Monday, January 19, 2009

Obama Delaying Digital Conversion To Help Campaign Contributor

Did you wonder why Barack Obama suddenly decided to delay the long-planned conversion of television transmissions from analog to digital before he even takes office? It turns out that a telecom adviser and former lobbyist for his transition team, R. Gerard Salemme, is a government relations executive for Clearwire, which partners with Sprint in providing its wireless data network. By delaying the conversion, Sprint and Clearwire will stall their major competitor, Verizon, from acquiring a spectrum for its own new generation wireless broadband network.

The Examiner's Tim Carney confirmed that Salemme is advising the Obama transitition team on telecom policy, but his name is nowhere to be found on Change.Gov, Team Obama's official transition team's website. Obama's transition team did not return Carney's calls seeking comment on the obvious conflict of interest. Carney writes:

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 . . .

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).

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 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.

Carney aptly observes that this is "not a great beginning for transparency and ending corporate influence in Washington." You can bet Salemme will be rewarded by his employer for a job well done. Julian Sanchez has the details of Salemme's financial support for Obama at Ars Technica:

Enter Gerry Salemme. A telecom industry veteran; former lobbyist; and Clearwire executive vice president for strategy, policy, and external affairs, Salemme has also been a generous Obama supporter. Early in the primary season, Salemme gave the maximum $2,300 to Obama for America, and then in August threw in another $10,000 to the Obama Victory Fund, a joint fundraising committee that accepts large contributions and carves them up between the party and candidate. (An apparent typo in the OVF's FEC filing credits this donation to "R. Gerard Salemine." OpenSecrets shows the cash as split into $5,400 for the Democratic National Committee's Services Corporation and two contributions of $2,300 to Barack Obama, which on face would seem to exceed Salemme's cap for the primary and general combined.) Once the race to the White House was won, Salemme scrounged another $5,000 for the transition effort.


Downtown Indy said...

The coupons amount to $1.34 BILLION dollars, a figure that floored me when I first heard about it. Of course, that now pales in comparison to the recent bailouts.

What I have NOT seen is any estimate of the cost to broadcasters if they are required to continue their analog signals.

(A) They will have to adjust their budgets to fund continuation of their dual-transmitter operations. Megawatts of transmitter power equates to many 10s of thousands of dollars in electricity costs per month.

(B) Broadcasters have contracts for disposal of the old analog gear, which means they stand to lose whatever they HAD figured on getting paid for that equipment.

They may find their contracts cancelled and with the current financial climatemay either be unable to find a new buyer or new bids come in far below the old contract prices.

And they may be forced into paying stiff penalties for failing to fulfill timely delivery according to the contract.

artfuggins said...

Hawaii did it early and it resulted in chaos...despite repeated warnings, people were not ready.

Downtown Indy said...

No Art, 'chaos' would be a general failure of the utility infrastructure for some reason and people not having a stockpile of essential needs.

Having the TV go out because you didn't act despite 18 months of near-constant reminders is 'inconvenience' or 'tough s**t.'

artfuggins said...

Downtown Indy, perhaps we are having a semantic difference here. You are correct. The people had plenty of notice and time to prepare but the fact is that a huge number didn't. Although one small station that is only viewed on one island did not make the conversion either. Televison is not only for entertainment but for warnings of pending danger......natural and manmade and if we have a significant part of the population unable to hear those warnings ..then we have a problem. However, the government did not fail this time, the people did.