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from: National Journal

Groups Back Telecom Deal Without FCC Disclosures

October 27, 2006
By David Hatch

Some nonprofits that back the AT&T, BellSouth merger receive considerable funding from the companies but do not disclose the ties in their comments to the FCC. No disclosure is required, but some observers think regulators should be made fully aware of the connections.

The League of Latin American Citizens, which represents 46 million Latinos in the United States and Puerto Rico, asked the FCC in an Oct. 24 letter to green-light the transaction. But President Rosa Rosales did not mention that the AT&T Foundation, the company’s philanthropic arm, gave $1.5 million to LULAC in June.

The letter was part of the latest public comment round on the pending deal, which the FCC will consider Nov. 3.

A press release issued by AT&T on June 30 includes a photo of LULAC and company officials standing with a giant placard depicting the $1.5 million check.

Meanwhile, the National Black Chamber of Commerce, which also urged the FCC this week to approve the combination, lists BellSouth and SBC Communications, now part of AT&T, among its corporate partners. But that connection is not mentioned in the Oct. 24 letter that chamber President Harry Alford sent to the agency.

“The reason groups like this are highly desirable as commenters is because they give off the impression of being pro-consumer and objective and nonpartisan,” said Massie Ritsch, spokesman for the Center for Responsive Politics. While he believes that a principled organization would not take a position it does not support, he thinks the credibility of the groups would be bolstered by revealing their affiliations.

BellSouth spokesman Bill McCloskey said these entities can separate their positions from their funding just like news organizations. “Your paycheck is paid by me and our subscriptions. I don’t suspect that has any influence on what you write.” AT&T spokesman Mike Balmoris said many of his company’s priorities, such as affordable broadband, are important to these groups. We welcome their support.”

LULAC did not return calls, nor did the chamber, which calls itself the “largest black business association in the world.”

“Black-owned businesses stand to benefit from this merger as both consumers and providers of services,” Alford wrote. He said many of the group’s members are “residential-based businesses” that would benefit from the companies’ proposal to offer inexpensive, high-speed Internet access.

Another merger supporter is the National Grange, an agricultural organization. Legislative Director Leroy Watson said BellSouth and the U.S. Telecom Association, whose members include AT&T, pick up the tab for “minor contributions,” such as meal costs at lobbying events, but do not pay for “ongoing operations.” AT&T executives sometimes speak at Grange functions.

The Grange did not mention the connections in an FCC filing this week, but Watson said the Grange’s policy arm is not influenced by its sponsors. Nevertheless, the organization might be amenable to disclosing such ties if the FCC establishes clear guidelines.

Another group supporting the deal is the Rainbow/PUSH Coalition. At deadline, Kimberly Marcus, director of media and telecommunications, said the coalition has received corporate contributions but was not sure whether any had come from Bell companies. She praised AT&T for its commitment to serving impoverished areas and said benefactors do not influence the coalition.