@jbtaylor on tech

As I mentioned yesterday, the Washington Post's Cecilia Kang has a must read story and blog post out about how AT&T has showered politicians and groups of all types with cash contributions.

Lo and behold, these same politicians and groups are backing AT&T's bid to takeover T-Mobile.

Kang writes:

"We went through some of these supporters and found it’s just plain hard to find politicians or organizations that haven’t received some financial support from AT&T over the years."

This is the kind of Washington, D.C. Inside-the-Beltway politics as usual that disgusts the rest of America. AT&T is banking that reporters covering this story won't do the digging that Kang has done.

What I am urging media to do is to ask questions to uncover who is working for whom before they act on what a source tells them.

Consider the recent opinion pieces in Politico and Roll Call backing AT&T.

Politico ran a pro-AT&T piece by former FCC commissioner Henry Rivera which never disclosed that Rivera's law firm, Wiley Rein, is representing Deutsche Telekom and T-Mobile USA.

A few days later, Roll Call ran a pro-AT&T opinion piece by former Congressman Rich Boucher which never disclosed that his employer, Sidley Austin, represents AT&T. Furthermore, the Internet Innovation Alliance of which Boucher is an honorary co-chair is an AT&T-funded outfit.

Suppose Rivera was still an FCC member and Boucher still represented Virginia in Congress (something I personally wish was the case, BTW), would either man still come out in support of AT&T?

I'm assuming they would.

But readers of Roll Call and Politico were never told of the financial ties between AT&T and the two gentlemen.

On May 18, Roll Call ran a piece about Boucher's new job at Sidley Austin. Would it have been that hard for the opinion page to read the news story which Roll Call's Kate Ackley had reported less than two weeks earlier?

A quick check of Boucher's Open Secrets profile discloses that between the 1998 and 2010 elections, the former Congressman's campaign committee received $110,500 in campaign cash from AT&T and all the competitors it's gobbled up during that time.

Here's the thing, the Internet makes this really easy to do. AT&T is banking on reporters not taking the time to investigates these ties.

My expectation is that neither Politico nor Roll Call will make this mistake again. Politico, to its credit ran a piece yesterday which looked into AT&T's financial ties to lawmakers.

There should be more of this type of reporting in my personal view.

With disclosure of financial ties, the public can decide for itself what is being said and what the motivations are behind the message.

Yesterday in response to an avalanche of opposition filed at the FCC to deny its bid to takeover T-Mobile, AT&T made a great deal of noise about the 300 groups and numerous politicians who support the company.

Here's what Michael Balmoris, my counterpart at AT&T had to say to the reporters we work with:

“Strong support for the AT&T-T-Mobile merger has been voiced by dozens of community, civic and minority organizations, 14 governors, multiple labor unions and elected officials.”

Put more accurately, here's what reporters really should have been told:

“Strong support for the AT&T-T-Mobile merger has been voiced by dozens of community, civic and minority organizations, 14 governors, multiple labor unions and elected officials, nearly all of whom receive financial support from AT&T."

Here's the unpleasant truth for AT&T. Opponents to the T-Mobile takeover haven't paid a dime to the thousands of consumers who have written into the FCC asking the Commission to block this transaction. Not one dime. These folks just hate this deal. It's a stinker.

Not so for AT&T's 300 groups and politicians. Nearly all have financial ties to AT&T and the company has paid millions of dollars for that support.

Media who take the time to dig just a bit are discovering that.

Cecilia Kang with The Washington Post points out in this morning's paper that the NAACP, Louisiana Governor Bobby Jindal and an affiliate of the National Urban League all support the merger. "All have direct financial ties to the telecom giant," Kang writes. She later tweeted that the Cattlemen's Association has financial ties to AT&T, too. (They also support the merger.)

On her blog this morning, she has more details and writes, "we went through some of these supporters and found it's just plain hard to find politicians or organizations that haven't received some financial support from AT&T over the years."

John Bresnahan with Politico explores this even further. In today's Politico he reports that, "AT&T has donated hundreds of thousands of dollars over the past several years to charities affiliated with top lawmakers — several of whom oversee telecom policy — as part of a broader effort by the company to win favor on Capitol Hill." Bresnhan reports that the Citizens for Responsibility and Ethics in Washington's analysis of lobbying and tax filings shows that AT&T has given nearly $1.25 million to lawmaker-affiliated charities since 2008.

According to the Center for Responsive Politics, from 1989 to 2010, no company gave more campaign cash to candidates for Federal office than AT&T.

How much of that cash do you think went to the governors who back the T-Mobile takeover?

If you were to do a quick search for news stories about the FCC today, you'd probably assume that the most important regulatory news coming out of the Federal Communications Commission was news that Verizon Wireless has agreed to pay $25 million to the federal government and to refund $52 million to its customers to settle charges about the company's "mystery fees." Verizon had been under investigation for incorrectly collecting and charging its customers fees for data never accessed on wireless phones.

Surely, that's big news, but it's not the biggest news to come from the FCC today.

A much bigger story is that the FCC issued a public notice in the special access docket which requests data from incumbent local exchange carriers and commercial mobile radio service providers.

How's that for telecom gobbledygook?

In English, what it means is the FCC is asking landline and wireless phone companies to provide confidential data about the prices charged and paid for special access connections. This request for data is a necessary step to take before the FCC can do anything to rein in Verizon, AT&T and other landline phone companies who dominate the special access market which our broadband economy depends upon.

As I've written in this Posterous before, special access circuits are the connections that wireless companies depend upon to connect your wireless call and to make sure your smartphone can surf the Web. Special access also connects your bank's ATM, the credit card payment system at a retail store like Wal-Mart or Best Buy and also the 1-800 reservations centers used by hotels, airlines and the like. It's also how your Internet service provider connects you to this or any other Website and how your email gets delivered.

The special access market is worth about $18 billion a year and it's a broken market. In economic terms that means there is no competition which pressures prices downward.

In the Washington, D.C. area, where I live and work, Verizon controls about 90 percent of the special access market. This means they can charge prices which are jacked up as much as 100 percent over their actual cost.

I call it Verizon's ATM machine.

Today's news about the FCC data request is a clear sign that the FCC is serious in enforcing the law and taking action in the special access docket.

Personally, I welcome it.

At Sprint, we issued the following statement to media about the FCC's step:

"Today’s announcement by the Federal Communications Commission that it is issuing a request for data about the special access market is an important milestone in the Commission’s efforts to fix this broken market. We would like to thank Chairman Genachowski, his fellow Commissioners and the FCC staff for their work to address this problem facing the country’s broadband economy.

Sprint has repeatedly indicated that it will provide the data the FCC needs to make a fact-based, data driven decision in this docket. Because the nation’s broadband economy depends upon these special access circuits, it is essential that the Commission get accurate and timely data from both purchasers and sellers of special access. We urge other communications companies to join with Sprint in fully cooperating with the FCC as it acts in addressing the matters pending in the docket.”