[flv width=”490″ height=”380″]http://www.phillipdampier.com/video/RT ATT Buys Support from Non-Profits 6-10-11.flv[/flv]

It’s a bad day for American television journalism when Russian State Television manages to tell viewers the facts about the merger of AT&T and T-Mobile that American networks ignore.  Russia Today is Moscow’s external television service, and delivers English language news to a global audience.  Public Knowledge’s Art Brodsky gets to tell RT viewers the real facts about dollar-a-holler groups advocating for AT&T,  a story American networks might not want to share with AT&T ad dollars at risk!  (7 minutes)

While AT&T and Verizon trade customers back and forth and enjoy fighting it out for “number one” in wireless service, smaller providers like Sprint are finding it increasingly difficult to compete with its two larger competitors, who have access to the best phones, most coverage, and don’t need to discount prices to attract new customers.

Forbes’ financial blog shares its impressions of the anticipated financial performance of the three biggest players in the U.S. market:

AT&T: Still the financial darling of Wall Street, AT&T will see some pressure on earnings from its integration of acquired assets of Alltel Verizon sold to win approval of its merger with the smaller carrier a few years ago.  Since Alltel’s network used CDMA technology, AT&T had to supply free new phones to every customer it acquired, as the GSM network it operates is not compatible.  AT&T is also still dealing with a slow bleed of iPhone customers departing for Verizon as contracts expire.  It will be interesting to see if Verizon’s imminent end of “unlimited smartphone data” will create a last minute rush from AT&T to VZW before Verizon terminates its unlimited data plan Wednesday night.

Verizon: Verizon will achieve the top spot for the number of new customers it has added during this quarter, mostly from new iPhone users.  The end of “unlimited data” could mean increased “average revenue per user” if new customers have to pay for a pricier data plan, but some analysts are keeping a “neutral” rating on Verizon’s stock, concerned about the margin squeeze created when Apple releases iPhone 5 this fall.  Customers off-contract or nearing expiration could jump for the new phone.  With the subsidy Verizon provides to new iPhone owners, it could bring down margins.

Sprint: The biggest challenge remains with the number three carrier Sprint, which had been picking up disaffected customers from AT&T, Verizon, and even T-Mobile.  That growth has since slowed, and now the company is depending on increased revenue from price hikes, especially on smartphones which now carrier a $10-higher price tag.  But Sprint is aggressively trying to hold the line on customer defections, sometimes approaching “giving away the store” in order to keep customers from leaving for AT&T or Verizon.  In addition to accelerating free/discounted upgrades to new smartphones, the company has also increased the number of calling minutes for its Everything Data plan from 400 to 750.

Sprint’s distant-third position requires the company to price its service plans more aggressively than its larger competitors, especially to counter the image it runs a smaller network with less-reliable coverage.  If AT&T succeeds in acquiring T-Mobile, the dominance of AT&T and Verizon will become even more solidified, threatening Sprint’s position as a viable alternative to the larger two.  That could leave Sprint in the difficult position of trying to finance upgrades even as it has to heavily discount service to keep its current customers loyal.

[flv]http://www.phillipdampier.com/video/CNBC Sprint Going the Distance 4-28-11.flv[/flv]

On April 28, Sprint Nextel CEO Dan Hesse talked with Jim Cramer about his initial impressions of the announced AT&T/T-Mobile merger and how Sprint would cope with it.  (9 minutes)

[flv]http://www.phillipdampier.com/video/CNBC Sprint Nextel CEO Speaks Out 6-9-11.flv[/flv]

Back in June, Dan Hesse was back with CNBC’s Jim Cramer to expand on Sprint’s strategy to deal with a wireless duopoly and how it hopes to compete in a market where two companies would control nearly 80 percent of all American wireless revenue.  (11 minutes)

Cicconi

Jim Cicconi, AT&T’s chief lobbyist told Politico the company’s practice of encouraging civil rights and charity groups to advocate on its behalf was “entirely natural,” and claimed opponents of the proposed merger of AT&T and T-Mobile were doing the same thing.

“The difference is that we seem to be having success and they are not. We attribute that entirely to the obvious benefits of the merger and the history of what we have stood for as a company,” Cicconi said. “What seems unnecessary is for opponents to attack the motives and credibility of those who have chosen to support our position and not theirs.”

AT&T has made substantial contributions, both financial and through involvement by key AT&T executives on various boards of directors of non-profit groups, as part of its corporate strategy.  Often, many of the non-profit groups involved thank AT&T by submitting letters of support for various business activities AT&T is engaged in, including public policy debates, mergers and acquisitions, and legislation that could impact the company’s bottom line.

On occasion, the connection between AT&T’s large financial contributions and the advocacy letters that often result becomes a point of contention with rank and file members of the organization, as happened in June with a gay rights organization that culminated in the resignation of its president and an AT&T-connected board member.

But more often than not, the corporate money-and-influence-connection goes unnoticed by the constituents of these organizations, many of whom will be disadvantaged, charge critics, by an outcome favorable to AT&T.

Politico explored the links between AT&T executives, lobbyists, money and civic groups and charities and discovered plenty:

Somehow, letters from the National Urban League and...

• Norelie Garcia, associate vice president of federal affairs at AT&T, who is an executive committee chair on the National Puerto Rican Coalition’s board of directors. The group wrote to the FCC May 27.

• Jerry Fuentes, president of AT&T for the Arizona and New Mexico regions, is the vice president for corporate policy on the National Hispanic Caucus of State Legislators’s business board of advisers. The organization wrote to the FCC backing AT&T on May 26.

• Barbara Winn, AT&T’s Sacramento-area director of external affairs, is listed on the letterhead of the Greater Sacramento Urban League as executive committee chairman in the filing the group sent to the FCC supporting the deal June 17.

• Tanya Lombard, assistant vice president of public affairs at AT&T, is a board member of the National Coalition on Black Civic Participation. The group wrote to the FCC May 25, saying “We believe it will help fulfill President Obama’s vision of an America in which everyone has affordable access to high-speed Internet service.”

AT&T is listed as a sponsor of the Cuban American National Council , the National Puerto Rican Coalition, and among the National Coalition on Black Civic Participation’s 35th anniversary partners. Meanwhile, it costs $25,000 annually to be a full member of the National Hispanic Caucus of State Legislators’s business board of advisers, as AT&T’s Fuentes is.

In 2009, the AT&T Foundation gave the local chapters of the Urban League in Chattanooga, Tenn.; Columbia, S.C.; and Knoxville, Tenn., a total of $45,000.

The National Urban League in 2009 received more funding — $100,000 — from the Sprint Foundation. But Sprint, which has been the most vocal corporate opponent of the AT&T/T-Mobile deal, does not have executives on the boards of any of those groups, the company said.

...the National Action Network turned out to be nearly identical.

Politico found many of America’s most influential civic rights groups received private briefings from AT&T executives promoting the deal — meetings which ultimately led to letters of support from those organizations, despite their having little or no input from those opposed to the merger.  AT&T also has dispatched “advocacy kits” to many groups filled with sample letters and talking points the company encourages groups to use as a template for letters of their own.  Not counting on the laziness among many tasked with writing the letters ultimately dispatched to the Federal Communications Commission, there is often a striking resemblance of correspondence favoring the merger.

Politico notes the text in two filings submitted last month to the FCC by the National Urban League and Al Sharpton’s National Action Network regarding the acquisition are nearly identical.

All of this disturbs ColorofChange, a civil rights group not on the payroll of either those supporting the merger or opposed to it.

“There are long-standing relationships AT&T has with these organizations that we think unfortunately have led some of them to take AT&T’s position on an issue that will negatively impact black people,” Rashad Robinson, executive director of ColorofChange told Politico.

AT&T just disclosed its latest lobbying reports, showing the company has increased its lobbying budget by nearly $1,000,000 compared with the same quarter last year — spending $6.84 million during the first quarter of 2011 alone on lobbying the federal government.

Sprint Nextel, seen by many as the primary opponent of the deal, actually reduced its own lobbying expenses during the same period, spending just $583,000 during the first quarter, down 25% from the $774,100 spent a year earlier.

What do virtually all 70+ Congressional Democrats who signed a letter supporting the merger of AT&T and T-Mobile have in common?  They accepted campaign contributions in the thousands of dollars from AT&T.  Paidcontent.org pieced together who got what, thanks to detailed records from the Center for Responsive Politics.  Is your member of Congress on this list?  Many of these members received $10,000 or more, and now you understand why:

G. K. Butterfield $10,500
Gene Green $10,000
Peter Welch $6,500
Joe Baca $10,250
John Barrow $10,000
Dan Boren $10,000
Robert Brady $9,000
Ben Chandler $7,000
Silvestre Reyes $8,500
William Lacy Clay, Jr. $10,500
Al Green $10,000
Alcee Hastings $10,000
Nick J. Rahall $10,000
James P. Moran $2,500
Gregory W. Meeks $9,500
Albio Sires $9,000
Tim Holden $8,000
Sanford D. Bishop, Jr. $11,250
Ed Pastor $10,000
Mike Ross $10,250
Rubén Hinojosa $7,500
Henry Cuellar $10,000
Joseph Crowley $10,000
Eddie Bernice Johnson $9,000
Luis Gutierrez $5,500
Adam Schiff $5,500
Jesse L. Jackson, Jr. $3,350
Adam Smith $4,500
Corrine Brown $6,000
Chaka Fattah $8,000
Henry C. Johnson, Jr. $2,000
Michael Michaud $8,500
Loretta Sanchez $11,000
Donna M. Christensen $7,500
Ted Deutch $6,000
Jim Costa $10,500
Betty McCollum $1,000
Ed Perlmutter $5,500
Brad Miller $2,000
Yvette Clarke $7,000
Grace Napolitano $4,000
Steve Cohen $5,000
Ron Kind $7,000
Betty Sutton $4,000
Heath Shuler $10,000
David Scott $11,500
Jared Polis NA
Cedric Richmond NA
Shelley Berkley $7,000
Frederica Wilson NA
Tim Bishop $10,500
Marcia Fudge $9,000
Rosa DeLauro $2,000
Karen Bass NA
Christopher S. Murphy $6,800
Frank Pallone $7,500
Laura Richardson $8,000
Dennis Cardoza $10,000
David Cicilline NA
Raúl Grijalva $2,000
Danny K. Davis $6,000
Brad Sherman $5,500
Ben Ray Luján $5,000
Dutch Ruppersberger $7,500
Terri Sewell NA
John B. Larson $5,500
Charles A. Gonzalez $10,500
James R. Langevin $8,000
Collin C. Peterson $4,500
Jerry McNerney $12,750
Joe Courtney $4,250
Gerald Connolly $9,500

Total $496,400

The U.S. Cattlemen’s Association this week took some time out to go all out for AT&T’s proposed merger with T-Mobile.  In addition to successfully navigating the FCC’s arcane comment filing system to submit their comments in favor of the merger, the group also penned a lengthy, favorable guest blog for Washington, D.C. inside-the-beltway-favorite, The Hill newspaper:

The expansion of next-generation wireless broadband envisioned by the T-Mobile and AT&T merger, for example, is critical for the next stage of rural America’s evolution and success. It will allow ranchers, farmers, and all rural residents who have been traditionally underserved to finally gain access to the best that mobile broadband has to offer, including faster and more reliable connections. We strongly encourage the Federal Communications Commission to support these developments as an investment in both the current and future generations of agricultural producers and small communities across rural America.

The cattlemen’s group has had a lot to say about telecommunications issues, especially mergers and acquisitions.  It was cited by Verizon as a supporter of its merger with Alltel in 2008, signed a joint letter in 2008 from industry-connected Connected Nation for a broadband plan compatible with the interests of the nation’s largest cable and phone companies, wrote a letter to the FCC opposing Net Neutrality in 2009, and submitted two pages of comments in May favoring the merger between AT&T and T-Mobile.

Apparently there is plenty of free time on the ranch to ponder billion dollar telecommunications mergers.

The argument from the group is that permitting mergers and blocking open net policies like Net Neutrality will convince carriers to provide enhanced service in rural areas where cattle ranches predominate.  But facts in evidence illustrate how wrong-headed that argument is:

• Verizon’s merger with Alltel has done nothing to bring its LTE network to rural America.  Verizon is focusing LTE upgrades on the markets where it makes the most business sense, and that does not include rural Texas or Oklahoma;
• The National Broadband Plan has directed stimulus funding for rural projects that are most likely to reach their ranch members — wireless ISPs and rural DSL.  The cattlemen’s group has nothing to say about either provider;
• Net Neutrality and the policies of an open and free Internet have no real impact on rural broadband deployment.  The same companies refusing to provide service yesterday are still refusing to provide service today, and that includes completely exempted wireless providers;
• T-Mobile’s urban-suburban focus is a mainstay of its business plan.  T-Mobile has never prioritized rural America as a viable service area, relying on roaming agreements to fill in service gaps.  Combining its urban-focused wireless infrastructure with AT&T will add nothing to the rural wireless experience.

The Washington Post finds financial connections between AT&T and the cattlemen group.

Advocating for a merger with T-Mobile makes about as much sense as the group advocating for a T-Mobile merger with Leap Wireless’ Cricket or MetroPCS.  All have a record of indifference about providing service in rural areas themselves.

So why does the group persist in fronting for AT&T’s public policy agenda?  Cecilia Kang at the Washington Post tweeted the obvious answer — they receive support from AT&T.

The piece for The Hill was penned by Jess Peterson, the cattlemen group’s executive vice president.  But Peterson has a second career: president of Washington, D.C.-based Western Skies Strategies, a lobbying firm that promises “success and profitability to our valued clients every time.”

The concept of dollar-a-holler public advocacy is not new, but AT&T is the Master of the Astroturf Universe.  The Center for Responsive Politics notes that from 1989 to 2010, no single company spent more on campaign contributions than AT&T.  Since 2008, more than $1.25 million has been “donated” to politically-connected charities and those willing to lend their name and reputation to back the company’s public policy agenda.

Facts have a hard time penetrating piles of cash, but here are some anyway:

1. T-Mobile’s combination with AT&T may create additional capacity for the combined company, but almost entirely in urban and suburban areas that will do nothing to help rural wireless.
2. No telecommunications company has a track record of providing service in areas unprofitable to serve or fail return on investment demands.  No merger will change that.
3. Promises for network upgrades already committed in long-range business plans do not sweeten a bitter deal for Americans concerned about competition in the wireless marketplace.
4. T-Mobile’s track record as being the most market-disruptive in pricing and innovation will be eliminated in a merger with America’s lowest rated wireless carrier.
5. Any excitement for rural wireless broadband from AT&T is tempered when would-be customers realize the company enforces a 2GB usage cap with an overlimit fee on their smartphone data plans — an Internet Overcharging scheme more punishing than either Verizon or Sprint.