Independent Jobs Study Disputes AT&T’s Claims

BY CCIA Staff
September 1, 2011

A study performed by University of California at Irvine professor of economics David Neumark and released today confirms that AT&T’s proposed take-over of T-Mobile, if approved, would cost the American economy tens-of-thousands of jobs.  The study shows that AT&T would shed jobs to eliminate redundancy and overlap in the merged company and reduce overall network investment.  Professor Neumark’s work debunks the unsubstantiated claims AT&T has made to sell the merger to policymakers and regulators – namely that acquiring T-Mobile will lead to an increase in jobs.

CCIA welcomes this independent study and its common sense conclusions. We have maintained since the merger was announced that would be damaging to American consumers and workers, and we are gratified, though not surprised, to find that position backed up by independent, thorough analysis. We are particularly happy to see that Professor Neumark used the same methodology in his study as did the jobs report released by AT&T.  However, Professor Neumark corrects the fabrications in AT&T’s report and finds that the proposed take-over would destroy between 34,000 and 60,000 American jobs.

We have always fundamentally believed in the power of competition. It drives innovation and keeps costs to consumers low, of course, but it has a much more basic effect on American workers. On the other hand, mergers that destroy competition rarely, if ever, result in more jobs. Professor Neumark notes this fact in the context of AT&T’s recent history. As he points out, since 2002 AT&T has caused the loss of around 107,000 job-years as a result of its strategy to grow through M&A rather than investing in its own network. The Department of Justice reiterated this point in a press conference yesterday. Jim Cole said that the administration’s view “is that through innovation and through competition, we create jobs.” CCIA could not agree more.

Professor Neumark’s study is also of the utmost importance because of AT&T’s consistent focus on the jobs argument throughout the course of their public campaign for the merger. The constant refrain was that the merger, in addition to providing better services for customers, would actually create jobs. While we were immediately skeptical of any claim that this merger would benefit anyone other than AT&T, it is vital to have a respected economist demonstrate the fallacies behind such an argument so that policy makers can, at the end of the day, make a properly informed decision.

The full text of the report is available here.

Related Articles

New Economic Impact Analysis Reveals Cost of Proposed Tech Regulations Would Total up to $109 Billion for Public Sector Workers; $1.02 Trillion for U.S. Investors

May 20, 2022

Washington – A new economic impact analysis by the Computer & Communications Industry Association reveals that proposed regulations in antitrust bills like S. 2992 and H.R. 3816 would come at a major cost for U.S. investors and pension plan members such as teachers, firefighters, and nurses. Troubling findings show that by the late 2030s, increased…

Ad Tech Bill Would Alter Law, Digital Advertising Business For Some Companies, Setting Dangerous Precedent For Antitrust Regulation

May 19, 2022

Washington – A newly introduced bill in the Senate would bar companies that process $20 billion in digital ad transactions from participating in the digital ad ecosystem. The bill introduced by Sen. Mike Lee, R-Utah, is among the more aggressive and narrowly tailored among various bills aimed at the tech industry. The bill gerrymanders regulations…

CCIA Provides Remarks in Support of Maintaining Flexible, Adaptable Merger Guidelines at FTC-DOJ Listening Forum

May 18, 2022

Washington – As part of a broader series on the impact of mergers and acquisitions, the Federal Trade Commision (FTC) and the Antitrust Division of the Department of Justice (DOJ) last week hosted a public listening forum on merger control with a focus on the technology industry. After submitting comments to the FTC and DOJ’s…