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What The AT&T/T-Mobile Deal Really Means for Latinos

As the debate rages over the AT&T and T-Mobile merger, supporters and detractors have been pushing their positions

By Jason Llorenz, Esq.
Published on LatinoLA: June 27, 2011


What The AT&T/T-Mobile Deal Really Means for Latinos


Over the past weeks and months, the debate has raged over the AT&T and T-Mobile merger, with supporters and detractors pushing their positions. In the mix has been a great many voices -- including advocates and organizations claiming to represent the interest of different groups. Below are four reasons why Latino community leaders support the transaction.

I. Latino Leaders Support this Transaction Because It Stands to Benefit the Community

For the Latino community, the Hispanic Technology and Telecommunications Partnership (HTTP) has expressed the opinion shared by many national Latino leaders, that this deal holds tremendous potential to serve the community well in ways that are important to their everyday lives. HTTP happens to be in good company, joining with numerous national Latino organizations to support the deal including Hispanic Federation, the National Hispanic Caucus of State Legislators (NHCSL); the Labor Council for Latin American Advancement (LCLAA); the US Hispanic Leadership Institute (USHLI), the US Hispanic Chamber of Commerce (USHCC), LULAC, and ASPIRA, among many others. Recently, the FCC received a letter from 14 leading organizations including those mentioned above, in support of the merger, asking the Commission to consider the Latino community's particular interests in the transaction [1]. HTTP has also submitted its own letter to the FCC, highlighting the diverse range of Latino voices supporting the deal [2].

The reality is that the opposition is loud and will most likely become louder. We ask for proof that the "sky will fall" if this merger is approved ÔÇô for facts that support that the American mobile industry will be taken decades back by the deal. Yet there has been no empirical evidence relayed to that effect. In fact, they cannot offer such evidence. All evidence both anecdotal and factual points to the opposite arguments they are making.

It is clear the old and unsupported view of mergers doesn't apply here. The American telecommunications industry is both dynamic and rapidly expanding in a marketplace that drives a relentless pace for innovation that creates jobs. This holds no comparison to the mergers of old steel or car companies that took place in shrinking marketplaces that commanded massive layoffs.

II. The Merger Unleashes Investment and Expands Good Jobs

For its part, the AT&T/T-Mobile merger will expand union representation in the telecom industry with the support of labor unions. As a result of the merger, AT&T will increase "what is already the biggest organized full-time work force of any broadband provider in the country".

Increased investment and efficiencies in the telecom space will create job opportunities, rather than reduce them for Latinos. Through infrastructure upgrades, increased construction and deployment projects and fostering online business opportunities, the merger will mean more jobs for everyone, including Latinos with the proposed additional $8 billion investment by AT&T for wireless deployment that might otherwise not occur.

III. The Evidence Doesn't Support Price and Consolidation Concerns

Some have argued that the deal is "a horizontal acquisition" that would create a highly consolidated mobile telephone market. It is true that the merger represents the numbers two and four telecom companies coming together, but the cost of obstruction may in fact be far more damaging than approving the deal. Blocking the sale of T-Mobile doesn't mean the status quo will continue -- T-Mobile's parent, Deutsche Telecom has publicly stated they will no longer invest in the American company. In fact, it is entirely likely that American jobs, including many Latinos' may be lost if the deal is blocked and the market faces the prospect of T-Mobile's slow decline or purchase by another rival that does not have the resources to properly invest in the company's success.

On the question of prices and choice, the same argument is brought out to scare us into believing that the merger will mean less competition, higher prices, fewer choices and poor customer service. Yet the opposite is true, as Latinos have benefited from the effectiveness of the telecom industry that has seen these mergers in the past and they will continue to benefit as the largest growing consumer group of wireless services.
Dr. Juan Andrade, President and CEO of the US Hispanic Leadership Institute and one of only two Latino recipients in history of a Presidential Medal of Honor, recently went on the record with the FCC stating, "I am writing in support of the proposed merger of AT&T and T-Mobile. Like you, I too have heard that the merger will have a devastating impact on consumers, promote anti-competitive behavior, and result in higher prices; that the merger will be bad for business, bad for innovation and bad for workers."
Dr. Andrade concludes: "We've heard this all before ÔÇô when SBC was acquiring Ameritech, when AT&T was merging with SBC, and so forth. And what have we seen? We've seen just the opposite. The Federal Communications Commission's own data show that these concerns proved unfounded as consumers benefited from tremendous innovation and competition in the wireless space, all while seeing wireless voice and data prices drop."

IV. Increased Access to High-Speed Wireless is a Benefit to All Communities ÔÇô especially the most hard to reach, Rural Latinos

The AT&T/T-Mobile deal will mean increased investment and an expansion of 4G LTE mobile broadband networks. This will undoubtedly benefit Latino consumers, particularly rural, mobile communities who rely on mobile phones for communication, civic engagement and daily transactions more than any other demographic group. Just this week, the Obama administration called for additional investment in rural broadband [3]. This transaction helps to accomplish that goal.

As avid consumers of mobile broadband services, the increased capacity represented by a post-merger AT&T being able to expand its deployment of 4G LTE technologies to more than 97 percent of the U.S. population will expand high-speed broadband to communities that would not have had an opportunity to be connected. While mobile broadband is only one component of broadband adoption, it serves as an important on-ramp to the Internet for many Latinos who otherwise would not have access. As 4G services become available in these communities, it presents new opportunity to connect more households as a stepping-stone to achieve the goals of President Obama's National Broadband Plan.

The merger will impact jobs, competition, choice, innovation, market expansion, and many other issues. The FCC should take the time to properly consider each of these matters. At the end of the day however, the marketplace as well as the Latino community will benefit greatly by these two companies coming together and the opportunities that flow from the investments that come with it.

[1] http://fjallfoss.fcc.gov/ecfs/document/view?id=7021682751
[2] http://fjallfoss.fcc.gov/ecfs/document/view?id=7021682774
[3] http://www.usda.gov/wps/portal/usda/usdahome?contentid=2011/06/0268.xml&contentidonly=true

About Jason Llorenz, Esq.:
Jason Llorenz is Executive Director of the Hispanic Technology and Telecommunications Partnership (HTTP).
Author's website




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