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Regulation

AT&T Lobbying Efforts Under Scrutiny

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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thebulk 4/25/2014 | 1:51:31 PM
Always I think that lobbying is always under fire, and more so when it has to do with telecom companies. More so since net nutrality has become a hot button topic. It will be interesting to see how this shakes out. 
[email protected] 4/25/2014 | 2:00:58 PM
Missionary Oblates of Mary Immaculate Didn't Jake and Elwood raise money for them in The Blues Brothers?
thebulk 4/25/2014 | 2:10:26 PM
Re: Missionary Oblates of Mary Immaculate No, that was the NCTA! LoL
Carol Wilson 4/25/2014 | 2:20:16 PM
Re: Missionary Oblates of Mary Immaculate At this point, I'm pretty confident AT&T will shrug this off. There are some companies - Kraft, Coca-cola and Pepsico - who ended their support of ALEC over the Stand Your Ground bill issue. 

It's pretty clear that AT&T is heavily committed to its regulatory agenda, seeking to eliminate legacy regulations with the move to all-IP. How far they are allowed to go with that - whether, for instance, they are allowed to tell people they won't provide them wireline service anymore - remains to be seen. 
mendyk 4/25/2014 | 2:23:26 PM
Re: Missionary Oblates of Mary Immaculate The oblates (who refer to themselves in shorthand as OMI) do take a vow of poverty (along with chastity and obedience) when they join the krewe. Interestng that they would be involved as a concerned shareholder.
thebulk 4/25/2014 | 2:25:07 PM
Re: Missionary Oblates of Mary Immaculate I think its clear that everyone in the telecom game wants to be aggressive with regulatroy agenda. It seems the name of the game is out with the old, in with the new. Just throw money at it until the issues are in your favor. 
briandnewby 4/25/2014 | 3:17:54 PM
Re: Missionary Oblates of Mary Immaculate Having worked at Sprint for several years--although also several years ago--I can say that my biggest criticism of the lobbying dollars by Sprint was that they gave to all candidates, worried, I guess, that they would guess wrong.

I think AT&T then and now has been more likely to hedge bets on a candidate.

Still, I always thought and often said that the people who made the biggest different to Sprint financially (and I'm sure the same would be said for the other carriers) were their legal and regulatory staffs.  Shareholders who want to know the amount spent lobbying really don't understand why they are asking it.
thebulk 4/25/2014 | 3:32:48 PM
Re: Missionary Oblates of Mary Immaculate @brian, 

So you think its a mistake to give to all sides to ensure that you come out on top? 
pcharles09 4/25/2014 | 8:26:04 PM
Re: Missionary Oblates of Mary Immaculate I'd say standard lobbying means you push hard on 1 side until you get what you want. At least that's the way it seems on TV...
mendyk 4/26/2014 | 8:55:22 AM
Re: Missionary Oblates of Mary Immaculate Standard practice for all but the most hardline lobbyists is to spread the money around. Put a little in everyone's pocket, and everyone is in your pocket, more or less. There's nothing new about this and it's not likely to change.
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