WASHINGTON-When it comes to getting a say in telecommunications policymaking in the nation’s capital, firms let their dollars do the talking. And, oh, how the money has talked in recent years, like an endless filibuster gushing in all its gilded glory.
While political action committee money is not surging out of the spigot with the same force it did in the years, months, days and hours before Congress passed landmark telecommunications reform legislation last February, it will continue to flow into the campaign coffers of Republicans and Democrats as new issues arise and old ones resurface.
It’s the way business is done here. Time-honored, tested and true. And why not? Money has a proven track record, especially in House and Senate commerce committees that oversee the telecommunications industry and the regulatory agency responsible for carrying out Congress’ every wish and desire-the Federal Communications Commission.
Ask Larry Pressler (R-S.D.), chairman of the Senate Commerce Committee and author in that chamber of the landmark telecom rewrite whose Phoenix-like rise in fund-raising was chronicled in The Washington Post recently. Not one to relish hitting folks up for cash, the gentile Pressler vaulted to the head of his class by amassing $1.2 million in overall PAC donations over the past two years during which Congress grappled with telecom reform.
The telecom bill was the ticket. His chairmanship of a committee with sweeping commercial jurisdiction made the donations all the sweeter. Pressler had to play the game this time around, owing to a tough challenge for his seat by House member Tim Johnson (D-S.D.).
Pressler’s counterpart in the House, Thomas Bliley (R-Va.), and retiring House telecommunications subcommittee Chairman Jack Fields (R-Texas) didn’t do bad either insofar as telecom PAC money is concerned.
Bliley, according to the Center for Responsive Politics, pulled down $59,200 in telecom PAC dollars from January 1995 through Sept. 3. Fields netted $64,842.
The two biggest telecom rainmakers on House Commerce: the still powerful ranking minority member, John Dingell (D-Mich.), who received $85,450, and an upstart Republican freshman from New York, Dan Frisa ($82,250). Another freshman Republican, Rick White, whose district in Washington includes Microsoft Corp., AT&T Corp.’s $11.5 billion prize catch, McCaw Cellular Communications Inc., and other high-tech stars, attracted an impressive $77,094 in telecom PAC dough through early this month.
Rep. Bill Paxon (R-N.Y.), chairman of the Republican Campaign Committee and a House Commerce member, hit $74,386. Not far behind are panel members Mike Oxley (R-Ohio/$66,499); Dennis Hastert (R-Ill./$66,601); Joe Barton (R-Texas/$57,600); Billy Tauzin (R-La./$52,750; Tom Coburn (R-Okla./$45,568) and Chris Cox (R-Calif./$40,550).
Even now, with telecom issues tabled for the year as lawmakers edged toward adjournment and onto the campaign trail, the big money was at work in the waning weeks of the 104th Congress. House minority leaders schemed to fill Commerce Committee slots vacated by Democratic retirements with freshmen like Bill Luther (D-Minn.) and Mike Ward (D-Ken.), who could use the PAC magnetism of the committee assignment in tight races with Republicans.
Critics argue the big money that drives PACs and hired guns subverts the political process and enables deep pockets to gain a competitive advantage in the marketplace. Attempts at reform of campaign finance laws-put on the books in the post-Watergate era 20 years ago to instill accountability in a system that had become infamous for big bags of cash from unknown donors at the doorsteps of political candidates-have come in all shapes and sizes. And have gone nowhere.
“I think there’s no doubt who affected the outcome [of telecom reform]. Money made a difference,” said Adam Thierer, an economic fellow at the Heritage Foundation.
In fact, according to Thierer, lobbying was so targeted that provisions within the telecom bill became known by the company advocating them-`the Corning provision,’ `the Circuit City provision,’ `the Ameritech provision’ and so on. Of course, no such names appear in the bill. There are section numbers.
While PAC watchdog groups have become cynical about campaign finance, Thierer notes that economists see the money as a calculated cost of doing business. Public choice economics is what the academicians call money spent by firms in search of a policy trade-off. Public choice economics is not just limited to PACs. Money can go to litigation, say, at the state level where future interconnection battles will be fought. Thierer believes telecom firms will spend a lot of money in coming years doing just that.
But House and Senate Commerce Committee members need not fret, now that telecom reform is finally law. There is power utility deregulation coming to the 105th Congress and the PAC money is just as good, maybe better.
For the wireless telecommunications industry, getting deregulated at local, state and federal levels over the last three years required long, hard hours of powerful persuasion on Capital Hill. It also required money, like the $51,764 in PAC money spent in 1995-1996 and the $2.4 million in lobbying expenses by the Cellular Telecommunications Industry Association in the first half of this year to secure national antenna siting and other policy plums.
To provide some perspective, the $2.4 million in lobbying expenses (separate from PAC money) of CTIA is as much as Exxon Co. spent. That amount places both entities just beyond the top-20 biggest lobbyists during the first six months of 1996. Making the top-20 lobbying list during that period are AT&T Corp. ($4.3 million), Motorola Inc. ($4.1 million) and BellSouth Corp.($2.7 million).
It doesn’t hurt having CTIA President Thomas Wheeler, an active Democratic fund-raiser with a political network second to none in the wireless industry, spearheading the cause.
But CTIA’s recent expenditures tell only part of the story, given that state and federal deregulation was accomplished in 1993 legislation. The vehicle then was a tax-raising budget bill.
In retrospect, it was a wise investment. The wireless industry got the attention of lawmakers. With PAC money in hand, their hearts and minds followed.
In this election cycle, the main objective was local deregulation-getting Congress to set a national siting policy that would end the patchwork of zoning regulations that delay and, worse, prevent wireless carriers from erecting base stations for reasons, legitimate and loony, ranging from aesthetics to health concerns.
The vehicle this time around was the historic telecommunications reform bill. But wireless money won much more than just antenna siting. There was long distance equal access relief for Bell cellular operators and the interconnection carve-out for the wireless industry.
The Personal Communications Industry Association spent far less, $6,500, on political candidates, relying more on a soft sell approach and its long-standing reputation as the voice for the paging industry.
“You can’t rely on it [money] solely. It’s a tool,” said Thomas Wanley, top PCIA lobbyist.
Wanley said the money tends to be split evenly between Republicans, who took over Congress in 1995 for the first time in 40 years, and Democrats.
The allotments, said Wanley, have less to do with evenhandedness and board political makeup than with identifying lawmakers whom have aided the industry and who are in tight races.
For example, Rep. Scott Klug (R-Wis.), primary author of the antenna siting provision and a target of Democrats in next month’s election, needs help.
The trade groups got added help from their members, with the Center for Responsive Politics reporting $43,050 in telecom PAC donations from AT&T Wireless Services Inc.and $54,931 from AirTouch
Communications Inc. in PAC dollars through Sept. 3. Antenna siting was important to those businesses, but so was getting
the Justice Department off their backs. And it worked, as no more antitrust officials are breathing down their necks.
Motorola Inc. threw in $90,187 and Northern Telecom Inc., $3,750, in the 1995-1996 timeframe. Law firms with wireless interests contributed their fair share, too.
It was the same story for long-distance telephone carriers-like AT&T Corp., MCI Communications Corp. and Sprint Corp.-that wanted to enter the $100 billion local exchange market. And for regional Bell telephone companies that wanted to keep those very companies away from their century-old monopoly stronghold and also sought the path of least resistance into the $70 billion long-distance business. And for the broadcasting industry that wanted to avoid paying billions of dollars for digital TV channels. And for the cable TV industry that wanted reregulation undone.
Yet there was difference in the magnitude of campaign dollars spent by wireless and other telecom sectors. The Baby Bells, long-distance giants, broadcasters and cable TV folks had money to burn.
Common Cause, arguably the loudest and most persistent advocate of campaign finance reform, said donations of soft money from local and long-distance telephone companies during the second half of 1995-the most intense period of negotiations between the GOP-led Congress and the telecommunications industry over a bill designed to overthrow a monopoly paradigm with a competitive one-were at record levels.
Soft money is unregulated and goes to national party committees that, in turn, can funnel to state and local candidates and get-out-the-vote efforts. Hard money from individuals and PACs are subject to federal limits.
The amount of soft money contributed corresponded to the huge stakes in play, and also as Common Cause found, to the ebb and flow of the telecom debate.
Overall, Common Cause, relying on Federal Election Commission filings, said the seven regional Bell holding companies gave nearly $1 billion in soft money, by a 2 to 1 margin, to Republicans. Despite the big money, things did not look good for the Bells in the early stages of the House bill. It has been suggested House Commerce Committee Chairman Bliley’s fondness for the AT&T workers in his district might have had something to do with the premature long distance gains.
But that changed. The Bells got to House Speaker Newt Gingrich (R-Ga.). The bill changed hue to the Bells’ liking and the momentum shifted to the local telephone lobby in last year’s telecom debate. The long distance alliance was beside itself, but was determined to make a comeback and dug down deep-into its pocket. And took its case to the White House .
At critical junctures that followed, long-distance carriers pulled out all the stops. Here is Common Cause’s chronology of events:
Oct. 17, 1995-The week after House-Senate telecommunications bill conferees are named and a week before the conferees begin their negotiations, MCI gives a $100,000 soft money contribution to the Democratic National Committee (DNC), its largest soft money contribution ever.
Dec. 21, 1995-The day after a conference agreement on the telecommunications bill is reached, in which the Clinton administration succeeds in helping win key victories for the long-distance companies, AT&T gives $190,000 to the DNC, its largest soft money contribution ever.
Dec. 28, 1995-A week after House Republican conferees balk at the conference agreement and declare the telecommunications bill `dead as Elvis,’ AT&T gives another $200,000 in soft money to the Republican National Committee, another record soft money contribution.
Dec. 29, 1995-MCI gives $100,000 in soft money to the DNC and $20,000 in soft money to the National Republican Congress Committee.
To this, Common Cause President Ann McBride had little good to say. “The integrity of the legislative process is destroyed by huge telecommunications companies which carefully target millions in campaign dollars to win favorable and lucrative results on Capitol Hill,” she stated the day after Clinton’s Feb. 8 signing of the telecom reform bill.
“The voices left out of this process are those of the average citizens,” added McBride.”The telecommunications battle of 1995 is an example of why the corrupt campaign finance system must be cleaned up now.”
But some don’t believe Common Cause has the answer and is, in fact, part of the problem.
“Congress has allowed itself to be tarred as a thoroughly corrupt institution in which senators and congressmen have no convictions beyond the next campaign contribution,” said Bradley Smith, an adjunct scholar with the Cato Institute, in written testimony before Congress earlier this year.
“But,” he added, “the solutions to the ensuing public anger do not lie with the facile proposals of those who have done the tarring.”
President Clinton and House Speaker Gingrich had a gentleman’s agreement earlier this year to give campaign finance reform a try. And still, nothing.
To put numbers with the high-powered CTIA lobbying machine is to understand why Wheeler & Co. are so successful. To be sure, CTIA’s success on the Hill benefits all commercial wireless carriers.
The American Mobile Telecommunications Association, which consists of several large dispatch radio firms and many small- and medium-sized ones, does not have a PAC.
Meanwhile, private wireless users lack the clout of commercial wireless carriers. That’s one reason why private wireless comes up short in spectrum policy. The Industrial Telecommunications Association lacks a PAC as well.
The Association of Public-Safety Communications Officials International Inc., by virtue of its representation, cannot have a PAC. But police, fire fighters and emergency medical workers say they need more spectrum. That is a tough sell when the administration and appropriators are hot to auction spectrum.
The catch is only commercial wireless spectrum-broadcast excluded-can be sold under current law. Thus, there is an incentive for policymakers to give commercial wireless new spectrum. But it could get worse. Lawmakers one day soon will approve private wireless spectrum sales.
“We don’t have any sweetener to carry our message,” said John Lane, a lawyer for APCO. “We have to do it by pure persuasion.”
