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from: Center for Public Integrity

Strains Showing in Longtime Friendship
Telecom firms have supported Rep. Dingell, and until recently, the incoming House committee chairman has supported them

By Drew Clark

WASHINGTON, November 21, 2006 — Rep. John Dingell greeted the Republican-drafted telecommunications bill, designed to speed the Bell companies' entry into the television marketplace, with sarcasm and cynicism.

"We have before us, then, a piece of the purest special interest legislation, something which will benefit the few at the expense of the many," the Michigan Democrat said on June 8, as the House debated the bill.

"This legislation is going to benefit the special interests, particularly the cable and the telephone industry," said Dingell, the ranking member of the House Energy and Commerce Committee. Dingell lost that battle; the bill passed the House overwhelmingly, 321-101. Even among Democrats, 106 voted for the final bill, with 92 opposed.

But with Democrats taking control of Congress in the midterm elections, the 2006 telecommunications overhaul is almost certain to be killed. Democrats are not likely to cooperate with any Republican-led push for the measure in December's post-election session. Despite the wide margin in the House, supporters of the telecom bill doubt they can secure enough votes in the Senate for passage this year.

And with Dingell set to reclaim in January the gavel of the Energy and Commerce Committee, which he vigorously ruled from 1981 until 1995, the shape of telecommunications legislation in 2007 could be vastly different.

The likely death of the telecom bill is a major defeat for the Bell companies — AT&T Inc., BellSouth, Verizon Communications and Qwest Communications International — and their lobbying arm, the U.S. Telecom Association, for whom passage of the bill was the key legislative priority. It would have allowed the Bell companies to string cable television wires without having to get approval by local governments.

But for the Bell companies, the most bitter irony in this turn of fate in the telecom wars is this: John Dingell was once one of their closest friends. He took their campaign contributions and, for more than two decades, promoted their legislative priorities on Capitol Hill. It's a relationship that soured only within the past year.

On the night of the Bells' pyrrhic victory in June, Dingell was acerbic as he walked off the House floor, just past 10 p.m. The House Rules Committee had denied the full House a vote on an amendment he authored to restore cities' control of their rights of way. A reporter asked him why that happened.

"This was decided by a very unprincipled lobby," Dingell said.

"But you used to be friends with the Bells," the reporter remarked.

"I have found that I was, but they were not."

Dingell has supported the Bells through legislation and through oversight of the Federal Communications Commission. And the Bells, in turn, have supported him.

Among telecommunications, media and technology companies, BellSouth is the single largest donor to Dingell campaigns since 1997. The company's employees and political action committee have contributed $108,875 of his $936,566 total telecom and related industry receipts from 1997 to June 2006.

The figures come from an immense database of campaign contribution and lobbyist spending by all segments of the information industries that the Center for Public Integrity's "Well Connected" Project today makes available for free on the Internet.

As part of the project's "Media Tracker" database, the Center for Public Integrity partnered with the Center for Responsive Politics to obtain access to all federal campaign contributions made by companies, individuals, unions and interest groups affiliated with the telecommunication, media and technology industries from 1997 to June 2006. The database is available online at www.publicintegrity.org/telecom.

In 1994, the last year in which Dingell was chairman of the Energy and Commerce Committee, he and Rep. Jack Brooks, D-Texas, who was chairman of the House Judiciary Committee at the time, moved forward a bill to remove business restrictions that had been imposed on the Baby Bell telephone companies as part of the divesture of AT&T Corp in 1984. The bill passed the House 423-5. It was a key element of the 1996 Telecom Act that passed in the next Congress after Republicans took control of the House and Senate.

Years later, as ranking member of the committee, Dingell co-sponsored legislation with then-Chairman W.J. "Billy" Tauzin, R-La., designed to promote broadband, or high-speed Internet service, by Bell companies. The measure would have given the Bell companies a greater incentive to invest in high-speed networks by freeing them from the obligation to share their high-speed wires with competitors. The measure passed the House in February 2002 on a 273-157 vote. But Ernest "Fritz" Hollings, D-S.C., chairman of the Senate Commerce Committee at the time, disagreed with the approach, and the matter died.

Dingell's support for the pro-Bell bill became an issue in Dingell's own re-election campaign in 2002. Republicans had taken control of the Michigan state legislature in 2000. When redistricting cost the state one congressional seat, the legislature redrew the boundaries to force Dingell into a primary battle with fellow Democratic Rep. Lynn Rivers from a neighboring district near Detroit.

Prior to the House passage of the broadband measure, Rivers appeared at a news conference with the Michigan Alliance for Competitive Telecommunications, a group of Bell rivals. She said the Tauzin-Dingell bill was "good for four big monopoly telecommunications mega-conglomerates and bad for everyone else."

Rivers' re-election fund received $7,000 from Rep. Nancy Pelosi, D-Calif. The newly elected speaker of the House for the 110th Congress had just defeated Rep. Steny Hoyer, D-Md., for minority whip. Rivers had supported Pelosi in the leadership contest, while Dingell had sided with Hoyer. Bell companies, meanwhile, rallied to Dingell's side.

Dingell defeated Rivers in the primary and continued to support Bell company positions until the spring of 2006. Dingell and his aides were negotiating with House Energy and Commerce Committee Chairman Joe Barton, R-Texas, the author of the telecom bill of which Dingell had been critical. Dingell and Barton had already collaborated on one version of draft telecommunications legislation and were negotiating a revision.

Dingell was concerned that Barton's approach, to create a national video franchise licensed by the FCC, would strip cities of control over their streets and rights of way. Dingell also believed that it might lead to discrimination against lower-income neighborhoods.

Dingell proposed a compromise. In committee, he offered an amendment designed to ensure that telecommunications companies build their television networks to include all neighborhoods within a city or geographic area. New entrants would not be required to conduct this "build-out" for the first five years after obtaining their video franchise. But three years after that, their telephone companies would have been required to expand their footprint to an additional 20 percent of homes within a particular area. Exemptions would have been granted for rural areas, where the cost of stringing wires can be prohibitively expensive.

But all build out rules were philosophically opposed by the Bell companies and the Republicans — and hence rejected by Chairman Barton. As chairman, Dingell is likely to revisit the subject in the event that the Bell continue to push for a national video franchise.

In another potential rift, Dingell has said that the FCC may need slow down on the proposed merger of AT&T Inc. and BellSouth. "He thinks they should take all the time they need to examine the matter, even if it takes until next year," said Dingell spokeswoman Jodi Seth.

Now, in the wake of the midterm elections, Bell company officials have high praise for Dingell. "[John Dingell] has always been a friend of Bell companies, and in return we have always been a friend of John Dingell," said Bill McCloskey, BellSouth spokesman. In the 2002 election cycle, Dingell's only hard-fought contest within the past 10 years, individuals associated with BellSouth contributed $45,325 to his re-election; the company's political action committee contributed an additional $10,000.

Further, two groups of BellSouth officials gave money on two separate dates in the spring of 2002, as Dingell was gearing up for the face-off with Rivers. On April 15, 2002, 58 company officials together gave $30,050 to Dingell's campaign. Most of them provided address in the Atlanta area, where BellSouth is based. On May 13, 2002, 26 company officials gave $14,025 to Dingell. Again, most of the contributors were from the Atlanta area.

Among the other top telecom and media donations to Dingell that year came from two of AT&T Inc.'s processor companies: SBC Communications and the wireless carrier Cingular, which together gave $27,274. Cingular was a joint venture of SBC and BellSouth and is now a joint venture of AT&T Inc. and BellSouth. An additional $2,750 came from employees of AT&T Wireless Services, which was acquired by Cingular in 2004, through its PAC. Verizon employees and its political action committee gave $18,750, and Qwest employees and its PAC gave $11,000.

Dingell spokeswoman Seth and Dingell telecom aide Johanna Shelton declined to comment on the congressman's longtime relationship with the Bells or on donations in the 2002 election. But Shelton said that Dingell is committed to "taking a look at some of the pieces of the telecom bill," as well as addressing other media and broadcast issues, in the upcoming Congress.

A former congressional telecom aide predicted that Dingell and the Bells would patch up their differences. "Dingell has always been an advocate of strong companies being good employers," said the aide, who declined to be identified.

Nine days after the election, Dingell announced that he had hired Gregg Rothschild as chief counsel of the House Energy and Commerce Committee. Previously counsel to Dingell when he was the ranking member of the committee, Rothschild also has worked for Sen. John Kerry, D-Mass. For the past two years, he has been vice president and policy counsel at Verizon.