly, ecologists who found out that new planning laws were harming wildlife would not be able to raise the issue in public, while climate scientists whose findings undermined government energy policy could have work suppressed.

The new policy is contained in an amendment to the agreement that all those receiving grants from the UK government must sign. As the press release announcing the move explained:

A new clause to be inserted into all new and renewed grant agreements will make sure that taxpayer funds are spent on improving people’s lives and good causes, rather than lobbying for new regulation or using taxpayers’ money to lobby for more government funding.

That might sound reasonable, especially the last part about not being able to lobby for more funding. It is aimed mainly at organizations that receive government grants, but many academics believe that it is so loosely worded that it will also apply to them, and will prevent them from pushing for new regulations in any circumstances. Even if that is not the UK government's intention, the mere existence of the policy is bound to have a chilling effect on the academics, since few will want to run the risk of having their grants taken away by inadvertently breaking the new rules.

Academics aren't the only ones who are worried. Recently, a group of MPs who sit on the important House of Commons Science and Technology Committee wrote a letter to the UK government expressing their concern that:

The "anti-lobbying" clause to be inserted into new grant agreements will create a barrier to evidence-based policymaking and will have unintended effects on the work of [Parliament's advisory] select committees.

Specifically, the politicians on the House of Commons Science and Technology Committee wrote:

We are concerned that the Cabinet Office's announcement has created ambiguity, and that researchers will become reluctant to present to us the policy recommendations that arise from their work. Academics may also become unwilling to take on advisory positions in Government or Parliament, and may even feel uncomfortable speaking at conferences where policymakers are present, for fear of falling foul of this clause.

The well-known UK academic and medical campaigner Ben Goldacre has written a powerful and informative piece explaining why he believes his "lobbying" of politicians serves an important function. He says:

I don't just want this ban overturned: I want to see more academics talking to policymakers, and I want the public to know what we do, so that they can decide if it's good or bad.

Indeed, he suggests that rather than forbidding academics from lobbying for new regulations, they should be encouraged and even trained to do so:

If you're an academic who lobbies, then don't be shy, and don't be scared: you should share your experiences, and your techniques. If you want to waste even more time on activities with no credit and no hope of funding, then perhaps we could set up a course, or a forum, to pool knowledge on better ways to interact with [the UK government]. And lastly, if you’re a politician, and you really want to ban this activity, then shame on you. You're a failure, an obstacle to good progress, and an outlier. But there's one final piece of happier news. You won't last long.

Let's hope he's right.

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+

Filed Under: academics, expertise, lobbying, policy, scientists, uk

Annotating The Letter Disney's CEO Sent To Disney Employees Asking Them To Fund Disney's Sketchy Lobbying Activities

from the oh-really-now? dept

Here's quite a scoop from Joe Mullin over at Ars Technica. Apparently, Disney is getting a bit desperate on the whole TPP thing. The company, which has been having a rough go of things because of the next generation not giving a shit about ESPN, decided to take things up a notch. CEO Bob Iger apparently emailed Disney employees asking them to contribute to DisneyPAC, specifically to help Disney pay for lobbyists to push the TPP across the finish line. They even made it so easy that employees can donate directly from their payroll. Here's the letter, with some commentary (how can I resist?):

As we head into the election year of 2016, the electorate faces significant decisions about the direction of our Nation's future. Besides choosing a new president, we will once again be electing new senators and representatives. These decisions will have a profound impact on the lives of all Americans. The election will also impact issues that affect our company. As such, we will continue to work with our representatives in Congress to ensure that they understand our perspective on critical issues like trade, intellectual property, tax, and travel policies. I write to urge you to consider supporting the Company's efforts through a contribution to DisneyPAC. A well funded DisneyPAC is an important tool in our efforts to maintain our positive profile in Washington.

We're a big giant company, and as such, we've stopped innovating. So we need to keep friends in Washington to protect us from innovation and competition. Please consider taking your hard earned money and giving it to us so we can keep doing that kind of thing.

In the past year, we successfully advocated the Company's position on a number of issues that have a significant impact on our business. We played a major role in ensuring that the "Trade Promotion Authority" legislation set high standards for intellectual property (IP) provisions in our trade negotiations, and we helped get that bill through Congress. We used that language in TPA to advocate successfully for a strong IP chapter in the Trans-Pacific Partnership (TPP) trade negotiations. We also pushed for provisions to promote digital trade and to reduce barriers in media and entertainment sectors. TPP will establish a strong baseline of protection for intellectual property while breaking down trade barriers in the Asia Pacific region. In both TPA and TPP we had to overcome significant efforts to weaken respect for IP, pushed not only by foreign governments but also from within our own Congress and the Administration.

Have you heard about the TPP? It was negotiated in backrooms by special interests -- but good news -- we're one of the big special interests! So we helped craft it and it's got all sorts of goodies for us. Not the public, of course. Or even you workers. But it's really awesome for Disney bosses.

The fight on these issues is far from over. Last year we spent significant time and effort engaged in a series of government reviews of the state of copyright law in the digital environment.

By the way, did we mention that 18 years ago we successfully extended copyright 20 years to keep Mickey Mouse from reaching the public domain, and we have two years left to do it again. Think of the Mouse, Disney employees. Think of the mouse!

We also continued to defend our right to be compensated for carriage of our programming by cable and satellite carriers as well as by emerging "over-the-top" services. With the support of the US Government we achieved a win in the Supreme Court against Aereo—an Internet service claiming the right to retransmit our broadcast signals without paying copyright or retransmission consent fees. With respect to tax issues, Congress extended certain provisions that provide favorable tax treatment for film and television production in the US. It also extended this treatment to live theatrical productions. Last year we also worked closely with the Administration on important veterans employment issues—an issue of critical importance for the men and women who defend our country and an area in which our company is proud to play a leadership role.

Yes, thanks to our efforts, we were able to destroy innovative technologies that consumers really liked! And now we're losing customers who are ditching cable. But rather than help us innovate, please contribute more money so that we can shut down other new innovations. Because we're Disney and thwarting innovation is just what we do these days.

In the coming year, we expect Congress and the Administration to be active on copyright regime issues, efforts to enact legislation to approve and implement the Trans-Pacific Partnership trade agreement, tax reform, and more proposals to weaken retransmission consent, to name a few.

Can you believe those numbskulls in Washington? We already did this once and suddenly they're back again, talking about the public interest and consumer rights and all that crap again. Please help us put an end to it.

On the trade front, we will also look to build on our achievements in other negotiations this year. 2016 should see significant activity in negotiations between the US and China over a Bilateral Investment Treaty (BIT), continued negotiations with the European Union over the proposed Transatlantic Trade and Investment Partnership agreement, the 50-country Trade in Services Agreement negotiations, and efforts by the US Government to raise IP standards and break down trade barriers through a variety of means.

We successfully got awesome anti-public / pro-Disney language into the TPP and now we can do it again in other trade deals. Go team! Help us lock up culture even more! And pretend it's about "free trade."

In 2016, Congress will further discuss various tax reform proposals. While comprehensive reform is unlikely, activity in the coming year will lay the foundation for what many expect to be a genuine opportunity for reform in early 2017. We have been active educating Members of Congress on the importance of lowering the corporate tax rate to be competitive with the rest of the world. The US has one of the highest marginal and effective tax rates among developed countries, creating a significant competitive impediment to companies headquartered in the US.

Because, yes, we know that you, dear Disney employee, are quite concerned about the tax rates of giant conglomerates like Disney. Please give us money to help us get a tax break! We may give you a free ticket to Disneyland in exchange. But no free music or movies. That's bad.

Congress will continue to be very active on intellectual property issues... After three years of hearings and testimony from 100 witnesses, we now expect the House Judiciary Committee to turn to legislating. We expect significant attention on legislation to modernize the Copyright Office, a small agency that can have an enormous impact on our interests.

Did you hear about the newly nominated Librarian of Congress? We hear she actually cares about the public and open access, and that's bad and must be stopped. At the very least, let's rip the Copyright Office out from under her and put it in the hands of people who understand us better. And by "understand" I mean, will soon accept jobs from us when they "transition" out of government work.

And the Copyright Office has launched several proceedings involving possible changes to laws governing the accountability of online services and the laws protecting technologies used to secure distribution of digital content. These discussions obviously have significant implications for a business like ours that is dependent on copyright policy in the face of ongoing change in technology and the marketplace.

Did I mention our successful efforts in killing innovation? This is the next part of our plan. Like the internet? Fuck you. We're Disney and we're going to fuck it up. With your money, hopefully!

We will also need to continue our work to fend off growing and concerted efforts to weaken our ability to freely negotiate the distribution of our broadcast and cable programming. Last year, the FCC teed up several rule makings that could have a significant adverse affect on retransmission consent and how we package and sell our media networks. As the debate becomes much more heated, we will need to remain vigilant.

Did you notice how odd it was that the FCC suddenly seemed to be caring about consumers again? We can't have that. We CANNOT have that. Please help us destroy the FCC. Sure your cable bills will be higher, and the internet will suck, but we're Disney. We've got a mouse.

With all of the challenges we will face this year, it is important that our PAC be strong. We, therefore, respectfully suggest that you consider making a contribution of [REDACTED]. You may give more or less than the suggested amount (although no contribution can exceed $5000 in any year) and any contribution will be appreciated. As always, 100% of your contribution is used in direct support of candidates and political entities that uphold policies and principles that are consistent with the best interests of our company. DisneyPAC contributes equally to Democrats and Republicans each calendar year. For your convenience, DisneyPAC has implemented a payroll deduction system, through which your contributions to the PAC will be deducted from your weekly paycheck. If you prefer, you may instead make a one-time personal contribution to the PAC. Your contribution is important to all of us, but I want to emphasize that all contributions are voluntary and have no impact on your job status, performance review, compensation, or employment. Any amount given or the decision not to give will not advantage or disadvantage you. You have the right to refuse to contribute without reprisal. Your help is truly appreciated.

We'll take money straight from your paycheck and put it to work making corporate Disney's life better. Not yours. Do that with whatever money you have left.

Filed Under: bob iger, copyright, disneypac, employees, lobbying, pressure, tpp
Companies: disney

While Most Of The Rest Of The Internet Industry Is Fighting Against CISA, Facebook Accused Of Secretly Lobbying For It

from the this-is-a-concern dept

For the past few years, much of the internet industry had been mostly silent on CISA, or vaguely for it, mainly because it would provide them immunity from liability if they share too much information with the government. However, as more details have come out about CISA, making it clear that it's a surveillance bill, rather than any sort of cybersecurity bill, the internet industry has finally, mostly come out against it. It started with Salesforce.com, after people started protesting a letter it had signed saying it favored "cybersecurity" legislation, but without naming CISA. In response, Salesforce came out directly and said that it did not support CISA. Soon after that, the BSA (the Business Software Alliance, which now prefers to just be called "The Software Alliance"), which had put together the letter Salesforce signed, said that it did not support CISA (or any of the other cybersecurity bills that have been introduced). Soon after that, CCIA, which represents a bunch of internet companies, came out directly against CISA, saying:

CCIA is unable to support CISA as it is currently written. CISA’s prescribed mechanism for sharing of cyber threat information does not sufficiently protect users’ privacy or appropriately limit the permissible uses of information shared with the government. In addition, the bill authorizes entities to employ network defense measures that might cause collateral harm to the systems of innocent third parties.

With that, the ball was rolling. Both Apple and Dropbox directly came out against CISA. Then Twitter, Yelp, Wikimedia and Reddit.

However, the folks at Fight for the Future, who have been working hard to stop CISA, are now claiming that they have it on good authority that Facebook is one of the only internet companies secretly lobbying in favor of the bill and is asking people to sign its petition to convince Facebook to back down:

This bill is toxic. The public hates it and tons of tech companies are against it, but Congress keeps trying to ram it through. Now that we know that Facebook lobbyists are working behind the scenes to get it passed, it makes more sense why Congress keeps coming back to it.

Facebook’s chief Senate lobbyist, Myriah Jordan, worked as General Counsel for CISA's sponsor, Senator Richard Burr, right up until taking the job at Facebook. On her lobbying disclosures she lists “cybersecurity” as one of the issues she's been discussing with senators. These “revolving door” connections give companies more power and influence than ordinary people could ever have, and it’s part of the reason why companies like Facebook think they can get whatever they want out of Washington.

Several offices on the Hill have heard from Facebook that they support CISA. As much as we wish we could reveal our sources, we agreed not to (selective leaking is part of how the lobbying game works, unfortunately). But this information matches with everything we know about Facebook's love for CISA over the years. They backed the bill loudly before it was unpopular and then stayed silent as other big tech companies came out against it. We've asked them to state their position publicly, bu they have said nothing. Facebook has backed this from day one, and now they're the lone tech voice still working to make sure it passes.

This would seem to be very unfortunate if it's true, and hopefully Facebook reconsiders. While Apple, Twitter, Yahoo, Google, LinkedIn and others have been quite vocal in fighting back against government surveillance, Facebook has been much less involved in those fights -- despite the fact that it often has more information than those other players. Facebook seems increasingly out of step with the rest of the internet industry in making sure that protecting the privacy of their users against government surveillance is a top priority. Hopefully, the company changes its position on this.

Update: For what it's worth, Facebook is now denying the story, saying that it has not taken a position either for or against CISA (and doesn't seem interested in doing so either way). That still seems like an odd position to take given that most of the other companies in the industry have come out against the bill. And, in addition, I've now heard from others on Capitol Hill as well supporting the statements from Fight for the Future that Facebook is considered to be in favor of CISA, though it's not clear if the company has been actively lobbying for it.

Filed Under: cisa, cybersecurity, lobbying, surveillance, tech industry
Companies: facebook

As Hollywood Lobbied State Department, It Built Free Home Theaters For US Embassies

from the lobbying-by-any-means-possible dept

Hollywood's efforts to win political clout have always stretched across the country, from glitzy campaign fundraisers in Beverly Hills to cocktail parties with power brokers in Washington.

Last year, the film industry staked out another zone of influence: U.S. embassies. Its lobbying arm paid to renovate screening rooms in at least four overseas outposts, hoping the new theaters would help ambassadors and their foreign guests "keep U.S. cultural interests top of mind," according to an internal email.

That was the same year that the Motion Picture Association of America, which represents the six biggest studios, reported it was lobbying the State Department on issues including piracy and online content distribution. Hollywood's interests – including its push for tougher copyright rules in the Trans-Pacific Partnership trade pact – often put the industry at odds with Silicon Valley.

The only public indication of the embassy-theater initiative was a February 2015 press release from American officials in Madrid, titled "U.S. Embassy Launches State-of-the-Art Screening Room." It credited "a generous donation" from the MPAA.

Asked about its gifts to the State Department, the lobby group declined to say how many embassies got donations or how much they were worth.

"Because film is a great ambassador for U.S. culture around the world, MPAA assisted with the upgrade of some embassy theater facilities," said spokeswoman Kate Bedingfield. "All gifts complied with the law as well as with State Department ethics guidelines."

Nicole Thompson, a State Department spokeswoman, said at least three embassies besides Madrid received between $20,000 and $50,000 in entertainment upgrades last year – London, Paris and Rome. The revamped screening rooms, she said, aren't intended to entertain U.S. officials, but rather to help them host screenings to promote an American industry and sow goodwill.

Thompson said the donations were proper and that all gifts to the department are reviewed to avoid even the appearance of a conflict of interest. "The department has explicit authorities to accept gifts made for its benefit or for carrying out any of its functions," she said.

The State Department routinely accepts gifts from outside groups, Thompson said. She couldn't provide any other examples of major gifts from groups that simultaneously lobby the agency. Thompson declined to list the items given by the MPAA or their total value, and wouldn't say whether the group had made similar gifts in the past.

There was at least one precedent. A spokesman for Warner Bros. Entertainment said the studio helped pay for the refurbishment of the screening room at the U.S. ambassador's home in Paris in 2011. "This donation was coordinated with the State Department and complied with all appropriate rules and regulations," the spokesman said.

State Department policies posted online specifically permit gifts from individuals, groups or corporations for "embassy refurbishment, " provided that the donors are vetted to ensure there's no conflict or possible "embarrassment or harm" to the agency. The posted policies include no caps on the value of donations, nor any requirements for public disclosure of foreign or American donors. The rules also say that the donations can't come with a promise or expectation of "any advantage or preference from the U.S. Government."

Obtaining an advantage, albeit a nonspecific one, sounded like the goal when a Sony Pictures Entertainment official wrote to the studio's chief executive officer, Michael Lynton, to relay a request to fund the screening rooms from Chris Dodd, the former U.S. senator who heads the MPAA. The executive writing the note – Keith Weaver – sought to assure the CEO that such a donation wouldn't be improper.

"The rationale being that key Ambassadors will keep U.S. cultural interests top of mind, as they screen American movies for high level officials where they are stationed," reads the message, included in a cache of emails hacked from Sony and which were posted online by the website WikiLeaks.

"The cost implication is estimated to be $165k (aggregate of $$$/in-kind) per embassy/per studio. Apparently, donations of this kind are permissible."

Besides Sony, the MPAA represents Disney, Paramount, Twentieth Century Fox, Universal Studios and Warner Bros. Entertainment. The e-mails suggest that Sony executives decided against contributing to the project for budget reasons.

The MPAA has long been a powerful presence in the nation's capital, spending $1.34 million on federal lobbying last year, according to data compiled by the Center for Responsive Politics. One of its flashier tools has been to host exclusive gatherings at its Washington screening room, two blocks from the White House, where lawmakers get to watch blockbuster films, rub elbows with celebrities, and up until several years ago, enjoy dinner – a perk scuttled because of stricter rules on congressional lobbying.

Hollywood studios depend on foreign markets for much of their profit but the MPAA's interests don't always align with those of other major American constituencies. For example, Hollywood studios have moved some film production to Canada to cut costs. American film workers have tried to get the federal government to stop the outsourcing of jobs, but have been met with resistance from the MPAA.

The trade group has also pushed federal officials to pressure foreign governments into adopting stricter copyright laws. An MPAA-funded study found that in 2005 worldwide piracy cost American studios $6.1 billion in revenue. That number has been disputed by digital rights advocates.

For the TPP trade deal, the MPAA has discouraged the American government from exporting "fair use" protections to other countries. In a hacked message from Dodd to the U.S. Trade Representative, the MPAA chief warned that including such provisions, which in American law allow limited use of copyrighted materials without permission, would be "extremely controversial and divisive." Digital rights activists have characterized the efforts as overzealous.

"They're basically encouraging other countries to adopt the most draconian parts of U.S. copyright law and even to reinterpret U.S. copyright law to make it more stringent," said Mitch Stoltz, an attorney for the Electronic Frontier Foundation. "Broadly speaking broadening copyright law harms free speech in many cases by creating a mechanism for censorship."

The state-of-the-art screening rooms are a relatively minimal investment by Hollywood as it works to strengthen connections abroad.

This spring, the U.S. ambassador to Spain, James Costos, brought a group of foreign officials to Los Angeles for a meeting hosted by the MPAA. Among them were representatives from the Canary Islands, who came prepared to discuss filming opportunities and tax incentives for American studios in the Spanish territory. The State Department touted the trip as an opportunity to "expand bilateral trade and investment, including through ties between the entertainment industries."

It's not known whether the path to that particular meeting was eased by the new screening room in Madrid. At the theater's debut in February, the ambassador's guests were treated to a dark tale of corruption, lobbying and double-dealing in Washington – the Netflix series "House of Cards."

Republished from ProPublica

Related stories: For more coverage of politics and influence, read ProPublica's previous reporting on secret political dealings by Sony, a reversal by the higher ed lobby and an imploding super PAC.

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for their newsletter.

Filed Under: copyright, copyright enforcement, embassies, hollywood, influence, lobbying, state department
Companies: mpaa

Corruption Watch: State Attorneys General Line Up Behind Jim Hood, Support Power To Attack Enemies Of Big Corporate Donors

from the gee,-I-wonder-why... dept

A large group of state Attorney Generals has now stepped into the legal fight between Mississippi Attorney General Jim Hood and Google. As we've explained a bunch, Hood went after Google with an investigation and detailed subpoena that was funded and written by the MPAA itself. In response to this, a federal court has already called out Hood's actions, noting that there was "significant evidence of bad faith" on the part of Hood as he attempted to unconstitutionally hold Google responsible for anything bad that its search engine found on the internet.

We've written plenty about issues with state Attorneys General. The state Attorney General position is frequently seen as the stepping stone to becoming state governor or US Senator. State AGs have a reputation as being grandstanding tools, focusing on getting big headlines over actually enforcing the law. In fact, they often will focus on grandstanding even when there is no legal basis whatsoever. The most damning account of this is one we wrote about five years ago, in which a group of AGs teamed up to shake down Chris Tolles, the CEO of online forum site Topix. The story is incredible and well worth reading. You'll see how a bunch of state AGs kept putting out press releases, blaming Topix for things with no legal basis. Tolles would go talk to them, explain how the company works in order to build understanding, and the state AGs would then, immediately, turn around and take what he told them, totally misrepresent it, and issue another press release twisting what he'd said into implying that the company was up to no good.

So, after opening the kimono and giving these guys a whole lot of info on how we ran things, how big we were and that we dedicated 20% of our staff on these issues, what was the response. (You could probably see this one coming.)

That's right. Another press release. This time from 23 states' Attorney's General.

This pile-on took much of what we had told them, and turned it against us. We had mentioned that we required three separate people to flag something before we would take action (mainly to prevent individuals from easily spiking things that they didn't like). That was called out as a particular sin to be cleansed from our site. They also asked us to drop the priority review program in its entirety, drop the time it takes us to review posts from 7 days to 3 and "immediately revamp our AI technology to block more violative posts" amongst other things.

In short, to state AGs, no opportunity to issue a press release slamming a tech company is too good to miss. We've seen it done against Twitter, Facebook, Craigslist, small social networking sites, MySpace, ISPs, and video game companies. Frequently there is no actual legal basis for this at all. They just issue completely misleading and out-of-context press releases that slam companies, frequently because people who are up to no good use those tools and the companies haven't magically weeded out bad actors. In fact, the state AGs have become so drunk with the power of all this that they've actually pushed very strongly to change federal law to give them more power to blame websites for the actions of their users, by exempting their investigations from Section 230 of the CDA (the law that says you can't blame sites for actions of their users).

A few years ago, seeing all these grandstanding plays by state AGs, some enterprising companies began to realize that this was a great way to attack competitors or companies they didn't like. And thus, as the NY Times covered last fall, a huge lobbying effort was set up by companies to woo state AGs with lobbying dollars, and push them to attack companies they didn't like. Microsoft, for example, used this to shake down foreign companies over copyright claims, even though copyright is a federal issue, rather than a state one. The NY Times article is rather eye-opening. It details how much lobbying efforts are now targeting state AGs, and how ridiculous it looks. It often involves ex-state AGs, lavish fundraisers and (quite often) issues that are completely unrelated to the state AGs mandate. Laws against corporate influence -- including things like having to register to lobby and preventing revolving door issues -- often don't apply to lobbying state AGs, and so the money and influence has come pouring in, which is making state AGs quite happy.

All this is prelude to the amicus curiae brief (friend of the court) filed by 40 state AGs in the appeal of that ruling against Hood. If you think that the state AGs are going to give up their new lobbying gravy train or their power to unconstitutionally shake down big companies, you've got another thing coming. The entire brief is one of "Hey we need this power, because FUD!" It starts out with a heartfelt plea for the continued right to "investigate potential violations of state law." Except, of course, that's almost never what these cases are about. Often there are no violations of law at all, but rather an attempt to blame companies for actions of their users -- which again is protected from liability.

If allowed to stand, the District Court’s March 27, 2015 order (the “Order”) enjoining the Mississippi Attorney General’s enforcement of his own subpoena would provide a roadmap for any potential wrongdoer subject to a legitimate state law enforcement investigation to attempt to thwart such an inquiry. With the Order as a guide, any target of a state investigation would be invited to conjure up potential federal defenses to yet-to-be filed civil claims and file a preemptive lawsuit in federal court against state law enforcement authorities. Such an outcome would undermine Attorneys General’s powers, granted to them by state constitutions and state statutes, to protect the general citizenry from violations of state law. It would also flood the federal courts with what amount to state-law discovery disputes. And it should not be countenanced by this Court.

What a bunch of hogwash. If there's a legitimate violation of state law, then such cases will quickly get dumped. In this case, it was clear from the beginning that the investigation (again, paid for and run by the MPAA rather than Hood's office) had nothing to do with "violations of state law." It was, as revealed by the Sony emails, entirely about trying to attack Google. That's why the court ruled in Google's favor, noting directly that Hood's proceeding "was brought in bad faith" and "with the purpose of harassing" Google in an effort to "coerce Google to comply" with unconstitutional demands to remove material from its website (in violation of the First Amendment).

The only situations in which Google's lawsuit provides a "roadmap" to others is if these state AGs are doing a similar attempt to use their power to demand the censorship of First Amendment-protected content at the behest of corporate interests. If they're not doing that, they don't have much to worry about. But, I guess, if you look at all those examples above, those kinds of bogus actions are an important part of some AGs' press and fundraising strategies. No wonder they're so loathe to give it up.

The state AGs' brief continually argues that state AGs should have almost unlimited power to investigate anything, because that's a huge source of their power, but it's equally the source of the kind of corruption that the NY Times article spoke about:

In furtherance of this paramount duty, Attorneys General have broad authority under the common law and/or state statutes1 to investigate potential violations of state laws within their jurisdiction, particularly state consumer protection laws.

But that broad authority does not trump the First Amendment and in no way should allow state AGs to launch massive investigations funded for and run by corporate entities into companies those entities don't like -- and whose sole purpose appears to be to violate the First Amendment rights of those targeted. This is a pretty basic and obvious distinction, and the fact that these state AGs play dumb about it is ridiculous, though not all that surprising.

The filing goes on and on about the importance of "civil investigative demands" (CID) -- the kind of subpoena-like tool that the MPAA wrote for Hood to send to Google. And no one doubts the importance of such tools. No one is questioning that. What's being questioned in this case is the ability for a third party representing corporate interests to write such a CID, give it to a state AG, and have that state AG send it -- especially when the clear intended purpose of that CID is not to investigate any violation of state law, but rather to force a company to censor content in violation of the First Amendment. Again, these distinctions are pretty obvious and the state AGs' brief ignores them all.

The state AGs also attack the fact that Google went to a federal court here, arguing that since Hood hasn't yet filed suit, Google has no right to go to court first -- which is just wrong. Not only has Hood made his intentions clear, Google is noting that it is protected under federal law from the crux of this investigation (to which the court agreed) and thus it is perfectly reasonable to seek an injunction by going to court.

And, of course, the state AGs try to attack Section 230. As we already noted, the state AGs have been lobbying strongly for a special exemption to Section 230 that would allow state AGs to ignore it. And here, it doesn't take them long to refer to the one case that has limited the interpretation of Section 230, the infamous "roommates.com" case, which argued that the site was not protected for content that it created itself (in that case, involving pull down options that could be seen as violating fair housing laws). This ruling is cited by nearly everyone seeking to undermine Section 230, and in nearly every case it has failed. That is one tiny narrow exemption from Section 230 in a very specific case, totally unrelated to the issues that Hood (er... the MPAA) are arguing in the CID that was sent. But, no matter, the state AGs see a tiny, tiny loophole and attempt to drive a Mack truck through it:

Google attempts to avoid this jurisdictional bar by arguing, in part, that it is entitled to immunity under the Communications Decency Act for any state law consumer protection claims the Attorney General may bring against it. Notably, however, the immunity the CDA affords internet service providers is not absolute. Although the CDA immunizes an interactive computer service from liability for content posted by a third party, it does not provide immunity for content or speech properly attributable to the service provider itself. See Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, 521 F.3d 1157, 1162 (9th Cir. 2008) (en banc) (“Section 230 of the CDA immunizes providers of interactive computer services against liability arising from content created by third parties[.]”) .... Accordingly, the Mississippi Attorney General is entitled to investigate Google’s activity to determine whether Google may be responsible for web content violative of Mississippi’s Consumer Protection Act. Indeed, it is unfair to ask the Attorney General to respond to Google’s contention that the CDA cloaks it with immunity when Google is withholding, and now has a preliminary injunction permitting it to withhold, the very materials that will allow the Attorney General to evaluate whether the CDA applies to Google’s acts and practices.

In other words, because of the very narrow and specific Roommates.com ruling, state AGs should be able to demand all sorts of stuff from companies, even if everything they're targeting is protected by Section 230, just in case the fishing expedition happens to turn up something not protected by Section 230. That interpretation effectively eviscerates the entire point of Section 230 protections and would allow the state AGs to shake down companies over actions they had nothing to do with. Such an interpretation is not just dangerous, it basically would open the floodgates to more of these bogus corporate-run and corporate-funded investigations.

The state AGs also present a ridiculous and misleading claim of "What's the big deal here, Google can just respond to the subpoena and it's not required to change any practices..."

Yet, here the Attorney General’s Subpoena merely represents an investigation. Responding to the Subpoena itself would not force or coerce Google to change its practices and procedures or otherwise abandon its rights. And, in fact, Google has not changed its behavior based on the Subpoena in order to eliminate the threat of potential prosecution--instead, it seeks to eliminate that threat through its lawsuit and the preliminary injunction.

But that ignores the entire history of how the state AGs operate. Again, read that story about Chris Tolles and Topix and his interactions with the state AGs. Despite no legal basis whatsoever, the state AGs constantly used any information he gave them in out-of-context and misleading press releases, creating a massive wave of bogus public pressure to force him to give in or just keep fighting more bad publicity and more bogus threats.

Whatever happens in this particular case, it seems abundantly clear that many state AGs are out of control and somewhat drunk on the power of the office they hold -- which has created a situation that can only be described as corrupt. They have tremendous investigatory powers to demand information, and yet there are almost no real limits on how they can effectively sell that power to third parties in the form of fundraisers and even handing over the keys to the investigation to those third parties themselves, as demonstrated by the MPAA writing out the entire CID that Hood sent Google. It's not surprising that fellow state AGs don't want to give up such power, but hopefully the court sees through this kind of power grab and puts an end to these kinds of bogus "investigations."

Nothing in this case would end the state Attorneys General legitimate investigatory powers. It would only serve to stop the abusive practice of allowing special interests to run clearly unconstitutional campaigns against companies they dislike by laundering them through state AGs offices -- or to stop the AGs themselves from engaging in these kinds of grandstanding against companies by misrepresenting what's happening and the law in order to get headlines. If the AGs want headlines and to present themselves as protecting the public, perhaps they could focus on actual law breakers instead.

Filed Under: attorney general, cda 230, censorship, copyright, corruption, grandstanding, jim hood, lobbying, mississippi, political power, states attorneys general

Hollywood Resists Revealing Details Of Its Cozy Relationship With Mississippi AG Jim Hood, But Glimpses Come Out

from the buddy-buddy dept

The whole legal fight between Google and Mississippi Attorney General Jim Hood has been pretty nasty from the very beginning, but it's been getting even nastier as it drags on. Even in many high stakes lawsuits involving large companies and the government, the filings tend to remain somewhat bland and low key. But this particular fight seems personal to many of the parties involved (going beyond just Google and Jim Hood to the MPAA and the studios it represents). If you don't recall, for a few years now, Hood has been bizarrely blaming Google for the fact that people do bad stuff online, rather than understanding that a search engine isn't responsible for the content that it finds. The reasons for Hood's ignorance became a lot more clear after the Sony Hack, when internal emails revealed that Hood was acting as a puppet for the MPAA whose hand was shoved so far up Hood's behind that it was a bit unseemly.

The MPAA's lawyers ran the entirety of Hood's "investigation." Those lawyers actually wrote the subpoena that Hood sent Google (Hood merely added the opening and his signature). The studios paid for the investigation, and the program itself was explicitly designed not to protect anyone online but to bring down Google (dubbed "Goliath" in the documents). The MPAA hired Hood's best friend, mentor and predecessor to lobby Hood on this... and (coincidentally, I'm sure), Hood hired the very same guy, Mike Moore, to help with the investigation -- which should raise serious conflict of interest questions. As these details were revealed, Hood launched into a bizarre anti-Google rant that was both ill-informed and often flat out incorrect. He insisted perfectly legal things (a news site about dark markets) were completely illegal, he blamed Google for not doing things it actually had done, and he couldn't seem to figure out the first thing about how the internet -- or the First Amendment -- actually work.

With this new info in hand, Google went to court to argue that Hood's demands were illegal, and a clear attempt of abusing the power of his office to attack a business. The courts have overwhelmingly sided with Google up to this point -- putting his demands (written by the MPAA) on hold and saying that it was clear Hood unconstitutionally acted in bad faith in violation of the First Amendment.

The judge also ordered Hood to cough up his communications with the MPAA -- something Hood was refusing to do the last time we checked in on this case about two months ago.

Since then, there has been a flurry of activity in multiple courts as Google, Hood and the MPAA fight it out in increasingly emotional terms. As Hood tried to resist, Google opened up another front in this and sent subpoenas to the Hollywood studios directly for those same communications and more. The studios have resisted strongly, claiming that their own documents are unrelated and they're not a party to the lawsuit. Google, however, has pointed out that since the MPAA was running the government's investigation almost entirely, it seems reasonable to argue that that information should be disclosed:

Each Subpoenaed Party asserts "work product protection," but none can identify any litigation they contemplated at the time the requested documents were created. They claim there is a "First Amendment privilege" shielding their activities from discovery, but they cannot explain how it applies here where they are engaged in lobbying government officials, where that lobbying is a matter of public record, and where their conduct is in no way likely to meet with government reprisal. And they assert "common and joint interest privileges" but cannot articulate any valid "interest" that creates or preserves a privilege. While some responsive documents might theoretically be subject to the attorney-client privilege, the Subpoenaed Parties have not collected or reviewed such documents, let alone provided a privilege log for them.

The studios then hit back angrily at these requests arguing that Google is going way overboard in asking for basically all of its anti-Google documents, even those it never actually sent to Hood (after finally agreeing that they would produce its communications with Hood):

The MPAA and Jenner have already agreed to produce all responsive documents they exchanged with Attorney General Hood prior to Google’s lawsuit; after all, only documents that Attorney General Hood actually saw could conceivably influence him. That should suffice if Google wants to probe the Attorney General’s motives.

Google filed the present motion because it insists on more. Google demands documents that the Attorney General never saw, and that instead include the internal deliberations of the MPAA, its communications with its members, and the legal advice of Jenner, as well as communications with others similarly aggrieved by Google’s conduct, on the misguided theory that such documents somehow are probative of Attorney General Hood’s intent. Moreover, Google’s demands impose very substantial burdens on the subpoenaed parties, not only because they require a wide-ranging search for documents, but more importantly because many of the documents are protected by the attorney-client and First Amendment associational privileges. Not only would the MPAA and Jenner be required to devote countless hours to the creation of privilege logs, but further time-consuming and expensive litigation with Google over the privilege assertions would be a near certainty.

Then, last week, Google hit back in a flurry of additional filings concerning the MPAA and Hood. Many repeat the same basic points, but it's clear that the battle is getting angrier and angrier on all sides. You can sense the exasperation on the part of Google's lawyers as they explain, again, that the studios are clearly trying to hide the details of their plan to use Hood to attack their company in violation of the Constitution:

The Honorable Judge Henry T. Wingate has ruled that Google is likely to succeed against AG Hood under Constitutional and federal law.

It is undisputed that the parties before the Court on this motion — Twenty-First Century Fox, Inc. (“Fox”), NBCUniversal Media, Inc. (“NBC”), and Viacom, Inc. (“Viacom”) (collectively “the Subpoenaed Parties” or “the Studios”) — played key roles in AG Hood’s unlawful conduct. The record already shows that as part of a secret plan called “Project Goliath,” they spent hundreds of thousands of dollars lobbying state attorneys general to pressure Google to alter its search results and other products in service of their agenda on federal copyright issues. In connection with Project Goliath, lobbyists for the Subpoenaed Parties formulated AG Hood’s demands to Google and ghost wrote AG Hood’s talking points, letters and even the CID that prompted Google’s lawsuit and Judge Wingate’s injunction.

Despite this extensive involvement in the events giving rise to the underlying litigation, the Subpoenaed Parties claim here that: (a) documents regarding Project Goliath, beyond their direct communications with AG Hood, are irrelevant; (b) they should not, in any event, be burdened to produce what they have; and (c) that such materials might be privileged — but it is “premature” to assess that issue. None of these arguments has merit.

And then, after the MPAA revealed some of the requested documents, Google went back to court to highlight that what's been emailed only serves to more strongly support the claims of a questionable relationship between Hood and the studios, which should support their arguments for more information. It starts out with Google outright mocking the MPAA's argument that it's unfair to force them to hand over documents to a court in Mississippi, since they're NY-based companies not operating in Mississippi. Google points out that the MPAA and the studios seemed to have no problem at all going to Mississippi to hang out with Hood, so it seems odd for them to suddenly act as if Mississippi is out of the way.

The MPAA and Jenner claim that Google somehow “dragged [them] into its dispute with [the] Attorney General.” ... The DCA portrays itself as a mere amicus of the Mississippi court, and reassures this Court that it “does not do business in Mississippi.” ... Their rhetoric does not match reality.

The Subpoenaed Parties sought out Mississippi when they co-opted the state’s Attorney General for their anti-Google campaign. Documents withheld by the MPAA until last week reveal a stunning level of involvement in Mississippi’s affairs. The MPAA and Jenner repeatedly travelled to the state to meet with the attorney general; they hosted campaign fundraisers and made contributions for Attorney General Hood (“AG Hood”); and they controlled the pen used to draft AG Hood’s illicit demands and threats to Google. The DCA (funded by the MPAA) likewise visited with AG Hood in Mississippi, established a presence on the ground, and regularly communicated with him — retaining Mississippi’s former attorney-general, Mike Moore, to lobby AG Hood as part of “Project Goliath.” It was Google that was “dragged” into this dispute by the Subpoenaed Parties, and not the other way around.

And then there's more:

The Subpoenaed Parties have made clear that they have no problem acting in Mississippi when it suits their ends. After their years of direct involvement there, litigating objections to a single subpoena in the state could not be an undue burden.

The filing notes that while the MPAA revealed its communications with Hood to Google, it did so only if Google promised to keep them confidential. Google notes that there is no legal reason to do so, but for now it agrees to do so. However, it does reveal the nature of what's in some of them. And what it shows is the MPAA and Attorney General Hood working hand in hand, with the MPAA basically calling the shots.

The Subpoenaed Parties and their representatives made repeated visits to AG Hood’s office in Mississippi to guide his anti-Google work. Even when they weren’t physically at AG Hood’s office, they may as well have been, getting together with him in Denver and Santa Monica and holding a fundraising dinner for him in New Orleans. But those interactions only scratch the surface, as the documents reveal remarkably cozy and constant communications between the Subpoenaed Parties and AG Hood... (MPAA’s Brian Cohen greeting one of AG Hood’s staffers with “Hello my favorite” and offering to send her pictures of his vacation in New Zealand); .... (discussing a meeting with AG Hood’s staff the MPAA’s Cohen gushed “OMG we spent 3 hours.”). This pattern of sustained, intimate contact is hardly the mark of a party that merely “communicated with Attorney General Hood” “previously” as the MPAA characterizes itself.

Despite protesting that Google has “inappropriately grouped” it with the MPAA and Jenner ..., the DCA is no different. It retained Mike Moore, Mississippi’s former attorney general, as a lobbyist to influence AG Hood regarding his Google investigation, even while Moore was serving as a deputized agent of AG Hood in connection with that same investigation. Alongside the MPAA lobbyists, Moore too was in constant contact with AG Hood regarding Google. And he co-hosted the campaign dinner for him that the MPAA put on. ... Similarly, the DCA’s Executive Director, Tom Galvin, was personally involved in discussions with AG Hood, also traveling to Mississippi to meet with him.... Although the DCA claims it “does not do business in Mississippi” ..., its “business” is lobbying and manufacturing press at the behest of the MPAA which heavily funds it. It was extremely active in that regard in Mississippi. The Subpoenaed Parties did not act alone in animating AG Hood with respect to Google, they coordinated their efforts with the major Hollywood studios who make up the MPAA, including Fox, NBCU and Viacom (collectively the “NY Parties”). That coordination continues to this day — the NY Parties are using the same law firm, Jenner, to resist subpoenas from Google, and in the Southern District of New York, they have made relevance, burden and privilege arguments that are virtually identical to those that the Subpoenaed Parties have advanced here.

There's a lot more in the documents being filed (some of which we'll cover in other posts), but suffice it to say this fight is getting even nastier as it continues, and it sounds like the contacts between the MPAA and Jim Hood (the same emails that wanted a ridiculous amount of money to reveal following our public records request) show that the relationship was even tighter than was revealed from the leaked Sony emails.

Filed Under: attorney general, cozy relationship, jim hood, lobbying, mississippi, project goliath
Companies: digital citizens alliance, google, jenner & block, mpaa

How States Are Fighting To Keep Towns From Offering Their Own Broadband

from the lobbying-dollars-at-work dept

Earlier this year, the Federal Communications Commission voted to ease the way for cities to become Internet service providers. So-called municipal broadband is already a reality in a few towns, often providing Internet access and faster service to rural communities that cable companies don't serve.

The cable and telecommunications industry have long lobbied against city-run broadband, arguing that taxpayer money should not fund potential competitors to private companies.

The telecom companies have what may seem like an unlikely ally: states. Roughly 20 states have restrictions against municipal broadband.

And the attorneys general in North Carolina and Tennessee have recently filed lawsuits in an attempt to overrule the FCC and block towns in these states from expanding publicly funded Internet service.

North Carolina's attorney general argued in a suit filed in May that the "FCC unlawfully inserted itself between the State and the State's political subdivisions." Tennessee's attorney general filed a similar suit in March.

Tennessee has hired one of the country's largest telecom lobbying and law firms, Wiley Rein, to represent the state in its suit. The firm, founded by a former FCC chairman, has represented AT&T, Verizon and Qwest, among others.

James Tierney, director of the National State Attorneys General Program at Columbia Law School, said it is not unusual for attorneys general to seek outside counsel for specialized cases that they view as a priority.

Asked about the suit, the Tennessee attorney general's office told ProPublica, "This is a question of the state's sovereign ability to define the role of its local governmental units." North Carolina Attorney General's office said in a statement that the "legal defense of state laws by the Attorney General's office is a statutory requirement."

As the New York Times detailed last year, state attorneys general have become a major target of corporate lobbyists and contributors including AT&T, Comcast and T-Mobile.

North Carolina is no exception. The state's Attorney General Roy Cooper received roughly $35,000 from the telecommunications industry in his 2012 run for office. Only the state's retail industry gave more.

The donations are just a small part of contributions the industry has made in the states. In North Carolina's 2014 elections, the telecommunications industry gave a combined $870,000 to candidates in both parties, which made it one of the top industries to contribute that year. Candidates in Tennessee received nearly $921,000 from AT&T and other industry players in 2014.

The FCC's decision came after two towns – City of Wilson in North Carolina and Chattanooga in Tennessee – appealed to the agency to be able to expand their networks.

The vote has rattled some companies. In a government filing earlier this year, Comcast cited the FCC's decision as a risk to the company's business: "Any changes to the regulatory framework applicable to any of our services or businesses could have a negative impact on our businesses and results of operations."

If the court upholds the FCC's authority to preempt restrictions in North Carolina and Tennessee, it may embolden other cities to file petitions with the agency, according to lawyer Jim Baller, who represents Wilson and the Chattanooga Electric Power Board. "A victory by the FCC would be a very welcome result for many communities across America," said Baller.

For some residents in and outside of Chattanooga, clearing the way to city-run broadband would mean the sort of faster Internet access that others might take for granted.

For 12 years, Eva VanHook, 39, of Georgetown, Tennessee, lived with a satellite broadband connection so slow that she'd read a book while waiting for a web page to load. In order for her son to access online materials for his school assignments, she'd drive him 12 miles to their church parking lot, where he could access faster WiFi.

Charter, the local Internet service provider, declined several requests by her husband to build lines out to her home. Only last month did Charter connect her home to the Internet. "Even the possibility to jump on [the local utility's] gigabit network would blow our minds right now," VanHook said. "There is nothing faster than Chattanooga. Just through meeting them and hearing them speak and having them understand what's going on, that's the kind of place I want to do business."

Republished from ProPublica.

Related: Obama Wants You to Have Cheap, Fast Internet, But Many Cities Aren't Allowed to Provide It

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Filed Under: broadband, fcc, isps, lobbying, municipal broadband, north carolina, states, tennessee
Companies: at&t, verizon, wiley rein