Playing Politics: Who's Spending in Silicon Valley
The technology industry has emerged as one of the top lobbying interests on Capitol Hill, with players like AT&T and Verizon spending big bucks to make their voices heard.
Innovations like Facebook and smartphones are becoming the norm as tech start-ups transform into mega corporations, sparking a number of bills on issues like online privacy, broadband spectrum, Internet piracy and matters of financial competition. These bills will affect the way device manufacturers, websites and mobile carriers do business -- and they are willing to spend millions to influence how lawmakers settle these subjects.
Lobbyist spending means companies have a pipeline to politicians making decisions about bills that affect their industry. Companies are spending more than ever in D.C., undoubtedly fueled by debates over privacy, technology and patents.
In 2011, computer and Internet industries devoted more than $125 million, becoming the fifth-highest spending industry in lobbying that year, according to data from OpenSecrets.org. Telephone utilities spent around $707 million on lobbying since 1998, while services and equipment companies laid out about $663 million.
The subjects of recent bills merits the million-dollar price tags in the eyes of the industry because of the game-changing effect the issues could have on industry practices. In 2011, lawmakers introduced the SPECTRUM Act to legislate wireless spectrum while building a nationwide public safety communications network, encouraging effective broadband usage while reforming federal management policies. The Internet industry also lobbied hard against the high-profile SOPA and PIPA legislation, which would have blocked sites and limited Web resources, trying to quash online piracy.
Here's a break down of heavy-spending players in the mobile and online sector, and the bills that entice them to shell out the cash:
AT&T is in the top 20 of lobbying spenders since 1998, spending nearly $134 million since that time, and hitting just over $20 million in 2011. Over the years, AT&T has pushed for and against bills on Federal Communications Commission regulations, antitrust clauses, and issues related to its failed merger with T-Mobile last year, when the company sent dozens of extra lobbyists to Washington to campaign for its cause.
But AT&T's all-time high was in 2006, when it wrote checks for close to $27 million in lobbying fees. The drop-off since then largely reflects the changing industry, since before 2006, subsidiary spending from the likes of Cingular and BellSouth gave AT&T lobbying efforts a boost, but now AT&T is spending millions out of its own pocketbook to fight for its best interests.
Like AT&T, Verizon is one of the few technology-based companies that ranks as a top lobbyist, spending more than $164 million on lobbying efforts from 1998 to 2011. The mobile carrier has consistently spent more than $10 million on lobbying efforts since 2003, and more than $15 million since 2008, racking up a tab of around $15.5 million in lobbying fees last year.
With a growing LTE network and fierce competition on the mobile market, Verizon is sure to continue its spending efforts in Washington, which have included a number of reports on corporate tax reform. The first-place carrier also weighs in heavily on broadband allocation, like with the SPECTRUM ACT, and lobbying to secure state control for television licenses that would expand its cable opportunities.
As a longtime political player, Microsoft predates many of today's technology start-ups just starting to make a mark. Microsoft spent at least $4 million annually on lobbying expenses as far back as 1998. The company hit an all-time high in 2004 with contributions nearing $9.5 million, before leveling off to around $7.3 million in 2011.
The company's lobbying history shows it seeks to protect its technology-based interests as well as it corporate policies, giving reports on issues about employment for immigrants and personal data privacy, like with the Commercial Privacy Bill of Rights Act of 2011.
In 2011, Google was the top lobbyist in the computer sector, spending nearly $9.7 million, or taking subsidiary Motorola into account, topping out at more than $11 million. That figure is nearly double spending in 2010's more than $5 million, signaling Google's focus on the effect Washington regulation could have on federal antitrust concerns.
Google didn't enter the lobbying business until 2003, but it didn't take long for the search-giant to become a top player. As the company continues to expand with Android and other online initiatives, it issued a number of reports on copyright patents and trademark issues. A fair share of lobbying spending focused on the financial side, like regulation of advertising and competition issues, and Google was also vocal in its opposition to the Do-Not-Track Online Act.
Apple has been around longer than many other tech companies, but it didn't start spending more than $1 million annually on efforts until 2006, coinciding with the time frame between the iPod and iPhone release.
Last year, the company reached an all-time high with nearly $2.3 million on lobbying spending, focusing on tax, trade and patent and trademark issues, but the figure still pales in comparison to some of Apple's tech counterparts.
Apple spent hundreds of thousands lobbying on the patent reform, an issue central to its legal strategies as it engages in patent battles with rivals. Apple lobbied on the Job Creation and Innovation Investment Act to give tax breaks on foreign earnings, which is pending in committee, showcasing the company's activity on an issue that could affect its financials.
Yahoo made its mark early in the online boom during the dawn of the search engine, but failed to amass the same momentum as Google over the years. The company faded from relevancy in the tech development world, but it's a different story in the legal, financial or governmental sectors, as Yahoo is still going strong on lobbying efforts.
Connected to its still-relevant service as an e-mail provider, Yahoo lobbies on many bills on user privacy and security, like the SAFE Data Act to require data protection, and an act to require federal disclosure of data breaches. The Web-based operation has spent more than $1.5 million on lobbying efforts since 2003, and spent an all-time high of nearly $2.5 million 2011.
All eyes are closely watching Facebook's political activity as the social network preps to become a publicly traded company. It even formed a political action committee in time for the 2012 election as part of a recent ramp-up to develop political connections. It wasn't until 2009 that Facebook started to use its cash to wield influence over legislation on issues like protection of personal data, patent reform and the high-profile SOPA and PIPA bills.
Facebook spent almost $1.4 million in 2011. Though it's a small figure compared to some of the social network's older counterparts, it shows a concerted effort, as 2009 and 2010 lobbying spending combined equaled around $560,000.
As lawmakers weigh-in on the changing communications field, and competition in the tech industry increases, lobbyists can expect to see millions more coming from the likes of mobile carriers and social media giants to influence vital decisions, which could change the face of the industry for years to come. ♦
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