When we hear the word “lobbying,” most of us think of back door deals made over fancy dinners eaten at Washington DC’s most exclusive restaurants. While these somewhat unethical practices are part of what lobbying is, there’s a lot more to it, and lobbying, in its purest form, isn’t necessarily a bad thing.
Internet service providers, such as AT&T, Comcast, Verizon, Charter, etc., are some of the biggest companies in the United States. They use their size, and substantial bank accounts, to lobby governments at all levels to achieve favorable legislation and other laws that will suit their business interests.
But just how much do these companies spend? In short, a lot. They’re some of the biggest spenders in the world of lobbying, and they do it for a variety of reasons.
We’re going to go into just how much the major internet service providers spend on lobbying, and why they shell out so much cash trying to influence the government so that you can better understand this issue and how it affects society as a whole.
The State of ISP Lobbying in 2022
Here are all the latest stats related to lobbying from ISPs:
ISP Lobbying By Company
In 1998, watchdog agencies began keeping track of how much money each company was spending on lobbying. Over the past 20+ years (1998-2021), here’s a breakdown of the total amount spent by each of the five biggest lobbying ISPs in the United States.
Sprint and T-Mobile were both in the top five previously, but after the merger Sprint obviously hasn’t made any contributions on its own. Prior to the merger on April 1, 2020, it contributed a total of $84.73 million.
What is Lobbying?
Lobbying is the act of trying to influence the laws that governments create. Technically, anyone can lobby; all they need to do is call or write their representative, to express their opinion. However, a person is considered an official lobbyist when they accept money to try and influence lawmakers' decisions.
Lobbying can include providing lawmakers with information and data about a bill that helps make it easier for them to decide which position to take on it. But in some cases, lobbyists are involved in the creation of the bill’s language, and some lobbying firms have even written entire bills that are then introduced in legislative bodies.
In theory, lobbying is a good thing. Those responsible for making laws can’t possibly know everything there is to know or fully understand each issue, and so they rely on lobbyists to gather information and make decisions. Groups genuinely interested in the betterment of society spend money on lobbyists to try and push their agendas and affect positive change.
However, these groups tend to have less money available to purchase lobbying services, meaning that organizations and institutions that have more cash to spend can buy themselves more political influence.
Because of this, lobbying has gotten a bad reputation as it can quickly turn into a form of political corruption, especially when the entity doing the lobbying is a company that has its own interests that aren’t always aligned with those of society.
Political Campaign Contributions
Lobbying can also come in the form of political campaign contributions. However, corporations are forbidden from giving contributions directly to candidates. Still, they can do so by giving money to political action committees (PAC), which are not so secret third-parties that are allowed to give money directly to candidates.
Ever since 2010, with the Supreme Court decision in the Citizens United vs. Federal Election Commission case, there are no longer any limits on how much money corporations can donate to political action committees. The court took the stance that these corporations have the same freedom of speech rights as individuals. This decision has led to a sharp increase in the amount of corporate money funneled into American politics.
In the world of internet service providers, donating to political action committees and then to candidates has long been a popular practice. How much money is donated depends on the year, but to give you an idea, know that the telecommunications industry donated more than $8 million in political donations in 2018 alone. This number pretty much represents the average.
How much influence these donations have is difficult to determine, but considering these companies continue to pour money into politics, it’s safe to assume they have some sort of an impact.
For example, many argue that the decision to reverse net neutrality – a move taken by Congress back in 2016 – came about as a result of the large numbers of donations that came from the telecommunications industry (both companies and individuals). This is a textbook example of how lobbying can help steer the direction of the nation’s politics.
Less Than Ethical Lobbying
The very nature of lobbying leaves it vulnerable to unethical practices. While many of these aren’t illegal, they once again speak to the power large corporations have to influence politics.
One example is this is the nearly $200,000 T-Mobile has spent over the past year at Trump hotels while it was negotiating its merger with Sprint and hoping to win approval from the government to allow the two companies to combine.
In this situation, it’s difficult to know if this money was spent specifically to secure approval for the merger, but it certainly looks that way. These types of transactions are recorded and made public, but there are likely countless others that aren’t made public that are having a significant albeit behind-the-scenes impact on American politics.
Why Do ISPs Lobby?
Clearly, spending money on lobbying, either directly or through political campaign donations, is beneficial for companies. This is because governments, either directly or indirectly, have an impact on industry. Being able to win influence in governments allows these companies to create a business environment that is more beneficial to them, and, at times, to society.
Internet service providers most commonly lobby politicians about the following things:
Laws and Regulation
As a company and/or an industry gets bigger, it begins to have a more significant impact on society, and this typically prompts government regulation. In an ideal world, this regulation keeps consumers safe from malicious corporate practices while not getting in the way of innovation and growth.
Of course, things don’t always work out this way. Companies are typically looking to remove regulations and other barriers to the prosperity of their business. When a company finds the laws on the books to be unfair or an unnecessary hindrance, then they will appeal to the government to try and either change the laws or make them less strict.
Large corporations tend to work to get regulations removed so that they can operate more freely. Ideally, representatives will be able to identify which regulations are genuinely needed and protect them, but industry lobbyists, who tend to be the most highly-paid and numerous, are there to get them to change their minds.
Again, it’s all about balance, but unfortunately, the large companies' considerable resources frequently put this balance in jeopardy.
However, in some cases, companies actually lobby for regulation. In the world of internet service providers, a good example of this is playing out as they continue to develop and implement 5G technology. ISPs argue that other industries occupy the frequencies they need to help usher along this technology and are calling for more regulation to improve the way these frequencies are shared.
Part of their strategy for doing this is positioning 5G as something essential. It’s then up to lawmakers, and their constituents, to determine if this is the case. Considering the resources the industry has to pour into lobbying, this is another example where one argument gets amplified more than the other, which will have an impact on the final decision taken by the government.
Another major issue that motivates ISPs to engage in lobbying is mergers. In today’s globalized economy, it’s difficult for large corporations to achieve significant growth organically, so they often buy out or merge with other companies to increase their market share, expand their product line, and, ultimately, improve their bottom line.
However, all mergers and acquisitions are subject to government approval. The reason for this is that if industries consolidate too much, then competition decreases, which means consumers have fewer options, which can lead to higher prices and exploitative business practices.
For ISPs, mergers and acquisitions have long been a major reason to engage in lobbying. Back in 1999, AT&T spent more than $23 million on lobbying to win approval for its purchase of Ameritech, the largest amount of money spent by one internet service provider in a single year.
In 2011, Comcast spent more than $18 million to secure government support for its purchase of NBC Universal, and over the past few years, T-Mobile has spent more than $8 million a year to warm lawmakers up to its plan to buy Sprint.
Overall, spending all this money seems to be effective. All of these mergers were approved, including the Sprint/T-Mobile merger, which was just passed in February 2020.
This particular deal helps show the influence of lobbying. When Sprint and T-Mobile merge, the US cellular industry will consolidate into just three large companies – Verizon, AT&T, and T-Mobile. Competition is already low, and prices are high, so it’s difficult to see why regulators are okay with this merger. Yet T-Mobile managed to convince them such a change is a good thing.
Government Subsidies and Tax Exemptions
In the United States, which operates largely as a free market economy, the private sector is responsible for delivering the vast majority of services society needs. However, since there are some things that we simply cannot do without, the government will step in to help, either by providing direct subsidies or by offering tax breaks and exemptions that incentivize companies to do things.
For corporations, these incentives are great. They allow the company to grow while saving them money, and, at times, they are also beneficial for society, as they can help push industrial development forward. However, many people argue these incentives are too favorable towards large companies and place an undue burden on governments.
Internet service providers are no different from any other company in that they are constantly looking for ways to get government support for the growth of their business.
The most recent example of this is in the push for 5G. Internet providers are looking for tax breaks and other subsidies, as well as favorable laws and regulation, to help make it easier for them to upgrade the nation’s wireless internet infrastructure.
However, while they do this, they also fight against any type of regulation that would affect their ability to set prices independently. This creates a situation where it seems the telecommunications companies are trying to have their cake and eat it too.
In the internet service industry, the issue of net neutrality is perhaps one of the best examples of lobbying's influence. For those who don’t know, net neutrality was a policy enacted under the Obama administration that forbids internet providers from giving any one website special privileges.
However, internet providers argue that they should be able to charge more money to websites that use more bandwidth. In theory, this makes sense, but advocates of net neutrality argue that such a model could create a situation where larger companies that have the money can pay for preferential access, thus increasing their reach and diluting the independence of the internet.
This is most important in the news media. Proponents of net neutrality worry that without this policy, large media companies could essentially pay to ensure their sites work better and that lesser-known sites don’t work as well. This would monopolize the messages being sent through the media, influencing people’s opinions and the direction of the entire nation.
Interestingly, when surveyed, people overwhelmingly support the idea of net neutrality, yet in 2017, shortly after the Trump administration took control, these regulations were rolled back. Advocates of net neutrality used this as a definitive example of how much influence lobbyists can have on politics. In this case, they were able to convince lawmakers to take action that goes almost directly against the will of the people - the very same people they were elected to represent.
The Impact of Lobbying
The impact of lobbying is tough to determine, although almost everyone agrees it works to some extent. If it didn’t, then why would companies continue to pour all of this money into hiring the services of lobbyists? These institutions are designed to maximize their profitability, so dumping money into something that didn’t work wouldn’t make too much sense.
Because of its effectiveness, some have argued that lobbying is a good thing. It’s one of the many tools citizens have at their disposal to help ensure the governments they elect to represent them are doing the right things for society. After all, anyone can lobby elected officials. However, because lobbying services are so expensive, large corporations that have more money are often able to make better use of lobbyists and are therefore able to gain additional influence within the government. Sometimes the amount of influence they have exceeds their role in society.
As a result, many people have now taken the perspective that lobbying erodes democracy. It makes politicians beholden to people other than their constituents and gives corporations, which obviously have different interests and motivations than regular people, more power and influence than they deserve.
After Citizen’s United paved the way for corporations to donate unlimited amounts of money to political campaigns, many have argued that American politics have been lost to special interests, i.e., those with the money to pay for lobbying.
Even if you don’t take this position, it’s clear that lobbying has a tremendous impact on our society. Going forward, American society needs to decide what it wants to do with these additional influencers in the political system. This decision will help determine the future of the American political system.
How to Counteract Lobbying
If you do feel that lobbying has gotten out of control, then there are a few things you can do. However, it’s true that one individual's efforts will not do much against the billions of dollars being spent by large corporations to influence the US government. Still, if many people combine their efforts, they can have an impact.
One thing you should do is take a look at campaign finance records. Candidates are required by law to make this information public through the Federal Election Commission, and you can use it to find out who your elected officials are beholden to besides their constituents. You can also look up your representatives’ voting records to see if they have been supporting bills that favor corporations over people. This information will make it easier for you to determine which candidates to support.
You can also petition your representatives directly and urge them to support legislation that puts stricter regulations on campaign finance. This will reduce the role lobbyists can have in government and takes us closer to reversing the Citizen’s United Supreme Court decision.
Another thing you can do is try and work only with companies that aren’t aiming to manipulate governments in their favor. To do this, you’ll need to look into what a company has done in the past. In other words, does it give to political candidates? Does it spend money on lobbying? There are plenty of companies that don’t engage in this type of behavior. By choosing to do business with them, you’re sending a message to their competition that they need to change their behavior.
Again, as an individual, it’s not likely you’ll be able to change much, but everything has to start somewhere. If you feel lobbying has gotten out of control, you should now have a roadmap for how to proceed so that you can play a role in restoring power in this democracy to the people and not massive corporations.
As you can see, the world of lobbying is a dark, confusing, and sometimes suspicious one. The practice by itself is not a bad thing, but if left unchecked, it can have some pretty dramatic and long-lasting consequences for society. Internet service providers don’t have an amazing record, as most of their lobbying dollars have gone towards changing regulations in their favor and getting mergers approved, but that doesn’t mean every dollar spent is bad.
If nothing else, you should now see that it’s your responsibility as a citizen of a democracy to investigate who is trying to influence your representatives and why.