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Rep. Inslee Worried AT&T Merger Will Kill Jobs Rep. Inslee Worried AT&T Merger Will Kill Jobs

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Congress

Rep. Inslee Worried AT&T Merger Will Kill Jobs

July 15, 2011

Rep. Jay Inslee (D-Wash.) wrote to the chief executives of AT&T and T-Mobile on Thursday to question whether the proposal to combine their companies would cost jobs.

T-Mobile's U.S. headquarters in Bellevue, Washington are just outside Inslee's district. He said his constituents have contacted him with concerns about the merger. "With Washington's 9.1 percent unemployment rate, we can ill afford to lose the more than 3,300 jobs T-Mobile maintains in Washington," he said in a letter.

Inslee homed in on an AT&T estimate that combining the two companies would save $10 billion through cuts to support and general and administrative expenses. He requested a "detailed explanation" of this number, "including the job loss estimate used to calculate this figure, both in headquarters organization and elsewhere."

Inslee also questioned whether prices will rise for T-Mobile customers who have unlimited data plans, unlike AT&T's subscribers who submit to usage caps.

Inslee's other concerns included whether AT&T really faces a spectrum shortage as it claims, whether the proposed consolidation will limit choice in the device market, and whether the merger will affect prices and choice in the market for wireless backhaul, the crucial landline connections wireless carriers largely purchase from AT&T and Verizon.

Inslee, a member of the Energy and Commerce Committee, is a longtime critic of the telecom industry in part due to his ardent support for net neutrality regulations.

AT&T has acknowledged that the merger could lead to some job losses, but says its plan to invest $8 billion in its wireless network over the next seven years will create jobs.
The investment would bring wireless broadband to 97 percent of Americans, the company says.

"We have a metric that every billion dollars results in 7,000 new jobs, so I think that's bringing new jobs to the economy, bringing new jobs to the country, extending a critical infrastructure to the country, and I think it's good for the overall economy," AT&T executive Ralph de la Vega said in a CNBC interview earlier this year.

The merger has been endorsed by the Communications Workers of America and other major unions, which see the combination as a boon to the labor movement since AT&T supports a unionized workforce.

Tim McKone, AT&T's executive vice president of federal relations, said, "We have received the letter and we look forward to responding to Congressman Inslee and discussing the tremendous benefits this merger will bring to consumers across the United States."

The $39 billion deal is under review at the FCC and the Justice Department. It is expected to face additional congressional hearings this fall.

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