AT&T/Verizon-NSA partnership shows why government and businesses shouldn't mix

One of the biggest complaints in the original 2009 tea party protests was the government’s decision to bail out the banks, plus the auto industry. FreedomWorks compared ex-Congressman Barney Frank to Wesley Mouch from Atlas Shrugged, Heritage Foundation wrote the auto bailout was sold on empty promises, and Michelle Malkin pointed out how many earmarks there were in the 2009 omnibus spending bill. It’s something conservatives and libertarians have complained about for years. Governments and businesses shouldn’t mix at all. The New York Times has given example number eight gazillion why this is true with a story on the NSA’s team up with AT&T (and Verizon) to spy on the Internet (emphasis mine).

The N.S.A.’s top-secret budget in 2013 for the AT&T partnership was more than twice that of the next-largest such program, according to the documents. The company installed surveillance equipment in at least 17 of its Internet hubs on American soil, far more than its similarly sized competitor, Verizon. And its engineers were the first to try out new surveillance technologies invented by the eavesdropping agency.
One document reminds N.S.A. officials to be polite when visiting AT&T facilities, noting, “This is a partnership, not a contractual relationship.”

There are obviously going to be complaints about these revelations because they’re from Edward Snowden. But the story also points out AT&T was handing over a billion domestic cell phone records each day in 2011. One reason why this was being done is because AT&T and Verizon were getting paid by the government for the logs.

AT&T, for example, imposes a $325 “activation fee” for each wiretap and $10 a day to maintain it. Smaller carriers Cricket and U.S. Cellular charge only about $250 per wiretap. But snoop on a Verizon customer? That costs the government $775 for the first month and $500 each month after that, according to industry disclosures made last year to Congressman Edward Markey.

AT&T and Verizon aren’t just benefiting from the “activation fees” as a way to get government cash. They’re also getting billions in cash from the federal government as part of the 2008 “economic stimulus” package. The Wall Street Journal studied the so-called “bonus depreciation” measure last year to find out how much of a break the telecom industry was getting.

AT&T estimated its federal tax bill last year at $3 billion, down from about $5.9 billion in 2007, before the tax relief was enacted. Verizon estimated that it would get $197 million back last year, compared with a 2007 bill of $2.6 billion.

That’s over $2B in tax breaks. Two. Billion. WSJ also points out the tax breaks did nothing to actually increase employment at AT&T or Verizon, like everyone promised it would. It again shows how disastrous those bailouts were and anyone thinking otherwise is just plain delusional. It isn’t just telecom companies making deal with the government. Google spent plenty of time in the White House in 2012 trying to avoid being called a monopoly by the FTC. The FTC ruled Google wasn’t a monopoly in March 2013. Two years later, the FCC enacted Net Neutrality. One thing Wired pointed out was how silent on the issue Google was.

But they didn’t hear from Google, one of the companies that spent the most money on lobbying five years ago when the FCC last examined the issue.

Google did sign a letter last year pressing the government to enact Net Neutrality. But this was after the FTC investigation had been settled. Plus, Google and Verizon were criticized in 2010 for reaching a deal on streaming. The evidence is completely circumstantial but it’s possible Google may have cut a deal with the government to not fight Net Neutrality in exchange for not being labeled a monopoly.

This just shows what happens when government and business get together for things. It’s a two-way street, whether the Left and the Right want to admit it or not. Whenever a business gets a tax break specifically tailored for them, there’s always the chance the government will come back and say, “I gave you this, now give me this.” Look at the history of the farm bill, where the government is paying farmers to not grow food under the idea of leveling the market. The government does the same thing with other food products. Or the federal government’s decision to fix the price of milk. Or local cities helping the taxi cab industry by fighting Uber and Lyft. Businesses should be able to keep as much of their money as possible. The same goes for individuals. But this AT&T/Verizon-NSA team up shows the consequences of when the government and business get together. That isn’t free markets. It isn’t even buying and selling politicians. It’s cronyism at its worst. This is why the government and business need to be separate from each other. It saves taxpayers money and also protects freedom and free markets.