Baby Bells' call for more autonomy gains as powers fall
By Jonathan D. Salant
Bloomberg News
Local phone companies such as Verizon Communications Inc. and SBC Communications Inc. that want Congress to rewrite U.S. telecommunications laws are about to find their task a lot easier.
The pending disappearances of AT&T Corp., which is being acquired by SBC, and MCI Inc., the subject of a bidding war between Verizon and Qwest Communications International Inc., will remove the two most formidable opponents to the lobbying efforts of the Baby Bells, so called because they were formed as part of the legal settlement that broke up AT&T's old Bell System in 1984.
AT&T, for example, made $9.6 million in campaign donations from 1999 through 2004, second only to SBC's $9.9 million among telecommunications companies. While a new generation of telecommunications companies, including Internet phone provider Vonage Holdings Corp., are pressing for continued regulation of the local companies, they lack political heft. Vonage gave $13,550 over the 1999-2004 period.
"If you're looking at raw power, I don't think there's anybody who gets close to the Bells at this moment," says Blair Levin, a Washington-based analyst with Legg Mason Wood Walker Inc. and a former chief of staff at the Federal Communications Commission.
The Bells are trying to persuade lawmakers to scrap regulations they say unfairly burden them. Among other things, they want to be able to decide themselves when to raise or lower rates, as their rivals can, without needing government permission. They're seeking to charge market rates to competitors leasing their telephone and high-speed Internet lines, instead of the government-set prices they are required to offer now. And they want to be free to offer combinations of television and telephone service that cable companies provide.
The U.S. Telecom Association, the Washington-based trade group for the Bells, hired the lobbying firms of Edward Gillespie, former Republican National Committee chairman; Ed Buckham, former chief of staff to House Majority Leader Tom DeLay; and Joe Lockhart, President Bill Clinton's former spokesman.
The Bells and their trade association spent $69 million on lobbying during the 24-month period between July 1, 2002, and June 30, 2004, according to PoliticalMoneyLine, a Washington-based group.
The companies have succeeded in getting the issue on the congressional agenda: The chairmen of the Senate and House committees that oversee the telecommunications industry say they want to rewrite the nine-year-old law. House Energy and Commerce Committee Chairman Joe Barton, a Texas Republican, and Senate Commerce Committee Chairman Ted Stevens, an Alaska Republican, said last month their chambers would consider legislation this summer. "We expect a bill this year," Stevens said on March 16.
