AT&T;, Nunez Swing for the Green

Times Staff Writer

State Assembly Speaker Fabian Nunez is being feted at a Pebble Beach fundraiser this weekend by AT&T;, whose interests he is championing in legislation with high stakes for two industries and millions of California consumers.

AT&T;, which wants to compete freely with cable television companies and stands to gain billions if lawmakers allow it, is holding the "Speaker's Cup" fundraiser at the fabled Monterey County golf resort.

Dozens of corporations, unions and Indian tribes will pay $10,000 to $45,000 to have their lobbyists and other representatives hobnob with Nunez (D-Los Angeles) and other elected officials over golf games, cocktails, spa treatments and dinner.

The event, scheduled a year in advance, is one of the biggest annual fundraisers for the state Democratic Party. The party, a major source of money for legislative campaigns, can accept unlimited donations; individual candidates cannot.

Nunez, whose duties as speaker include fundraising for legislative contests, is sponsoring a bill that would dramatically reshape the way Californians get video services.

California law requires companies seeking to offer cable television service to strike franchising agreements with each city and county where they want to do so -- negotiations that take months. Nunez's bill would free phone companies from having to negotiate hundreds of such agreements.

AT&T;, Verizon and others, noting that cable TV bills have risen faster than inflation in recent years, say opening the industry to more competition will save consumers hundreds of millions of dollars a year. Nunez endorses that view.

Opponents say it could cost local governments millions of dollars in lost fees and would be disadvantageous to cable companies, which have long-term agreements with local governments that they are required to fulfill.

The issue is expected to be one of the hardest-fought in the Legislature this year.

Ned Wigglesworth, analyst with the campaign finance watchdog group therestofus.org, called the appearance of Nunez's attendance at the AT&T; fundraiser "awful."

"From the perspective of it actually influencing Nunez, we have no way of knowing," said Wigglesworth, "but it very well could. When you're speaker of the California Assembly you're held to a higher standard and you have a responsibility to avoid the appearance of conflicts of interest."

Michael Josephson, founder of the nonprofit Josephson Institute of Ethics in Los Angeles, called the Pebble Beach event a business investment for AT&T.;

"If you're doing something for the Democratic Party, there are going to be senior Democrats who are going to be grateful for that," said Josephson. They'll be predisposed, he said, "to listen to your case.... It's an edge."

The "Speaker's Cup" began in 1998, sponsored by the California Assn. of Highway Patrolmen for former Assembly Speaker Antonio Villaraigosa, now mayor of Los Angeles, to generate donations for the speaker's campaign funds. After voters capped donations to individual lawmakers by passing Proposition 34 in 2000, AT&T; began using the Pebble Beach event to raise money for the state Democratic Party.

Nunez called the fundraising part of his job "unfortunate."

"You've got to raise a lot of money," he said, "and you've got to keep the majority and you've got to bring back every Democrat that's here."

He said the timing of the Pebble Beach event is coincidental with interest in his bill, AB 2987. The measure passed the Assembly utilities committee this week, and will likely face a vote by the entire chamber in the next couple of months.

"What's driving me to do this is bringing true competition to the video cable marketplace," Nunez said. "In the end, I think consumers are the ones who are going to benefit. On the public policy grounds, it's the right thing to do, so I don't feel uncomfortable."

Ken McNeely, president of AT&T; California, who will attend the fundraiser, called the event "an opportunity for ... a number of people with policy interests in Sacramento to have an opportunity to make policy statements and get their message out to policy makers."

Aaron L. Read, a lobbyist who helped launch the first Pebble Beach fundraiser in 1998, said the weekend promotes collegiality in the Capitol.

"I think interpersonal relationships and improving those are the key to everything in life," said Read. "When people know you, they're more apt to try to find common ground."

The phone and cable industries spend hundreds of thousands of dollars a year in California on lobbyists and donations to politicians. In the last month alone, AT&T; donated more than $48,000 to lawmakers and candidates. The California Cable and Telecommunications Assn. has given more than $18,000.

AT&T; has begun airing television commercials around California that say, "We are on the edge of a whole new era of choice in TV for consumers across California The California Legislature can be the catalyst."

Cities and counties are girding for the battle.

Through their agreements with cable companies, they earn millions of dollars a year in fees and can dictate the location of cable service.

"We're concerned about communities getting services, and our control at the local level is what allows us to get service to neighborhoods that otherwise wouldn't" have it, said Jean Hurst, lobbyist for the California State Assn. of Counties.

People wanting to be heard on the issue are making the Capitol rounds.

"My offices have received dozens of contacts from interested parties regarding AB 2987," said Assemblywoman Jenny Oropeza (D-Long Beach) in a typical comment. "From meeting requests and TV commercials to full-page newspaper ads and calls, letters and faxes to my office, it's clear this bill is going to be one of the major issues of 2006."

AT&T; says that even if it reached one cable TV agreement with a local government every week, it would take seven years to offer video service to all of its phone customers in the state.

"We have 21st century technology but 20th century regulations," said McNeely.

Cable companies, whose contracts with local governments require them to serve wide areas, say Nunez's legislation is unfair. They say it would allow phone companies to cherry-pick which areas to serve while cable firms remained locked in.

"The bill is here to see if they can find a cheaper way to enter the California market," said Dennis Mangers, president of the California Cable & Telecommunications Assn. "They would have the dream of any new competitor."

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Times staff writer Dan Morain contributed to this report.

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