Public Knowledge Statement on Congressional Letter regarding AT&T Takeover of T-Mobile

Earlier today, a small group of members of Congress led by Rep. Heath Shuler (D-NC) sent a letter to President Obama urging that the Administration reverse course and approve the AT&T takeover of T-Mobile, arguing that the deal was needed as a boost to the economy.

The following is attributed to Gigi B. Sohn, president and co-founder of Public Knowledge:

"We thought the issues of job creation and investment had long been settled.  It is perfectly clear that AT&T's history has been to destroy jobs, not to create them.  The company has shed 10,000 jobs a year for the past ten years.  There is no reason to believe that the takeover of T-Mobile will do anything to change that dynamic.  To the contrary, T-Mobile has created jobs at the same time AT&T has cut them.  And by removing T-Mobile's investment, the amount of money spent on improving the wireless networks will less, not more.

"It is discouraging that those simple facts have not yet been accepted by policy makers who continue to push for a deal that's bad for our economy, bad for consumers and bad for technological innovation.

"We also note that the Administration has characterized the Justice Department suit to block the transaction as a 'law enforcement' action and we question whether it is proper even to ask for the Administration to consider a settlement under those circumstances."

Here are the materials from Rep. Shuler:

Rep. Shuler Urges Obama Administration to Settle Proposed AT&T/T-Mobile USA Merger

Washington, DC ---- Today U.S. Representative Heath Shuler (D-NC), along with 15 Democratic co-signers, sent a letter to President Obama urging him to swiftly resolve concerns with the proposed transaction between AT&T and T-Mobile USA and to settle and approve the merger, which will create jobs and expand high-speed Internet access to individuals and businesses across the country.

“The road to economic recovery is long, but there is an opportunity before us to immediately create jobs and spur infrastructure investments and technological innovations that will create jobs for years to come,” said Rep. Shuler.  “By settling the proposed merger of AT&T and T-Mobile USA we can put thousands of Americans back to work and promote economic development across the country. I urge the President to strongly consider the vast benefits this merger will have on job creation and the economy and quickly resolve any concerns the Administration may have with the proposal.”

A recent study found that the AT&T/T-Mobile USA Merger would almost immediately create approximately 55,000 to 96,000 new jobs. Another study estimates that the long-term next generation wireless broadband investment that will result from this merger will create hundreds of thousands of additional jobs by 2016. Additionally, this merger will spur billions of dollars in new private investment to deploy high-speed wireless Internet to 97% of the U.S. population.

“High-speed internet will continue to be a critical tool for success as businesses across America struggle to compete in the global economy,” said Rep. Shuler. “This merger will help expand broadband service to rural areas and other underserved populations, promoting economic growth and job creation. The President has set a goal of deploying next generation high-speed wireless to 98% of Americans in the coming years.  The merger will not only help meet this goal, but do it without taxpayer money during a time of fiscal crisis in our country. I look forward to working with the Administration to settle and approve this merger while ensuring consumers and competitive markets are protected.”

See below for the full text of the letter:

 ###

September 15, 2011


The Honorable Barack Obama
President of the United States
The White House
Washington, D.C. 20500

Dear Mr. President:

                On September 8th, you came before a Joint Session of Congress and asked us to focus our efforts on solving America’s jobs crisis by working to reduce unemployment, encourage private investment and promote new and innovative technologies that will drive job creation. We agree wholeheartedly, and both the Congress and the Administration should take action immediately to battle our country’s severe economic crisis.
                              
                One opportunity rests squarely before you with the proposed transaction between AT&T and T-Mobile USA. We urge the Administration to resolve expeditiously your concerns and approve the proposed merger between AT&T and T-Mobile USA. The current merger proposal embraces the three job creation strategies you have already highlighted.     

First, the merger will reduce unemployment.  AT&T has announced plans to repatriate 5,000 jobs that are currently being performed overseas.  In addition to these 5,000 jobs, a recent study (SITE) has shown that the merger will create somewhere between 55,000 and 96,000 new jobs to integrate the two networks and upgrade facilities.

                Secondly, the merger will engender new private investment to deploy wireless high speed Internet access services to 97% of the U.S. population.  Coverage of this magnitude will necessitate an additional $8 billion investment from AT&T over and above its current industry leading capital investments.

You recognized the economic importance of these services in your “State of the Union” address to the nation last January, when you said “within the next five years, we’ll make it possible for businesses to deploy the next generation of high-speed wireless coverage to 98% of all Americans.”  The proposed merger will virtually achieve that goal – and do so on a faster timetable than you had proposed and without a single dime of taxpayer money.

                Finally, the deployment of next generation, wireless broadband is the type of investment in new and innovative technology that will drive job creation for years to come.  A recent study by Deloitte predicts that next generation wireless broadband buildout by the wireless industry will create 371,000-771,000 jobs and GDP growth between $73 billion and $151 billion by 2016.  AT&T’s proposed merger commitment to make available this new technology to 98% of the nation’s population will be a key component of the industry buildout. 

We recognize that the Department of Justice has intervened in the merger to ensure competitive markets and protect consumers.  Addressing these concerns through a settlement agreement that ensures robust competition while preserving the job creation, capital infrastructure investment and wireless broadband deployment benefits of the merger should be the Department’s goal.

We urge you to encourage resolution of this matter in a timely fashion and appreciate your consideration of our concerns.

Sincerely,
Heath Shuler
Member of Congress



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