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AT&T is using T-Mobile’s recent layoffs as an excuse to bash the FCC and its rejection of AT&T’s proposed $39 billion acquisition of T-Mobile USA.
On Friday AT&T’s head of legislative affairs Jim Cicconi issued a statement offering a big fat “I told you so,” to the FCC. T-Mobile recently announced it was laying off 1,900 workers in seven call centers around the country.
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Cicconi said in his statement that AT&T had planned to keep those very same call centers open if it had been allowed to merge with T-Mobile. In fact, last year AT&T argued — however implausibly — that it would “bring back” to the U.S. some 5,000 overseas call-center jobs should the merger go through.
The FCC said it believed that the merger would actually cause job losses. When the companies announced the merger in March 2011, AT&T told the WSJ that the combined company would make $40 billion in cost cuts, probably involving thousands of job losses.
Which isn’t stopping AT&T from crowing today. “Rarely are a regulatory agency’s predictive judgments proven so wrong so fast,” Cicconi said. “But for the government’s decision, centers now being closed would be staying open, workers now facing layoffs would have job guarantees, and communities facing turmoil would have security. Only a few months later, the truth of who was right is sadly obvious.”
Update at 5:31 p.m. PT: The FCC has reportedly rejected Cicconi’s notion, however, telling AllThingsD that “in just a short period of time, T-Mobile has re-emerged as a vibrant competitor in the mobile marketplace.”
“Competition benefits all wireless consumers,” the FCC’s e-mail to AllThingsD continued. “The bottom line is that AT&T’s proposal to acquire a major competitor was unprecedented in scope and the company’s own confidential documents showed that the merger would have resulted in significant job losses.”
Here is AT&T’s full statement:
Yesterday, T-Mobile made the sad announcement that it would be closing seven call centers, laying off thousands of workers, and that more layoff announcements may follow. Normally, we’d not comment on something like this. But I feel this is an exception for one big reason- only a few months ago AT&T promised to preserve these very same call centers and jobs if our merger was approved. We also predicted that if the merger failed, T-Mobile would be forced into major layoffs.
At that time, the current FCC not only rejected our pledges and predictions, they also questioned our credibility. The FCC argued that the merger would cost jobs, not preserve them, and that rejecting it would save jobs. In short, the FCC said they were right, we were wrong, and did so in an aggressive and adamant way.
Rarely are a regulatory agency’s predictive judgments proven so wrong so fast. But for the government’s decision, centers now being closed would be staying open, workers now facing layoffs would have job guarantees, and communities facing turmoil would have security. Only a few months later, the truth of who was right is sadly obvious.
So what’s the lesson here? For one thing, it’s a reminder of why “regulatory humility” should be more than a slogan. The FCC may consider itself an expert agency on telecom, but it is not omniscient. 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 other lesson is even more important, and should be sobering. It is a reminder that in government, as in life, decisions have consequences. One must approach them not as an exercise of power but instead of responsibility, because, as I learned in my years of public service, the price of a bad decision is too often paid by someone else.
