AT&T's Expensive Lobbying Failure

There aren't many companies who spend more to lobby the federal government than AT&T.

And to build support for their proposed merger with T-Mobile, AT&T cranked up their already considerable lobbying expenditures. According to the most recent disclosure forms, the company's vaunted lobbying shop has already burned through $11.7 million in 2011, compared to the $15.4 million it spent for all of 2010. AT&T and T-Mobile spent $1.3 million in the second quarter of this year on outside lobbying firms and contracted high-powered DC insiders like Trent Lott and John Breaux to schmooze their former colleagues in Congress.

It was a strategy that has served AT&T and other corporate interests well: flood the halls of power with money and influence. And for the moment, it has failed.

The Justice Department's move to block the T-Mobile merger means that, as a Politico report put it this morning, “the company's master plan showed serious signs of unraveling.” Interestingly, the report also notes that AT&T may have had a little too much faith in its lobbying game:

AT&T has an impressive track record on merger proceedings. Over the past decade, it has cleared high-profile deals, including one with SBC Communications, despite the initial reservations of regulators.

But this time, AT&T's confidence in the deal may have hurt its case.

In fact, AT&T's confidence bordered on arrogance, according to staffers who were in meetings with A&T's lobbyists over the past five months.

One staffer said AT&T was “almost dismissive” of competition concerns that had been raised about the deal.

The ultimate fate of the merger is still up in the air. AT&T has made clear they are going to fight Justice's lawsuit. The FCC, which also must approve the merger, has indicated that they are in agreement with DOJ regarding the deal's potential anticompetitive effects.

Thus far, however, AT&T's bottomless wallet and deep bench of well-connected suits haven't been able to get the job done.