WORLDCOM PLAYS LEADING ROLE IN WASHINGTON LOBBYING, CAMPAIGN DONATIONS

As Washington awoke Wed. to realization that major long distance provider, Internet backbone operator, Web hoster and wireless operator faced possibility of bankruptcy for questionable accounting practices (see separate story, this issue), it also was not lost on many that WorldCom was active player in Washington lobbying scene. WorldCom spent just under $4 million in lobbying alone in 2001, and was 5th- largest campaign donator of all telecom companies. Its political action committee as of May 31 had nearly $2 million on hand for more donations. But on smaller scale, WorldCom also is major backer of various grass-roots lobbying efforts fighting for competitive local exchange carriers (CLECs) and ISPs on Capitol Hill and at FCC, including Voices for Choices, U.S. ISP Assn. and group born only last week, BroadNet. Executives of all 3 of those groups expressed confidence they would be able to continue if WorldCom funding were to dry up.

Many members of Congress receive donations from WorldCom, typically members not particularly close to Bell companies. In this Congress, some of WorldCom’s top recipients include Senate Commerce Committee member Dorgan (D-N.D.), $13,750; House Commerce Committee member Pickering (R-Miss.), a local representative for Miss.-based WorldCom, $12,000; Senate Commerce Technology Subcommittee Chmn. Wyden (D-Ore.), $11,500; House Commerce Committee member Wilson (R-N.M.), $10,000; Rep. Davis (R-Va.), whose district includes WorldCom’s Internet Network Operations Center (formerly UUNet), $8,000; Miss. Sen. Cochran (R), $8,000; House Judiciary Committee ranking Democrat Conyers (D-Mich.), who led House fight against Tauzin-Dingell, $5,000; House Judiciary Committee member Cannon (R-Utah), who champions ISP issues, $4,500; and House Judiciary Committee Chmn. Sensenbrenner (R-Wis.), who has sought to apply antitrust regulation to Bell companies, $2,500. Recently ousted CEO Bernie Ebbers gave $1,000 each to Pickering, Cochran, House Telecom Subcommittee ranking Democrat Markey (Mass.) and Sen. Smith (R-N.H.), while his wife gave $2,000 to Pickering and $27,500 to Republican National Committee.

WorldCom already has given $804,180 to members of Congress and political parties this Congress, 54% to Democrats and 46% to Republicans, ranking it 5th in telecom behind SBC Communications ($1.6 million), BellSouth ($1.5 million), Verizon ($1.32 million) and AT&T ($1.32 million). In 106th Congress, WorldCom gave $21,500 directly to senators ($11,000 to Republicans, $10,500 to Democrats) and $49,000 directly to House members ($28,500 to Republicans, $20,500 to Democrats). Donations above are numbers most recently reported to Federal Election Commission, with some figures compiled by Center for Responsive Politics.

WorldCom’s $3,995,000 spent on Washington lobbying in 2001 was mostly in-house. Largest outside lobbying group was Patton Boggs, with $360,000 received from WorldCom, marginal amount for city’s largest lobbying shop with $52.5 million in 2001 lobbying revenue. PodestaMattoon received $160,000 and had 7 lobbyists on Hill, at federal agencies, and firm indicates it also lobbied Office of President and Vice President. Alvarado & Gerkin received $120,000 to lobby on broadband in House and Senate, mostly fighting Tauzin- Dingell, while Capitol Resources received $120,000. WorldCom’s lobbyist at Capitol Resources was and remains John Lundy, former chief of staff to Senate Minority Leader Lott (R-Miss.). WorldCom alone spent $3.235 million lobbying in 2001. At FCC it pursued issues such as spectrum reform, universal service, access charges, reciprocal compensation, unbundled network elements and cable open access. On the Hill, along with fighting Tauzin-Dingell, WorldCom lobbied on online privacy, Internet gambling, spam, cybersecurity, dot- kids legislation and the R&D tax credit. Figures are from lobbying disclosure forms filed with Senate.

Part of WorldCom’s lobbying effort is in supporting so- called “grassroots” organizations fighting for like causes. One of those groups is Voices for Choices, which is also funded by groups such as ALTS, CompTel, Sprint and AT&T. Voices for Choices executive declined to disclose WorldCom’s funding level or its percentage of the coalition’s total revenue, but spokeswoman said group was confident it would continue if WorldCom doesn’t continue its funding. Another group funded in part by WorldCom is reborn U.S. ISP Assn., which due to involvement of Verizon has chosen to avoid lobbying on broadband issues. Other funders include AOL Time Warner, Cable & Wireless, Earthlink, eBay and BCE Teleglobe. USISPA’s chairman is WorldCom Chief Network Counsel Clint Smith, but we're told Smith may be reassigned within WorldCom, leaving his role in USISPA in doubt. Earthlink Vp- Law and Public Policy Dave Baker is a USISPA dir., and while he refused to concede that WorldCom’s days were at an end, he said their “severe strain… doesn’t change the legitimacy of the issues.”

Just last week new ISP advocacy group emerged. BroadNet boasts memberships from many small ISPs and several state ISP associations, but its 2 primary funders are Earthlink and WorldCom. BroadNet Exec. Dir. Maura Colleton, former WorldCom employee, acknowledged that BroadNet’s “shoestring budget” consists of $5,000 per month apiece from WorldCom and Earthlink, committed through year-end. BroadNet’s focus is lobbying FCC on needs of ISPs to interconnect with Bells, and its completing white paper to be filed with FCC Mon. Colleton was realistic Wed. upon latest news of WorldCom. “It’s a hard day,” she said, but “we are going full speed ahead with BroadNet. These issues are critical for everyone.”