Municipal Government

Justice Dept Blocks AT&T/T-Mobile Merger

October 25, 2011
By Marc Bussanich, LaborPress City Reporter

The Communication Workers of America (CWA) is supporting the AT&T/T-Mobile merger because it’s about jobs, said Chuck Porcari, a spokesman for CWA Communications. “AT&T has pledged to bring back 5,000 call center jobs if the merger is allowed to go through,” noted Porcari.
 
But the Department of Justice (DOJ) filed a civil antitrust lawsuit to block the proposed $39 billion acquisition by AT&T of T-Mobile USA Inc., claiming that the “transaction would substantially lessen competition for mobile wireless telecommunications services.”
 
Gia Pomona, a spokeswoman for DOJ, said that the agency initiates antitrust lawsuits when a proposed transaction will negatively impact consumers. “We believe the proposed merger will lead to higher prices and fewer innovative products for American consumers,” Pomona noted.
 
But Porcari emphasized that T-Mobile’s parent company, Deutsche Telekom, has indicated it has no plans to invest in its wireless network in the U.S. “T-Mobile’s parent company’s comments clearly indicate that T-Mobile is leaving. Rather than let T-Mobile exit the U.S. market, AT&T’s acquisition would mean that T-Mobile’s U.S. workforce could choose union representation.” But out of approximately 40,000 workers, 20,000 could potentially lose their jobs as a result of the merger, acknowledged Porcari.  
 
Porcari also mentioned that if the AT&T proposed merger is blocked, Sprint can then move in to acquire T-Mobile, which would not necessarily be good for the workers of a Sprint/T-Mobile tie-up because “Sprint has shown that it is not and has actively opposed workers having a voice in the workplace.”
 
In contrast, AT&T has always displayed neutrality towards workers organizing at AT&T worksites, according to Porcari. “AT&T has merged with over a dozen companies over the past 20 years, and each time AT&T has shown neutrality.”
 
AT&T’s Chairman and CEO, Randall Stephenson, testified before Congress and “told the congress members that he would look forward to working with the union to ensure the success of the merged companies,” noted Porcari.
 
Art Brodsky, Communications Director for Public Knowledge, a public-interest advocacy organization, said he doesn’t believe that the organizing opportunities for CWA that could emerge from the merger would offset the negative impacts to consumers. “Union members are consumers too, and they will see their phone bills go up if the merger goes through.”  
 
But as the economy remains dire and President Obama’s jobs bill has yet to pass congress, the opportunity to create and expand jobs now “is the lens CWA sees through,” noted Porcari. President Obama, during his State of the Union address earlier this year, called for a National Wireless Initiative “to make available high-speed wireless services to at least 98 percent of Americans.”  
 
In September, the CWA released a report on how blocking the merger would “harm consumers, communities and the economy.” In particular, the report highlights that the country’s vast rural areas and minority groups would especially benefit from the merger.
 
“The post-merger AT&T would expand access to 4G LTE [the fastest wireless technology] to an additional 17 percent of the population (about 55 million people) in less populated areas,” the report states. The report continues, “African Americans and Hispanic Americans, who outpace whites in their adoption of wireless Internet connections, would have a particular interest in the expansion and upgrading of wireless networks.”
 
Because of these potential benefits to two of the country’s largest national groups resulting from the merger, as explained in the report, prominent organizations like the NAACP, the National Urban League, the Alliance for Digital Equity and the Hispanic Group support the proposed merger.

October 25, 2011

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