New Information on AT&T/T-Mobile Merger Proves It's About Eliminating Competition, Jobs

[Source: AlterNet, by Sarah Jaffe, August 16, 2011]

AT&T claims its purchase of T-Mobile will create jobs - but history shows it's far more likely to eliminate them.
 
The announcement that AT&T wants to buy T-Mobile was met with consternation among progressive groups. The further consolidation of telecom companies would narrow the range of options for customers and increase the power of a massive corporation that throws political donations around like confetti.

Now a document [PDF], accidentally posted on the Federal Communications Commission's website by a law firm working on the $39 billion deal, shows the extent to which the stories told by AT&T about the proposed merger just aren't holding up.

Karl Bode at DSLReports.com explains that though AT&T claims to need T-Mobile to expand its high-speed data coverage from 80 percent to 97 percent of the population, in fact, T-Mobile's services are mostly redundant for that purpose. Meanwhile, the estimated cost of expanding that 17 percent is only $3.8 billion, while the cost of buying T-Mobile is far higher. “While the $39 billion price certainly delivers AT&T customers, equipment, employees, and spectrum, most of T-Mobile's network replicates AT&T's existing resources in major markets, and T-Mobile's network is significantly less robust in rural markets where AT&T would want to expand,” Bode wrote.

And the biggest problem with that redundancy?

It makes it increasingly likely that the merger will eliminate thousands of jobs, rather than create them.

Dave Saldana at Other Words noted that T-Mobile executives have already acknowledged preparing severance packages for “the upwards of 20,000 workers who likely will find themselves expendable in the merged mega-corporation.” And Craig Aaron, president and CEO of media reform organization Free Press, which has led the fight against the merger, said in a statement:

“AT&T has already told Wall Street it plans to cut investment by $10 billion if the deal goes through. And there has never been a merger that didn't lead to job cuts—or synergies, as AT&T calls them. At a moment when Washington claims to be all about job creation, policymakers are staring at a deal that will likely push another 20,000 workers into the unemployment line.”

T-Mobile stores and call centers will likely be closed, their employees laid off. Employees in states like Texas, where Governor Rick Perry claims an “economic miracle” through conservative governance and takes credit for thousands of jobs. Saldana notes that hundreds of Texans work at T-Mobile call centers in Brownsville, Frisco and Mission, but Perry doesn't seem concerned about their jobs. Perhaps it's the $692,195 in campaign donations from AT&T that swayed him. (And as Perry kicked off his presidential campaign this weekend, we can assume there'll be more coming.)

The lone bright spot in the mega-merger plans was the thought that maybe AT&T, the lone major cell-phone provider with a union workforce, would be more willing to accept the T-Mobile workers' drive to join a union. Deutsche Telekom, T-Mobile's parent company, had good relations with its union in Germany, but here in the U.S. it's been a different story. The T-Mobile workforce has faced an aggressive anti-union campaign from management as they attempt to organize, and AT&T's neutrality in union elections has been a boon to its workers.

As Josh Eidelson wrote:

“...no progressive group is pushing the merger more strongly than the union that represents AT&T workers, the Communications Workers of America (CWA). King’s reporting also suggests that unions and civil rights groups backing the merger took their stand after outreach by CWA. CWA says it supports the merger because it is confident that the consolidation will give former T-Mobile workers the opportunity to unionize without being subject to the fear tactics that T-Mobile management has employed in the past to stymie organizing efforts.”

But if massive layoffs are already in the works, the prospect of more union jobs is offset by the specter of fewer jobs, period, in an economy where workers can ill afford to take another hit.

The choice for American workers shouldn't be bad jobs or no jobs, limited job security or the elimination of jobs entirely. Still, the choice also shouldn't require expanding corporate power to expand worker power.

The tension between telecom corporations and their workers is heightened right now, as 45,000 Verizon wire-line workers strike this week. Verizon's wireless division is non-union, and as it expands its wireless service, it claims that cutbacks in worker benefits on the landline side are necessary — even as profits grow. It is more clear than ever that the goal of expanding unions in the telecommunications industry is a deeply important one. But supporting a mega-merger that will result in the elimination of 20,000 or more jobs isn't the way to do it.

Read AlterNet's coverage of the AT&T and T-Mobile merger:

It's Time to Break Up AT&T, Verizon, Comcast, Time Warner and the Rest of the Telecoms


As AT&T and T-Mobile Edge Closer to Merger, What's In It For Customers? Very Little


The Secret $8 Billion Wireless Scam: How AT&T, T-Mobile and Verizon Game the System


Shills R Us: Organizations That Get AT&T Cash Endorse its Mega-Merger with T-Mobile

You can also learn more at freepress.net, and join its campaign to stop the merger here.