WASHINGTON—AT&T Inc. and BellSouth Corp., awaiting final federal action on their $79 billion merger and key stakeholders in the telecom reform debate on Capitol Hill, have been among the most generous donors to federal candidates and political parties in the 2006 election cycle.
Indeed, AT&T is king of the hill, having spent more—$2.4 million-plus through Sept. 11—than any other company in the telecom, Internet and media industries, according to Federal Election Commission data compiled by the Center for Responsive Politics. BellSouth is not far behind, contributing $1.1 million during the same period to help congressional incumbents and other candidates fund their campaigns.
Verizon Communications Inc., parent to No. 2 wireless operator Verizon Wireless, is just a notch under AT&T in political money spending, giving 59 percent of its $1.7 million to Republicans.
Thus far, the top contributor to the war chest of House telecom and Internet subcommittee Chairman Fred Upton (R-Mich.) is AT&T, with $13,500 put toward the congressman’s re-election bid. Upton last week urged the FCC to stop delaying votes on AT&T’s proposed acquisition of BellSouth, saying the record supports prompt final action on the deal.
Most of the money is generated from companies’ political action committees and its individual members, employees and owners, and family members of those individuals.
All told, telecom, Internet and media companies have poured $50.6 million into political campaigns so far this election cycle. Sounds like a lot of money. But the three industries—which together comprise the communications/electronics sector in CRP campaign finance figures—ranks only seventh among all industrial sectors in political contributions during this period.
AT&T has steered two-thirds of campaign contributions to Republicans, while BellSouth has put 59 percent of its donations toward the GOP. The allocation of political money could change next year if Democrats reclaim control one or both houses of Congress and the likelihood telecom reform legislation will still be in play.
The mobile-phone industry wants expanded federal pre-emption of states to be part of any new telecom law. It is the highest priority for a cellular industry seeking a national regulatory framework free of new state rules and consumer lawsuits that have dogged wireless carriers in recent years. Industry has additional issues too, with some peculiar to individual wireless companies.
Overall, wireless carriers and vendors are among the biggest political spenders in the telecom space.
Wireless industry trade association CTIA has contributed a little more than half of its $223,774 to Republicans during the current election cycle through early September. CRP plans to update its figures later this week.
Sprint Nextel Corp. has contributed 62 percent of its $426,025 to Republicans this political season. In contrast, Qualcomm Inc., the CDMA technology giant, has given 63 percent of its $311,200 to Democrats. Motorola Inc. has hedged its bets on Republicans, allotting nearly three-fourths of its $294,581 in campaign donations to the GOP. Lucent Technologies Inc., poised to be acquired by French telecom giant Alcatel Alsthom S.A. in a $10.7 billion deal, contributed just over 60 percent of its $58,094 to the GOP this election year.
No. 1 wireless operator Cingular Wireless L.L.C., jointly controlled by AT&T and BellSouth, favored Republicans slightly over Democrats in doling out $205,350 to federal candidates. T-Mobile USA Inc., which is controlled by German telecom giant Deutsche Telekom AG, contributed 60 percent of its $153,250 to the GOP. Right behind it, Western Wireless Corp.—acquired by Alltel Corp. in 2005—went strong for Republicans with $152,400 in political donations to date.
Meantime, Alltel, which won federal regulatory approval earlier this month for its acquisition of Midwest Wireless Holdings L.L.C., has given nearly 60 percent of its $98,150 campaign contributions to Republicans.
Interestingly it appears telecom, Internet and media companies may be looking beyond the midterm elections, seeing that Sen. Hillary Clinton (D-N.Y.) is the largest recipient ($1.6 million) and Sen. George Allen (R-Va.) the third biggest beneficiary ($552,358) of campaign contributions from the three industries. Both are potential candidates in the 2008 presidential race.
Changing hearts and minds on Capitol Hill involves more than writing checks to lawmakers who can help advance the cause of wireless companies and others in the telecom industry. Big bucks also are spent on lobbying lawmakers and other federal officials. In 2005, AT&T and Verizon were among the top spenders in all U.S. industry, shelling out $16 million and $11.7 million, respectively for in-house and outside lobbying.
