updated 02:35 pm EDT, Fri March 23, 2012
ATT makes contentious merger link
AT&T's Senior Executive VP Jim Cicconi in remarks tried to seize on T-Mobile's job cuts as validation for why its failed takeover of T-Mobile should have been cleared. He contended that AT&T would have kept the jobs if the $39 billion deal had been approved. To him, the cuts were purportedly proof that the FCC had been wrong and that it should never challenge corporations on competition issues.
"The FCC may consider itself an expert agency on telecom, but it is not omniscient," Cicconi argued. "And when it ventures far afield from technical issues, and into judgments about employment or predictions about business decisions, it has often been wildly wrong."
The statement's logic has already been called into question, as it was attempting to equate correlation with causation. The 1,900 net job cuts would have been attributed to declining market share that came from a lack of an iPhone deal during the iPhone 4S' launch quarter, not an inherent inability to compete from T-Mobile. Much of T-Mobile's current state has come from AT&T using its larger status to buy more wireless spectrum and pay for what amounted to a four-year exclusive on the iPhone.
The comments also consciously sidestepped the primary negative consequences that had led the FCC to question the deal and ultimately force a stop. FCC officials believed that job cuts would happen regardless of whether or not the merger went through, as there was both inevitable overlap as well as historical evidence that virtually every large merger led to layoffs.
The agency, along with the Department of Justice, had further decided that no amount of claimed jobs would avoid the problems sparked by reduced competition. Among them were a tougher time for smaller networks like Sprint and a return to AT&T once more having the majority of phone subscribers, as it did before it was forcibly broken up in the 1980s. AT&T partly sabotaged the merger attempt on its own when it submitted information to the FCC that estimated it only needed $3.8 billion, not an acquisition ten times larger, to reach the LTE coverage goals it was promising in public.
Making the comments has no immediate, practical purpose for AT&T other than to state its political stance. Neither the DOJ nor the FCC are likely to revisit the proposed merger.