Communications Workers of America Urges FCC to Deny Sale of AT&T Mobility Units to Liberty Latin America

FOR IMMEDIATE RELEASE: January 22, 2020 

The union says the transaction as currently structured threatens considerable harm to the public interest by endangering potentially hundreds of jobs, harming workers and threatening service quality.

WASHINGTON – In comments filed yesterday, the Communications Workers of America (CWA) called on the FCC to deny the sale of AT&T Mobility operations in Puerto Rico and the U.S. Virgin Islands to Liberty Latin America Ltd. (LLA). Because of LLA's strained financial position and track record of opposing workers' rights, including the offshoring of jobs to countries with lower labor standards, the deal, as currently structured, endangers jobs, harms workers, and threatens service quality.

CWA also outlines how the transaction could impact the deployment of FirstNet – a particular concern given recent natural disasters in Puerto Rico – as another reason that more disclosure is needed to assess whether the transaction will harm the public interest. FirstNet is the nation's first interoperable broadband network specifically dedicated to first responders and the agencies and personnel who support them, and it's being built, operated, and maintained by AT&T.

"Puerto Rico has seen its telecommunications infrastructure destroyed by numerous natural disasters in recent years," said Communications Workers of America President Chris Shelton. "AT&T's plans to dump its mobility operations in both Puerto Rico and the U.S. Virgin Islands appeases Elliott Management and boosts AT&T's stock price with complete disregard for the public interest, the company's workers and the health of AT&T's network. The FCC should deny this transaction unless there are clear and enforceable commitments by Liberty Latin America to honor collective bargaining agreements, protect jobs in Puerto Rico and U.S. Virgin Islands, and invest in quality service for its customers, including a robust 5G network."

Liberty Latin America, a Bermuda-incorporated company, has had a negative net income since 2016 and is highly indebted, with a leverage ratio greater than any of its peers. LLA's strained financial position raises serious questions about the company's ability to invest in network upgrades and achieve true 5G service for Puerto Rico and the U.S. Virgin Islands.

In September, after purchasing a small stake in AT&T, Paul Singer's Elliott Management announced plans to extract profits at the company by eliminating jobs and divesting critical assets. Elliott Management's proposals also push AT&T to spend billions on stock buybacks, drive up its share price, and enrich Singer, leaving fewer resources for building next generation wireless and fiber broadband networks and training workers for the jobs of the future. When AT&T announced in early October that it would sell its Puerto Rico and U.S. Virgin Island Mobility units to LLA, the Wall Street Journal noted that this deal aligned with the goals outlined by Elliott Management.

CWA, which represents approximately 100,000 AT&T workers, has voiced strong opposition to the controversial proposals from Elliott Management. The union has said Elliott's plans would put 30,000 jobs at risk, including jobs in Puerto Rico and the U.S. Virgin Islands, destroy long-term value at AT&T and are the "archetype ploy of vulture capitalists." In October, CWA penned letters to AT&T's CEO, board of directors, the company's 100 largest investors, and the Business Roundtable, calling on them to reject damaging proposals from Elliott Management.

As of December 2019, CWA represented 840 workers employed by AT&T Mobility in Puerto Rico and 37 workers employed by AT&T Mobility in the U.S. Virgin Islands. The workers represented by CWA work as technicians, retail employees, and call center representatives, among other positions.

CWA's filing is available at https://cwa-union.org/sites/default/files/20200121-cwa-fcc-comments-att-libertylatinamerica.pdf.

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