AT&T poised to lose FCC vote

Facing a major regulatory issue, AT&T; Inc. has unleashed the kind of lobbying blitz that makes it one of the grand corporate players of the great Washington game.

And yet, for all the money AT&T; and other old-line telecom and cable companies have spent pushing their cause, they are poised to lose a key vote to a bunch of newer tech companies that never had anything to do with Washington until recently.

If the Federal Communications Commission votes today in favor of crafting rules to let the government oversee access to the Internet, it could be a sign of a fundamental shift of power under the Obama administration.

“This is totally new in Washington, that opposed to only the old Goliaths like AT&T;, or traditional public utilities commissions or large insurance companies at the table, they are now joined by others like tech growth companies,” said Mark Heesen, president of the National Venture Capital Assn.

His trade group represents investors of Web giants such as Google Inc., Facebook Inc. and Amazon.com Inc.

The vote is on a proposal that would begin a months-long process to formulate rules on how Internet service providers manage traffic on their networks so as not to block or unfairly slow some content. The proposal, favored by FCC Chairman Julius Genachowski, is expected to pass.

AT&T; and other wireless and cable providers contend that the proposal amounts to giving the government control over the Internet, and that companies will lose the ability to reduce congestion on their networks.

Web service providers such as Google and Skype counter that they need unfettered access to all Internet users because the carriers could decide to block services that compete with their own.

In recent weeks, large telecommunications and cable firms have been flooding congressional offices with e-mail and phoning aides to try to get them to sign on to letters to Genachowski protesting his push for new net neutrality rules.

Staffers on Capitol Hill and at the FCC say the most active lobbyists have been from AT&T; -- a company that is historically the largest donor to the political campaigns of Congress members. It has spent more than $8 million in lobbying this year on a wide variety of issues including net neutrality, according to the Center for Responsive Politics.

Last week, 72 Democratic members of Congress wrote to the FCC in opposition to the net neutrality proposals. Many of them, staffers said, had been encouraged to write by AT&T.; And 52 of them received a total of $180,000 in campaign contributions from AT&T; this year, the Center for Responsive Politics said.

Over the weekend, AT&T;’s chief lobbyist, Jim Cicconi, reached inside the company for lobbying support, asking its 300,000 employees to write to the FCC that net neutrality would severely hurt their business.

AT&T; spokeswoman Claudia Jones declined to comment on the firm’s lobbying on the issue, saying: “Honestly, if you look at letters against net neutrality, they were sent because [lawmakers] had conviction and felt very strongly about it.”

Google, by contrast, hired its first Washington staffer in 2005 and opened its first permanent office there last year, with a staff of 20. It has spent $1.8 million on lobbying this year, compared with $6.8 million by Verizon Communications Inc. and $6 million by Comcast Corp.

Dozens of venture capitalists and high-tech giants including Amazon, EBay Inc. and Facebook jumped into the debate this week, throwing their support behind Genachowski’s proposal, which would benefit their firms.

Not all broadband network operators agree with AT&T;’s approach, saying such an aggressive tack on the first major item introduced by Genachowski may hurt the firm down the road.

Marvin Amore, general counsel at public interest group Free Press, said that if the FCC compromised on its proposal, it would be an indication that AT&T;’s tactics were effective.

“This would send a clear signal that if you run as hard as you can and pay a bunch of lobbyists and sow confusion in the press, Julius Genachowski will buckle,” Amore said.

Genachowski, a former FCC counsel, has roots in the Internet start-up world. He was an executive at IAC/InterActiveCorp, which owns Internet companies including Evite and Urban Spoon.