To gain regulatory approval for its $26 billion merger with Sprint, T-Mobile made numerous promises. One was that the deal would immediately create jobs (there’ve been 5,000 layoffs so far). Another was that the company would work closely with Dish Network to help them build a fourth wireless network that would replace Sprint, theoretically “fixing” the reduction in competition the deal created. As predicted, that plan isn’t working out so well.
T-Mobile was supposed to closely shepherd Dish’s own network build over a period of 7 years, but the two companies have proven largely incapable of getting along. Recently, Dish accused T-Mobile of shutting down its 3G (CDMA) network (which Dish is currently using as it builds a 5G network) prematurely. T-Mobile in turn accused Dish of being too cheap to pay for 4G and 5G upgraded phones for its fairly tiny userbase. This week T-Mobile balked, issuing a hilariously passive aggressive press release saying T-Mobile would be leaving its 3G network on for a little bit longer because Dish was, effectively, incompetent:
“Recently it’s become increasingly clear that some of those partners haven’t followed through on their responsibility to help their customers through this shift. So, we’re stepping up on their behalf. We have made the decision to extend our deadline for the CDMA sunset by three months to March 31, 2022.”
Salty! T-Mobile goes on to accuse Dish of being generally terrible, and throws in a few references to the “digital divide” for good measure:
“There should be no more room for excuses. We have provided even more time and those partners can follow suit with the effort that is needed to ensure no one is left on the wrong side of the digital divide.”
Recall that it’s T-Mobile that spent millions of dollars lobbying the Trump administration (including spending more money at Trump’s hotel) to approve a $29 billion merger with Sprint that experts warned would reduce competition, ultimately raise consumer prices, and result in thousands of lost jobs. And recall that the Trump DOJ and FCC approved T-Mobile’s demands before even seeing the full impact analysis of the deal.
Then, to provide cover for the approval of a deal most folks didn’t think should have been approved due to competitive harm, Trumpland and T-Mobile came up with the idea of creating an entirely new wireless carrier out of Dish Network (a company with a long history of empty promises in wireless) and some twine. The deal was crafted by folks who like to wax poetic about how government shouldn’t meddle in business, yet now expect the U.S. government to mommy Dish and T-Mobile’s attempts to create an entirely new competitor. A plan you wouldn’t need if government had just blocked the deal and forced Sprint to find outside investment (Amazon, Google, Comcast, whoever).
But T-Mobile and Dish can’t even get along long enough to make it out of the first several years of the plan. And Dish continues to delay the launch of any meaningful wireless network. I still tend to think this ends with Dish stringing the FCC along for a few years on network build obligations until it can cash out of its vast spectrum holdings and head for the exits. Then, over time, investors will pressure the remaining three wireless providers (AT&T, T-Mobile, Verizon) to progressively exploit the dwindling competition and stop competing so intensely on price.
In most countries (Ireland, Canada, many European countries) the reduction of overall wireless competitors from four to three via merger and consolidation always ends badly. I tend to think Trumpland regulators and T-Mobile knew this from the outset, and this entire deal was crafted to help them pretend that wasn’t going to happen this time.
Much like the company’s dedication to women, AT&T’s dedication to not funding people eager to overthrow democracy appears to be somewhere between inconsistent and nonexistent. Shortly after January 6 a number of companies, including telecom giants like AT&T, publicly crowed about how they’d be ceasing all funding to politicians that supported the attack on the Capitol and the overturning of, you know, fucking democracy. Of course that promise was never worth all that much, given the the umbrella lobbying orgs companies like AT&T used never really stopped financing terrible people.
Initially, AT&T made a big stink about how it had suspended funding to all 147 Republicans who voted to overturn the 2020 election. But not only did AT&T not actually suspend funding via its numerous policy and lobbying tendrils, it didn’t even really ever stop funding insurrectionists directly:
“In February, however, AT&T donated $5,000 to the House Conservatives Fund. The chair of the House Conservatives Fund is Jim Banks (R-IN), who objected to the certification of the Electoral College in January. Banks also signed an amicus brief submitted to the Supreme Court supporting Texas’ efforts to throw out the election results in several states.”
“We have been assured that none of the employee PAC?s contributions will go toward the reelection of any of those members of Congress,? Balmoris said. ?Any future contributions to multi-candidate PACs will require such consistency with the policy suspending individual contributions.”
Six months later, when a reporter tries to press AT&T on the fact it continues to fund insurrectionists, it just goes radio silent:
“Six months later, AT&T is charting a very different path. In August, new FEC disclosures reveal, AT&T donated $15,000 each to the National Republican Congressional Committee (NRCC) and National Republican Senatorial Committee (NRSC). These donations will support the reelection of every Republican objector running for reelection.
Popular Information contacted AT&T and asked whether, as it had pledged in March, it had secured a commitment that none of the funds it donated to the NRCC or NRSC would support Republican objectors. This time, the company did not respond.”
In short, AT&T funded a bunch of politicians who filled the public’s head with propaganda and bullshit, resulting in a violent if clumsy attempt to steal an election. Now AT&T doesn’t want to talk about it, and hopes that if it stays quiet about it, the storm will pass. And they’re probably right, given the broader press’ ongoing tendency to normalize what happened earlier this year (largely because they don’t want to offend leak sources and advertisers). Which, of course, all but guarantees that, sooner or later, the same bullshit is going to play out all over again, potentially with more calamitous results.
As vaccinations and relaxed health guidelines make returning to the office a reality for more companies, there seems to be a disconnect between managers and their workers over remote work.
A good example of this is a recent op-ed written by the CEO of a Washington, D.C. magazine that suggested workers could lose benefits like health care if they insist on continuing to work remotely as the COVID-19 pandemic recedes. The staff reacted by refusing to publish for a day.
While the CEO later apologized, she isn’t alone in appearing to bungle the transition back to the office after over a year in which tens of millions of employees were forced to work from home. A recent survey of full-time corporate or government employees found that two-thirds say their employers either have not communicated a post-pandemic office strategy or have only vaguely done so.
As workforcescholars, we are interested in teasing out how workers are dealing with this situation. Our recent research found that this failure to communicate clearly is hurting morale, culture and retention.
We first began investigating workers’ pandemic experiences in July 2020 as shelter-in-place orders shuttered offices and remote work was widespread. At the time, we wanted to know how workers were using their newfound freedom to potentially work virtually from anywhere.
We analyzed a dataset that a business and technology newsletter attained from surveying its 585,000 active readers. It asked them whether they planned to relocate during the next six months and to share their story about why and where from and to.
After a review, we had just under 3,000 responses, including 1,361 people who were planning to relocate or had recently done so. We systematically coded these responses to understand their motives and, based on distances moved, the degree of ongoing remote-work policy they would likely need.
We found that a segment of these employees would require a full remote-work arrangement based on the distance moved from their office, and another portion would face a longer commute. Woven throughout this was the explicit or implicit expectation of some degree of ongoing remote work among many of the workers who moved during the pandemic.
In other words, many of these workers were moving on the assumption – or promise – that they’d be able to keep working remotely at least some of the time after the pandemic ended. Or they seemed willing to quit if their employer didn’t oblige.
We wanted to see how these expectations were being met as the pandemic started to wind down in March 2021. So we searched online communities in Reddit to see what workers were saying. One forum proved particularly useful. A member asked, “Has your employer made remote work permanent yet or is it still in the air?” and went on to share his own experience. This post generated 101 responses with a good amount of detail on what their respective individual companies were doing.
While this qualitative data is only a small sample that is not necessarily representative of the U.S. population at large, these posts allowed us to delve into a richer understanding of how workers feel, which a simple stat can’t provide.
We found a disconnect between workers and management that starts with but goes beyond the issue of the remote-work policy itself. Broadly speaking, we found three recurring themes in these anonymous posts.
1. Broken remote-work promises
Others have also found that people are taking advantage of pandemic-related remote work to relocate to a city at a distance large enough that it would require partial or full-time remote work after people return to the office.
A recent survey by consulting firm PwC found that almost a quarter of workers were considering or planning to move more than 50 miles from one of their employer’s main offices. The survey also found 12% have already made such a move during the pandemic without getting a new job.
Our early findings suggested some workers would quit their current job rather than give up their new location if required by their employer, and we saw this actually start to occur in March.
One worker planned a move from Phoenix to Tulsa with her fiancé to get a bigger place with cheaper rent after her company went remote. She later had to leave her job for the move, even though “they told me they would allow me to work from home, then said never mind about it.”
Another worker indicated the promise to work remotely was only implicit, but he still had his hopes up when leaders “gassed us up for months saying we’d likely be able to keep working from home and come in occasionally” and then changed their minds and demanded employees return to the office once vaccinated.
2. Confused remote-work policies
Another constant refrain we read in the worker comments was disappointment in their company’s remote-work policy – or lack thereof.
Whether workers said they were staying remote for now, returning to the office or still unsure, we found that nearly a quarter of the people in our sample said their leaders were not giving them meaningful explanations of what was driving the policy. Even worse, the explanations sometimes felt confusing or insulting.
One worker complained that the manager “wanted butts in seats because we couldn’t be trusted to [work from home] even though we’d been doing it since last March,” adding: “I’m giving my notice on Monday.”
Another, whose company issued a two-week timeline for all to return to the office, griped: “Our leadership felt people weren’t as productive at home. While as a company we’ve hit most of our goals for the year. … Makes no sense.”
After a long period of office shutterings, it stands to reason workers would need time to readjust to office life, a point expressed in recent survey results. Employers that quickly flip the switch in calling workers back and do so with poor clarifying rationale risk appearing tone-deaf.
And even when companies said they wouldn’t require a return to the office, workers still faulted them for their motives, which many employees described as financially motivated.
“We are going hybrid,” one worker wrote. “I personally don’t think the company is doing it for us. … I think they realized how efficient and how much money they are saving.”
Only a small minority of workers in our sample said their company asked for input on what employees actually want from a future remote work policy. Given that leaders are rightly concerned about company culture, we believe they are missing a key opportunity to engage with workers on the issue and show their policy rationales aren’t only about dollars and cents.
3. Corporate culture ‘BS’
Management gurus such as Peter Drucker and other scholars have found that corporate culture is very important to binding together workers in an organization, especially in times of stress.
But many of the forum posts we reviewed suggested that employer efforts to do that during the pandemic by orchestrating team outings and other get-togethers were actually pushing workers away, and that this type of “culture building” was not welcome.
One worker’s company “had everyone come into the office for an outdoor luncheon a week ago,” according to a post, adding: “Idiots.”
Surveys have found that what workers want most from management, on the issue of corporate culture, are more remote-work resources, updated policies on flexibility and more communication from leadership.
As another worker put it, “I can tell you, most people really don’t give 2 flips about ‘company culture’ and think it’s BS.”
To be clear, former T-Mobile CEO John Legere did some amazing things with T-Mobile. After regulators blocked AT&T from acquiring T-Mobile in 2011 (which wound up being a very good thing), he took the $3 billion break up fee and turned an also-ran into a major thorn in the side of AT&T and Verizon. Legere accomplished this by (gasp) generally treating consumers well, eliminating annoyances like long-term contracts, sneaky fees, and many other telecom industry mainstays. He also did it by embracing an entertaining, wise ass persona in an industry not known for having a sense of humor.
But then, T-Mobile owners Deutsche Telekom decided it would be a good idea to throw all of this away by pursuing a $26 billion merger with Sprint. That suddenly forced Legere into a position where he had to behave exactly like the companies he’d just spent a decade making fun of. That included lying a lot about the benefits of the deal as the company tried to sell the Trump administration on the competition and job-eroding megadeal (that wound up not being particularly difficult, since the industry-allied Trump FCC and DOJ didn’t care about hard data).
“Legere’s 2020 compensation was revealed yesterday in a filing with the Securities and Exchange Commission (see pages 49 and 50). Legere was previously paid $27.8 million in the full year of 2019 and $66.5 million in 2018, mostly in the form of stock awards. His 2020 compensation of $137.2 million did not include any stock awards?instead, it consisted of a $136.55 million severance payment, $600,000 in salary, and $50,000 in reimbursement for legal fees.”
Legere certainly had a comfy exit, also offloading his $17.5 million Central Park West apartment to Giorgio Armani on his way out of town.
Of course, you’re supposed to ignore (and most of the US press certainly will) the fact that Legere repeatedly promised in print that the Sprint merger would result in a massive surge in new jobs. That never happens in the wake of telecom consolidation, and soon enough, the company was busy laying off 5,000 employees. Unions and Wall Street analysts predict the layoffs could get as high as 15-30,000 as redundant positions are inevitably eliminated over the next few years.
Given the Sprint merger reduced US wireless sector competition by 25%, and the FCC currently has its hands tied behind its back due to the net neutrality repeal, which T-Mobile supported (which again neutered most FCC authority, not just net neutrality rules), it’s inevitable that investors now pressure T-Mobile to behave more and more like AT&T and Verizon over the next few years. That means more empty promises, more efforts to nickel-and-dime subscribers, and a steadily eroding effort to seriously compete on price. All the stuff Legere repeatedly insisted he was opposed to. That’s not speculation or opinion, it’s what happens every time a country decides to give a middle finger to competition by allowing mindless consolidation in telecom. There are 40 years of indisputable evidence.
Again, Legere deserves all the praise in the world for turning T-Mobile into a heavyweight champion in wireless. But at the same time, he also deserves ample criticism for the ease in which he was willing to throw all of that in the toilet, and the grotesque amount of falsehoods and Trump ass kissing that accompanied the effort along the way.
Yet another report has shown that US consumers aren’t getting the broadband speeds they’re paying for.
Researchers from broadband deal portal AllConnect dug through FCC data on broadband speeds and found that about 45 million Americans aren’t getting the speeds that broadband providers are advertising. Fiber and cable broadband providers appeared to have the toughest time providing the speeds they advertise, with those subscribers getting around 55% of the speeds they were promised. Satellite and DSL providers generally offer crappy speeds, but at least, the report found, those speeds were delivered more consistently.
The firm noted that consumers just aren’t getting accurate data on what speed is available, or how much speed they’ll get. Something that’s kind of important during a pandemic in which broadband is key to education, employment, health care, human connection, and opportunity:
“Having dependable internet is crucial right now, and with so many options available, it is important to have information like this to help consumers make the right choice for their needs. Being able to compare various aspects of internet service like reliability and speed helps make those decisions a little easier,? Layton adds.”
Granted this has been a problem for the better part of this decade. And it’s another problem (much like patchy availability and high prices) federal regulators haven’t done enough to seriously address. Speed data ISPs provide to the FCC is notoriously unreliable, and the FCC historically doesn’t do enough to verify availability and speed claims. It only takes a few minutes perusing our $350 broadband availability map, which all but hallucinates competition and throughput, to realize there’s a chasm between what the US government and industry claims exists, and what actually exists.
Every year, the FCC is mandated by Congress to release a report detailing the status of the U.S. broadband industry. If broadband isn’t being deployed on a “timely basis,” the agency is supposed to, you know, do something about that. But every year, sometimes regardless of party, the agency, swaddled in dodgy data, pretends this isn’t a problem. Why? Because we’ve fused extremely politically powerful telecom monopolies to our government surveillance apparatus, and holding these companies accountable is bad for political careers.
Of course ISPs aren’t just engaged in false advertising when it comes to speeds. They also routinely use a bevy of misleading fees and surcharges to covertly jack up their advertised rates post sale — to the point where your advertised cable or broadband bill can be as much as 45% higher than advertised. And again, aside from the very occasional suggestion by regulators that ISPs could maybe do better or be more transparent, nobody much does anything about it. After all, who wants to risk losing Comcast, AT&T, Verizon, T-Mobile, and Charter campaign contributions by doing the right thing?
As we’ve noted a few times, there’s an underlying belief in American tech policy that if we just keep throwing money at entrenched broadband monopolies we can lift US broadband out of the depths of mediocrity. But as we’ve noted more than a few times, heavily subsidizing a bunch of regional monopolies, while not doing anything about the conditions that created and insulate those monopolies, doesn’t result in much changing. It’s especially ineffective when you don’t really punish ISPs for decades of taking taxpayer money in exchange for network upgrades that almost always, like clockwork, wind up unfinished.
The latest case in point: in 2015, regional monopolies CenturyLink and Frontier Communications took nearly $800 million in taxpayer funds to expand broadband to underserved areas they deemed too expensive to wire themselves. And guess what happened:
“The deadline to hit 100 percent of the required deployments passed on December 31, 2020. Both CenturyLink and Frontier informed the FCC that they missed the deadline to finish deployment in numerous states.”
CenturyLink rather coyly acknowledged that it failed to meet deployment milestones in more than 25 states. Frontier failed to meet its deployment targets in around 17 states. Under the law, ISPs have a year from the point they finally inform the FCC that haven’t done what they promised to… actually do what they promised.
And while that same law says the the government can take back taxpayer funding “equal to 1.89 times the average amount of support per location received in the support area,” plus another ten percent of the carrier’s total funding in that area, that often never happens. ISP lawyers routinely tap dance over, under, and around those milestones; and penalties are particularly pathetic when there’s a captured regulator like outgoing FCC boss Ajit Pai at the helm.
A shining example of this lack of accountability is Frontier Communications, which we’ve long held up as a stunning example of monopolization and corruption in states like West Virginia. This is a company that time, and time, and time again has failed to meet its obligations tied to taxpayer subsidies, and in some instances was even caught defrauding the government. The federal response to this? To throw yet more taxpayer and ratepayer money at the company via the recent, scandal-plagued Rural Deployment Opportunity Fund auction:
“CenturyLink and Frontier are both getting more money from the FCC in the new Rural Digital Opportunity Fund, with CenturyLink getting $262.4 million spread over 10 years and Frontier getting $370.9 million over 10 years.
“Sen. Shelley Moore Capito (R-W.Va.) recently urged the FCC to block Frontier’s new funding, saying that “Frontier has a documented pattern of history demonstrating inability to meet FCC deadlines for completion of Connect America Fund Phase II support in West Virginia.”
Folks in DC (especially the Ajit Pai types) claim they’re focus is “lifting burdensome regulations to boost network investment.” In reality, they’ve effectively ceded all policy decisions to regional monopolies, which they’re utterly incapable of holding accountable for much of anything. When the data then shows that this clearly and obviously only results in less competition, stifled investment, wasted money, and mediocrity, the impulse is almost always to pretend that this data isn’t real… then double down on the same decisions that brought us there. Rinse, wash, repeat.
Now with COVID highlighting broadband’s importance in an entirely new way, there’s a massive new push to solve the problem by throwing more money at it. But until and unless policymakers embrace polices that specifically target the dominance of entrenched monopolies, driving more competition to market, we’re not getting off this ridiculous hamster wheel.
Like AT&T, Frontier, and other U.S. telcos, Verizon has a long, rich history of taking tax breaks, regulatory favors, and taxpayer subsidies in exchange for networks it only half deploys. That was the case in the 90s when Verizon took a several billion tax breaks from the state of Pennsylvania in exchange for networks it never deployed. It was also the case in New York City, where Verizon was sued by the city for promising to deploy fiber universally to all five boroughs, and then, well, not doing that.
In 2017, NYC sued Verizon, stating a 2014 deal to deploy fiber to the entire city fell well short of the full goal. As some local reporters had warned at the time (and were promptly ignored), the city’s deal with Verizon contained all manner of loopholes allowing Verizon to wiggle over, under and around its obligations. And wiggle Verizon did; a 2015 city report found huge gaps in deployment coverage — particularly in many of the less affluent, outer city boroughs.
Last week during the holiday bustle the city quietly announced it had settled its lawsuit with Verizon. Under the confidential settlement, the city claims Verizon will expand fiber deployment to an additional 500,000 low income homes across the city:
“This settlement will make sure that Verizon builds out its fiber footprint more equitably throughout New York City ? especially in low-income communities that have historically been underserved by internet service providers,? said DoITT Commissioner and Citywide CIO Jessica Tisch. ?This agreement attacks that unfair imbalance, and recognizes that high-quality internet is a necessity, not a luxury.”
The problem, as usual, will be in the follow up. The original lawsuit (pdf) stated that Verizon had deployed fiber to 2.2 million out of the city’s 3.3 million residences with FiOS, despite the original 2008 agreement with the city calling for “100%” FiOS availability. An additional 500,000 deployed homes sounds good, especially during a pandemic, but it’s still a far cry from the company’s original promise to the city. The city likely found the lawsuit to be too costly or unwinnable, and with so much else going on, agreed to settle and at least get something for its efforts.
Granted this isn’t just some one-off problem. Telecom giants are so politically powerful (on both the state and federal level) that genuine accountability for failed promises is extremely hard to come by. One simply needs to look at the long list of cities and states that have accused the company of taking subsidies and tax breaks then failing to evenly deploy fiber, whether it’s Philadelphia or a huge swath of New Jersey. And again, you’ll find much the same story having played out with telco giants like AT&T and Frontier Communications from Mississippi to West Virginia.
As we’ve noted for a long time, policymakers act as if U.S. broadband mediocrity is just something that happens or is due to America just being really, really big. In reality, the reason U.S. broadband is patchy, expensive, with atrocious customer service? Plain old state and federal corruption we often refuse to even acknowledge, much less do anything about.
This may be shocking to hear, but nearly all of the promises AT&T made in the lead up to its $86 billion merger with Time Warner wound up not being true.
The company’s promise that the deal wouldn’t result in price hikes for consumers? False. The company’s promise the deal wouldn’t result in higher prices for competitors needing access to essential AT&T content like HBO? False. AT&T’s promise they wouldn’t hide Time Warner content behind exclusivity paywalls? False. The “$15 TV service” the company repeatedly hyped as a byproduct of the deal? Already discontinued. The idea that the merger would somehow create more jobs at the company? False.
AT&T has laid off 41,000 employees just since it received its 2017, $42 billion tax cut from the Trump administration for doing absolutely nothing (technically, less than nothing, since it fired countless employees and trimmed 2020 CAPEX by around $3 billion). And this week, the company laid off another 600 employees across Time Warner, including employees at HBO and DC Comics:
“The moves are likely to cause anxiety at WarnerMedia, which has reorganized several areas of its business since being acquired by AT&T for about $85 billion in 2018. Since AT&T took over the company formerly known as Time Warner, top executives with years of oversight of distribution, programming and advertising sales have departed. Kilar?s ascension to the CEO role in May has only served to fuel more recalibration.”
Granted if you’ve watched the history of U.S. media and telecom consolidation, this should surprise nobody. The first year or two after such deals are usually filled with empty promises about how “nothing will change” (AT&T brass repeatedly promised Time Warner employees they would have ample resources and creative freedom), only to be followed up by everything changing, and, as is the case when a lumbering telecom monopoly jumps more fully into a creative business it doesn’t fully understand, often not for the better.
And while AT&T has hinted that much of this had to do with COVID-19, that’s not the case. Most of these moves were either planned for some time, or part of the company’s ongoing attempts to shed the massive debt accumulated from the company’s spending spree on DirecTV (2015) and Time Warner (2018). Both mergers were supposed to position AT&T as a dominant player in the online video and advertising space. Instead, AT&T has been losing paying TV customers hand over fist after a number of bungled decisions ranging from price hikes on price sensitive cord cutters to bungled streaming branding.
It was yet another example of the perils of a “growth for growth’s sake” mindset, blended with yet another example of how lumbering, government-pampered telecom monopolies like AT&T and Verizon just aren’t very good at this whole competition and innovation thing.
AT&T’s repeated missteps were bad enough that they resulted in an investor backlash, the “retirement” of former AT&T CEO Randall Stephenson, and a newfound focus on firing more people than ever to recover debt. As is often the case, lower and mid-level management has to pay the cost for years of higher level managerial dysfunction. As is also often the case, the majority of press outlets that were eager to parrot AT&T’s pre-merger promises are utterly absent when it comes time to tally the human cost of mindless merger mania.
You may be shocked to learn this, but nearly all of the promises AT&T made in the lead up to its $86 billion merger with Time Warner wound up not being true.
The company’s promise that the deal wouldn’t result in price hikes for consumers? False. The company’s promise the deal wouldn’t result in higher prices for competitors needing access to essential AT&T content like HBO? False. AT&T’s promise they wouldn’t hide Time Warner content behind exclusivity paywalls? False. The idea that the merger would somehow create more jobs at the company? False.
Last week, yet another AT&T promise disappeared without much fanfare or notice. Ahead of the Time Warner merger, AT&T promised regulators the deal would directly culminate in the release of a cheaper, $15 per month TV service dubbed AT&T Watch. This $15 service was highly promoted not only in AT&T filings, but during its court defense of the merger by the CEO himself:
“Watch” will be different because it will not include any sports channels. This will enable AT&T to sell it for $15 a month, compared to $35 a month for DirecTV Now. Stephenson brought it up on the stand in the context of AT&T’s streaming businesses. He testified that AT&T does not want to stop innovation in streaming services and brought up the new skinny bundle.
“The whole thing was an obvious PR ploy from the start, and now with the acquisition fading into the rear view, there?s little reason to keep the service going any longer. The company never got around to adding Roku support for Watch TV, and it stopped giving the service away with unlimited data plans last October. Those who want to get a streaming TV service from AT&T can turn to one of its broader and more expensive packages instead?with prices starting at $55 per month.
Irony being that due to incompetence, AT&T’s grand merger ambitions (or its lobbying assault on net neutrality) didn’t even actually help it dominate the TV space, at least not yet. The mergers saddled AT&T with so much debt, the company immediately turned around and imposed rate hikes. Those hikes, in turn, drove TV customers to the exits by the millions, since the whole point of “cutting the cord” is to get away from ridiculously bloated cable TV bills. It’s part of the reason that AT&T CEO Randall Stephenson is now an ex-CEO, somewhere napping on a giant pile of money.
In short, much like the $42 billion tax cut AT&T nabbed from the Trump administration (that resulted in 41,000 layoffs), AT&T made a long list of promises that wound up being completely hollow. This was all laid out to US District Judge Richard Leon during the merger trial, yet Leon still ignored all of the warnings and rubber stamped the deal without a single condition. At absolutely no point did Leon in his absurd ruling recognize the threat of AT&T owning both a monopoly over broadband and a massive media empire in charge of content needed by competitors (who also were quickly subjected to price hikes).
All of this was obvious to anybody that has paid attention to the fact that AT&T has a thirty year history of making all manner of promises in exchange for deregulation, tax cuts, regulatory favors, and merger approvals that almost universally wind up being complete bullshit. But like the last dozen or so times we’ve been through this, absolutely nobody on any level of government will try to hold AT&T accountable, lest they put campaign contributions in jeopardy.
Back when T-Mobile and Sprint were trying to gain regulatory approval for their $26 billion merger, executives repeatedly promised the deal would create jobs. Not just a few jobs, but oodles of jobs. Despite the fact that US telecom history indicates such deals almost always trigger mass layoffs, the media dutifully repeated T-Mobile and Sprint executive claims that the deal would create “more than 3,500 additional full-time U.S. employees in the first year and 11,000 more people by 2024.”
Before the ink on the deal was even dry, T-Mobile began shutting down its Metro prepaid business and laying off impacted employees. When asked about the conflicting promises, T-Mobile refused to respond to press inquiries. Now that shutdown has accelerated, with estimates that roughly 6,000 employees at the T-Mobile subsidiary have been laid off as the freshly-merged company closes unwanted prepaid retailers. T-Mobile says the move, which has nothing to do with COVID-19, is just them “optimizing their retail footprint.” Industry insiders aren’t amused:
“Peter Adderton, the founder of Boost Mobile in Australia and in the U.S. who has been a vocal advocate for the Boost brand and for dealers since the merger was first proposed, figures the latest closures affect about 6,000 people. He cited one dealer who said he has to close 95 stores, some as early as May 1.
In their arguments leading up to the merger finally getting approved, executives at both T-Mobile and Sprint argued that it would not lead to the kind of job losses that many opponents were predicting. They pledged to create jobs, not cut them.
?The whole thing is exactly how we called it, and no one is calling them out. It?s so disingenuous,? Adderton told Fierce, adding that it?s not because of COVID-19. Many retailers in other industries are closing stores during the crisis but plan to reopen once it?s safe to do so.”
None of this should be a surprise to anybody. Everybody from unions to Wall Street stock jocks had predicted the deal would trigger anywhere between 15,000 and 30,000 layoffs over time as redundant support, retail, and middle management positions were eliminated. It’s what always happens in major US telecom mergers. There is 40 years of very clear, hard data speaking to this point. Yet in a blog post last year (likely to be deleted by this time next year), T-Mobile CEO John Legere not only insisted layoffs would never happen, he effectively accused unions, experts, consumer groups, and a long line of economists of lying:
“This merger is all about creating new, high-quality, high-paying jobs, and the New T-Mobile will be jobs-positive from Day One and every day thereafter. That?s not just a promise. That?s not just a commitment. It?s a fact….These combined efforts will create nearly 5,600 new American customer care jobs by 2021. And New T-Mobile will employ 7,500+ more care professionals by 2024 than the standalone companies would have.”
That was never going to happen. Less competition and revolving door, captured regulators and a broken court system means there’s less than zero incentive for T-Mobile to do much of anything the company promised while it was wooing regulators. And of course such employment growth is even less likely to happen under a pandemic, which will provide “wonderful” cover for cuts that were going to happen anyway.
Having watched more telecom megadeals like this than I can count, what usually happens is the companies leave things generally alone for about a year to keep employees calm and make it seem like deal critics were being hyperbolic. Then, once the press and public is no longer paying attention (which never takes long), the hatchets come out and the downsizing begins. When the layoffs and reduced competition inevitably arrives, they’re either ignored or blamed on something else. In this case, inevitably, COVID-19.
In a few years, the regulators who approved the deal will have moved on to think tank, legal or lobbying positions at the same companies they “regulated.” The same press that over-hyped pre-merger promises won’t follow back up, because there’s no money in that kind of hindsight policy reporting or consumer advocacy. And executives like John Legere (who just quit T-Mobile after selling his $17.5 million NYC penthouse to Giorgio Armani) are dutifully rewarded, with the real world market and human cost of mindless merger mania quickly and intentionally forgotten.