T-Mobile’s lobbying spending may be paying off

Introduction

T-Mobile, the nation’s No. 4 wireless carrier, is keeping up the investment in Washington lobbying that’s helped the upstart compete against its far bigger rivals by buying companies and acquiring better frequencies.

T-Mobile, which is only a fraction of the size of its giant rivals AT&T and Verizon, began bulking up on Washington muscle after AT&T announced it planned to buy its smaller rival in 2011 and then doubled down when the Justice Department blocked the deal. The lobbying investment is intended to help T-Mobile turn telecommunications policies to its favor.

T-Mobile — which has also cut prices to better compete — spent $5.2 million on lobbying in 2013, according to the latest filing in the Senate’s Lobbying Disclosure Act Database. That’s almost unchanged from the prior year but represents a 74 percent increase from 2010.

Despite the increased spending, T-Mobile is not in the class of its bigger rivals. No. 2 wireless carrier AT&T spent $15.9 million on lobbying in 2013, and Verizon Communications Inc., the largest, doled out $13.4 million.

T-Mobile’s sharp increases began in the second quarter of 2011, shortly after AT&T announced it planned to buy Deutsche Telekom AG’s 67 percent ownership stake in T-Mobile for $39 billion. In August 2011, the Justice Department filed a lawsuit to block the purchase, arguing that it “would substantially lessen competition for mobile wireless telecommunications services across the United States.” By December, AT&T gave up fighting the department and dropped the deal.

That meant T-Mobile had to upgrade its inferior network if it wanted to compete with the giants and attract new customers. It needed help in Washington to gain Federal Communications Commission approval to purchase other wireless companies and ensure new policies make it easier for the smaller carrier to buy more spectrum.

In the first quarter of 2012, immediately after AT&T ended its bid, T-Mobile spent $1.1 million on lobbying, a 53 percent increase from the first quarter of 2011. The spending continued to go up in subsequent quarters.

“My guess is they see this as a good investment, and they have to double down to fight the good fight across the board,” said Jeff Silva, senior policy director for telecommunications at Medley Global Advisors in Washington, D.C.

Silva said the investment has paid off. The FCC and the Justice Department last year approved T-Mobile’s purchase of MetroPCS, which boosted network speeds. T-Mobile has also been able to close some deals to gain more spectrum and is currently seeking approval of the purchase of more frequencies in a deal with Verizon Wireless.

“It appears to me, when looking at everything that has transpired since the merger was blocked, that increased lobbying has been a solid investment and a good use of their money,” Silva said. “They have scored a series of victories and gained ground in the policy arena since that point.”

T-Mobile’s lobbying prowess will be tested this year, as the FCC writes rules for a first-of-its-kind auction of frequencies that are currently licensed by TV broadcasters. The spectrum, in the 600 MHz band, is highly desirable because it travels long distances and penetrates buildings better than higher frequencies. T-Mobile wants the FCC to cap the amount of frequency that AT&T and Verizon can buy.

“I suspect that they are going to keep their foot to the pedal on lobbying this year,” Silva said.