Last week, the Communications Workers of America reiterated its support of the AT&T and T-Mobile merger by pushing back against merger opponents over claims that joining the company and expanding AT&T’s LTE network won’t create jobs. From CWA:
Opponents of the merger have used inaccurate and false comparisons in their jobs numbers, the report found. Opponents include Sprint, which made a failed bid to buy T-Mobile, Public Knowledge, and others. The claim that the merger will eliminate jobs stems from a faulty and convoluted analysis of wireline and wireless employment characterized by “sloppy research and the inability to distinguish between the change in the number of wireline and wireless jobs” in a Sprint-commissioned study, CWA said.
Instead, the CWA report said, the merger will create up to 96,000 new jobs based on AT&T’s commitment to build out high speed wireless broadband to 97 percent of the population, and AT&T’s commitment to bring back a net 5,000 quality wireless jobs to the United States.
CWA’s full merger and jobs report, “The AT&T/ T-Mobile Merger and Jobs: The Real Story,” is available on their website.
In response to the Department of Justice’s move to block the merger of AT&T and T-Mobile, the Communications Workers of America has released a new report on the effect blocking the merger will have. Titled, rather bluntly, “Blocking the AT&T/T-Mobile Merger will Harm Consumers, Communities & the Economy,” the report covers everything from AT&T’s commitment to expand 4G LTE, to the effect the merger will have on much-needed job creation.
The entire report is a must-read, but there are a few points made that are worth highlighting, beginning with the argument that blocking the merger will be good for preserving competition. As CWA states:
“[T]here is no long-term future for a stand-alone T-Mobile as an effective competitor: it has neither the spectrum nor the capital to create a competitive network utilizing the latest wireless technology (called 4G LTE). In January 2011 the CEO of T-Mobile’s parent company, Deutsche Telekom (DT), stated that DT would not provide the capital for T-Mobile’s 4G LTE deployment. T-Mobile also is on a downward trajectory suffering from declining revenue, eroding profit margins and increasing customers defections.”
With Verizon, AT&T, and now Sprint making the shift to 4G LTE technology, the fact that T-Mobile will soon be left behind regardless of the merger continues to be overlooked. And given that only AT&T and T-Mobile are compatible when it comes to network technology, the idea that T-Mobile could simply merge with someone else simply isn’t realistic. From the report:
There are two separate technological family trees that are not easily compatible. GSM based systems have evolved through UMTS, HSPA+, LTE and, the next step, LTE Advanced. CDMA based systems have evolved to EVDO.
• The merger between AT&T and T-Mobile creates technological synergies because each of these companies utilizes GSM and HSPA based networks.
• A merger between Sprint and T-Mobile (these companies were in merger discussions) would have experienced significant technological challenges because the two companies utilize different and incompatible technologies. T-Mobile’s systems are GSM based while Sprint’s systems are CDMA based.
As for AT&T’s ability to expand its 4G LTE network to cover nearly every corner of America — a key point, as it dovetails with President Obama’s State of the Union pledge to bring advanced mobile broadband to everyone — CWA points out such an expansion wouldn’t be feasible without the merger due to capacity and spectrum constraints:
AT&T’s other options could not remotely approach the merger in terms of increasing capacity, utilizing spectrum more efficiently, improving service and expanding 4G LTE deployment… [I]t would take AT&T eight years to obtain and activate the number of cell sites it will obtain from T-Mobile. AT&T also could not depend on a possible federal auction to reallocate spectrum because it is a multi-year process that needs Congressional approval, a FCC rule making, the actual auction and then a period for relocation of incumbent licenses and integration of existing network and equipment with the spectrum — if the bid is successful.
These are just a few of the salient points CWA makes about the merger. There’s much more to be found in the full report, including the effects blocking the merger will have on job creation and efforts to close the digital divide. You should definitely dig in.
With AT&T’s merger with T-Mobile still receiving scrutiny in the Beltway, things are heating up in the advertising world. Since the merger was first announced, AT&T has been touting the benefits of its joining with T-Mobile, including the expansion of AT&T’s 4G LTE network to the vast majority of America. Rival carrier Sprint, meanwhile, has attempted to counteract the merger’s benefits for consumers by hitting hard on the competition angle.
Today, things heated up a notch with AT&T running an ad against Sprint in Washington D.C.. As Shira Ovide of the Wall Street Journal reports:
As AT&T Inc. works to convince regulators and lawmakers on the merits of its proposed takeover of T-Mobile USA, the telecom giant said it is launching an advertising blitz in Washington focused on its original selling point for the deal: better wireless service.
“In case you’re wondering why Sprint is trying to kill the AT&T/T-Mobile merger… It’s all about spectrum,” reads the text of the AT&T ad slated to run starting Tuesday in publications popular on Capitol Hill, such as the Washington Post, Politico and the Hill newspapers.
Sprint has long claimed AT&T’s spectrum concerns are off the mark, which is no doubt why AT&T decided to highlight Sprint’s industry dominance in spectrum holdings. Meanwhile, Sprint is also receiving blowback on the labor front, with the Communications Workers of America — which has a good relationship with AT&T, given the telecom’s union-friendly stance — taking out ads of its own with the headline:
Sprint — a creator of American jobs? We don’t think so.
Images of the ads are available after the jump.
Speaking of the merger, on Monday the Communications Workers of America (CWA) released a new paper on the positive effect AT&T’s merger with T-Mobile will have on jobs. From the official press release:
The research element of the compilation includes the study by the Economic Policy Institute that concludes the merger will create 96,000 jobs over the next seven years, work made necessary by the billions of dollars in capital investments planned for building out America’s 4-G broadband network.
The real world experience includes the fact that AT&T employees represented by CWA are protected by contract language that says they cannot be laid off if their work has been off-shored, as well as the fact that there has never been a merger-related layoff of a CWA covered worker in 17 previous mergers and/or acquisitions by AT&T.
You can download and read CWA’s paper here.
As the California Public Utilities Commission continues to examine the proposed merger of AT&T and T-Mobile, the Communications Workers of America has restated its support for the merger. Via Rajani Baburajan of Financial Tech Spotlight:
“What we are telling the PUC today is this: At the end of the day, an AT&T/T-Mobile merger will accelerate high-speed broadband buildout to more Californians, it will positively impact consumers and it will create jobs,” said James Weitkamp, VP of CWA District 9, in a statement.
As executives from AT&T, T-Mobile, Sprint and various consumer and activist groups convene in the Senate today, the Communications Workers of America has released a research paper outlining the benefits of AT&T joining with T-Mobile. The full paper is available on their site (PDF), but here’s an excerpt (bolds in original):
On March 20, 2011, AT&T announced an agreement to purchase T-Mobile USA. This development did not come out of the blue: Deutsche Telekom (DT) was actively considering a sale to either Sprint or AT&T. The alternative to the AT&T merger was not a standalone T-Mobile but a merger with Sprint. Thus, a comprehensive assessment of the impact of the AT&T/T-Mobile merger should include a comparison with the only real alternative that was being considered seriously: a Sprint/T-Mobile merger. As shown below, consumers, workers, and communities will be better served by a T-Mobile merger with AT&T than one with Sprint.
Josh Smith of the National Journal reports the Communications Workers of America — the country’s largest telecom union — has come out strongly in favor of AT&T joining forces with T-Mobile:
T-Mobile’s current owner, Germany-based Deutsche Telecom, was looking to dump the American company because it couldn’t grow its subscriber base, according to CWA. “T-Mobile was going to be sold to either AT&T or Sprint,” the union argues. “AT&T is the better option for consumers and workers.”
CWA makes the case that Sprint is in no financial position absorb the stress of a merger, while AT&T is stronger, has a better track record with mergers, and uses more compatible technology.
Perhaps the crux of the union’s support, however, lies in labor positions. CWA accuses Sprint of taking “strongly anti-union” positions and shipping jobs overseas, while AT&T remains neutral.