Analysis: AT&T fully loaded for Washington showdown

WASHINGTON Tue Mar 22, 2011 5:17pm EDT

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WASHINGTON (Reuters) - AT&T's (T.N) high-powered lobbying operation -- on steroids even by Washington standards -- will be critical in persuading regulators to approve its $39 billion bid to buy Deutsche Telekom AG's (DTEGn.DE) T-Mobile.

The deal will face criticism from lawmakers and scrutiny from U.S. regulators, who will likely demand major concessions to ensure open competition among mobile and Internet carriers.

Tough as this deal will be to get through regulators, AT&T commands a formidable armada of lobbyists, has deep roots in Washington, and connections in the White House -- chief of staff William Daley used to lobby for SBC Communications, which became AT&T.

AT&T, decimated after the U.S. government in 1984 dismantled one of the world's most powerful communications empires, intensified its Washington presence to restore "Ma Bell" to its former glory.

"The ink wasn't dry on the consent decree and they started lobbying heavily," said Catherine Sloan, a vice president at Computer and Communications Industry Association, which called AT&T's latest deal a "lose-lose for consumers."

A protracted battle between AT&T, left only with its long-distance service after the 1984 breakup, and the local bell companies ended when President Bill Clinton signed the Telecommunications Act of 1996.

That bill combined with an eased regulatory environment during the Bush administration allowed the Bell system to almost completely rebuild itself.

BIG NAMES, BIG DOLLARS

One of the lobbyists working on the 1996 act was Jim Cicconi, who at the time was working for law and lobbying firm Akin Gump Strauss Hauer & Feld.

AT&T hired Cicconi in 1998, and he now heads AT&T's lobbying operation in Washington that boasts 93 outside lobbyists and donates to a long list of lawmakers from the most powerful to the most obscure.

AT&T is one of the biggest political donors, giving $46 million since 1989 to lawmakers on both sides of the aisle, according to the Center for Responsive Politics which tracks political spending.

Among the top recipients for their last re-election races were House of Representatives Speaker John Boehner ($87,300) and Senate Majority Leader Harry Reid ($89,650).

In the last election cycle, AT&T was also the largest contributor to Senator Jay Rockefeller, the Democratic chairman of the Senate Commerce Committee ($37,000), Representative Lamar Smith, the Republican chairman of the House Judiciary Committee ($22,000) and Representative Fred Upton, Republican chairman of the House Energy and Commerce Committee ($11,000), according to Center for Responsive Politics data.

VETERAN OF TWO WHITE HOUSES

Cicconi, whose press officer declined an interview for this article, is originally from Texas, where he went to both college and law school.

"He's very smart and very skilled almost in an understated way. He's just very well regarded in Washington policy circles for his political savvy," Medley Global Advisors analyst Jeffrey Silva said.

Silva also praised AT&T's Washington regulatory team. "They will leave no stone unturned in making the case for this merger," he said.

Cicconi worked in the White House under two presidents, serving as a special assistant to President Ronald Reagan and deputy chief of staff to President George H.W. Bush.

He was working at AT&T Corp as general counsel in 2005, when it was bought by SBC Communications. He stayed with the company, which took the AT&T name, and became its chief lobbyist.

"He's always thinking several steps ahead," said another telecommunications expert. "I think he honestly does believe in the power of making a deal."

Most antitrust experts in Washington expect the deal will be approved, if the companies agree to major asset sales and service pledges with the Justice Department and Federal Communications Commission.

A Washington telecom industry source, who didn't want to be named to preserve relationships, noted how much energy Cicconi put into brokering a deal with the Federal Communications Commission on Internet traffic rules known as "net neutrality." The FCC gave wireless service providers more leeway in managing their networks but still barred them from blocking access to competing voice and video applications.

The telecom industry expert said Cicconi is professional and charming, but said he wasn't bullet-proof. "It's a mentality of being more equal than everybody else," the expert said. "I don't think he constantly worries about overplaying his hand, but he should."

(Editing by Bernard Orr)

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