ATandT-T-Mobile Merger Job Claims Fuel Bitter Debate Over Antitrust Suits

By Wayne Rash  |  Posted 2011-11-09

ATandT-T-Mobile Merger Job Claims Fuel Bitter Debate Over Antitrust Suits

WASHINGTON - The steady drumbeat of advertisements by AT&T claiming huge job growth if the merger with T-Mobile is allowed to go through is impossible to escape in Washington.

The ads appear daily in everything from newspapers to bus signs to broadcast commercials. Each time, the claim is the same-if AT&T is allowed to acquire T-Mobile, it will result in 96,000 new jobs, plus 5,000 jobs brought back to the U.S. from overseas. The ad seems to imply that AT&T will help spur job growth in the struggling U.S. economy to an extent that even the government can't manage.

Of course, if you read the fine print that accompanies these ads, you'll see that most of those numbers are highly speculative, but the ads trumpet them nonetheless. Now, an economic study, sponsored by mobile competitor Sprint but carried out by David Neumark, professor of economics at the University of California, Irvine, suggests otherwise.

The study says that contrary to its claims, AT&T's merger with T-Mobile will almost certainly result in the loss of thousands of jobs as redundancies are eliminated, staff streamlined and costs reduced. The Neumark study claims that previous AT&T mergers have resulted in significant job losses and that in the period leading up to the merger, AT&T was already shedding U.S. jobs. The study also noted that during the same period T-Mobile was adding jobs, a trend the study indicated would be reversed after the merger.

All of this was presented at a high-profile news conference Nov. 8 in the new Capitol Building Visitors Center. The media event also included representatives from the Media Access Project (MAP), a public interest group opposing the merger that is trying to get AT&T's advertising dropped by media outlets because it is, the group claims, not truthful.

AT&T, in response to the MAP claims, has said that the company has a First Amendment right to run those commercials. Currently, MAP has approached one television station in Washington, the highly rated CBS affiliate WUSA-TV, and formally requested that the station stop carrying the ads. There's no indication of how the television station plans to respond.

For its part, the supporters of AT&T also had their own news conferences. The Communications Workers of America released a study of its own claiming that AT&T really will manage to come up with 96,000 new jobs. The CWA is backing the merger because T-Mobile isn't unionized, and if the merger happens, the CWA is counting on signing up those new employees as union members, assuming they still have jobs after the merger.

Adding to the day's merger media madness, think tank Tech Freedom presented a discussion by George Mason University professor Josh Wright about the AT&T-T-Mobile merger.

Attorney General Says DOJ Ready to Proceed With ATandT Case

Wright did not make his remarks available to the press, but in the past, he has been a harsh critic of the U.S. Department of Justice's antitrust suit seeking to stop to merger. He has also criticized the antitrust lawsuits of Cellular South and Sprint.

All of this was happening while U.S. Attorney General Eric Holder was testifying before the Senate Judiciary Committee where he said that the DOJ was "ready and eager to go to court" in the antitrust suit against the AT&T-T-Mobile merger. He also said that his department doesn't file suits it doesn't plan to take to trial. Holder was trying to put speculation to rest that the DOJ was looking for a settlement with AT&T.

Meanwhile. AT&T is pushing back the anticipated closing date for the acquisition of T-Mobile.

If this sounds like a lot of activity in one day for an antitrust suit that's not going to trial until February, well, it is. The reason for all of this activity is visible on the surface in the form of those ubiquitous advertisements by AT&T that the merger will somehow magically add 100,000 new jobs once it happens. But beneath the surface, there's a lot going on. The Attorney General is under pressure by some Republican lawmakers to resign, although not because of the merger.

But many of those same Republican members of Congress are also pressuring him to drop the antitrust lawsuit against AT&T. There is some indication in the rumor mill that the GOP is making it seem as if dropping the AT&T merger would involve some sort of quid pro quo in which those same members of Congress might go easy in its investigation of the "Operation Fast and Furious" scandal which involves the Department of Alcohol, Tobacco, Firearms and Explosives, a DOJ agency. During this sting operation, ATF facilitated illegal gun sales to suspected Mexican drug cartel members as a way to build cases against these criminal organizations.

But despite the fact that such a thing as the Republicans going easy on Holder for any reason is sheer fantasy, the idea is gaining traction in some circles in Washington. So, as a result, all sides brought out their big guns for the day Holder was testifying before his Senate oversight committee.

Will all this somehow change the direction of the antitrust action, or anything else for that matter? Of course not. The Neumark report has been out since August; the wildly inflated job claims have been public nearly as long. What's really going on is an attempt to influence the undercurrent of political pressure, pro and con, that's building up in advance of the actual hearings next year. It's also clear evidence that AT&T has millions of dollars saved up to spend on political pressure and it won't be shy about using it. 


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