A telecommunications company has confirmed for this columnist that its vice president for policy—who is also an Obama donor and a former lobbyist—is advising Barack Obama’s transition team on telecom policy.
Obama’s transition team, which has failed to disclose this executive’s involvement, happens to have proposed a significant change in telecom policy that will profit that very company, called Clearwire.
By pushing to delay the long-scheduled transition of television broadcasting from analog signals to digital signals, president-elect Obama is directly aiding Sprint and its partner Clearwire while hurting Verizon.
Clearwire’s executive vice president for “Strategy, Policy and External Affairs” is R. Gerard Salemme. Writer Julian Sanchez reported Wednesday on the website Ars Technica that Salemme is serving on the Obama transition team as a telecom advisor. Clearwire told this columnist that Salemme is on leave to help craft Obama’s telecom policy.
Clearwire provides infrastructure for Sprint’s wireless data network. In layman’s terms, Sprint pays Clearwire to connect your Blackberry to the Internet.
The fates of Sprint and Clearwire, as well as their competitors, particularly Verizon, are tied up with the Federal Communications Commission’s (FCC’s) actions on digital television because wireless broadband (high-speed Internet over cell-phone signals, in effect) is tied up with the FCC’s actions on digital television.
Here’s the policy issue in brief: For decades, TV programming has been broadcast over the air in analog format. These days—in addition to cable, which, obviously, goes over cables and not over the air—television broadcasters can send programming over the air in digital format.
By using digital broadcasting, more programming can be crammed into a narrower range of frequencies. Seeing this as an opportunity, the FCC—which has complete control over who can use what frequencies in the U.S.—started pushing during the Clinton administration to end all analog TV broadcasting and move it all to digital broadcasting.
After years of wrangling and negotiating, Congress and the FCC set February 17, 2009—between the Superbowl and the NCAA tournament—as the date for all TV broadcasting to switch to digital.
This will free up a huge swath of frequencies, which the FCC has auctioned off to other telecommunications firms. One buyer was Verizon, who will use this spectrum for its wireless broadband networks (again, providing Internet for Blackberries and similar devices).
Specifically, they will use this spectrum to launch their fourth-generation wireless broadband network (or “4G” as it’s known, in contrast to the “3G” you hear about with today’s iPhones and Blackberries). So, Verizon’s 4G network awaits the transition to digital TV.
But Sprint and Clearwire, on spectrum they already own, have begun launching their 4G network. That means Sprint is ahead of the competition in wireless Internet. It also means Sprint and Clearwire stand to benefit from Obama’s push to delay the transition to digital TV: The longer broadcasters use analog signals, the longer Verizon has to wait to get the spectrum it needs for its 4G network—which gives Sprint a longer honeymoon as the only network offering 4G speeds.
There are legitimate arguments for delaying the transition—many TV owners who have requested vouchers for a free analog-digital converter box won’t have the boxes before February 17, in part due to budgetary rules—but the appearance of impropriety is glaring.
Salemme, a former telecom lobbyist who has given thousands to Obama, including $5,000 to Obama’s transition team, has helped Obama craft a policy that will benefit Salemme’s company. This is just the sort of arrangement that led to years of Democratic outrage over the Bush administration’s energy policy.
Sanchez’s detailed and well-reported article on Ars Technica called to light these conflicts of interest—and the fact that Salemme’s name is nowhere to be found on Change.gov. As of yesterday, the Obama transition team still hadn’t addressed the concerns or added Salemme’s name. The transition team did not return a phone call or respond to an email request for comment from this author.
Almost unanimously, Capitol Hill staff and industry sources this week expressed certainly that Obama would get his way, meaning the long-scheduled transition would be delayed. While Obama proposes this delay as a boon to consumers, it’s hard to ignore that it provides a huge profit opportunity to one of his donors who secretly helped him craft the policy.
Not a great beginning for transparency and ending corporate influence in Washington.
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