This story, by Ian Shapira, ran in the print edition of today’s paper:
AT&T remained confident Tuesday that it will win over regulators to approve its $39 billion bid to buy T-Mobile USA, even as critics continued to bash the deal as anti-competitive and bad for consumers.
Bolstering its chances, AT&T has one of the most muscular lobbying operations in Washington. Last year, it enlisted an army of about 90 lobbyists and has had on its roster well-known former lawmakers, including Trent Lott (R-Miss.) and John Breaux (D-La.) of the Senate and J.C. Watts (R-Okla.) of the House of Representatives, according to the Center for Responsive Politics.
It is also one of the biggest campaign contributors among any corporation in history and has spent $15 million annually on lobbying efforts since 2005, according to the nonprofit group. The Republican chairmen of three key House committees — Fred Upton (R-Mich.), Lamar Smith (R-Tex.) and Darrell Issa (R-Calif.) — together have received more than $200,000 over their political careers from AT&T’s political action committee, the center’s data show. They did not immediately return phone calls for comment.
Experts and consumer advocates say the merger, which would create a wireless behemoth by combining the nation’s second- and fourth-largest cellular carriers, raises serious doubts for federal antitrust regulators. But they also note that AT&T is especially well-positioned to make its case.
Critics point to a key detail in AT&T’s proposed transaction as a sign of the company’s confidence that it will ultimately win over regulators: AT&T must hand over $3 billion to T-Mobile, plus some valuable wireless spectrum, if the deal gets nixed.
“Why are they so confident?” asked Craig Aaron, the managing director of Free Press, a Washington-based nonprofit group that examines media and Internet policy. “I have to believe that they must have made the rounds in Washington to find out. . . . You’d have to think that they have this confidence because of all that lobbying clout that they bring to bear.”
Congress does not have direct oversight over the deal; AT&T needs approval from the Federal Communications Commission and the Justice Department.
Michael Balmoris, an AT&T spokesman, said the company did not shop the idea of the merger with regulators before announcing the deal. In a presentation to investors this week, Wayne Watts, AT&T’s senior executive vice president and general counsel, said the company “fully understands and respects” the regulatory process.
In the presentation and on a Web site promoting its cause, AT&T argued that the merger will bring wireless access to 95 percent of the U.S. population and reach far-flung locales — fulfilling a key goal of President Obama. AT&T also contended that previous wireless company mergers have resulted in lower prices for consumers.
Critics of the deal doubt prices will come down in this case. And they worry about what AT&T will do with its influence in Washington.
Aaron said the firm’s lobbying clout is partly due to James W. Cicconi, a company senior executive vice president. Last year, GQ magazine ranked Cicconi as No. 4 on its list of top “influencers” in Washington, right behind Haley Barbour, the Mississippi governor and possible GOP presidential candidate.
Cicconi was instrumental, Aaron said, in brokering a deal that paved the way for the FCC to pass rules governing whether providers of wireless Internet connections can control Web content.
“He’s shown himself to be a savvy strategist,” Aaron said. “Back in 2008, President Obama said he wasn’t going to take a back seat to anyone in net neutrality. Of course, the following year, FCC backed away and changed its position, and that was largely due to lobbying by AT&T with direct pressure at the FCC.”
Art Brodsky, a spokesman for Public Knowledge, a nonprofit public-interest group, said many critics of the deal are also wary of William Daley, the White House chief of staff. In the early 2000s, Daley was president of SBC Communications, which later merged with AT&T, and then worked for JPMorgan, which is helping finance the AT&T/T-Mobile merger.
“A bunch of us are saying there’s no way he should touch this,” Brodsky said. “The FCC chairman has been known to consult with people at the White House all the time, and JPMorgan is in line for millions of dollars in fees out of this deal.”
The White House did not return a phone call or -mail requesting comment about Daley’s potential involvement.
AT&T’s financial contributions tend to benefit Republicans more than Democrats, according to the nonprofit watchdog: During the 2010 election cycle, 55 percent of the company’s $4 million to federal-level politicians aided Republicans and 44 percent helped Democrats.
“AT&T is one of the biggest fish on the block,” said Dave Levinthal, a spokesman for the Center for Responsive Politics. “They are massive. They employ a number of lobbyists and former members of the government. There are very few companies that have multiple former Congress members working for them. They are in a rare position even for big companies when it comes to the strength of their lobbying force.”