The U.S. Congress: Where It Pays to Deceive
Why are more than 70 House Democrats helping AT&T lie to you?
They just signed on to an industry letter that was so riddled with misinformation about AT&T’s proposed merger with T-Mobile it’s shocking that anyone would put their name on it.
All told these representatives raked in more than $1.8 million in campaign contributions from AT&T. That number likely helped convinced them to look the other way as they signed a letter in support of AT&T's attempt to gobble up T-Mobile and form a telecommunications colossus that rivals the Ma Bell monopoly of old.
These members of Congress should be working for us. But sadly, that’s not the way Washington works in the new era of corporate politics. After the Citizens United decision, the cost of running for Congress has spiraled upward giving contributing corporations even more power to dictate policy to money-hungry elected officials.
This letter is no exception.
In it the Democrats write that AT&T's takeover will "require billions of dollars in private investment capital and create thousands of jobs."
That’s untrue: AT&T has already told Wall Street that “synergies” from the merger will result in billions of dollars less investment and massive layoffs. Analysts estimate that between 20,000 and 25,000 T-Mobile employees will lose their jobs if regulators approve the deal.
I challenge any one of these signing Democrats to find a large merger in the long history of telecommunications that hasn’t led to extensive layoffs.
And AT&T has a frightening track record on firing. Over the past decade, as it grew massively through mergers, AT&T has shed more than 100,000 workers -- reducing its employee rolls in eight of the last nine years. AT&T laid off 12,000 workers in 2009; in 2010 its number of employees dropped by more than 15,000. And the company has let go nearly 6,000 employees in the first quarter of 2011.
In the letter the Democrats also state that AT&T’s takeover of T-Mobile would “be a significant benefit for the millions of Americans that may not otherwise see those benefits, including our constituents living in rural and underserved communities.”
This is also false: Earlier this month, AT&T told the FCC that, even without the merger, it will deploy next generation “4G” services to 97 percent of the population by the end of 2012. And AT&T’s rival Verizon has pledged to cover its entire footprint with 4G LTE service -- 98 percent of Americans -- by 2014.
So it’s fair to assume that competitive pressure will force AT&T to serve these areas with its own advanced network, regardless of the merger. If AT&T fails to offer wireless coverage to consumers, there is no doubt that it will cede significant market share to Verizon – something AT&T is loath to do.
These members of Congress seem willing to overlook evidence that's obvious to anyone following the debate.
If this deal goes through, just two companies, AT&T and Verizon, would control nearly 80 percent of the mobile market in America. With too few choices, mobile phone users would face higher prices and poorer services. The lack of competitive pressure will stifle the sorts of innovation that the U.S. needs to stay ahead in a world where billions of people are using their mobile phones in increasingly inventive ways.
In any other industry, allowing this much concentration, especially without any meaningful regulatory oversight, would be unthinkable.
By comparison, the top 10 oil producing firms combined control less than 80 percent of the U.S. market, but this merger will give that level of market dominance to just two wireless companies.
AT&T knows that it can't win approval of this merger by telling the truth. That's why it has spent $200 million on lobbyists and campaign contributions over the years — to get people like these Democrats in the House to do whatever AT&T wants.
Our elected officials should be looking out for us, not just big corporations. Opposing this massive merger would be a good start.
© 2011 Tim Karr