The impact of the last minute stampede by Verizon Wireless customers (new or otherwise) to lock in the company’s unlimited data plans before they were retired last week has reached Wall Street, but the ripples extend far beyond Verizon Wireless itself.

Macquarie USA analyst Kevin Smithen this morning downgraded AT&T stock to “neutral,” expressing concern about AT&T’s slowed growth in wireless revenues.

“We see increased headwinds to wireless revenue growth, limited improvement in enterprise and a lack of clarity on the status of the [pending acquisition of T-Mobile],” he writes. “We view projected organic revenue growth of 0.5% in 2012 as uninspiring. At current levels, we believe absolute and relative risk-reward to roughly balanced given these issues.”

Customers concerned about Internet Overcharging schemes being implemented by Verizon Wireless began fleeing other providers to “lock in” unlimited data service with Verizon before it was nigh.  One big victim of that was AT&T.

“We were waiting for the next iPhone to finally jump to Verizon, even if it meant paying a termination fee to AT&T, just to escape the dreadful service,” says Shai Lee, who was among several dozen readers contacting Stop the Cap! for assistance securing unlimited data plans with Big Red.  “When Verizon announced $30 for 2GB, there was no way we were going to be locked into paying that, so we jumped early.”

Many followed.

Smithen believes customers are also fleeing other carriers, especially T-Mobile, which he believes will lose two million customers before AT&T closes the deal or faces ultimate rejection for its merger by Washington regulators.

Some analysts believe T-Mobile customers are leaving over a combination of the company’s inherent weakness as a provider-now-in-limbo while others dread the reality of being ultimately stuck with AT&T.

“It’s like fleeing a country before the invading army reaches your town,” shares Samuel, a T-Mobile customer leaving for Verizon. “I won’t live under AT&T’s regime.”

Smithen sees even greater challenges for AT&T with the arrival of iPhone 5, which will either cost the company to subsidize or start another wave of AT&T emigration.

Verizon has already managed to secure 32 percent of the U.S. iPhone 4 market, according to a study by the mobile analytics company Localytics.  Since rumors about Verizon imminently ending unlimited data plans began in May of this year, Localytics has tracked a spike in Verizon iPhone purchases, one explained by existing customers upgrading to smartphones, and new customers arriving from other carriers.

For AT&T, customers on contract with smartphones are not adding additional services and those with data plans are trying to stay within plan limits, robbing AT&T of extra revenue.

Smithen says with this track record, average revenue per customer is “stalling.”

Is this a T-Mobile priority coverage zone?

One of the “benefits” AT&T’s lobbying team claims will come with a merger between AT&T and T-Mobile is improved wireless service for rural America.

But an investigation into T-Mobile’s urban-focused coverage, and AT&T’s own recent rural past prove those claimed benefits simply don’t make any sense.

Although rural and small town America is increasingly aware of AT&T, that comes mostly from the company’s recent acquisitions, not from mass expansion projects to blanket rural America with AT&T iPhones.  AT&T has been on a shopping spree for smaller regional wireless carriers for the last five years, picking up resources through acquisition, not from independent investment.  But a buyout of T-Mobile will bring no new assets for AT&T’s presence in rural America.  It will simply reduce competition in larger communities the same way AT&T cut out competitors in rural markets.

Just ask customers of Dobson Cellular.  In 2007, AT&T bought the rural provider, doing business as Cellular One, for $2.8 billion dollars and converted customers to AT&T.  Dobson was the largest cell phone company around in Alaska and rural Michigan.  In fact, the company provided roaming capability to customers of AT&T and T-Mobile who ventured into the rural areas Dobson specialized in serving.

After the conversion, did service improve for the newly acquired AT&T customers?

“No way,” says ex-Cellular One customer Jim Duncan who lives in a former Dobson service area in Michigan. “AT&T ruined cell phone service when they got here with dropped calls and phantom busy signals, turning a friendly local-focused company into one where you are just an account number reaching some national call center.”

Acquired by AT&T in 2007

Duncan says AT&T never cared one bit about rural Michigan before buying Dobson, and in his view, still doesn’t.

“Smaller markets are an afterthought for AT&T and T-Mobile has zero impact (and customers) in my area, so I have no idea what great improvements a merger will bring to our part of Michigan that neither company paid much attention to,” Duncan says.

That same year, AT&T also grabbed spectrum worth $2.5 billion with its acquisition of Aloha Partners, which spent time at FCC auctions buying up 700Mhz spectrum and then eventually reselling it at a profit to wireless carriers.  AT&T didn’t just buy some of Aloha’s spectrum, it acquired the whole partnership.

Acquired by AT&T in 2008.

In April 2008, Edge Wireless customers in southern Oregon, northern California, southeastern Idaho and Jackson, Wyoming discovered they were well on their way to becoming AT&T customers, too.  AT&T acquired Edge and rebranded it AT&T. That hardly represents investment and dedicated expansion into rural Rocky Mountain states — AT&T simply bought up another company that did.

Also in 2008, AT&T snapped up Centennial Communications, a considerable-sized regional player in the central United States.  Centennial delivered service in less urban areas in Indiana, Ohio, and Michigan in the north, and Louisiana, Texas, and Mississippi in the south.  One million customers, Centennial’s spectrum and name all became part of AT&T.  Did service improve for Centennial customers with that merger?

“Overall, it stayed the same when it was Centennial and switched to AT&T,” says our reader Kevin, who now lives in Ft. Wayne, Ind.  “We did get access to the iPhone, but along with it came AT&T’s infamous dropped calls and lousy customer service.”

Acquired by AT&T in late 2008.

Kevin switched to Verizon Wireless earlier this year.

“If I was the FCC, I wouldn’t approve this merger because it promises nothing for rural America or anyone else,” says Kevin. “AT&T had a presence in Indiana before they bought Centennial, so all the deal did was reduce competition in this state.”

Centennial’s service areas were not exactly among T-Mobile’s priority coverage areas, either.

Acquired by AT&T in 2011?

“T-Who?,” Kevin asks.  “We’re aware of them now, but I don’t know anyone who has service with them.”

The real unanswered question is what AT&T is doing with all of the rural spectrum it already owns, controls, or has acquired.  How will an acquisition of an urban-focused carrier help deliver improved service in the rural markets both companies have traditionally ignored?

Answer: It won’t.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WANE Ft Wayne Centennial Joins ATT 10-09 and 02-10.flv[/flv]

WANE-TV in Ft. Wayne, Ind., covered the merger of Centennial and AT&T back in 2009 and early 2010.  Fort Wayne was the home of a major regional office for Centennial.  (4 minutes)

[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)

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