(Courtesy of USA Today)
The Justice Department‘s move to block AT&T’s purchase of T-Mobile USA marks a rare Washington defeat for the largest U.S. phone company, a failure that deal opponents called a triumph of antitrust analysis over lobbying muscle.
As it sought regulators’ blessing for the transaction, AT&T boosted lobbying spending by 30%, to $11.7 million, in the first six months of 2011, vs. the same period last year, according to Senate records. Its PAC gave $805,500 to federal candidates this year, more than any other company, according to the Center for Responsive Politics.
AT&T’s lobbying strategy has been guided by 13-year company veteran Jim Cicconi, a Washington insider since serving in the Reagan White House. It produced letters to regulators from more than 70 members of Congress, multiple economic studies aimed at supporting the deal, and a pledge to preserve 5,000 jobs. Yet the Justice Department on Wednesday sued to halt the $39 billion deal, calling it harmful to competition.
“There was no indication from the DOJ that this action was being contemplated,” Wayne Watts, AT&T’s general counsel, said in an e-mail. Michael Balmoris, AT&T spokesman, replied to questions about the company’s lobbying by referring to Watts’ statement. E-mail and phone requests for comment from Cicconi were not returned.
But on Wednesday, Sharis Pozen, the acting head of Justice’s antitrust division, said the agency had been in constant dialogue with the parties. “We apprised them of our serious concerns.”
AT&T’s campaign in Washington began March 20, as the proposed purchase of the Deutsche Telekom unit was announced, with a volley of Sunday phone calls to members of the Federal Communications Commission, which hasn’t concluded its review.
In succeeding weeks, AT&T won the support of the Communications Workers of America and the International Brotherhood of Teamsters. AT&T executives testified twice to Congress. The company also hired three outside lobbying groups to work for the merger