More Consolidation, Fewer Jobs, No Duh

We watch in frustration as the federal government, dressed as Charlie Brown asks AT&T, wearing Lucy's blue dress and smiling brightly, if she really will hold the football properly this time. "Oh yes, Charlie, this time I really will create all those jobs if you let us buy T-Mobile," says AT&T Lucy.

Over at HuffPo, Art Brodsky recently revisited AT&T's promises in California to create jobs, lower broadband prices, and heal the infirm if the state would just deregulate the cable video market -- which it did, 4 years ago. California upheld its end of the bargain -- wanna guess if AT&T did? Hint: Charlie Brown ended up on his back then too.

The answer comes from James Weitkamp (via Art's HuffPo post), from the Communications Workers of America, a union that all too often acts in the interests of big companies like AT&T and CenturyLink rather than workers:

"AT&T and Verizon have slashed the frontline workforce, and there simply are not enough technicians available to restore service in a timely manner, nor enough customer service representatives to take customers' calls. Let me share some statistics. Since 2004, AT&T reduced its California landline frontline workforce by 40%, from about 29,900 workers to fewer than 18,000 today. The company will tell you that they need fewer wireline employees because customers have cut the cord going wireless or switched to another provider, but over this same period, AT&T access line loss has been just under nine percent nationally. I would be shocked if line loss in California corresponds to the 40 percent reduction in frontline employees.


"Similarly, since 2006 Verizon California cut its frontline landline workforce by one-third, from more than 7,000 in 2005 to about 4,700 today. I venture that Verizon has not lost one third of its land lines in the state."

Note that AT&T, Verizon, and other massive incumbents like Comcast have been wildly profitable over this term.

The same trend holds in cellular wireless - as noted by the Wall Street Journal:

The U.S. wireless industry is booming as more consumers and businesses snap up smartphones, tablet computers and billions of wireless applications. But for the industry's workers, the story is less rosy.

In May, on the heels of a record year for industry revenue, employment at U.S. wireless carriers hit a 12-year low of 166,600, according to U.S. Labor Department figures released earlier this month. That's about 20,000 fewer jobs than when the recession ended in June 2009 and 2,000 fewer than a year ago.

While the industry's revenue has grown 28% since 2006, when wireless employment peaked at 207,000 workers, its mostly nonunion work force has shrunk about 20%.

This should not be a surprise. In fact, it would be shocking if the increasing consolidation of telecom created more jobs. The fewer firms in the market, the more they are likely to work together for mutual gain -- to the detriment of all the rest of us.

Rural voices are continuing to make this point, as Parul Desai recently did on the Daily Yonder:

If the merger goes through it is unlikely the two remaining larger carriers would try to compete on price.  AT&T has chosen to emphasize network improvements, speeds of service, and gains in network development that the merger will enable, rather than tout future pricing benefits. The company has indicated to stockholders that it plans to bring T-Mobile revenues per user up to match those of AT&T, suggesting that price increases may be inevitable. 

But for every Parul Desai, there is a massive organization already bought off by AT&T claiming all their members are clamoring for fewer choices and higher prices.

But that is where we are going - both in wireline and wireless. The only question is how long policy makers will pretend the telecom/broadband industry is characterized by competition at all. But the fiction of competition serves a purpose - it allows those policy makers to justify their refusal to regulate in the public interest. As long as they pretend telecom has competition, they can say there is no need to regulate because the market will prevent AT&T, Comcast, Verizon, et al., from raising prices too much and cutting back on investment.

We can do better - but it requires smart government policies on the national level as well as preserving local self-determination to choose if building a publicly owned network makes sense. Though we will not have competition in poles, wires, or towers, we can have competition in services -- telephone, cable television, and access to the Internet. We can... but will we?