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Into Thin Air

Lobbyists spent a record $15 million on advertising during the 2005 session and another $12 million in 2007 — but less than $1 million this year. What happened?

AUSTIN — Through all the debate, intrigue and jostling during the last legislative session, something familiar was missing: A lobby-funded advertising war.

The lobby spent just $740,000 from January to June on television and other media intended to influence legislation and regulation — a fraction of what it invested during years past, state ethics records show.

Contrast this year with 2005 and 2007, when high-stakes debates over telecommunications and energy prompted industry lobbyists to spend a combined $27 million for ads while lawmakers were in town.

The 2009 session — with issues like voter identification, stimulus funding and higher-education policy — just didn't force them to the airwaves.

"It's deep pocket people and big, hard fights — that's typically where you see the media spending," said Bill Miller, an Austin-based political consultant and lobbyist with HillCo Partners.

This session, the biggest media spender was Tim Graves, a lobbyist and executive director of the Texas Health Care Association, a group that advocates for improved long-term care for the state's elderly.

Graves spent $440,000 for television, print and radio ads focused on nursing homes, which the association believes are "chronically underfunded" in the state's Medicaid program. With the stimulus money offered by the federal government, Graves hoped to increase spending on nursing homes by 12 percent, or about $250 million, to make up for previous lean budget years. The final increase was smaller, but still an improvement, he said.

"Obviously, the target was the folks at the capitol, but also folks around the state," he said of his advertisements. "It's a good way to explain our story."

Of course, advertising is just one method for industry and interest groups to get their messages heard. The lobby spent more than $3 million on the traditional ground game during the past session — food, drinks, entertainment and gifts, among other categories regulated by the Texas Ethics Commission. (See our searchable lobby database).

The strategy of targeting the public — to influence lawmakers and improve an industry's image in the public — is also nothing new in Texas. Lobbyists spent about $20 million on media during sessions from 1993 to 2003, for example.

But the 2005 session set the bar for costly ad campaigns. The $15 million spent that session came mostly from the battle between SBC, now AT&T, and the Texas Cable Association. The terrain was the future of the residential video market.

With its core land-line phone and long-distance business in decline, SBC wanted to get into the home television market, asking lawmakers to allow the company to bypass the traditional franchise agreements that cable companies negotiated with municipalities over the years. At the same time, cable companies wanted to expand their services to the local phone business.

The battle got nasty. The cable industry, which for years built out a statewide network and gave away channels for public-access programming under the previous rules, felt lawmakers were giving SBC an unfair competitive advantage. Ads depicted smoke-filled rooms and lawmakers making deals with SBC lobbyists. SBC responded with its own ads but some cable companies refused to air them, so the company turned to newspapers.

"It's all about cable wanting a level playing field," said Christine DeLoma, communications director for the Texas Cable Association. "We don't feel that's what we have."

Ultimately, SBC got the legislation it sought. Later that year it re-branded as AT&T, whose top lobbyist didn't respond to an interview request. The company has since launched the U-Verse television service to compete with cable.

Two years later, energy generation prompted another air war.

The private equity group seeking to acquire TXU in 2007 spent $11 million on an advertising campaign to sell its plan to Texans and lawmakers, who were skeptical of the deal and of a previously announced plan to build 11 coal power plants.

The group, Texas Energy Future Holdings, used television and print to tout its new board members and its plans to reduce the number of coal plants to three. The ads also promised that electricity rates would be cut.

"We really had to go out to the public and explain the merits of the deal," said Jeff Eller, vice chairman of Public Strategies, Inc., who helped write the campaign.

Critics continued to view the deal skeptically, believing it bad for consumers and potentially risky financially. But the company got its wish: the acquisition occurred without lawmakers stepping in.

"There was more money flowing than I could have fathomed to make sure that they got a warm reception from Texas," noted Geoffrey Gay, an Austin lawyer and energy expert who opposed the deal.

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