The Department of Justice announced it would sue to block the proposed $39 billion merger between cell phone giants AT&T and T-Mobile USA, prompting swift criticism by AT&T and unions, pitting the unions against traditional allies like consumer groups, which hailed the move.
The DOJ argued that the proposed deal, which would join the nation's second- and fourth-largest wireless phone carriers, would result in higher prices and less product choice. Consumer groups and others argue it would also mean loss of jobs.
But Communications Workers of America vigorously argued against that idea, charging job cuts and other casualties from the loss of competition are "just plain wrong."
"The proposed AT&T/T-Mobile merger is good for workers and good for job creation," said CWA Telecommunications Policy Director Debbie Goldman, citing data that job loss at AT&T has been on the landline side with the reduction of customers. The company has added jobs on the wireless side, the union statement said.
CWA represents the only unionized wireless workforce in the country at AT&T. T-Mobile has been strongly opposing any attempts to unionize.
If the deal goes through, T-Mobile would become part of AT&T, which has a neutrality clause in its contract with the Communications Workers. That would open the way for CWA to organize T-Mobile employees without facing the constant opposition - and law breaking - it now receives from current T-Mobile management.
"In today's sinking economy, where millions of Americans are looking for work, DOJ has filed suit to block a merger that will create as many as 96,000 quality jobs," CWA said in a statement.
"In a nation where workers' rights are routinely violated, as occurs everyday at T-Mobile, DOJ apparently believes workers should be on their own instead of having a fair choice about union representation. DOJ's action would put good jobs and workers' rights at the bottom of the government's priorities."
In contrast to the sharp criticism, consumer groups applauded the DOJ move.
"This announcement is something for consumers to celebrate," said Parul Desai, the policy counsel for Consumers Union.
"We have consistently warned that eliminating T-Mobile as a low-cost option will raise prices, lower choices and turn the cellular market into a duopoly controlled by AT&T and Verizon."
CWA argues that T-Mobile is not planning to invest in the American market, opting to focus on the Europe. They say the merger with AT&T would build hi-speed networks in under-served areas.
But even that claim is in doubt.
In a recent email, ColorofChange.org said, "Thanks to a letter filed by AT&T's attorneys that contained confidential information, we now know with certainty that AT&T could easily upgrade its wireless networks without buying T-Mobile - it has simply chosen not to do so."
But many say despite government opposition to the merger, it's not dead. Indeed, the DOJ left the door open to further negotiations with AT&T to address their concerns.
Photo: Dan_H // CC 2.0