The real winners in the game of political donations

Mike DanoAlthough the outcome is far from clear, the stage appears set for a blockbuster election season for congressional incumbents and wannabes. Following the Supreme Court's landmark ruling removing spending limits on corporations' political donations, those inside the Beltway are expecting businesses across the spectrum--including telecom heavyweights--to kick in record funds to federal candidates.

Indeed, AT&T--the nation's second-largest wireless carrier--ranks as the country's single most generous corporate political contributor, according to detailed figures provided by the Center for Responsive Politics. The carrier sits at the top of the organization's "heavy hitters" list, having donated a whopping $44.2 million to Republicans and Democrats during the past ten years via soft money, political action committees and individuals (and that number only counts federal contributions). Thanks to the Supreme Court's recent ruling, that tally could well balloon dramatically in the coming years.

Other big spenders in the telecom space include Verizon Communications, Microsoft, T-Mobile USA parent Deutsche Telekom, Motorola and others.

According to the Center for Responsive Politics, AT&T's spending during the 2010 election cycle (which is ongoing) splits exactly down the middle between the GOP and Democrats. Most of the rest of the telecom contributors during the period favored Democrats to some degree, with Google's split--fully 70 percent of the company's donations (all from individuals) went to Democrats--the furthest to the left.

Of course, the Supreme Court's ruling likely marks a sea change in the American political landscape. Corporations previously were limited to PACs funded with voluntary and limited contributions from their executives and employees. The court's ruling essentially opens a direct conduit between companies' general treasuries and congressional candidates. But telecom likely will only represent a small portion of the overall pie. According to the Center for Responsive Politics, the telecom industry as a whole donated much less than leading industries such as real estate and healthcare.

Jeffrey Silva, senior policy director for telecommunications, media and technology at Medley Global Advisors, said the nation's telecom players likely will use the court's ruling to their advantage by increasing political spending in an effort to sway key issues, most notably net neutrality. But don't expect anti-net neutrality advertisements on Election Day. "The average person doesn't know about or care about net neutrality," Silva pointed out.

Instead, telecom heavyweights likely will continue doing what they've always done: Donate to candidates whose political leanings align with their own. Translation: Net neutrality proponents may not get the same boost as their ideological rivals. But, as Silva pointed out, U.S. corporations--including telecom firms--generally like to "split the difference" by supporting both sides, thereby ensuring they'll have the ear of whoever wins.

Most of the major donors in the telecom field declined to say whether they would increase their political spending as a result of the Supreme Court's ruling. However, Motorola did say that it would not increase its spending.

So how will the upcoming mid-term elections play out, in light of relaxed spending rules on corporations? Spending may well jump, if companies with the financial wherewithal judge it worthwhile. Thus, voters may well see a barrage of political advertising even greater than in past years.

But I suspect the real winners--aside from triumphant candidates--will be the media companies paid to carry the ads for both the left and the right. And thanks to the growing importance of wireless as an advertising medium, mobile marketers could get a major boost from Election Day. --Mike

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