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AT&T tries to link T-Mobile job cuts to lack of merger

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.



By Electronista Staff
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Comments

  1. AlohaMacintosh

    Fresh-Faced Recruit

    Joined: Mar 2012

    +12

    Liar

    Can ANYONE say..."GodDam••d LIAR ?...the truth means NOTHING to people like this.

  1. fjose1929

    Fresh-Faced Recruit

    Joined: Jul 2011

    +7

    Job cuts

    Job cuts are one thing but bankruptcy is around the corner. TMobile was playing around with apple. Had they gone ahead and made a deal with apple they would not be where they are.

    Regardless if they were going to make the merger, they should have operated like a going concern. In the end they just toyed with apple and are reaping the whirlwind.

  1. OldMacGeek

    Fresh-Faced Recruit

    Joined: Aug 2010

    +7

    I call BS

    You know, I was in favor of the merger, but this 'logic' is awful. "See why you shouldn't mess with big companies? Let us police ourselves. We promise not to be bad." :)

  1. Bobfozz

    Fresh-Faced Recruit

    Joined: Jul 2008

    +3

    AT&T

    not to be trusted. Liars. Not only did they sidestep the FCCs reasons, but AT&T said it would BRING jobs. I don't see that one at all. It's like when the telecom companies said they would lock people in for DSL for X dollars and it was for 1-2 years and then they used the elevator to lift prices. They bitched that the internet and all its attendant cabling (etc.) was running them out of business. The REAL problem was that some others got some of the $$$ whereas they wanted it ALL!!!

  1. loco

    Fresh-Faced Recruit

    Joined: Jan 2004

    +1

    I'm at a loss for words.

    Talk about diversion - "Look, see? Those jobs were lost! You should have given us the number one spot in the market when we asked! Never mind that we torpedoed our case when we said internally we only needed to spend a tenth of what we expected to. We wanted to spend 33 BILLION DOLLARS more just to save those 1,900 jobs!"

  1. facebook_Terrin

    Via Facebook

    Joined: Mar 2012

    +2

    ATT sucks

    ATT stinks. ATT proposed to T-Mobile to purchase the company and promised the government would approve the deal. T-Mobile had way more to lose if the deal didn't go through because 1) the uncertainty of whether T-Mobile would be around would cause subscriber loss, and 2) T-Mobile would have to hold off on any long term planning to its network because it wouldn't make sense to spend money on something that might not exist in a year. This risk is the whole reason ATT had to pay 6 billion dollars to T-Mobile. The loss of subscribers was anticipated if the deal failed.

    Had ATT not proposed the deal, T-Mobile likely would have had the iPhone before Sprint. T-Mobile's parent company is one of Apple's biggest partners in Europe. Apple, however, isn't going to invest in a carrier that might not exist in a year. Now that the deal is out of the way you already see T-Mobile making plans to make its network iPhone compatible. According to T-Mobile the lack of iPhone is the main reason of subscriber loss.

    As a T-Mobile customer using two unlocked iPhones, I would never dream of going to the other carriers. I pay $63 dollars a month for a two line family plan that includes unlimited data on one line. If I wanted it on both lines, it would cost ten dollars a month more. The same plan used to cost me $140 on ATT.

    I can only use Edge, but when not by wi-fi I stream Pandora, surf the internet, read email, all without delay. Occasionally, I can even use Netflix without stutter.

    T-Mobile rocks.

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