The battle over the Tauzin-Dingell bill brings to new light the political slugfests waged by telecom's titans and the lobbyists in their employ. Though virtually invisible to outsiders, lobbyists' strategic maneuvering and subtle manipulations of consumer influence are increasingly crucial to the success or failure of industry legislation. But it's now harder than ever to tell the players from the pawns.

Lobbyists are an unsung bunch. Foresworn to deny their own effectiveness, they must attribute every victory not to their own hard work, skill or the resources at their disposal but to the merits of the message they had to send. When they win, it must be because consumers demanded it.

“This is a vicarious enterprise,” said Michael Boland, Verizon Communications' vice president for legislative relations and a 25-year veteran of Washington's K Street, which is to lobbyists what Madison Avenue is to advertisers. Congressmen and commissioners make policy, Boland said, and their actions are guided largely by consumers. Lobbyists are merely a resource at their disposal.

But while consumers wield considerable influence over the telecom industry, that's not to say they are leading the lobbying charge — telecom lobbyists are fully aware of the sway consumers hold and direct their efforts accordingly. “Instead of spending time with a dozen experts who influence half a dozen members of Congress, [lobbyists] are trying to influence millions of people who will in turn influence 435 members of the House of Representatives,” said Joe Andrew, partner at Cadwalader, Wickersham & Taft, a law firm specializing in telecom regulation. “It's commercial now. It's a mass market approach.”

Telecom lobbying battles in the age of deregulation don't pit consumer interests against corporate interests as much as they pit corporate interests against other corporate interests. Most typically, ILECs counter interexchange carriers, while consumers and other industry stakeholders are recruited to pick a side — or risk getting caught in the middle.

AT&T and SBC Communications each spent almost $4 million on lobbying Congress in the first half of 2001. In addition, SBC, BellSouth and Verizon donated a combined $1.78 million to federal political candidates in the 2002 election cycle, according to Open Secrets, a campaign finance watchdog group. AT&T, WorldCom and Sprint collectively donated more than $1.4 million, and in Pennsylvania — where the state utility commission ordered a functional separation of Verizon's wholesale and retail selves — AT&T spent more than $3 million lobbying in the first half of 2001, according to data routinely collected by the state's ethics commission. Verizon spent more than $2.2 million lobbying in Pennsylvania during that time.

“It's a bet-the-house time period,” Andrew said.

The Tauzin-Dingell bill has provided a grand stage for this multimillion-dollar drama, with the House of Representatives recently postponing its vote until March. Tauzin-Dingell would relax rules requiring ILECs to unbundle their network to competitors and ease the path for ILECs to offer long-distance data services. Influence Online, a lobbying trade publication, called the bill “the lobbying campaign of the year in terms of sheer heft…. It might be simpler to list the people who aren't working the issue.” For example, at least 15 law firms, lobbyists and consultants registered with Congress to serve Verizon's lobbying interests in the first half of 2001; an equivalent force signed up with Bell arch-rival AT&T.

Not surprisingly, Michael Rubin, chief lobbyist for the U.S. Telecom Association, insisted this was consumer warfare. “Tauzin-Dingell became such a big campaign not because of the ‘hired guns’ inside or outside the associations but because this is something that mattered to consumers.”

As evidenced in the Tauzin-Dingell campaign, this reliance on consumers as a driving force can, at times, spark tensions between telecom companies and nonprofit consumer groups, especially those that rely on corporate donations for survival. Last summer The Washington Post reported a bitter exchange of missives between AT&T and the National Puerto Rican Coalition, to which AT&T annually donates $35,000. AT&T Foundation President Esther Silver-Parker upbraided the NPRC for supporting the Tauzin-Dingell bill in a letter to Congress. Though Parker didn't threaten to sever funding to the nonprofit, the effect of her letter was much the same: NPRC President and CEO Manuel Mirabal said he feared he would lose AT&T's financial support if he contradicted its views.

In November, two Bay area consumer groups — the Latino Issues Forum and The Greenlining Institute — complained to the California Public Utilities Commission that Pacific Bell had pressured community groups to testify in favor of the Bell companies' bid to enter California's $15 billion long-distance market. Robert Gnaizda, policy director and general counsel of The Greenlining Institute, told the San Francisco Business Times, “They don't say, ‘We'll cut you off, you'll never get any money.’ They just use their influence. It's like the Mafia visiting your store and asking how your kids are doing.” Gnaizda's group asked the CPUC to investigate the matter, promising to deliver other groups that claim to have been pressured by Pacific Bell — provided the CPUC could protect their anonymity. At press time, the CPUC had not responded to the request.

Another side effect of the premium placed on consumers' welfare in telecom policy matters is an outgrowth of so-called “Astroturf” — ad hoc organizations that pose as grass-roots advocacy groups but instead serve the interests of their corporate financers. For example, the Web site for an organization called Consumers' Voice claims the group's purpose is to ensure “that men and women in communities across the country have a voice in consumer matters.” But Consumers' Voice lobbies exclusively on platforms that oppose Bell interests and receives much of its funding from AT&T.

Voices for Choices, a coalition of competition advocates, including CompTel and Association for Local Telecommunications Services, has been active in the fight to stop Tauzin-Dingell, spending more than $126,000 on campaign ads in 2001's first quarter, according to media research firm CMR. VFC's Web site says its aims are directed at protecting consumers from Bellborne abuse. AT&T and WorldCom are tucked into the group's member list among more obscure names (such as the Stillaguamish Tribe of Indians), and the coalition is led by Steve Ricchetti, whose firm Ricchetti Inc. also lobbied for AT&T in 2001. VFC doesn't hide its corporate ties, but critics complain that those who see or hear the group's ads don't know where its funding comes from. Last spring, the American Association of Retired Persons asked VFC to stop naming AARP as an ally in VFC's anti-Tauzin-Dingell ads, even though AARP is demonstrably anti-Tauzin-Dingell. (Ricchetti did not return calls to Telephony.)

Not surprisingly, the Bells' playing field has its own Astroturf. Connect USA, which describes itself as “a coalition of businesses, workers and consumers founded with the support of SBC Communications,” spent more than $62,000 on pro Tauzin-Dingell ads in the first quarter of 2001, according to CMR. In 1999, SBC also funded the Campaign for Telecommunications Access, an amalgam of advocacy groups for the elderly and disabled that urged the FCC to ease restrictions on SBC's merger with Ameritech. And Qwest Communications has propped up a score of state organizations such as the Minnesota Alliance for Telecommunications Competition to agitate its rivals in the cable industry. MATC ads identify its members as “consumers, businesses and telecom companies,” though perhaps not necessarily in that order — the group's Web site doesn't include a list of members.

“Everybody does it,” said Dave McClure, president of the U.S. Internet Industry Association (USIIA). “It makes it very difficult to be heard.”

While the growth of Astroturf may add to the noise of a particular fray, Cadwalader's Andrew said their bias doesn't necessarily corrupt the process. Politicians and their staffs generally check the background of the groups that pitch to them, and folks who lobby for a living are motivated to be honest because their credibility is their livelihood. Andrew compares it to a courtroom in which opposing lawyers each argue in their client's interest: Neither side lies, but they each express their own interpretation of the truth.

“The judge is not looking for independence” from either side, Andrew said. “But he tries to make reasoned judgments about what's right and wrong.”

The harsh economic climate of recent months also has created shifting winds in the influence held by the industry's trade associations. In 2001, SBC followed Verizon in becoming a member of USIIA (one of the first ISP associations) and CompTel, a staunch Bell opponent. CompTel President H. Russell Frisby Jr. pointed out that the Bell companies (and AT&T, for that matter) are nonvoting members in his group. But Bell companies have become financial pillars of USIIA, and Verizon employee C.L. Hoewing sits on the group's board of directors. “Since we have ILECs not only in our organization but on our board, how do we reconcile that?” USIIA's McClure said. “It's not easy,”

Though USIIA once was dedicated solely to independent ISPs, such support alone wasn't enough to keep the group afloat, so McClure broadened the group's charter to include non-ISPs. Because of USIIA's sliding-scale membership fees, the group gets $25,000 each from its two Bell members, while the majority of its ISP members pay only $150 a year.

“We'd like to have more [Bell members],” McClure said. “We could use another couple of $25,000 members.”

But because USIIA supports Tauzin-Dingell — much to the bewilderment of prominent ISP associations — critics have called the USIIA a puppet of the Bell companies. McClure denies the charge, claiming that the views of Bell companies and ISPs don't always conflict and that new amendments to Tauzin-Dingell protecting consumers' choice of Internet provider will benefit ISPs.

As weaker trade associations lose members and funding, the temptation to seek well-heeled corporate sponsors may increase. ALTS has lost almost 40% of its CLEC members and a third of its budget in the last year and a half. ALTS President John Windhausen said that although he would allow Bell companies and long-distance carriers as affiliate members (which don't influence ALTS policy), he would refuse them full-fledged membership. At the same time, many independent trade associations have become extinct in this climate. “There really are not a lot of advocacy groups left that are real. And most people can't tell the difference,” said Bruce Kushnick, executive director of the New Networks Institute, a research and consulting firm.

Kushnick has led his own personal fight against the Bell companies for years, through scathing reports to various regulatory authorities. He currently is assembling Teletruth, a group that will seek to expose, among other things, the roots of Bell company Astroturf. Though he admits that AT&T has its own spurious consumer support, he's not targeting the long-distance carrier: “In the overall scheme of things, I consider AT&T Mother Theresa compared to the Bells.”

Like everyone else in this game, Kushnick claims to be fighting for consumers. He is the author of a report called “Liar, Liar, SBC's Pants on Fire” and an unpublished novel called “Touchtone,” about a whistle-blower on the run from phone company execs who try to kill him after he learns how much they're overcharging him. Kushnick admits he has alienated some sympathizers by being too controversial — AT&T, for example, is a natural choice for an ally but has kept its distance, he said. “They thought my ‘Tauzin-Dingell is Evil’ report was too loud.”

And for lobbyists, maintaining the proper distance from controversy is key. Experts say one of the main reasons they use ad hoc coalitions and Astroturf is to allow telecom companies to air caustic, inflammatory ads without sullying their own names — a tactic wholly consistent with the lobbyist's directive of keeping all eyes on the message and away from the messenger. As any great lobbyist will tell you: Great lobbying doesn't do a thing.