Playing Politics: Why Carriers Pony Up Millions

How Much Does a Voice in D.C. Cost?

A review of past election cycle donations at OpenSecrets.org shows an uptick in political contributions to candidates whose views are in sync with the mobile industry, which isn't surprising considering the increasing amount of federal rules and regulations that affect these companies. As the industry comes under further regulation, carriers and phone makers are spending in the millions to ensure they have a voice among lawmakers.

Contributions from political action committees, or PACs, coming from the telecom and mobile sector already total nearly $1.3 million for the 2012 election cycle, with companies like T-Mobile, Sprint, Motorola and Qualcomm ranking as top donors. From a partisan view, donations are split fairly evenly between candidates, with 47 percent of funds going towards Democrats and 54 percent towards Republicans.

Contributions from telephone utilities -- a category that includes AT&T and Verizon -- are at a heftier $3.1 million and lean toward the right, with 61 percent of donating going towards Republican candidates.

More Regulation, More Millions Spent

A growth in campaign contributions over the last decade can be linked to increasing federal scrutiny on the industry's operations. State and federal governments draft bills on topics central to mobile use like data privacy and GPS tracking.

Often the issues are local, like a San Francisco law on cell radiation that was ultimately delayed, but donations to local representatives secure communication between public and private sectors. As such issues come up for debate, companies will want to ensure strong ties to the lawmakers so they have a leg up on what could immediately affect their best interests.

Political ties and the access they offer are central to having a voice in future issues. For example, it helps a company to have a politician on its side when infrastructure issues come up in local communities. And in the coming years, spectrum allocation is sure to turn into a debate where carriers will want their voices in the conversation.

But the efforts to lock in lawmakers may not translate into help with regulators, especially as companies merge and the government cautiously assesses whether mergers are in the best interests of the market.

One such case is the failed AT&T and T-Mobile merger, especially given the former's millions of dollars in candidate support. AT&T eventually withdrew its bid after a Federal Communications Commission report found the deal would harm competition and the job market, assessments made by appointed commissions rather than elected officials. And while the deal was under speculation, the FCC faced pressure from heads of other rival carriers like Sprint weighing in during Senate hearings, offsetting AT&T's influence.

The Influence of PACs in 2012

If past totals are any indication, contributions could easily skyrocket in the run-up to the November elections. In 2010, the election season contributions from utilities topped $6.1 million, and those from the telecom sector totaled $2.6 million.

This year's contributions could easily exceed past levels. Companies organize PACs to collect donations from their employees, spouses and supporters, which can then be donated to campaigns. Coming together in a PAC allows for higher maximum donations, $5,000 per person, and $5,000 contributions to a candidate committee per election, or $15,000 to a national party committee.

The system allows companies to amass thousands of dollars to shore up specific candidates and parties, adding up to millions of dollars in campaign contributions. Typically, the smaller telecom companies generally hovered in the $2-3 million range since 2000 per election cycle.

Utility company PAC donations hit a 14-year-high at $6.1 million in 2010. A whopping 73 percent of those donations came from AT&T and Verizon, contributing $3.2 million and $1.2 million, respectively, with an additional 20 companies and industry associations making up the rest.

AT&T is the largest donor in the telecommunications industry year after year, and one of the most active overall, with its PAC spending $4.9 million in the 2010 election cycle, proving how the tech industry is beginning to overtake traditional influences like labor and the financial sectors.

Despite the variable results, tech companies continue to sign checks and hand them over to candidates. It's practically tradition; playing the campaign finance game has long been a way for American businesses to wield influence in Washington.

As the telecom sector continues to develop into a leading industry, and laws catch up to modern communication methods, companies succeeding in the mobile market are sure to make their presence strongly felt. ♦

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