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AT&T Lobbying Efforts Under Scrutiny

Carol Wilson
4/25/2014
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AT&T's support for the American Legislative Exchange Council (ALEC) is once again under scrutiny, this time by a group that wants AT&T shareholders to vote in favor of a requirement that the company publicly disclose the amount of money it is spending to lobby at the state level, and in its support of lobbying groups such as ALEC.

The effort is being presented by AT&T Inc. (NYSE: T) shareholders AFSCME, Zevin Asset Management and Missionary Oblates of Mary Immaculate at today's Annual Meeting. As part of the AT&T proxy statement, the group is asking shareholders to support requirements that AT&T's board disclose its lobbying policies and expenditures.

AT&T is recommending a vote against the proposal, noting in its proxy statement that it already discloses its lobbying expenditures. "AT&T is committed to adhering to the highest ethical standards when engaging in any political activities. AT&T's policies and procedures with respect to political contributions are clearly set forth on the Company's website in the Corporate Governance section. AT&T publishes the AT&T Political Engagement Report semiannually; it is an itemized list of corporate contributions and employee PAC contributions to candidates and candidate."

A particular target of the effort is AT&T's support for ALEC, an organization funded by corporations that also includes state legislators and works to draft model legislation. The group came under fire for having drafted a model Stand Your Ground Law, similar to what was adopted in Florida prior to the shooting death of Trayvon Martin, an unarmed black teenager, and the acquittal of George Zimmerman, the man who shot him. ALEC backers have pointed out the Florida bill preceded their model legislation.

In this instance, however, the corporate watchdog group backing the latest proxy vote, SumOfUs.org, is more focused on AT&T's efforts to shape telecom regulation at the state level to eliminate many of the rules by which AT&T and other legacy telecom players are still forced to play such as carrier of last resort and wholesale interconnection requirements.

"We are saying there should be full accounting and oversight of AT&T's lobbying efforts and its relationship to ALEC and that shareholders should be aware of what AT&T is spending," says Lisa Lindsley, a spokeswoman for the group, which has gathered 55,000 signatures on a petition backing the proxy vote. "The Board should be accountable and make sure shareholders are aware of the risks."

Those risks include damaging its public reputation among potential customers, she says.

CenturyLink Inc. (NYSE: CTL) and Verizon Communications Inc. (NYSE: VZ) are also members of ALEC, which has drafted model legislation that addresses a number of concerns for incumbent telecom and cable providers including bills that would prohibit municipalities from building broadband networks, eliminate local cable franchises in favor of state-wide franchises and give network operators greater access to public rights-of-way while limiting local authority to collect fees.

AT&T is being singled out in part because of its presence on ALEC's board, Lindsley says: "AT&T certainly has a leadership role within ALEC that we haven't seen other telco players having," she says. The proxy vote is advisory, not binding, so even if a substantial number of shareholders vote in favor of it, the AT&T board does not have to act.

AT&T has defended its funding and participation in ALEC in the past, including standing up to Sen. Dick Durbin (D-Ill.) when he inquired about AT&T's participation in ALEC following the Zimmerman acquittal. Noting that any answers given to Durbin would likely fuel ALEC critics, AT&T's longtime chief lobbyist James Cicconi, a senior vice president at the company, defended AT&T's free speech rights in a letter that was excerpted in an editorial in The Wall Street Journal.

UPDATE: 4/28/2014 -- AT&T shareholders rejected the idea of requiring an annual report on lobbying by a 3-1 margin.

— Carol Wilson, Editor-at-Large, Light Reading

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pcharles09
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pcharles09,
User Rank: Light Beer
5/21/2014 | 5:14:18 PM
Re: Missionary Oblates of Mary Immaculate
Thanks for the plug. That site definitely looks interesting.

Hopefully it helps make a difference.
pcharles09
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pcharles09,
User Rank: Light Beer
4/30/2014 | 5:43:27 PM
Re: Missionary Oblates of Mary Immaculate
That still baffles me. The guy publicly was discriminatory in his pre-Clipper business practices. How does a person like that get any type of award??
Carol Wilson
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Carol Wilson,
User Rank: Blogger
4/29/2014 | 2:20:38 PM
Re: Re : AT&T Lobbying Efforts Under Scrutiny
AT&T has long been savvy in using its money at the state level to get things it wants from legislators and, on occasion, regulators, atlhough that's not the typical path.

Today, AT&T has a substantial wish list at the state level: they would like to see most of the regulations that applied to them as a telephone company relaxed or eliminated in the Internet area. They don't want to be forced to be the carrier of last resort, for instance, maintaining an aging network that serves an ever-smaller number of (mostly low-value) customers. They would like to be able to substitute wireless access where copper access is costly to maintain. And they would like to prevent competition from municipalities who occasionally decide to fund the build-out of their own broadband networks. 

They would like the states to prevent local governments from imposing fees or franchise agreements, as well.

So spending to get friendly treatment at the state level is probably a good investment for their business. 

The SumOfUs.org folks think this is happening under the investor radar even though AT&T claims everything is already disclosed. I suspect the information is there for those who dig, but few people care to dig. 

I don't doubt there is an agenda on the SumOfUs.org side - they think AT&T should be pressured to stop advancing its deregulation agenda at the state level. I've seen AT&T operate in the states since I started covering telecom in 1985 and I don't think they're going to stop anytime soon.
SachinEE
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SachinEE,
User Rank: Light Sabre
4/29/2014 | 2:08:09 PM
Re : AT&T Lobbying Efforts Under Scrutiny
It is hard to see how much AT&T stand to gain out of their support and sponsorship for ALEC. Other backers were quick to distance themselves when attention was raised to the similarities between their drafts and the Stand Your Own Ground bill but this AT seems to be oblivious to this fact. This, in my mind, sounds a warning bell that the latter may be looking for more legislative favors than they would want the public and even their shareholders to know.
SachinEE
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SachinEE,
User Rank: Light Sabre
4/29/2014 | 2:05:40 PM
Re: Missionary Oblates of Mary Immaculate
Even though the shareholders do have a right to know how their money is being managed and spent, I believe that this move by the lobby group SomeOfUs.org is about something else and has very little, if anything, to do with increasing financial accountability. As pointed out, the money that giant companies spend on lobbying is a very small fraction compared to what they spend in unnecessary legal fees and marketing campaigns. If it was about greater financial accountability, these would definitely be the places to begin the fight for blood.
mendyk
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mendyk,
User Rank: Light Sabre
4/29/2014 | 9:19:31 AM
Re: Missionary Oblates of Mary Immaculate
The fact that Donald Sterling almost received not one but two lifetime achievement awards from the NAACP tells us all we need to know about the effect of spreading money around.
pcharles09
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pcharles09,
User Rank: Light Beer
4/28/2014 | 9:51:31 PM
Re: Missionary Oblates of Mary Immaculate
Reminds me of House of Cards, if you're familiar with the show.

I would think that you'd want to avoid the majority to try & get the minority to push your agenda. Seems like giving to all can lead to deadlock (political gesturing-wise).
mendyk
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mendyk,
User Rank: Light Sabre
4/28/2014 | 4:58:02 PM
Re: Proposal rejected
Divine intervention only goes so far...
Carol Wilson
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Carol Wilson,
User Rank: Blogger
4/28/2014 | 3:48:11 PM
Proposal rejected
Only about a quarter of AT&T shareholders voted in favor of requiring an annual report on lobbying activities so the proposal was rejected. 
sam masud
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sam masud,
User Rank: Light Sabre
4/28/2014 | 2:22:52 PM
Open up
Lobby dollars I guess are free speech (probably that's what the Supremes, or at least a majority of them, likely think) but it's reasonable to ask how much this "free speech" costs.
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