Page 12


Dialing for Dollars BY ROBERT BRYCE Austin p HONE DEREGULATION has become the 74th Legislature’s version of the Lobbyist Employment Act. Why? Billions of dollars are at stake; the critical bill is 70,000 words long and exceedingly complex, meaning you need a lobbyist to decipher it; and the measure will shape the explosive growth that’s certain to occur in the telecommunications industry over the next decade. Whenever money and market share are at stake, you can count on finding a gaggle of lobbyists. And San Antonio-based SBC Communications Inc. has a phone book-full. was scheduled to go through the sunset process in 1993at a time when SBC’s main subsidiary, Southwestern Bell Telephones, had 86 lobbyists at the ready. But the Lege decided to wait two years before putting the PUC through sunset, the cyclical hear ings procedure by which agencies justify their existence and rework their regulations. The extra two years gave SBC time to let a few lobbyists go and this year Southwestern Bell will struggle by with just 83. Add in another 28 lobbyists who work for Southwestern Bell publications, messaging services and cellular phones, and you begin to get an idea of how important the Texas market is to Southwestern Bell and SBC. Southwestern Bell can also count on help from lobbyists from the Texas Telephone Association, a trade group that represents local exchange telephone carriers. TTA has 18 lobbyists. To get an idea of how big SWBT’s lobbying effort is, consider this: Exxon, the Irving-based oil giant, had 1994 revenues of $101 billion. The company currently has 27 registered lobbyists for all of its operations. SBC, which had $11.6 billion in revenues last year, has a grand total of 129 lobbyists looking out for its interests. Groups opposed to Southwestern Bell have also hired an army of lobbyists. According to the Ethics Commission, long distance carrier AT&T has 29 lobbyists. MCI has nine and Sprint has six. Other parties with interests in the bill, such as the Texas Daily Robert Bryce is a contributing editor of the Austin Chronicle. Texas Cable TV Association, have seven lobbyists apiece. According to press reports, the TTA spent $20 million on advertising, grassroots efforts and lobbying in 1993. It will likely spend that much or more this time. Southwestern Bell and the TTA didn’t pass the bill they wanted last session, which critics from the newspaper industry say was too good a deal for Southwestern Bell. This year, it looks like Southwestern Bell will get a bill signed into law that will allow it to mold the pending deregulation to its own desires. HB 2128, the mammoth telecommunications bill carried by Representative Curtis Seidlits, a Democrat from Sherman, passed the House on April 19 and is now being scrutinized by the Senate Economic Development Committee. It should reach the Senate floor in the next few days. Wall Street sees the bill as a potentially big win for SBC. Analysts at Merrill Lynch released a report on March 14, just after the bill was filed, which says that if HB 2128 is passed as written, it will be “extremely favorable to SBC.” Calling SBC its “favorite” of the Baby Bells, the brokerage house said the bill has “very strict build-out requirements for competitive entry at the local level that would protect SBC from competitive ‘cream skimming.’ While the bill protects SWBT’s butter, it’s still not clear who will leave the table hungry. Southwestern Bell has lots of potential competitors and all of them want to eat off each others’ plates. For instance, long distance companies like AT&T want to sell local phone service. Local phone companies like Southwestern Bell and US West want to sell long-distance service. Cable companies like Cox and Time Warner want to sell phone services. Southwestern Bell wants to expand its cable offerings. All of them want to sell subscription services that could include Internet access, and electronic versions of magazines and newspapers. Speaking of newspapers, they want their piece of the pie, too. The big dailies want to get further into electronic publishing, but they don’t want to have to pay Southwestern Bell for it. They want an independent company \(read them service. Meanwhile, everybody wants to produce and sell TV shows and movies. On April 18, SBC announced a fiveyear, $500 million partnership with the Walt Disney Company, Ameritech and BellSouthtwo other “Baby Bells”to develop “entertainment and interactive programming for distribution by the three phone/video/communications companies. SBC executive Edward E. Whitacre Jr. said in a press release that the deal will allow the company to “move beyond its current boundaries and closer to its goal of becoming a full-service telecommunications provider.” Being full service means being global, which SBC assuredly is. The company owns 10 percent of Telefonos de Mexico, the Mexican phone company worth some $1 billion, as well as sizWhile SBC goes Hollywood and international, consumer groups in Austin are struggling to keep from getting run over by the Southwestern Bell juggernaut. With the fewest lobbyists and the least PAC money, consumer groups are searching anywhere and everywhere for allies. They don’t care who provides local phone services, they just want a competitive environment that will lead to lower prices. Before HB 2128 was filed, Texas Citizen Action, Texas Consumer Association and Consumers Union allied themselves with cable operators and the daily newspaper lobby to oppose Southwestern Bell. The TDNA took out full-page ads in the five major-media-market newspapers attacking Southwestern Bell. The ads, which had huge headlines that said, “Beware of Monopolies Bearing Gifts,” criticized a deal that Southwestern Bell proposed at the beginning of the legislative session. The deal would free Southwestern Bell from price regulation by the PUC. In return, the company promised to invest $1.1 billion in infrastructure for fiber optics and other upgrades. Whatever happens, Southwestern Bell starts the deregulation era from an en Southwe stem Bell, which had $11.6 billion in reven ues last year, has a grand total of 129 lob byists looking out for its interests. 6 MAY 5, 1995