As Trump threatens AT&T, cellular companies fight for government goodwill

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Chairman of the United States Federal Communications Commission, Ajit Varadaraj Pai (John Lamparski/Getty Images)

President Trump fired off the latest salvo in his ongoing war against CNN Monday morning from London, bemoaning the news outlet’s prominence abroad and suggesting that a boycott of parent company AT&T would force the network’s coverage of his administration to improve.

Trump’s tweets represent his latest attack on the news outlet and the mainstream media at large, which he has dubbed “fake news”. They also expose a different struggle quietly raging in the nation’s capital since 2016.

As telecommunications companies such as AT&T, Verizon, T-Mobile, and Sprint battle to curry favor with the Trump administration, personal loyalties and vendettas intertwine with millions of lobbying dollars to fundamentally shake up the industry.

The telecom services lobby is among the most powerful in Washington, spending a combined $93 million in 2018 and ranking 10th in spending so far in 2019. Among the four major cellular service providers, AT&T towers over its three rivals, spending more than $18.5 million dollars in 2018 on a number of prominent D.C. firms including Akin Gump, Ogilvy Government Relations and Fidelis Government Relations. The company’s presence has been described as “formidable” and it was among the top dozen companies across all industries in terms of lobbying spending last year.

AT&T Dominates Lobbying Amongst Cell Service Companies

The company is associated with several prominent Trump insiders, most notably David Urban, a former senior advisor to the Trump campaign who helped the campaign flip Pennsylvania to red and was described by Politico as one of “the 30 most powerful people in Trump’s Washington.” Urban now serves as president of American Continental Group, a lobbying group that was paid $200,000 to lobby the Trump administration on behalf of AT&T subsidiary WarnerMedia in 2017.

AT&T also employs Lyndon Boozer, a lobbyist who previously served as special assistant at the Federal Communications Commission (FCC), and Ado Machida, who served as the director of policy implementation for the Trump presidential transition before joining Navigators Global, which has received $540,000 to lobby on behalf of AT&T since 2017.

But the slew of lobbying dollars and close ties to the Trump administration have not moved the administration toward a favorable perception of the communications giant.

When AT&T announced its intention to merge with Time Warner, the mass media company that owned TBS, HBO and CNN, then-candidate Trump vehemently opposed the proposed plan, calling it “a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few.” When Time Warner shareholders approved the deal in February 2017, Trump-appointed FCC chairman Ajit Pai refused to review it.

The Justice Department reportedly held several meetings with AT&T leaders and sought structural adjustments to the deal, including forcing the company to sell Turner television properties, including CNN.

The department later filed a rare antitrust suit against AT&T to prevent the acquisition, a suit reportedly filed at the direct request of Trump, who had been pressuring the Justice Department to stop the deal for months before the suit was filed. The administration’s efforts were defeated after a D.C. district judge ruled in favor of AT&T and the D.C. appeals court upheld the decision, allowing the deal to be completed on June 14, 2018.

The administration’s animus toward AT&T in particular is made more dubious by its receptive approach to the three other major cellular networks.

AT&T’s chief rival, Verizon Communications, has deep ties to the administration, as numerous prominent officials have previously served as employees or lobbyists of the company. The most prominent of these is Ajit Pai, the current FCC chairman who has dismissed concerns regarding his work as associate general counsel for Verizon between 2001 and 2003.

Pai championed the repeal of net neutrality through the Proposal to Restore Internet Freedom, a decision that was wildly unpopular with the public and internet companies but backed by Verizon. Pai has made light of accusations that he is improperly influenced by Verizon, even privately showing a self-made video in which he jokes about being a “Manchurian candidate” dead-set on seizing the FCC for the network.

Verizon’s lobbying network, while less robust than AT&T’s, includes significantly more Trump confidantes than its rival. In addition to Pai, another ex-Verizon employee, lobbyist Peter Davidson, currently serves as the Department of Commerce’s general counsel. William Smith, former chief of staff for then-representative and current vice president Mike Pence, and Robert Wasinger, Trump campaign official and former White House liaison, also lobby for the network through Sextons Creek and McGuireWoods LLP, respectively.

What has raised the most eyebrows, however, is the different position the administration has taken on the merger of the third and fourth largest cellular providers, T-Mobile and Sprint. The two companies announced their intent to unite in April 2018, outlining a $26 billion dollar deal that would create a combined network of 126 million customers that would rival AT&T and Verizon. Experts predicted that the deal was unlikely to go through as it would substantially reduce competition in the industry and likely be faced with antitrust litigation, which the DOJ has indeed recommended.

Less than 24 hours after announcing the proposed merger, T-Mobile CEO John Legere, whom Trump had publicly feuded with on Twitter in 2015, and eight senior executives booked swanky rooms at the Trump International Hotel in Washington, D.C. Over the next eight months, the company spent $195,000 on accomodations at the Trump-owned hotel. Legere was spotted meandering in the lobby in prominent company apparel on at least four occasions.

The company spent an additional $8.1 million last year in an attempt to influence the government through an extensive network of well-connected lobbyists and more than tripled its lobbying expenditures to Trump associate Manus Cooney, a former Trump campaign bundler who now works alongside David Urban at American Continental Group.

In stark contrast to its policy on the AT&T-Time Warner merger, the president and FCC chairman have reportedly become advocates for the deal, with Pai approving the proposal on May 20 in light of the merger’s contributions to the commission’s “critical objectives.” Democratic senators have demanded to know if the administration has interfered with the Department of Justice’s ongoing antitrust investigation into the deal.

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