Nextel Lobbies For Bigger Share Of Cellular Space
The outright granting of airwaves would be unusual. Over the past decade, the FCC has conducted auctions for the rights to airwaves, and they have brought in billions of dollars -- and lots of controversy.
Nextel has said that the value of its proposed swap -- combining the airwaves relinquished with its nearly-billion-dollar payment -- is $4 billion. Verizon Wireless and others have said the airwaves, or "spectrum," the company wants is worth at least $1 billion more than that. The industry's trade association, in defiance of Nextel, believes that the FCC should give Nextel a less valuable slice of spectrum at a cost of more than $2 billion above what Nextel has offered to pay.
Nextel's lobbying effort was always dwarfed by the other side. The company had to build its lobby army from scratch. It has retained more than a dozen lobbying firms to blanket Capitol Hill with its pleadings. It is also attempting to become a bigger player in the influence game by raising money for congressional election campaigns. For the first time in its 17-year history, Nextel is asking its executives to fork over thousands of dollars to establish a political action committee.
"Once we realized our opponents had a very entrenched lobbying apparatus, we knew we needed to make sure that our voice was heard," Horner said.
Nextel's rapid move from the sidelines to the front lines of lobbying fits a well-worn pattern. Even large companies and industries resist involvement in the frustrating and expensive world of influence peddling. But when they get thrown into a regulatory or legislative fight, they ramp up quickly by purchasing many weapons of pressure.
Microsoft Corp. co-founder Bill Gates, for example, did not hide his distaste for the capital's money-soaked inside game and for years steered clear of it. But after the Clinton administration Justice Department filed an antitrust lawsuit against the company, Gates abandoned his objections and developed what has become one of Washington's best-financed and most sophisticated lobbying operations. Under the Bush administration, the antitrust suit was settled on terms agreeable to Microsoft.
The credit union industry was also a minor participant in Washington's ways until a Supreme Court decision threatened its ability to expand several years ago. Then the Credit Union National Association awakened, hired high-priced consultants and created a state-of-the-art lobbying presence in the districts and states of pivotal members of Congress. Eventually, the association mobilized those local advocates to defeat the potent American Bankers Association and enact legislation in 1998 that overturned the Supreme Court decision.
Now it is Nextel's turn. Beginning in late spring 2003, Robert S. Foosaner, the firm's chief regulatory officer, went on a K Street spending spree, quickly quadrupling Nextel's lobbying expenditures.
He hired former Republican and Democratic staff members from both the House and Senate, primarily to contact their old bosses, their current aides and colleagues. He also retained telecommunications analysts who could tag along with those access specialists to explain Nextel's policy positions in as much detail as the lawmakers could tolerate.
The initial decision about the airwaves' sale lies exclusively with the five-member FCC. But its choices are heavily influenced by the opinions of lawmakers, especially those who sit on committees that fund or oversee its work. In addition, Congress can second-guess the FCC and modify the agency's ruling if it so chooses.
To gain entry to the offices of Senate Republicans, Nextel retained McSlarrow Consulting LLC's Alison H. McSlarrow, a former senior aide to Sen. Trent Lott (R-Miss.). Nextel also looked to Fierce, Isakowitz & Blalock, a lobbying firm that is 100 percent Republican, to help it gain access to Republicans in both the House and the Senate.
For assistance with Democrats, Nextel brought on Ricchetti Inc., which is headed by Steve Ricchetti, who was a deputy chief of staff to President Clinton. It also hired the Harbour Group LLC, a unit of the law firm Swidler Berlin Shereff Friedman LLP, whose managing director, Joel Johnson, is a former aide to Senate Minority Leader Thomas A. Daschle (D-S.D.).
Nextel also carefully targeted the Senate's powerful telecommunications subcommittee. It retained the firms of two former aides to the panel's chairman, Sen. Conrad Burns (R-Mont.); the Giacometto Group LLC's Leo A. Giacometto; and Capitol Coalitions Inc.'s Brett Scott. Scott's partner, Amy R. Mehlman, is the sister-in-law of Kenneth B. Mehlman, President Bush's campaign manager.
With so large a contingent, Nextel had to establish a hierarchy. To coordinate the team's efforts, it assigned Harbour Group's Johnson along with Alexander Strategy Group's Terry Haines. Haines, a former aide to Rep. Michael G. Oxley (R-Ohio), and his partner Ed Buckham, a former top aide to House Majority Leader Tom DeLay (R-Tex.), often pair up with the Democrats at Harbour Group to give lobbying campaigns bipartisan coverage.
Nextel believes it has enough lobbyists to defend itself on the airwaves issue and to take on others as well. But it does not underestimate the difficult road it still must travel.
"Nextel is fully aware of the lobbying power of our opposition. They are unbelievably well funded and they have long relationships" in Washington, Horner said. "When you're fighting the entire cellular industry, that's a formidable challenge."
© 2004 The Washington Post Company
Nextel, the nation's sixth-largest cell phone company, would pay $850 million to put public safety groups on less-crowded airwaves to gain more spectrum.
(Daniel Acker -- Bloomberg News)
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