[July 06, 2011]

CWA To Public Utilities Commission: The Facts Support AT&T/T-Mobile Merger

The Communications Workers of America today filed comments with the California Public Utilities Commission on the proposed merger between AT&T (News - Alert) and T-Mobile, reiterating its position that the merger is good for consumers and good for American workers.

The California PUC is conducting an advisory review of the proposed merger, the purpose of which is to inform the Federal Communications Commission.

"What we are telling the PUC today is this: At the end of the day, an AT&T/T-Mobile (News - Alert) merger will accelerate high-speed broadband buildout to more Californians, it will positively impact consumers and it will create jobs," said CWA (News - Alert) District 9 VP James Weitkamp. CWA District 9 represents 58,000 workers in California including more than 23,000 at AT&T.

Summary of Comments:

An AT&T/T-Mobile Merger is good for consumers and workers.

• The merger will dramatically expand high-speed broadband buildout, benefiting the one-third of California households who do not have a home broadband connection, while increasing speeds for another one third of Californians.
• California's unemployment rate has risen to 11.7%, and this merger will create jobs. AT&T has committed to increase capital expenditures by at least $8 billion over the next seven years, which would create as many as 96,000 good, famiy-supporting jobs across America.
• The merger will substantially ease network congestion, resulting in fewer dropped calls and faster connection speeds throughout the country.
• This merger will allow AT&T to offer 4G LTE service to 55 million more Americans. According to a 2010 report as part of CWA's Speed Matters campaign, only 16.6% of broadband subscribers in California currently connect to the Internet at such speeds.
• The merger will benefit workers in the wireless industry as AT&T is the only wireless company with a unionized workforce and a long tradition of non-interference with respect to the organizing employees.

• Deutsche Telekom indicated multiple times that it was simply no longer willing to commit new capital to T-Mobile.
• T-Mobile lacks the resources necessary to develop the 4G LTE high-speed broadband network the company would need to remain competitive.
• The only other suitor for T-Mobile was Sprint (News - Alert), and a Sprint/T-Mobile deal could not work for many reasons, network incompatibility not the least of them. For example, Sprint is still integrating Nextel and would struggle to make the capital expenditures necessary to fully use T-Mobile's assets.

Sprint - the only other alternative -- is a bad player when it comes to treating workers.

• Sprint has a long history of hostility to union organizing and trampling workers' rights.
• Sprint has an extensive record of outsourcing and off-shoring American jobs.

T-Mobile can't survive on its own.

• "T-Mobile's parent Deutsche Telekom is not in a position to finance the necessary large scale investments in the U.S. for T-Mobile to remain competitive." - Phillipp Humm, CEO, T-Mobile USA, in Senate testimony, May 11, 2011.
• Industry analysts have stated that T-Mobile would be unable to survive on its own if the merger fails.
• The FCC (News - Alert) and independent analysts agree the cost of a fourth generation network would be closer to $10 billion. T-Mobile USA, either with Deutsche Telekom or standing alone, does not have the resources for this type of capital expenditure.

Additional Points

• Finally, CWA believes it is important that the FCC follow past precedent and employ same product and geographic market definition it has used in recent wireless mergers; the local market for mobile telephony/broadband services. Further, it should upgrade its spectrum screen to reflect recent developments in the wireless industry.

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