Justice Dept. blocks AT&T/T-Mobile merger, unions assail move

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The Department of Justice announced it would sue to block the proposed $39 billion merger between cell phone giants AT&T and T-Mobile USA, prompting swift criticism by AT&T and unions, pitting the unions against traditional allies like consumer groups, which hailed the move.

The DOJ argued that the proposed deal, which would join the nation's second- and fourth-largest wireless phone carriers, would result in higher prices and less product choice. Consumer groups and others argue it would also mean loss of jobs.

But Communications Workers of America vigorously argued against that idea, charging job cuts and other casualties from the loss of competition are "just plain wrong."

"The proposed AT&T/T-Mobile merger is good for workers and good for job creation," said CWA Telecommunications Policy Director Debbie Goldman, citing data that job loss at AT&T has been on the landline side with the reduction of customers. The company has added jobs on the wireless side, the union statement said.

CWA represents the only unionized wireless workforce in the country at AT&T. T-Mobile has been strongly opposing any attempts to unionize.

If the deal goes through, T-Mobile would become part of AT&T, which has a neutrality clause in its contract with the Communications Workers. That would open the way for CWA to organize T-Mobile employees without facing the constant opposition - and law breaking - it now receives from current T-Mobile management.

"In today's sinking economy, where millions of Americans are looking for work, DOJ has filed suit to block a merger that will create as many as 96,000 quality jobs," CWA said in a statement.

"In a nation where workers' rights are routinely violated, as occurs everyday at T-Mobile, DOJ apparently believes workers should be on their own instead of having a fair choice about union representation. DOJ's action would put good jobs and workers' rights at the bottom of the government's priorities."

In contrast to the sharp criticism, consumer groups applauded the DOJ move.

"This announcement is something for consumers to celebrate," said Parul Desai, the policy counsel for Consumers Union.

"We have consistently warned that eliminating T-Mobile as a low-cost option will raise prices, lower choices and turn the cellular market into a duopoly controlled by AT&T and Verizon."

CWA argues that T-Mobile is not planning to invest in the American market, opting to focus on the Europe. They say the merger with AT&T would build hi-speed networks in under-served areas.

But even that claim is in doubt.

In a recent email, ColorofChange.org said, "Thanks to a letter filed by AT&T's attorneys that contained confidential information, we now know with certainty that AT&T could easily upgrade its wireless networks without buying T-Mobile - it has simply chosen not to do so."

But many say despite government opposition to the merger, it's not dead. Indeed, the DOJ left the door open to further negotiations with AT&T to address their concerns.

Photo: Dan_H // CC 2.0

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  • This is one of those reasons why the average working person, who isn't part of the privileged few in a labor union, doesn't jump to support the labor movement. It's absolutely clear that the merger of two huge corporations would be bad for the average person. Competition goes down, prices go up - remember, t-mobile, which was to be swallowed by AT+T, has some of the lowest prices, meaning that as the company gets subsumed and contracts run out, prices go up. How is this in the interests of "the workers"?

    Also, the bullshit story that CWA is spinning, that somehow the merger of two companies creates jobs, is quite obviously false. Who believes this? Does even CWA believe this nonsense? Will the benevolent overlords at AT+T decide that they will keep all the administrators, all the call center staff, all the workers at the t-mobile store directly across the street from the AT+T store?

    Utter nonsense from CWA.

    Posted by GW, 09/02/2011 12:40pm (3 years ago)

  • When unions are in favor of corporate consolidation, it's time to find another union.

    Posted by Alan, 09/02/2011 12:39pm (3 years ago)

  • This is a tough call--what do progressives say about this? I'm a Credomobile user, and Credo has been campaigning against the merger--but CWA has been fighting for it. I frankly don't know what side to take on this. Any comrades have any ideas?
    P.S. I just got an Android smartphone on Credo in preference to getting an iPhone on AT&T. I hope I did the right thing.

    Posted by Hank Millstein, 09/01/2011 8:51pm (3 years ago)

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