AT&T Gains FCC's Ear as Regulators Near Decision on Net Neutrality Rules

AT&T Inc. has spoken more frequently than any other company with U.S. officials as they near a decision on rules that may restrict how carriers offer mobile Internet service, according to regulatory filings.

Jim Cicconi, a Republican who is AT&T’s top Washington executive, talked at least six times about the net-neutrality rules from Nov. 4 to Nov. 26 with Edward Lazarus, chief of staff at the Democrat-led Federal Communications Commission, according to disclosure filings with the agency.

In that span no other company discussed the open-Internet rules more than twice with Lazarus, who reports directly to FCC Chairman Julius Genachowski, according to the filings. Lazarus and officials advising Genachowski on the issue have met about two dozen times in the past month with AT&T opponents and public-interest advocates, Josh Gottheimer, an FCC spokesman, said today in an interview.

Companies such as Google Inc. that rely on the Web to reach customers have urged the FCC to pass rules that bar telephone and cable providers from interfering with the Internet traffic they deliver to subscribers. The carriers led by AT&T and Comcast Corp. say rules may restrict their ability to manage their networks and discourage investment in Internet capacity.

Photographer: George Frey/Bloomberg

One issue to be resolved is how rules treat the mobile Web traffic that’s growing as consumers adopt data-hungry smartphones such as Apple Inc.’s iPhone. Close

One issue to be resolved is how rules treat the mobile Web traffic that’s growing as... Read More

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Photographer: George Frey/Bloomberg

One issue to be resolved is how rules treat the mobile Web traffic that’s growing as consumers adopt data-hungry smartphones such as Apple Inc.’s iPhone.

“I don’t believe anybody else presumes to hijack the commission’s staff resources in that manner,” said Cathy Sloan, a vice president at the Computer & Communications Industry Association, a Washington-based trade group that opposes AT&T on the issue.

‘Can Only Hurt’

AT&T’s frequent access to FCC officials “can only hurt. That’s what it’s designed to do,” said Sloan, whose group lists as members Google, Dish Network Corp., Yahoo! Inc., Facebook Inc. and Microsoft Corp.

Both sides are trying to affect draft rules that Genachowski may present to commissioners for a Dec. 21 vote.

“I’m proud of the process we’ve run,” Genachowski said at a news conference in Washington today. “It’s been a participatory process engaging with the broadest possible array of stakeholders.”

According to FCC filings, those speaking to Genachowski’s advisers in the past week included representatives of Media Access Project and Public Knowledge, Washington-based groups that advocate for an open Internet. Verizon Communications Inc. Chief Executive Officer Ivan Seidenberg on Nov. 24 told Genachowski the “FCC should not adopt rules that would effectively dictate the structure of what is still a new and evolving industry,” according to a filing.

Flexibility Sought

Regulators are considering whether mobile Web service should be subject to the same rules as Internet service delivered over wires. AT&T opposes net-neutrality rules for wireless in part because companies need flexibility to manage traffic on crowded airwaves, the company said in a filing. Carriers’ wireless traffic and revenue are increasing as more consumers adopt smartphones such as Apple Inc.’s iPhone.

The Computer & Communications Industry Association’s position is that “there’s no reason to exempt” mobile services from regulations, Sloan said.

Republican lawmakers, who gained control of the House in the Nov. 2 election, have told the FCC that adopting net- neutrality rules would be “a mistake.” Representative John Boehner of Ohio, the incoming House Republican leader, has warned of “a government takeover of the Internet.”

Access to Genachowski

Cicconi, AT&T’s senior executive vice president, also spoke once with Genachowski, as did AT&T Chairman Randall Stephenson, according to filings, which are required when someone discusses a pending issue with the commission.

Genachowski and Lazarus spoke separately with opponents of AT&T’s net-neutrality position, including Dish Chief Executive Officer Charlie Ergen and Markham Erickson, executive director of the Open Internet Coalition, which lists Google, Amazon.com and EBay Inc. as members.

Cicconi declined to comment, said Michael Balmoris, a Washington-based spokesman for AT&T. Lazarus wasn’t available to comment, said Jen Howard, an FCC spokeswoman.

Genachowski, a former technology entrepreneur and executive at IAC/InterActiveCorp, in September 2009 proposed rules to keep Internet-service providers from selectively blocking or slowing content delivered to subscribers, or favoring their own offerings. The regulations would need approval from the commission, on which two Democrats join Genachowski in the majority.

‘All Options’ Considered

The agency is considering “all the options” as it seeks “the right rules to write down to preserve Internet freedom and openness,” Genachowski said at a conference in San Francisco on Nov. 17. At a news conference today he declined to comment on when the issue may come to a vote.

For the FCC, listening to the largest U.S. telephone company offers a chance to deflect criticism of net-neutrality rules, Andrew Jay Schwartzman, policy director for Washington- based Media Access Project, a public-interest law firm, said in an interview.

“The chairman’s office is concerned about minimizing opposition to his plans, and AT&T represents the greatest threat because of its political and financial clout,” Schwartzman said.

Getting AT&T’s assent can help protect the agency from congressional backlash, Joel Kelsey, a political adviser to the Washington-based advocacy group Free Press, said in an interview.

Political Coverage

“It gives them the ability when they’re hauled up in front of the House Republicans to say, ‘There’s wide support for this,’” Kelsey said. His group supports net-neutrality rules and says they should apply to wireless services.

On Nov. 19 and Nov. 21, Cicconi, a former deputy chief of staff to President George H.W. Bush and a former special assistant to President Ronald Reagan, discussed with Lazarus “the merits” of draft legislation never made public that “should be a model” for the commission, according to an AT&T filing.

The legislation was proposed by U.S. Representative Henry Waxman, a California Democrat, and withdrawn when it failed to win Republican support. It would have let mobile Web providers block some data-hungry applications while denying that ability to service delivered over wires, Harold Feld, legal director for the Washington-based advocacy group Public Knowledge, said in an interview.

It’s “a problem” that the House draft is a basis for discussion at the FCC, said Sloan of the Computer & Communications Industry Association.

“A long list” of U.S. senators support strict rules, she said. “I wonder what they would think about some cozy deal between AT&T and a supposedly independent agency.”

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

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