T-Mobile, MetroPCS Deal Approved By FCC, but With Jobs Concern
T-Mobile's proposed merger with MetroPCS has received the approved of the Federal Communications Commission and, moreover, with a tone that couldn't be further from the FCC's response to 2011's proposed joining of T-Mobile and AT&T.
"With today's approval, America's mobile market continues to strengthen, moving toward robust competition and revitalized competitors. ... Today's action will benefit millions of American consumers and help the U.S. maintain the global leadership in mobile it has regained in recent years," FCC Chairman Julius Genachowski said in a March 12 statement.
Consumer interest group Public Knowledge also applauded the deal, which is expected to help the now fourth- and fifth-largest U.S. carriers better compete against the far-larger market leaders Verizon Wireless and AT&T.
"We're glad the FCC has approved the merger of T-Mobile and MetroPCS. To counter the power of AT&T and Verizon, the market needs more strong, national competitors. ... The improved competitive landscape will benefit consumers," John Bergmayer, senior staff attorney at Public Knowledge, said in a statement.
Bergmayer added that while it "would be better if the wireless market was not so distorted that the loss of a competitor is a win for competition," things being what they are, "this particular merger is in the public interest."
In a joint statement, the two carriers expressed their delight with the speed with which the FCC approved the deal.
T-Mobile CEO John Legere said the merger will benefit customers, shareholders and the industry.
"Our combined company will have the products, spectrum, scale and resources to shake up this industry and deliver an entirely new wireless experience," said Legere.
The carriers announced Oct. 3, 2012, that the deal had been approved by the boards of MetroPCS and T-Mobile parent company Deutsche Telekom. DT will hold a 74 percent share of the new company and pay MetroPCS $1.5 billion in cash.
On March 5, the Department of Justice gave the deal a green light, moving it forward to be considered by the FCC, the Committee on Foreign Investment and MetroPCS shareholders. The prepaid carrier's shareholders are scheduled to vote April 12.
For all the benefits of the deal—customers can expect a stronger network and better devices through T-Mobile's improved leverage, and T-Mobile will gain subscribers, spectrum and a bigger cut of the lucrative and growing prepaid market—a feared downside is job cuts.
T-Mobile was said to be planning "significant" layoffs at its Bellevue, Wash., headquarters, as early as March 7, The Seattle Times reported March 6.
FCC Commissioner Jessica Rosenworcel, like her colleagues, approved the deal, saying she expects it will lead to "more choices and lower prices" for consumers. But she expressed concern that as the companies move ahead, workers don't get left behind.
"Major job losses are not in the public interest. The companies have pledged to me that they have no plans to close any domestic call centers, to move them offshore, to close any retail stores or to reduce retail positions as a result of the is deal," Rosenworcel said in a statement. "They have also assured me that they plan to increase the overall number of workers they employ in the United States. I expect that the company will keep its work—and live up to these promises."
On March 12, the Communications Workers of America (CWA) recirculated a March 8 statement, calling on T-Mobile not only to maintain its call center positions but those of network technicians as well.
"T-Mobile has now said publicly that the 'synergies model' they shared with the [FCC] assumes no layoffs, and we'll hold them to that," said the CWA.