AT&T, Verizon spend millions to access California cable TV market

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Associated Press

SACRAMENTO, CA — AT&T and Verizon, the two most dominant players in California’s telephone market, spent nearly $26 million to lobby lawmakers last year in a successful effort to access the state’s lucrative cable TV market.

The two companies also gave more than $1 million in campaign contributions, according to campaign finance reports released Wednesday by the secretary of state’s office.

The contributions came as lawmakers were rewriting the rules governing the state cable industry to make it much easier for telephone companies to compete for the 7.4 million California households that subscribe to cable.

“The $25 million the telephone industry spent on lobbying was the factor in passing the bill,” said Carmen Balber, consumer advocate for the Foundation for Taxpayer and Consumer Rights, a Santa Monica group that has been critical of the measure.

Lawmakers approved the bill with overwhelming majorities, by a 64-5 vote in the Assembly and a 33-4 vote in the Senate. Gov. Arnold Schwarzenegger signed it in September.

Its passage was a huge victory for the telephone companies, which have been denied similar access on the federal level. Previously, access to the state’s $5.3 billion-a-year cable market was controlled by cities and counties through local franchises.

The new law creates state franchises that are open to competition. Local governments had opposed the change, fearing they would lose revenue because they would no longer have individual contracts with cable providers.

They also worry that a lack of local contracts means cable providers will bypass less affluent neighborhoods and focus instead on bundling TV, Internet and telephone service to the well-to-do.

Some rural counties said they might be bypassed by cable and telephone companies entirely.

Consumer groups also warned that cable prices could skyrocket as telephone and Internet rates have in the past few decades.

As lawmakers considered the legislation, lobbyists paid by the two companies treated them to meals at local restaurants and gave their top aides tickets to watch the San Francisco Giants, San Diego Padres, Sacramento Kings, Sacramento Monarchs and the Los Angeles Lakers. The favors went to lawmakers of both major political parties.

In August, for example, AT&T gave an aide to former state Sen. Chuck Poochigian, R-Fresno, four tickets so her family could attend the Champions on Ice show in Sacramento. The tickets were $73.84 each.

Aides to Assembly Speaker Fabian Nunez, D-Los Angeles, also scored tickets to shows courtesy of AT&T. One staffer attended the “American Idols Live” concert, while another saw the Sacramento Ringling Bros. and Barnum & Bailey Circus.

A spokesman for Nunez, the bill’s author, disputed that the money and freebies given by the telephone companies helped sway lawmakers’ decisions.

“There is no connection between political spending and the policy work that gets done in the state Legislature,” Nunez spokesman Richard Stapler said.

AT&T Inc. was by far the most generous of the two companies. In 2006, the company gave $744,614 to political candidates and campaigns, including $44,600 to Schwarzenegger and $50,000 to the state Democratic Party. The company also gave $100,000 to the committee that pushed the $37.3 billion infrastructure bond
package that was supported by the governor, Nunez and other legislative leaders.

The company also sponsored a golf fundraiser last spring in Monterey that was headlined by Nunez and raised $1.7 million for the Democratic Party.

Meanwhile, AT&T spent $23.6 million to influence decision-makers in the capital, mostly for hiring lobbyists and paying for television commercials. Company spokesman Gordon Diamond said in an e-mail that California’s media market made the company’s advertising outreach expensive.

AT&T spends what it needs to ensure that consumers, policymakers and others are well-informed and educated on issues,” Diamond said.

In 2006, Verizon Communications and its employees contributed $395,347 to political candidates and campaigns. The company also spent $2.3 million on lobbying expenses.

Schwarzenegger received a $22,300 check from Verizon, as did former state Treasurer Steve Westly, who had hoped to challenge him in the election. The California Democratic Party cashed a $10,000 check from Verizon, and three county Democratic Party organizations received $25,000 each. The California
Republican Party received a $25,000 donation.

Verizon spokesman Jonathan Davies said in an e-mail that the spending was a way for the company to participate in the political process and advocate policies that benefited Californians.

“Government determines many of the policies that have far-reaching impact on the way we do business and the types of services that we can deliver to our customers,” Davies said.

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