CWA: Today’s Jobless Report Shows Real Need for Job Creating Mergers Like AT&T/T-Mobile

Friday, December 2, 2011

Contact: Candice Johnson or Chuck Porcari, CWA Communications, 202-434-1168, cjohnson@cwa-union.org and cporcari@cwa-union.org

Washington, D.C. – Even with the slight improvement in today’s jobless report, the economy continues to need real stimulus and support to trigger the quality employment that workers need. The AT&T/T-Mobile merger, with its investment of $8 billion in additional capital for broadband buildout, can spur that stimulus, bringing a much needed high speed network and accompanying economic development to an additional 55 million Americans, covering 97 percent of the country.

Our government should address anti-trust concerns as part of the AT&T/T-Mobile deal and move to seize the real opportunity of increased jobs, investment and economic development. The AT&T/T-Mobile merger will be a real source of quality jobs, returning outsourced jobs from Asia and supporting economic development, especially in rural areas.

The FCC, in its release of a staff report on the merger, should have considered the following:

The report argues that the merger will result in fewer jobs for T-Mobile workers. This ignores job guarantees for current T-Mobile employees that AT&T has committed to provide as part of the merger. AT&T committed to retain all call center workers at both companies who are on payroll at the time of the merger; this is the largest employee group at either company. AT&T also pledged to bring back 5,000 jobs now overseas.

The report assumes that the status quo will continue if the merger does not go forward, and that employment at T-Mobile will continue at current levels. That assumption is unsupportable. Deutsche Telekom, T-Mobile’s parent, has made it clear, in congressional testimony, directly to the FCC, and in numerous public statements, that it will not continue to invest in T-Mobile USA. A stand-alone T-Mobile will not make capital expenditures of billions of dollars, not while it is experiencing a declining customer base. And T-Mobile has chosen not to risk building a 4G LTE network. T-Mobile jobs will decline.

The report ignores the proposed $8 billion of additional expenditure by AT&T for broadband buildout that will create as many as 96,000 jobs, some directly related to the merger and others to be created as a result of needed manufacturing, installation and support industries.

The FCC claims that a Universal Service Fund (USF) investment of $4.5 billion in each of five years will create up to 500,000 jobs. Yet the staff report dismisses an economic analysis that demonstrates that AT&T’s investment of $8 billion will create 100,000 direct and indirect jobs. Using the FCC USF methodology, the $8 billion investment (1/3 of the USF total spend) by AT&T would create up to 225,000 jobs.

Residents in rural communities and urban neighborhoods are stuck in a digital divide that will not be closed without a major investment in broadband build-out of the scale that AT&T has proposed. The FCC’s USF program alone will not be able to fulfill the mandate identified by President Obama in his State of the Union Address to close this digital divide. Instead the report assumes that competitive forces will require AT&T to build out. Market forces alone have failed to deliver high speed broadband to all our communities. The report dismisses, without evidence, the AT&T merger-based commitment to extend high speed coverage to 55 million Americans.

High speed broadband is critical to economic development, especially in rural areas. Buildout on the scale pledged by AT&T means new opportunity for business and jobs in broad areas of the country where now there is little broadband access.

Jobs, employment and workers’ rights matter. We hope that the government will not overlook important opportunities for employment, investment and economic security.