Will FCC Chairman Genachowski Allow More Job Destruction in a T-Mobile/MetroPCS Merger?

by Nathan Newman

tmobileoffshoreFCC Chairman Julius Genachowski has made job creation a top priority. Here’s a test: will he require conditions to protect jobs in the T-Mobile/MetroPCS merger?

When merging companies talk about “transaction-specific efficiencies” and cost savings through “synergy,” the workers involved know that pink slips are usually on the way. That’s what we can expect if Federal Communications Commission Chairman Julius Genachowski allows a proposed merger of T-Mobile and MetroPCS to go through without conditions to protect employment.

Without conditions, the prospects for T-Mobile workers look grim. T-Mobile and MetroPCS claim the merger will result in $1 billion in “cost reductions” in both customer support and back office operations (see p. 42-44 of their merger request to the FCC), euphemisms for job loss and outsourcing. Today, MetroPCS outsources its entire customer service staffing, with many of those jobs overseas in the Philippines and the Caribbean. It appears that T-Mobile is prepared to adopt this low-road path after the merger in order to realize $1 billion in “synergies” and “efficiencies.”

T-Mobile workers would not be facing this prospect but for the fact that the FCC rejected the proposed merger between AT&T and T-Mobile two years ago. During that merger review, AT&T committed to a no lay-off policy, to keep all call centers open, and to bring back 5,000 offshored call center jobs. In addition, AT&T, the only unionized wireless company, promised to respect workers’ rights at the newly acquired work locations, giving T-Mobile workers a real opportunity to select union representation. All of this I detailed at the time in this Economic Policy Institute report.

Instead of that scenario, soon after the FCC blocked the AT&T/T-Mobile merger, T-Mobile closed seven call centers and displaced 3,300 employees, sending the work to foreign countries. Then, T-Mobile searched for another merger partner, and last fall inked a deal with MetroPCS. Now the FCC is poised to approve that merger.   If the Commission is going to allow this T-Mobile/MetroPCS merger to go forward, they should at least try to undo some of the damage they inflicted on T-Mobile’s workforce by requiring the merged company to preserve existing jobs and repatriate jobs those companies have already outsourced overseas.

A broad coalition, ranging from the Communications Workers of America to the NAACP, the Sierra Club, the National Consumers League, SEIU, the AFL-CIO, and the Center for Community Change is working to secure such job commitments in any FCC decision. In a letter to the FCC, the coalition notes that the merger is a threat to T-Mobile employees’ job security, to the “economic health of the communities in which they live and work, and the consumers who rely on quality service provided by trained and experienced employees.”

In addition, 62 members of Congress have urged Chairman Genachowski “to seek enforceable commitments to protect and grow U.S. jobs” as he evaluates this transaction.” And state and local officials – including mayors from Florida, South Carolina, and Virginia – have written the FCC asking the Commission to protect jobs in the T-Mobile/MetroPCS merger.

With a slow recovery and high unemployment, this is a clear time for the FCC to exercise its power to secure job commitments as part of this merger approval.

Will Chairman Genachowski live up to his stated rhetoric and make jobs a top priority in this merger review? Or will he let thousands more T-Mobile jobs disappear?

Nathan Newman is founder of Tech-Progress.org which examines issues where technology and economic justice intersect, including a focus on antitrust and cyberlaw issues involving the Google antitrust investigations   He has consulted with a range of organizations on policy reports around the technology sector, including on behalf of Demos, Economic Policy Institute, Communication Workers of America, Sierra Club, Natural Resources Defense Council and Blue-Green Alliance Before that he was Executive Director (2008-2010) and Founding Policy Director (2005-2008) of the Progressive States Network.

We also recommend his personal site: NathanNewman.org

 

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