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Lawsuits Threaten Merger Between AT&T and T-Mobile

AT&T has proposed a $39 billion deal to merge with T-Mobile USA, pledging in their August 31, 2011 press release to "bring back 5,000 wireless call center jobs to the United States that are today outsourced to other countries." In the press release, AT&T reported that their plan had already received positive recognition from a number of elected officials and offices throughout the country, as well as technology giants such as Facebook, Microsoft, Yahoo! and Oracle.

The company's efforts were immediately disputed by the United States Justice Department, who filed a civil antitrust lawsuit alleging that the company merger would reduce competition and potentially increase prices and lower quality for products and services. Days later, Sprint Nextel filed a similar lawsuit against AT&T. Sprint's reasons echoed those of the Department of Justice, claiming the merger would harm customer and corporate customers with higher prices and less innovation, strengthen the duopoly control of AT&T and Verizon on the market and harm other independent wireless carriers.

AT&T's Reaction

AT&T responded publicly to the suit in a 27-page statement released on September 9, 2011. In the statement, the company emphasized that the proposed merger would benefit consumers and offer more competition, not less. The statement also references the significant loss of subscribers that T-Mobile has experienced in the last two years, and how the merger will help both companies. AT&T also suggests the Department of Justice's failure to depict the current state of competition in mobile telecommunications.

Could Merger Decrease Call Center Jobs?

In a study prepared by University of California, Irvine, economist David Neumark, employment levels historically dropped when AT&T made acquisitions. The study was commissioned by Sprint as part of their argument against the AT&T/T-Mobile merger, and also suggests that the merger will result in a significant reduction of capital for the company - as well as job reduction and consolidation. Neumark has also stated that AT&T has acknowledged that this reduction would occur.

AT&T has not yet responded to this study, or addressed what will become of their plans to bring the wireless call center jobs back home from overseas. If the merger is approved, will the promise be carried out as planned? Or, if legal action is taken to prevent the merger, what will become of those job positions?

As of this article's posting date, they have not yet responded to ICMI's request for information on this topic. ICMI will continue to follow this developing story. Please leave us your thoughts and comments on the issue here on our site.

Christina Hammarberg is the former associate editor at ICMI.