Debate on STELA, Retrans Prompting Lobbyist Spending Surge, Observers Say

NCTA spent the most of any association or company reviewed in this sector: $6.6 million in Q4, up from $5.88 million during the same period the year before. NCTA also dropped more money on lobbying firms than most others, with more than $1.3 million spent on more than 20 firms in Q4. NAB’s in-house lobbying spending increased by half a million dollars -- $3.8 million in Q4, compared to $3.29 million last year. NAB also spent close to half a million dollars on its lobbying firms in this latest quarter.

Members of the bigger media associations threw similar weight around on Capitol Hill. Of NCTA members, Comcast spent $4.78 million in Q4, way up from its $2.33 million the year before. It also spent well over $1.5 million on its many firms. Time Warner Cable clocked $2.49 million in Q4, $2.14 million in the same period last year. Cox Communications spent $1.1 million, significantly up from the $870,000 it spent in last year’s Q4. Charter Communications spent $750,000 and Viacom $570,000. Of broadcasters, CBS spent $840,000 this year, slightly down from $870,000 this time last year. Disney Worldwide Services reported spending $810,000 in Q4 and lobbied on retrans consent, STELA reauthorization and spectrum. 21st Century Fox spent $1.52 million.

STELA and Retrans Factors

STELA reauthorization and retrans fights have likely fueled the spending from NAB and NCTA, Free Press Policy Director Matt Wood told us. “We are focused on media diversity and journalism issues too, as those play out in the same broadcast consolidation battles,” Wood said. “We're also focused on broadband and wireless competition, and on Internet freedom fights to protect net neutrality and prevent mass spying.” Free Press spent $16,126 in lobbying this quarter. The public interest group lobbied on a wide range of video and telecom issues, from net neutrality to surveillance to the IP transition.

Expect a rampup in lobbying as these issues percolate in 2014, a telecom industry lobbyist told us. Lobbying activity will increase particularly in the first half of the year, especially once there’s a committee STELA draft and markup, which the lobbyist expects will happen in Q1. The lobbyist said Congress has not been especially active overall. House Communications Subcommittee Chairman Greg Walden, R-Ore., has committed to a draft by that quarter. The Supreme Court’s decision on Aereo, likely around mid-year, will also spur reaction in Congress, but that debate is largely frozen until the court decides, the lobbyist said.

"The STELA reauthorization is very big -- it’s very big for broadcasters but it’s very big for pay-TV operators,” Jeff Silva, analyst at Medley Global Advisors, told us. It’s considered must-pass legislation, making it perhaps the only telecom or media bill sure to become law in 2014, Silva said. Lobbyists will be “putting muscle” into the debate given that context, he said.

The American Cable Association also spent more in 2013’s Q4 than last year. In Q4, it spent $130,000 on in-house lobbying and paid $100,000 to the Alpine Group. In last year’s Q4, ACA spent the same amount on its own lobbying but paid Alpine $40,000 less. The American Television Alliance paid $150,000 in Q4 both this year and last to Fierce Isakowitz.

Dish Network logged consistently strong spending, with $370,000 in Q4, up from $320,000 a year ago. It weighed in on retrans and several video bills as well as the spectrum incentive auction. DirecTV spent $550,000 in Q4 on STELA and various video issues. LightSquared also spent $465,000 on lobbying across eight firms in Q4. It had spent more than $600,000 in 2012’s Q4 on various firms.

CEA spent $940,000 in Q4, up from $770,000 in 2012’s Q4. It mentioned several trade and communications lobbying priorities, including lobbying on the CableCARD bill introduced last fall by House Communications Subcommittee Vice Chairman Bob Latta, R-Ohio. That bill had attracted significant industry interest from cable companies and TiVo.

Telecom Spending Steady

Telecom industry lobbying remained steady. CTIA spent $3.57 million in Q4, up from last year’s $3.4 million. CTIA’s priorities ranged from potential legislation affecting stolen or lost cellphones to wireless emergency alerts to in-flight connectivity to wireless carrier billing practices to spectrum policy, it said. Both CTIA’s report and that of Les Brownlee & Associates, which represented CTIA on behalf of AT&T, Verizon and T-Mobile, emphasized lobbying on reallocating spectrum from the Department of Defense to carriers, with compensation for DOD.

USTelecom spent $1.87 million itself plus $160,000 on four lobbying firms. As the Ingram Group wrote in its report, USTelecom’s priorities included lobbying on the FCC National Broadband Plan, data breaches and privacy, FCC USF recommendations and bonus depreciation tax issues. In 2012’s Q4, USTelecom spent $1.89 million and paid several firms in the low hundreds of thousands. Among its broad swath of lobbied bills, USTelecom pointed to the IP transition and in the House, lobbying on the reauthorization of STELA and the Electronic Communications Privacy Act.

The House Commerce Committee’s proposed overhaul of the Communications Act will certainly spur debate and activity, the telecom lobbyist said, comparing the energy and process debates to what accompanied the STELA conversation in 2013.

"You have to assume that plays a role as well,” Silva said of the proposed Communications Act overhaul. Even if Congress doesn’t act in the next year, it’s an important “formative” stage likely to attract lobbyists, he said. Between STELA reauthorization and a review of the Communications Act, NAB and NCTA and others will pay attention, he said.

AT&T spent $3.635 million in Q4 for in-house lobbying, up from $3.4 million from this time last year. It also spent hundreds of thousands of dollars on more than a dozen other lobbying firms in Q4, including $140,000 to Akin Gump, $120,000 to Breaux Lott Leadership Group, $90,000 to Prime Policy and $80,000 to Roberti White. Its report tallied several pieces of legislation the telco focused on, from the surveillance bills like the FISA Improvement Act and USA Freedom Act -- in both cases, lobbying relating to service provider obligation provisions -- to the FCC Process Reform Act and FCC Consolidated Reporting Act.

Verizon’s in-house lobbying spending dropped slightly this year compared to last but, like other heavyweights, it employs an armada of firms. It spent $3.46 million in Q4 2013 compared to $3.48 million a year ago. In Q4, Verizon paid most of its many firms $50,000 or less, with the exception of $100,000 to the DCI Group. CenturyLink spent far more in Q4 2013 than the year before. It spent $1.49 million this year, with a focus on broadcast retrans consent, the FCC’s Connect America Fund, patents, federal procurement and tax policy, along with $95,000 to three lobbying firms. During the same period in 2012, CenturyLink spent $890,000 on lobbying and also paid $105,000 to the same three lobbying firms.

Of the two other big carriers, Sprint’s spending is up -- $716,887 in Q4 for lobbying on wireless Lifeline issues, the USF, spectrum auctions, special access and other issues. It spent $637,308 in 2012’s Q4. SoftBank also paid the Carmen Group $210,000 in Q4 to lobby on SoftBank’s acquisition of Sprint. T-Mobile spent around half a million dollars on several firms in Q4 and $1.425 million on in-house lobbying. It spent $1.44 million in last year’s Q4. Silva emphasized that the FCC’s broadcast incentive auction, scheduled for mid-2015, will prompt further lobbying from both broadcasters, which want to make sure they're protected and have adequate compensation for their spectrum, and from AT&T and Verizon, companies that want to make sure they can fully bid.

IP Transition Lobbying

The Western Telecommunications Alliance upped its lobbying efforts in the last year, too, spending $85,000 in Q4 compared to $30,000 in 2012’s Q4. It lobbied against the FCC’s quantile regression analysis, used to calculate the agency’s USF high-cost support, and “expressed its opposition to providing USF reimbursement support to RLECs based off of a model that does not take such carriers’ uniqueness (e.g., size, service territory terrain, geography, etc.) into account,” it said. It lobbied in favor of its data-only broadband and capital budget mechanism plans.

"WTA continued to express its support for limited broad based technical [IP] trials as a way to understand technical problems that may arise as networks incorporate more IP,” the alliance said in its lobbying report. “WTA expressed it[s] opposition to such trials as a way for companies to by-pass current rules and regulations.” It also lobbied in favor of the Video Choice Act of 2013 and the Television Consumer Freedom Act of 2013, citing the “relief” that would provide for RLECs in the video business “with regard to gaining access to content, the prices they pay concerning retransmission consent agreements and the forced tying associated with programming.”

The Telecommunications Industry Association’s spending dropped from $80,000 in 2012’s Q4 to $60,000 in 2013. It focused on federal spectrum reallocation, in-flight mobile device use and the IP transition, among other issues, according to its report. For the Independent Telephone and Telecommunications Alliance, Q4 spending stayed steady at $19,000. Several companies cited an eye toward FCC structure and operations as well as tax issues, government surveillance concerns, patents and cybersecurity.

Google also exerted lobbying heft with $3.98 million spent in Q4, up from $3.35 million in last year’s Q4. Google’s lobbying involved spectrum allocation, white spaces rules, broadband adoption and deployment and online video, it said.

Other big issues for 2014, according to Silva, may be National Security Agency surveillance and cybersecurity. Telecom and technology companies have made clear they do not want a role in holding the metadata, as some have suggested, Silva said. He suggested the issue would be “front and center” throughout the coming months, sure to attract lobbying attention. “You know something’s hit a nerve,” Silva said, mentioning CTIA’s statement opposing data retention mandates following President Barack Obama’s surveillance talk Friday. “I don’t think it’s something they want to be dragged into. They certainly don’t want another mandate.”