Flush with telecom cash, Texas Congressmen push for AT&T, T-mobile merger
A telecommunications industry merger that critics say will hurt the public interest and inhibit competition is being backed by some Texas congressmen whose campaign coffers are lined with thousands of dollars from the telecom companies that will benefit from the deal.
Announced in March, the proposed $39 billion takeover of T-Mobile by wireless provider AT&T, would create the nation’s largest wireless company, putting 80 percent of the wireless market into the hands of just two companies. (Verizon is the other.)
Proponents say the deal will spur innovation and help bring service to rural areas more quickly while critics argue those promises are overstated, would likely result despite a merger and have the potential to limit service and harm those customers as the options become increasingly concentrated.
The acquisition, currently being reviewed by the U.S. Justice Department and the Federal Communications Commission, is drawing support from Texas politicians on both sides of the aisle, who share in receiving generous funds from AT&T.
In a letter addressed to the U.S. Justice Department and the Federal Communications Commission, key lawmaker U.S Representative Lamar Smith, R-Texas, urged the federal government on Monday to “carefully weigh all of the evidence” on the proposed merger between the two telecommunication giants, reports Reuters, Politico and the National Journal:
“Recently, you have heard from members of Congress who, based on the limited information provided in congressional hearings, urged you to conclude that this merger should be blocked,” he wrote. “Unfortunately, they provided you with only one side of the story. I feel compelled to briefly point out the other side.”
While not explicitly endorsing the merger, Smith pointed to various benefits like job creation and competition, and advised agencies to consider these advantages before coming to a conclusion. Smith said other lawmakers’ objections to the merger — like worries from Sen. Herb Kohl, D-Wisc., who said in July that the merger would harm to competition, consumers and fail to be in the public interest — were “one-sided” and based on limited information.
Although he and other legislators aren’t granted a direct role in reviewing the merger, Reuters notes, they can be influential in shaping public opinion, by holding hearings and providing oversight of regulatory bodies. As chairman of the Judiciary Committee, Smith’s agency oversees the Justice Department, where — aside from the FCC — the final decision lies.
However, Smith’s concern, writes Political Correction, is “drowned out” by his pocketbook, which sports generous donations from the two telecom companies. Smith has received $69,800 from AT&T’s PACs, making the company his second-largest benefactor over his career. Smith generated next to nothing from Sprint, the company that stands to take the greatest hit from the merger’s approval.
AT&T PACs are the first or second greatest donors for Republican chairmen heading the three House committees that oversee the merger.
Another strong supporter of the merger is U.S. Rep. Gene Green, D-Texas, joined other lawmakers in signing a June letter to the FCC, supporting the deal.
Green has also benefited from AT&T funds. Since 1997 his campaign has received around $75,000 from the company’s two PACs, according to a Federal Elections Commission records. Money from Sprint’s PAC totaled less than $4,000 during this time period. In the 2010 election cycle, Green received $10,000 from AT&T, who co-hosted at least one fundraiser for the Green campaign in 2010, while letter co-signers and Texas congresmen Al Green ($10,000), Eddie Bernice Johnson ($9,000) and Rubén Hinojosa ($7,500) pocketed cash from the telecomm PAC during the same cycle,according to the Center for Responsive Politics and Paidcontent.org.
The legislators are part of a coalition of 77 Democratic lawmakers who added their signatures to the letter advocating for the merger; 66 of those names received nearly a half-million dollars in campaign contributions from AT&T.
The company was the top contributor to federal campaigns between 1990 and 2010, donating more than $45 million to candidates from both major parties while spending more than $140 million on lobbying in the last 14 years alone, according to media reform group Free Press. That organization sent a letter of its own in June to heads of the U.S. Committee on Commerce, Science and Transportation, which includes ranking member Sen. Kay Bailey Hutchison, R-Texas, debunking some of AT&T’s promises.
“AT&T gives millions of dollars to people running for office, and then spends even more to meet with them and influence them once they take office. All that money may or may not buy votes, but it surely buys access,” said Matt Wood, policy director of Free Press. “It’s little wonder then, perhaps, that politicians are willing to support the company and mouth AT&T talking points that run counter to the truth.”
Claims about jobs, rural coverage, service improvements, and prices made first by AT&T and later echoed by political officials, go against a cursory review of the facts, which shows AT&T’s guarantees are overblown, unrelated to the merger, or downright false, said Wood.
Meanwhile, lawmakers like Rep. Edward Markey, D-Mass., and Sen. Al Franken, D-Minn., have been especially outspoken against the deal, calling the move a dangerous blow to competition and innovation. They have said the deal would result in job losses, higher prices, decreased choice and cause “substantial” harm to the public interest. If approved, argued Franken, the market would see an “effective duopoly.”
“It would concentrate enormous power over the entire telecommunications sector in the hands of only two companies, and it would incentivize AT&T and Verizon to coordinate prices to the detriment of consumers,” wrote Franken in a 24-page letter to the FCC. It would create an unreasonable risk to the economy to entrust too much power over such a crucial industry to a company that has a history of market domination. This transaction is not in the public interest. If approved, it would result in greatly reduced competition.”