In Senate, McCain has been reliable ally of big telecom firms

by Greg Gordon, Sacramento Bee

John McCain broadcasts his affection for Theodore Roosevelt, but his opposition to regulating the local telephone industry suggests that he may not share the former president's passion for busting huge corporate trusts.

Unlike Roosevelt, who railed against "malefactors of great wealth," McCain's positions frequently have echoed those of the giant regional Bell phone companies, now consolidated as AT&T, Verizon and Quest, the big survivors of the telecommunications wars of the last quarter-century.

McCain's opposition to the 1996 Telecommunications Competition and Deregulation Act, intended to spur competition by pressuring the Bells to lease their lines and switches to competitors cheaply, offers a window into how he might view regulation of other markets as president.

The Arizona senator characterizes his unsuccessful stand against the measure, and his later attempts to thwart its implementation, as in keeping with his commitment to free markets and his maverick positions on behalf of American consumers. He was the only Republican senator to vote against the legislation.

Critics charge, however, that McCain backed an approach to telecommunications that has limited competition and kept prices high. They note that executives of the big three telecom giants and their lobbyists have raised and donated millions of dollars for his political committees.

With McCain on their side, the Bells wound up escaping the stringent sanctions of a 1982 federal court antitrust case that broke up AT&T and the curbs of the 1996 law. They now dominate local and long-distance phone markets.

In two stints as the chairman of the Senate Commerce Committee from 1997 to 2004, McCain proposed legislation and sent tough letters aimed at hindering the Federal Communications Commission from implementing the 1996 law. He even tried to persuade a nominee for FCC chairman not to appeal a court ruling that would have neutered the law. McCain's legislation stalled, and the Clinton-era FCC stood its ground in court.

But watchdog groups and former FCC officials say that McCain had an impact, especially in 1997, when the Clinton administration let him pick Michael Powell, the son of Colin Powell, who would later become President Bush's secretary of state, for a Republican FCC seat.

They charge that later, as Bush's first FCC chairman, Powell undercut the law, leading to the collapse of hundreds of fledgling companies and ensuring the Bells' and cable giants' dominance over U.S. telephone and Internet markets.

McCain campaign spokesman Tucker Bounds said the senator had stated openly that the 1996 law "was flawed and didn't serve consumers, so it is not surprising that he took actions to block its enactment or impede its implementation."

McCain backed Michael Powell "because Powell shared McCain's belief in a free marketplace," Bounds said.

Watchdog groups charge that McCain has been too cozy with the phone giants. Executives of the consolidated Bells, the head of their trade group and their present and former lobbyists have raised as much as $4.25 million for McCain's 2008 presidential campaign, data from the nonprofit groups Public Citizen and Campaign Money Watch show.

More than 60 present and former telecom lobbyists work for McCain's campaign as staffers and volunteers, some in high-echelon posts while on leave from their firms.

Bounds said McCain "has never taken legislative action on behalf of any special interest," including the Bells.

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