by: Nadia Prupis, t r u t h o u t | Report
Consumer advocacy groups and politicians from both sides of the aisle have begun to speculate on what the impending merger between AT&T and T-Mobile will mean for the country's economy and the effect it could have on contentious policy issues, such as network neutrality.
The $39 billion deal was announced over the weekend. The sale will not officially close until the Federal Communications Commission (FCC) and the Justice Department finish conducting regulatory reviews, which could take up to 18 months.
AT&T chairman and CEO Randall Stephenson said the transaction will create "significant customer, shareowner, and public benefits," and that "with additional spectrum and network capabilities, we can better meet our customers' current demands."
The acquisition would reduce the amount of national wireless providers from four to three and give AT&T approximately 130 million subscribers - about 43 percent of the market - making it the biggest mobile phone carrier in the United States. The FCC and the Justice Department could impose certain restrictions on AT&T/T-Mobile before approving the deal to ensure that the new entity gives up ownership of some of its airwaves and provides coverage in rural areas.
Critics of the deal warn that less competition could have a negative impact on the economy, particularly as mobile devices increase in popularity among average consumers.
"I think it has a number of implications for lots of different policies in the communications realm," said Joel Kelsey, political director of media reform organization Free Press. When the FCC in December decided not to regulate wireless carriers to ensure net neutrality, "their justification was that you're less likely to see some of the same types of anti-competitive actions for fear that a carrier would lose a large number of customers ... looking at it through the lens of this merger, I think that justification has kind of gone out the window."
Gigi B. Sohn, president and co-founder of digital rights advocacy group Public Knowledge, said that consumers know "the results of arrangements like this - higher prices, fewer choices, less innovation ... the US needs both strong network neutrality rules and a competition policy that requires dominant broadband providers to make their networks available to competitors."
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But the merger also has a vocal supporter in the Communication Workers of America (CWA), the largest communications and media labor union in the country, and the AFL-CIO. Following AT&T's announcement, AFL-CIO President Richard Trumka stated that the acquisition would have "important, positive implications for consumers in the US ... for the US telecom workforce and for our country's economic future."
CWA Communications Director Candice Johnson said the proposed deal "really is the economic driver for the 21st century." Expanding wireless networks to rural and undeveloped parts of the country will "reach 95 percent of the country who have no broadband at home ... it will provide opportunity and access for people who right now don't have any. The US is so far behind the rest of the developed world in terms of broadband adoption and speed."
AT&T would uphold net neutrality standards, Johnson said, despite wireless carriers being unregulated. "I definitely think we can ensure an open Internet with no discrimination," Johnson said. "I think there will still be a lot of competition on wireless service."
The Wall Street Journal predicted that if the deal is approved, several thousand jobs are likely to be lost through layoffs and attrition.
Johnson said that some mergers "sometimes result in job loss, some don't," pointing to the CWA's history of joining forces with companies such as Centennial Wireless and AT&T Mobility. "We did not see job loss as a result. There's good evidence to show that won't be the case," Johnson said.
"Mergers don't create more jobs," Kelsey said. "That's the whole point of mergers. It may result in more dues paid union members, but people will get fired over this."
Politicians on both sides of the aisle have stated their plans to investigate the deal and understand its potential effects on the economy.
"The proposed AT&T and T-Mobile merger raises important questions about competition in the telecom industry and the effect on American consumers," said Rep. Lamar Smith (R-Texas), chairman of the House Judiciary Committee, which will hold a hearing to discuss the merger. "Congress must take a close look at the plan to ensure that the proposed merger promotes a healthy and competitive telecommunications market."
Sen. John D. Rockefeller (D-West Virginia), chairman of the Senate Committee on Commerce, Science and Transportation, on Monday echoed Smith's comments, stating, "With every passing day, wireless services are becoming more and more important to the way we communicate. So it is absolutely essential that both the Department of Justice and the FCC leave no stone unturned in determining what the impact of this combination is on the American people."
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