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Critics, Backers Battle Over AT&T Merger Jobs Claims Critics, Backers Battle Over AT&T Merger Jobs Claims

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TECHNOLOGY

Critics, Backers Battle Over AT&T Merger Jobs Claims

Critics and supporters traded barbs on Tuesday over AT&T’s assertion that its proposed acquisition of T-Mobile USA will result in as many as 96,000 new jobs. 

The jobs claim is one of many issues being weighed by the Federal Communications Commission as it examines whether the proposed merger between the nation’s second biggest wireless carrier, AT&T, and No. 4 T-Mobile is in the public interest. The Justice Department filed a lawsuit in August to block the deal, saying it would concentrate the wireless market and raise prices. 

 

A group of opponents led by Sprint commissioned a study by David Neumark, a University of California economics professor, to weigh the validity of AT&T’s job claims.

Neumark’s study cited three reasons why he believes the merger would end up costing jobs. AT&T has pledged to invest $8 billion in capital upgrades after any merger, but this would still be less than the net capital investments that would come if T-Mobile were to remain a separate company, Neumark said. In addition, he said past AT&T mergers have led to job losses and that AT&T itself has told investors that the merger will result in job reductions. 

“It’s a blatant political strategy to try to justify an anticompetitive merger,” the American Antitrust Institute’s Bert Foer told a panel discussion on Tuesday sponsored by opponents of the merger on Capitol Hill.  

 

Debbie Goldman with the Communications Workers of America, which supports the merger, argued that the study is flawed because it focused on AT&T’s past mergers involving both traditional telephone and wireless companies. She told National Journal that most of the job losses from past mergers were due to cuts in AT&T’s wireline work force. 

Public Knowledge President Gigi Sohn and other merger critics say they would like to see the FCC act on the merger before the end of the year.

So far, the FCC has given little indication of when it may act. It could call a special meeting to vote on whether to approve the deal or whether to refer it to an administrative law judge to weigh concerns about the merger. Jeffrey Silva, a telecom analyst with Medley Global Advisors, said the latter move would be “bad news” for the merger’s prospects.

As for the Justice Department’s case, Attorney General Eric Holder told the Senate Judiciary Committee on Tuesday during an oversight hearing that the department’s antitrust division is prepared to see the case through to the end.

 

"There is a trial team that is in place and they are ready and eager to go to court,'' Holder said.

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