AT&T points finger at federal regulators for layoffs at T-Mobile

AT&T blamed the Federal Communications Commission (FCC) Friday for thousands of layoffs at T-Mobile, saying the jobs would have been saved if the agency had approved the merger of the two companies last year.

AT&T claimed the merger with T-Mobile would have created thousands of jobs and pledged to bring call centers back to the United States if it was approved. But the FCC's review concluded the deal would have stifled competition in the wireless industry and destroyed jobs. 

The agency, along with the Justice Department, moved to block the $39 billion deal, and the companies were forced to abandon it.

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On Thursday, T-Mobile announced it would close seven call centers and lay off 1,900 workers, about 5 percent of its work force.

"Normally, we’d not comment on something like this," Jim Cicconi, AT&T's vice president of legislative affairs, said in a blog post. "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."

Cicconi slammed the FCC not only for blocking the deal, but for how they handled it.

"At that time, the current FCC not only rejected our pledges and predictions, they also questioned our credibility," he wrote. "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."

He said if the FCC had approved the deal "workers now facing layoffs would have job guarantees, and communities facing turmoil would have security."

Cicconi said the layoffs show the FCC should adopt more "regulatory humility."

"The FCC may consider itself an expert agency on telecom, but it is not omniscient," he wrote. "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."

An FCC spokesman said that since the deal collapsed, T-Mobile has "re-emerged as a vibrant competitor in the mobile marketplace."

"Competition benefits all wireless consumers," the spokesman said. "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.”

T-Mobile distanced itself from AT&T's comments.

"It should be obvious that AT&T is speaking for themselves and not for T-Mobile," Tom Sugrue, T-Mobile's vice president of government affairs, said in a statement. "These decisions, while difficult, are about optimizing our business to better compete for the future."

Although AT&T promised the deal would have allowed it to invest in its network and create jobs, FCC officials questioned whether AT&T would have to make those investments anyway to keep pace with rival Verizon. The officials, pointing to statements by AT&T executives that the deal would lead to "cost savings" and "synergies," concluded it would likely lead to massive layoffs instead.

Cicconi said he hopes the FCC will remember that "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," he wrote.

— This story was updated at 3:02 p.m. with a comment from the FCC and on March 24 at 4:00 p.m. with a statement from T-Mobile.