U.S. Telephone, Broadcast Companies Backing
McCain Over Bush
By Heather Fleming Phillips
U.S. Telephone, Broadcast Companies Backing McCain Over Bush
Washington, Feb. 15 (Bloomberg) -- Republican presidential
candidate John McCain doesn't mince words when it comes to
government regulation of communications industries -- he hates it.
He supports lifting restrictions that prevent the U.S.
broadcast networks from owning more TV stations and he favors
radical deregulation of the telephone industry. The Arizona
Senator wants to shrink and restructure the Federal Communications
Commission, which regulates the phone and broadcast industries.
That's why the industry supports McCain's White House bid.
News Corp., America Online Inc., BellSouth Corp. and EchoStar
Communications Corp. -- companies with interests in the Senate
Commerce Committee that McCain chairs -- had representatives
hosting a $500-a-plate Washington fundraiser last Thursday.
And while the companies don't always get their way with
McCain, his anti-regulatory views and committee chairmanship win
him support and almost twice as much industry cash as Republican
rival George W. Bush of Texas through last December. FECInfo
records show McCain had $47,000 and Bush had $16,000.
''John McCain is, in his bones and on the record, the most
aggressive Republican in the country in pursuit of a profoundly
anti-regulatory agenda,'' said former FCC Chairman Reed Hundt, a
Democratic supporter of Vice President Al Gore.
''This disturbs some businesses and delights others, and he
lets the chips fall where they may,'' said Hundt.
McCain also promotes free trade, winning the backing of high-
tech companies such as Qualcomm Inc., which makes the technology
that goes into wireless phones. Qualcomm hosted a fundraising
event for the Senator last year.
''As a congressman, as a Senator and as chairman of the
Commerce Committee, McCain has established a record that is
deregulatory and pro free trade,'' said Jonas Neihardt, vice
president of government relations for Qualcomm. ''McCain is keenly
interested in high-tech issues.''
Employees Back Frontrunners
While the companies back McCain, individual employee
donations from 13 phone companies show that through 1999, they
favored the frontrunners, donating almost $138,000 to Bush and
more than $55,000 to McCain, and $142,000 to Gore and $17,300 to
former Democratic Senator Bill Bradley.
One business that's seen McCain as friend and foe is the
television broadcast industry. McCain supports its efforts to
sweep away ownership limits and even introduced legislation last
year that would let a single company own a TV station and
newspaper in the same market, a practice banned for 25 years. Yet
he was one of the industry's strongest Capitol Hill opponents when
it pushed, and won, free access to a new chunk of airwaves to
begin airing their digital TV channels. McCain said that decision
amounted to a $70 billion ''give-away'' to the industry.
McCain also butted heads with broadcasters in 1997 when he
threatened legislation against any TV network or station that
refused to adopt a content-based TV program ratings system. He
argued that was the best way to inform parents of the violence and
smut in TV programming so they could protect their children. The
networks, with the exception of General Electric Co.'s NBC, went
along with those ratings.
'No Surprises'
Still, James May, top lobbyist for the National Association
of Broadcasters, personally hosted the Washington McCain event,
and his group contributed $5,000 to McCain's Senate campaign
committee in the 1998 election cycle and $10,000 in the 1992
cycle. The association doesn't contribute to presidential
candidates.
''I like the fact that with John McCain, there are no
surprises,'' said May. ''In my view, at the end of the day, he is
far more friendly on broadcast issues than any other candidate in
the race.''
The FCC under the Clinton-Gore White House has taken a number
of controversial, anti-broadcast industry positions, including
imposing a requirement to air three hours of educational
children's TV programming a week. The FCC also failed to relax
ownership restrictions, and it's looking at adding public service
requirements for stations, such as more kids' programming and
public service announcements, in return for new digital channels.
Broadcasters are worried that Gore would continue the
existing policies. In Clinton's proposed fiscal year 2001 budget,
for example, he included for a second year a plan to require
stations to pay $200 million annually for their current analog
stations. McCain has repeatedly opposed such fees. Bush remains an
unknown to the industry.
Phone Industry
The local telephone industry, which has pushed for years to
break free of regulations keeping it out of other types of
businesses, has found McCain's deregulatory message a natural fit.
He was only one of five Senators to vote against the 1996
Telecommunications Act for being too regulatory. In negotiations
on the massive rewrite of the law, he sought to let regional phone
companies enter the long-distance business in two years. Instead,
the act required the companies to meet a detailed, technical
checklist that proves onetime monopoly local markets are open to
rivals. Now four years since the telecommunications act was signed
into law, only one company, Bell Atlantic Corp., has won
permission to offer long-distance service.
Just last year, McCain introduced legislation that would free
the regional phone companies from the restrictions preventing them
from transmitting Internet traffic over long distances.
''What you'll find people like is his candor and his
willingness to listen to the industry,'' said Bill McCloskey, a
spokesman for BellSouth, which provides local phone service in the
southeastern U.S. ''The fact that that results in having a
deregulatory stance certainly benefits many in the industry.''
McCain Benefits
McCain's reaped the financial benefits of his support of the
industry over the years as well. Combined, local phone companies
and the United States Telecom Association, which represents local
companies, contributed $38,000 to McCain's presidential campaign
through political action committees, according to FECInfo, which
tracks campaign spending in federal elections. In his past two
Senate races, the local phone companies' PACs and the U.S. Telecom
Association gave more than $85,000 in contributions.
The money doesn't influence him, however, because ''McCain
has a very highly developed sense of right and wrong with a
populist streak,'' said Ivan Schlager, a telecommunications
attorney with Skadden, Arps, Slate, Meagher & Flom, who worked as
minority staff director on the Senate Commerce Committee under
Democratic Senator Ernest Hollings.
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