Comcast And Other Telecoms Spent Over $88 Million On Lobbying In 2015 by David Mumpower, Cut Cable Today
For as long as cable TV and internet companies have been around, many people have been calling for tighter federal regulation of the industry. With issues like cable companies holding regional monopolies, imposing data caps, undermining net neutrality, and increasing prices to exorbitant rates, the industry always seems to be pushing the envelope in terms of what it can get away with.
Critics argue that cable conglomerates have the ability to persuade lawmakers into legislating laws beneficial to businesses rather than consumers. Some believe that by splashing around enough lobbying money, the cable companies can orchestrate the most favorable laws possible for their industry, no matter how detrimental such legislation is to the citizenry.
The Children's Investment Fund Management LLP is a London-based hedge fund firm better known by its acronym TCI. Founded by Sir Chris Hohn in 2003, the fund has a global mandate and supports the Children's Investment Fund Foundation (CIFF). Q3 2021 hedge fund letters, conferences and more The CIFF was established in 2002 by Hohn Read More
Maybe that’s why we shouldn’t be surprised that the telecom industry, made up of cable TV, internet, and wireless providers, spent over $88 million lobbying government officials in 2015, including current Presidential candidates Hillary Clinton and Ted Cruz. This ranked the industry among the highest spenders on lobbying in 2015, and the bulk of the contributions came from cable TV companies and related organizations.
Which Politicians Accepted Money from Big Cable?
Hillary Clinton has taken more money from Big Cable than all other Presidential candidates to date.
The obvious question you’re wondering is which politicians are most susceptible to lobbying. Since our focus is on the cable industry, we’ll prioritize this topic. The research from OpenSecrets.org, a website from the Center for Responsive Politics that meticulously tracks special interest spending, and other resources suggests that senators are the priciest for Telecom Services & Equipment companies to lobby. The top three people lobbied in 2014 all held this title. They were also Democrats who have held important committee positions.
Most important among them is Ed Markey from Massachusetts. As a Senator, he sat on the Subcommittee on Communications and Technology. Lobbyists spent $419,350 wooing him. Notably, the Republican who received the most funding from lobbyists during 2014 was Greg Walden, a Congressman from Oregon’s second congressional district. The key title he held in the House of Representatives was Chairman of the Subcommittee on Communications and Technology. In other words, lobbyists directed most of their money at people who were most influential on legislation involving the cable television industry.
These numbers are based on contributions from PACs and individuals giving $200 or more.
OpenSecrets.org is already tracking lobbying benefactors for the 2016 election campaign. Hillary Clinton has received almost as much money from Telecom Services & Equipment in this current election cycle as the next five candidates combined. To date, she has received $357,768 from the industry. Comcast’s top lobbyist, David Cohen, also hosted a $2,700-a-plate fundraiser for Clinton in June 2015.
That doesn’t tell the whole story, though. Clinton is the presumed nominee for the Democratic Party, and her opponent, Bernie Sanders, is running on an anti-lobbying platform. Two of the other recipients in the top eight thus far in 2016 are Republican candidates Ted Cruz and Jeb Bush (who just dropped out of the race). Cable companies are keeping their options open by attempting to make inroads with some of the strongest candidates to become the next President of the United States.
Comcast – The Math and Logic of Lobbying
To many, lobbying is one of the scariest aspects of American democracy. Critics of lobbying argue that businesses who don’t like current laws can buy new ones. All they have to do is seduce enough elected officials into working against the interests of the people they represent. Democratic Presidential candidate Bernie Sanders has echoed this sentiment on many occasions, recently saying “Virtually no piece of legislation can get passed unless it has the ok from corporate America.” Sanders has also recently protested the DNC’s decision to lift the ban on lobbyist donations, and his staunch anti-lobbying position has started to draw the ire of top lobbyists and consultants.
Today, virtually no piece of legislation can get passed unless it has the ok from corporate America. http://t.co/22kZZUlZXm
— Bernie Sanders (@SenSanders) February 21, 2013
Republican front-runner Donald Trump has also railed against lobbyists repeatedly during his campaign, stating that lobbyists “totally control these politicians” and “they’re telling them what to do, like a little puppet.”
From a financial perspective, lobbying is a sound practice for corporations. Consider that Comcast, the largest cable conglomerate in the country, earned revenue of $68.775 billion in calendar 2014. Their net income for the year was $39.84 billion.
Comcast’s signature industries are, of course, cable television and internet. Cable TV is the jumping off point for many of their core services. They first evolved into an oligopoly in this industry; then, they vertically integrated by becoming a part-owner of cable channels such as QVC in 1986 and The Golf Channel in 1994.
By 2004, they were so ambitious about the future of cable television that they made an infamous bid to purchase The Walt Disney Company. Their primary goal had nothing to do with Mickey Mouse, theme parks, or the vaunted Disney movie catalog. Comcast wanted ESPN, which they described as “the most important and valuable asset” in the entire company.
A dozen years later, that assessment is no longer valid. The Walt Disney Company recently announced record profits. Their stock performed poorly in the wake of this news due to the perception that ESPN is an albatross. Its profits fell five percent during the quarter and seem poised to fall even more. Given Comcast’s stated perception of ESPN as a selling point for cable, it’s understandable why they’d be nervous about the future of their industry. Comcast is based in cable, and cable seems to be dying. That’s particularly troubling since another American entertainment staple, Blockbuster, once seemed to be dying, and now they’re dead.
The dynamics of television and other forms of media consumption are clearly evolving. As more and more people employ streaming television in lieu of cable, major conglomerates such as Comcast face uncertain futures. With almost $40 billion in profit, they have a lot of assets to protect, and the First Amendment to the Constitution provides them with the means to do so. They can lobby to change the laws of the land to improve their portfolio at the expense of their current and former customers. That’s why Comcast puts big money toward lobbying on issues like net neutrality and trying to push through mergers that would make the company an even bigger industry giant.
The Cost of Doing Business
According to the Center for Responsive Politics, Comcast spent $15.63 million on lobbying in 2015, the second most of any tech communications company tracked by Consumer Watchdog. The National Cable and Telecommunications Association spent another $14.12 million toward the same purpose, which is understandable since it is cable television’s trade association. So, the two companies invested almost $30 million toward the same goal: lobbying for one-sided legislation favoring the cable industry.
The underlying rationale for this practice is understandable. Comcast and other cable carriers want to enact legislation that maximizes their bottom line. They also seek governmental protections for some of their more unsavory business practices such as internet bandwidth data caps. From their perspective, the financial costs are chump change. Sure, $15.63 million sounds like a lot to the layperson. To a company earning $40 billion in revenue, however, it’s basically nothing. It’s the equivalent of a 0.04 percent investment. Mathematically, that’s the equivalent of someone earning $50,000 buying a $20 gift card as a gift. It’s a fungible purchase.
With regards to 2015 lobbying, the addition of the NCaTA investment turns into two friends buying a $40 gift card instead. The goal is still the same. Not coincidentally, many other participants in the cable oligopoly similarly invested in Washington D.C. lobbying. Time Warner’s financial outlay was $6.8 million while Charter Communications and Dish Network lined the pockets of politicians with $4.15 million and $1.53 million, respectively.
Overall, 94 different clients handled transactions with 554 lobbyists. The grand total of money exchanged was a whopping $88,771,758 according to the Center for Responsive Politics. Virtually none of that capital went toward protecting the interests of consumers. It’s specifically targeted to build relationships with politicians who will vote in the interest of big business.
What the Politicians Receive
The cable company’s side of the lobbying discussion is easy to understand. They want laws beneficial to their financial needs. Why are politicians so willing to accept such offers, even though many of them work against the needs of their electorate? That’s a bit more complex.
The cable lobby has long stood as one of the most sophisticated lobbying services in Washington. They understand that television is one of the subjects that unite Americans as a people. Most of the changes they lobby government officials to make are subtle but insidious. Entire executive teams at major cable conglomerates have job duties wherein they anticipate company needs several years ahead. Then, they lobby to ask for modest augmentations of current laws. When done correctly, the minimal financial lobbying expenditure will reap several exponents worth of financial rewards. To make that work, they have to understand basic human nature when they lobby.
Everyone wants free stuff. You do, I do, and your House Representatives, Senators, and other elected officials do. Since lobbying can take on any form and the rules on governmental gifts are opaque, complex, and constantly in flux, a lot of options exist to entice legislators. This is true despite the fact that one of United States President Barack Obama’s first executive orders intended to limit lobbying gifts.
Today, lobbyists can offer elected officials valuable gifts such as Super Bowl tickets. They can throw parties or even campaign fundraisers under the guise of lobbying. Some of the most flagrant abuses involve campaign contributions as tit-for-tat exchanges of legislative votes for re-election support. There aren’t even any rules restricting lobbying to the national’s capitol. A major energy drink company’s lobbyists negotiated with the attorney generals of several states while at a Michelin Star restaurant close to a decadent Hawaiian resort. Simply stated, despite the various laws in place to protect lobbying abuse, the only true limit in place today is a lobbyist’s imagination. In fact, sometimes politicians want things from lobbyists that many would deem morally reprehensible.
Lobbyists Don’t Always Win
I should note an important caveat here. Not all lobbying attempts are successful. In fact, Comcast and Time Warner Cable’s failed merger attempt included a great deal of lobbying, which explains the donations listed above. Politico noted that the two companies wasted $32 million lobbying for something the government ultimately rejected. In fact, the total cost of this joint endeavor was $336 million, which means roughly 10 percent of their expenditures went directly toward lobbying. At one point, Time reported that the companies had 76 different lobbyists worked on the deal yet they couldn’t buy the vote they so desperately wanted.
The situation isn’t entirely grim, though. A form of lobbying is still possible from anywhere on the Internet. John Oliver proved this through a legendary request that ironically occurred on cable television. On his program, Last Week Tonight with John Oliver, the comedian convinced 45,000 people to tell the Federal Communications Commission their thoughts regarding Net Neutrality. While he offered no gifts are other enticements to his viewers, their passion toward the topic caused the FCC to rule against cable companies. In the process, Oliver proved that old school democracy through First Amendment lobbying is still possible, just as the architects of the Constitution and its amendments intended.
Given the above, cable television users and especially cord cutters should feel nervous about the upcoming election. It’s clear that lobbyists will do everything in their power to persuade elected officials to vote against the best interests of the citizenry. The cost of doing business for cable conglomerates is negligible relative to the potential financial losses they incur when laws favor the people instead of major corporations.
If you’re on the fence about who to vote for this year, you should investigate the track records of the various candidates at OpenSecrets.org. They might alter your opinion on who you want in office.
Disclaimer: This is an editorial piece, and as such, the opinions in this article are those of the author and do not necessarily reflect those of the site.