Investors Slam Comcast For Lack Of Lobbying Transparency
from the fat-man-behind-the-curtain dept
While we think we have a solid grasp on how much companies spend on lobbying and influence peddling, we actually have no idea. Case in point: while a company like Comcast may disclose its overall spending on “lobbying” (as defined as visiting DC to speak to politicians in a bid to shape policy), there’s a universe of other influence peddling it’s not at all transparent about. For example when AT&T and Comcast wanted the FCC to kill net neutrality rules, both paid a long list of legitimate and sometimes shady groups to express support for the move, even if that support ran in stark contrast of the interest of their constituents.
Hand in hand with “astroturf” and other efforts, companies often pay a long list of consultants, academics, think tankers and others to parrot support for what, quite often, is anti-competitive and anti-consumer policy positions. For example, paying an ex-politician to write an op/ed supporting the death of net neutrality isn’t strictly “lobbying,” but it’s influence peddling. Yet such efforts aren’t usually included in many companies’ financial disclosures. Participation in proxy trade organizations and state-level lobbying often lacks the same transparency as standard “federal lobbying” disclosures.
Some Comcast investors have apparently grown tired of this lack of transparency. In a recent letter to the company, an investment group dubbed Friends Fiduciary demanded greater transparency into the company’s lobbying practices, arguing that failure to do so is actively harming the company’s reputation:
“Comcast’s lack of lobbying transparency perpetuates its negative public image and could fuel regulatory backlash or contribute to the rise of municipal broadband, potentially threatening company profitability. In a highly regulated industry providing essential services such as telecommunications, we maintain that careful consideration of reputational risk becomes even more crucial.”
The group is quick to single out Comcast’s disingenuous “support” for net neutrality–and its opposition to community broadband–as examples of how the company is actively harming its overall reputation (while inviting an inevitable post-Trump-era regulatory backlash) and therefore its overall corporate value:
“Comcast’s lack of lobbying transparency perpetuates its negative public image and could fuel regulatory backlash or contribute to the rise of municipal broadband, potentially threatening company profitability. In a highly regulated industry providing essential services such as telecommunications, we maintain that careful consideration of reputational risk becomes even more crucial. Municipal broadband has drawn bipartisan support, especially in conservative areas.
More than 750 communities in the US have decided to operate their own networks. As one article puts it, “Our desire for better broadband, and our collective disdain for Comcast, tends to be one of the few things capable of bridging the partisan divide.” Comcast’s consistent low rankings in the areas of trust and citizenship speak to the potential for its lack of transparency to impact its future prospects.
Not too surprisingly, Comcast says the company isn’t keen on bringing more transparency to its lobbying expenditures, claiming doing so would be too expensive and time consuming:
“Because the information that this proposal seeks to be disclosed is generally publicly available in appropriate detail, implementing this proposal would require us to incur unnecessary expense, would divert management attention away from our primary business activities and would raise potential competitive concerns,” Comcast said.”
Of course most activist-leaning investor proposals like this one usually struggle to get shareholder approval. After all, there’s a lot of money to be made by natural monopolies and regulatory capture. When you’re happily enjoying tepid, rubber stamp regulators and little to no real competition in most of your markets, what incentive do you have to actually engage in more ethical, transparent behavior? Any real progress on this front needs to come via broader lobbying disclosure reform, something lobbyists often put an end to before it can gain any real traction.