AT&T calls out FCC after T-Mobile USA layoffs

AT&T calls out FCC after T-Mobile USA layoffs

Summary: AT&T rails on the FCC for not heeding its predictions about T-Mobile being forced into major layoffs without approval of the merger.

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Just one day after T-Mobile USA announced that it was cutting 1,900 jobs from seven call centers, AT&T is calling out the Federal Communications Commission.

Jim Cicconi, AT&T's senior executive vice president of External and Legislative Affairs, wrote a memo on the AT&T Public Policy blog on Friday detailing the company's stance, which basically rails on the FCC for not approving the $39 proposed bid for the merger.

Considering that the acquisition never came to pass, it might seem a bit strange that AT&T is getting involved. Nevertheless, Cicconi argued that "only a few months ago AT&T promised to preserve these very same call centers and jobs if our merger was approved."

Cicconi added that AT&T already predicted that T-Mobile, the nation's fourth largest mobile provider, would have to deal with a significant number of layoffs.

Cicconi continued:

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.

Sounds a bit bitter, but perhaps AT&T is right here. Then again, how many layoffs would have taken place at other telecommunications companies, such as Sprint and regional carriers opposed to the bid, if AT&T was able to combine forces with T-Mobile?

Related:

Topics: AT&T, CXO, Mobility, IT Employment

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14 comments
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  • That's the problem here

    if AT&T was able to combine forces with T-Mobile, you can only speculate "how many" or even "if" they would have even laid off anyone, yet at the moment, the factual number is 1,900 [b]were[/b] laid of because they didn't merge.
    William Farrel
  • 1900 is only the beginning. Enough with the job killing policies please.

    Wow who would have thought that the FCC would not grok the business reality of this. Oh wait that's right theyre on the dole paper pushers who have never tried to run a business. Dooh!
    Johnny Vegas
    • That 1,900 less AT&T would've laid off

      ...had they merged. Don't think for as minute those jobs would have been saved otherwise. They wanted this sale for the added bandwidth, nothing more.
      ScorpioBlack
  • I know the merger was not liked by many

    but the evidence was out there that T-Mobile was in trouble and to be honest AT&T was in the best position to pick them up because the technology used is similar. I never understood how merging with T-Mobile would create such a lack of cell phone carriers. There are others out there and I think the merger had the potential to make service better for all which was what AT&T stated was their primary goal with the merger.
    bobiroc
  • AT&T makes a phone call to the FCC?

    After T-Mobile lost 700,000 subscribers in the last quarter, it's not unreasonable to see them lower the number of call center jobs.

    Loss of customers, commiserate with a reduction in headcount is smart business, reduces costs, and allows customers to get less-expensive cell phone service through better management, and making the difficult decisions.

    AT&T on the other hand, seems to outsource more, leading to inflated prices in relation to the value of the service they provide. Sprint was concerned about this. Before the AT&T/T-Mobile Announcement, Sprint called AT&T out for bilking its customers.

    Also, AT&T, and it's 110+ subsidiaries (see the FCC website for a complete list) is probably more difficult to manage headcount-to-subscriber ratio than AT&T does.

    T-Mobile may be more transparent, but that's probably because they're run by Germany-based Deutsche Telekom, and have a German CEO, and as everybody knows, German engineering is typically the best on the planet. It's like comparing Mercedes, or a BMW to a Ford Pinto. Once you hit 170,000 miles, the pinto starts leaking oil and breaking apart at the head gaskets and stuff, requiring a complete engine overhaul. German vehicles however, are so rigorously engineered, they just need regular scheduled (and planned) maintenance, which may include an oil change, or in this case, employee attrition when subscriber numbers dwindle.

    AT&T hasn't experienced a loss of customers since they inked the exclusive iPhone agreement, so they probably forgot what it's like to loose customers enmasse.
    FreddyCrugeer
    • Wha?

      [ul][i]AT&T on the other hand, seems to outsource more, leading to inflated prices in relation to the value of the service they provide[/i][/ul]Surely you jest. Does the phrase, "AT&T is bringing this function in-house" conjure up visions of streamlined efficiency? I find it very easy to believe that AT&T could find vendors who would do certain things better/faster/cheaper than they could do the same thing in house.
      Robert Hahn
    • Counterpoints

      "After T-Mobile lost 700,000 subscribers in the last quarter, it's not unreasonable to see them lower the number of call center jobs."
      - The merger was designed to happen about a year and a half ago. If it had happened then, those 700,000 people would have been AT&T customers. As it turned out, how many of those 700,000 moved to AT&T?

      "Loss of customers, commiserate [sic] with a reduction in headcount is smart business, reduces costs, and allows customers to get less-expensive cell phone service through better management, and making the difficult decisions."
      - Surely you'd like to reword this sentence. It sounds like you're advocating a management strategy of loss of customers commensurate with a reduction in headcount. After T-Mobile got its 4.x billion dollar windfall as a result of the deal falling through, it still couldn't manage to avoid layoffs in the immediate aftermath. That doesn't reflect well on management.

      "AT&T on the other hand, seems to outsource more, leading to inflated prices in relation to the value of the service they provide. Sprint was concerned about this. Before the AT&T/T-Mobile Announcement, Sprint called AT&T out for bilking its customers. "
      - What? No! A direct competitor of AT&T portrayed AT&T in a negative light?!? And what exactly has led you to the impression that AT&T "seems to outsource more" ?

      "Also, AT&T, and it's 110+ subsidiaries (see the FCC website for a complete list) is probably more difficult to manage headcount-to-subscriber ratio than AT&T does."
      - utterly unintelligible.

      "T-Mobile may be more transparent, but that's probably because they're run by Germany-based Deutsche Telekom, and have a German CEO, and as everybody knows, German engineering is typically the best on the planet."
      - Ah, the old "everybody knows" premise. Can't very well argue with that rock solid logic. Now,exactly how does "German Engineering" (by which, I assume you mean "German Leadership") lead to transparency?

      "It's like comparing Mercedes, or a BMW to a Ford Pinto. Once you hit 170,000 miles, the pinto starts leaking oil and breaking apart at the head gaskets and stuff, requiring a complete engine overhaul. German vehicles however, are so rigorously engineered, they just need regular scheduled (and planned) maintenance, which may include an oil change, or in this case, employee attrition when subscriber numbers dwindle."
      - Yeah, let's compare high-end German sports cars to one of the cheapest models Ford has ever put out. That'll prove Germany's better. Unfortunately, not even the spirit of this argument holds true. Compare the total cost of ownership (purchase price, maintenance, parts, resale value) of similarly featured German and U.S. automobiles.

      "AT&T hasn't experienced a loss of customers since they inked the exclusive iPhone agreement, so they probably forgot what it's like to loose customers enmasse."
      - Last I checked, that exclusivity agreement expired over a year ago. Somebody forgot to tell AT&T's customers to evacuate.
      TheRealChrisJones
  • Waiting for endorcement from Hot Air Balloonists...

    Here's another thing- AT&T's company culture, which we learned during the merger timeframe, which is based on politics (buying off politicians and regulators, and hot-air baloonists) probably wouldn't have meshed well with T-Mobile anyway.

    I'm pretty happy with T-Mobile service. It works better than AT&T, I don't drop calls. At the same time, I don't care what service Hot Air Balloonists use anyway. But their endorsement gave me a chuckle.
    FreddyCrugeer
    • Enjoy it while you can.

      There is a reason TMobile parent company wanted to sell it off. They can't afford to move to 4G. Instead of merging, TMobile is going to die. Same result, just a different path.
      bluecougee
      • Maybe then AT&T can pick up the pieces

        and use T-Mobiles towers and equipment to expand their network.
        bobiroc
  • "the $39 proposed bid"

    Wow, no wonder the bid fell through. I think T-Mobile is worth more than that!

    At least, say, 100 bucks?

    ;-p
    TheRealChrisJones
  • AT&T Layoffs and Promises

    AT&T may have promised to save the T-Mobile call center Jobs but they never promised to save their own which they also just laid off. Sometimes demise is better than merger. AT&T isn't exactly a fair cost cellular company. Even FOX New Hosts have been taking shots at them for their unfair service. Their throttling of Data Speed has lost every individual court challenge. A shame class action has not been allowed by the courts.
    Voice Stream which became T-Mobile is doing so poorly that it just gave away every phone in their inventory for zero dollars with a two year contract. Laying off 1900 people does not mean the end of the carrier.
    For you who compared german engineering with the Mercedes and the Pinto get a grip. If a Pinto were designed and priced at 50 thousand dollars I chance to say it might last just as long as the Benz. Germans and engineering???? The only thing the Germans ever designed was a blimp that blew up and gas chambers to kill people. Oh yeah, and the Mercedes that shuttled Hitler around town.
    stopthemerger
  • AT&T Would Have Destroyed Far More Jobs

    Had AT&T's T-Mobile merger gone through retail store jobs would have been destroyed. AT&T would destroy any duplicative jobs they don't need to maintain -- for one in the retail sector I just mentioned as they would close all of T-Mobile's retail stores nationwide. Also T-Mobile engineers working on installing and maintaining that carrier's network would lose their jobs. Besides the jobs issue there was also the factor that the deal would have resulted in a massive amount of spectrum concentration in AT&T's hands creating a monopolistic anti competitive and anti consumer Ma Cell. Fewer choices in wireless service is bad for consumers when the national post-paid market is already concentrated enough.

    Had the AT&T T-Mobile merger gone through there would have been a decline in pre-paid competition also since T-Mobile had recently entered the pre-paid business and reports indicated they planned to expand in pre-paid services if the merger failed where T-Mobile has been more successful as of late than the post-paid contract market. The FCC and the Justice Department made the right call in denying Ma Bell a Ma Cell.
    maneeshpan
    • RE: AT&T Would have Destroyed Far More Jobs

      Wow you must have some inside information because that would go against what AT&T said about the merger. You are so smart.
      bobiroc