If it wasn’t already clear that AT&T (NYSE:T, news, filings) really wants to buy T-Mobile USA, witness today’s economic bribery offer. The international telecommunications giant is now promising to bring 5,000 call-center jobs back to the USA if the merger gets approved. Not only would those jobs come back from overseas, the new employees would be eligible to join the unions and there would be no US-based job losses from those call centers due to synergies. (Sorry India, you’re holding the wrong end of that sword!)
What this definitely demonstrates is that AT&T senses this is a critical moment, and that they’re worried the wind is changing for the worse. And I think they’re right. The FCC has restarted the clock, and there has been a shift in the media against the company’s spectrum-derived argument that the deal is necessary to its future. The supporters AT&T lined up in the early stages already did their part and went home long ago. AT&T is therefore playing the most powerful card they have left in their hand: the jobs card.
The timing isn’t exactly subtle here, just 14 months before an election which will almost certainly turn on that very subject. The Obama administration desperately needs to gain some traction with job creation, and is actually putting the finishing touches on a not-so-secret plan right now. The newest Republican challenger, Texas’s Governer Perry, is trumpeting his own job creation talents. And the unions are looking for anything that looks like a victory after a messy but unresolved fight with Verizon.
You have to admit, it’s as inspired as it is cynical. One of the arguments that Democrats might use to bolster a rejection of the deal is that synergies mean job losses, but the tangible 5000 job gains offset that. If the Obama adminstration nixes the deal we will surely see Republican ads appear arguing that unnecessary government intervention caused jobs to remain overseas that could have been brought home. And it’s not just about those jobs either, it’s about customer service – because Americans associate overseas call centers with unintelligible, circular conversations and impenetrable interactive voice systems. AT&T isn’t just promising 5000 jobs, the subtext is that its customers will get someone local to talk to again.
So, what will it be? 5000 more unionized jobs for a nice healthy duopoly capable of strangling what’s left of the competition for the next few decades? Nothing like a Faustian bargain like that going into Labor Day weekend. Actually, there are probably a few more short term concessions AT&T will make to sweeten the pot further in exchange for long term dominance – I’ll bet they just hold out for a few more. This deal is still almost sure to go through in some form, it’s just a matter of time.
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