Search News
For the Media
For media inquiries, call CWA Communications at 202-434-1168 or email comms@cwa-union.org. To read about CWA Members, Leadership or Industries, visit our About page.
Workers, Consumers to Gain from SBC-AT&T Merger
Washington, D.C. -- A research paper released by the Communications Workers of America has determined that the merger of SBC Communications and AT&T "is in the best interests of consumers and industry employees throughout the United States because it will reinvigorate AT&T's declining business" and present no harm to competition.
In fact, without a vigorous merger partner, "there is a real threat that AT&T will face even more dramatic declines, or will disappear altogether. That would be very damaging for consumers and workers," the report said.
CWA President Morton Bahr said it was critical that state and federal regulators review the report's findings. "AT&T's consumer business is now in a free-falling decline, and this will continue to have a drastic impact on employment and jobs. Allowing this company to decline into obsolescence, and eventually be sold off for its assets, serves no one. The merger with SBC, however, provides a real opportunity for job growth and the further development of services and products that consumers want," he said.
The CWA paper cited the dramatic deterioration of AT&T's operations, noting that total revenues had declined by $19 billion, or 38 percent, since 1999. In 2004, AT&T suffered a $10 billion operating loss, the report noted.
"The principal victims of the decline are AT&T employees," with the company cutting occupational employment in the wireline operations by two-thirds, or 27,000 jobs since 1999, the paper found. This downsizing has been devastating to families and communities, and also threatens customer service as AT&T continue to slash jobs and outsource and offshore technical and customer service work to places such as India, the Philippines and Mexico, the report said.
It is clear, the report said, that "AT&T, as a stand alone business, can only go in one direction, and that involves shrinking revenues, shrinking income, shrinking investment and shrinking jobs," the study said. But "SBC has a plan for AT&T that will create a new, vigorous provide of innovative telecommunications products for consumers and a robust provider of secure jobs in communities throughout the United States," it added.
AT&T has a record of careening "from one failed business strategy to another," the report said, citing AT&T's decision to sell the cable operation it originally purchased for $92 billion for $54 billion, thus abandoning its facilities-based broadband strategy, and its decision in 2001 to spin off its wireless operation, leaving the company without a wireless product to meet customers' demands for bundled service.
Other AT&T actions – exiting the residential market, discontinuing direct marketing of Voice over the Internet Protocol, closing call centers, severely limiting all marketing, moving away from service to small business customers – also indicate that AT&T has clearly chosen to focus only on larger business and government customers.
It is clear that both consumers and business customers are finding other providers, including CLECs, cable providers and Voice over the Internet Protocol (VoIP) providers, and wireless companies to handle their communications needs, the report noted. "Already-abundant competition in the telecom space is expanding further," the study said.
"The number and prominence of competitors able to offer local and long-distance service has been on the rise," wireless service…has cut deeply into the number of minutes used on wireline networks, cable companies are offering similar packages, and emerging technologies offer additional competitive outlets, including VoIP, email, instant messaging and text messaging, the report found.
The future for AT&T employees is less clear, however, and these workers need the opportunity of the merger with SBC to stabilize their future, the report said.
Federal and state regulators should quickly and enthusiastically endorse the proposed transaction, the report concluded. The New Jersey Board of Public Utilities will take up the issue tonight at a meeting in Somerset County.
###
The white paper is available here.
In fact, without a vigorous merger partner, "there is a real threat that AT&T will face even more dramatic declines, or will disappear altogether. That would be very damaging for consumers and workers," the report said.
CWA President Morton Bahr said it was critical that state and federal regulators review the report's findings. "AT&T's consumer business is now in a free-falling decline, and this will continue to have a drastic impact on employment and jobs. Allowing this company to decline into obsolescence, and eventually be sold off for its assets, serves no one. The merger with SBC, however, provides a real opportunity for job growth and the further development of services and products that consumers want," he said.
The CWA paper cited the dramatic deterioration of AT&T's operations, noting that total revenues had declined by $19 billion, or 38 percent, since 1999. In 2004, AT&T suffered a $10 billion operating loss, the report noted.
"The principal victims of the decline are AT&T employees," with the company cutting occupational employment in the wireline operations by two-thirds, or 27,000 jobs since 1999, the paper found. This downsizing has been devastating to families and communities, and also threatens customer service as AT&T continue to slash jobs and outsource and offshore technical and customer service work to places such as India, the Philippines and Mexico, the report said.
It is clear, the report said, that "AT&T, as a stand alone business, can only go in one direction, and that involves shrinking revenues, shrinking income, shrinking investment and shrinking jobs," the study said. But "SBC has a plan for AT&T that will create a new, vigorous provide of innovative telecommunications products for consumers and a robust provider of secure jobs in communities throughout the United States," it added.
AT&T has a record of careening "from one failed business strategy to another," the report said, citing AT&T's decision to sell the cable operation it originally purchased for $92 billion for $54 billion, thus abandoning its facilities-based broadband strategy, and its decision in 2001 to spin off its wireless operation, leaving the company without a wireless product to meet customers' demands for bundled service.
Other AT&T actions – exiting the residential market, discontinuing direct marketing of Voice over the Internet Protocol, closing call centers, severely limiting all marketing, moving away from service to small business customers – also indicate that AT&T has clearly chosen to focus only on larger business and government customers.
It is clear that both consumers and business customers are finding other providers, including CLECs, cable providers and Voice over the Internet Protocol (VoIP) providers, and wireless companies to handle their communications needs, the report noted. "Already-abundant competition in the telecom space is expanding further," the study said.
"The number and prominence of competitors able to offer local and long-distance service has been on the rise," wireless service…has cut deeply into the number of minutes used on wireline networks, cable companies are offering similar packages, and emerging technologies offer additional competitive outlets, including VoIP, email, instant messaging and text messaging, the report found.
The future for AT&T employees is less clear, however, and these workers need the opportunity of the merger with SBC to stabilize their future, the report said.
Federal and state regulators should quickly and enthusiastically endorse the proposed transaction, the report concluded. The New Jersey Board of Public Utilities will take up the issue tonight at a meeting in Somerset County.
###
The white paper is available here.