While the U.S. is in the depths of an economic crisis with no end in sight and harder times looming ahead, the Department of Justice and the Federal Communications Commission are reviewing a proposed $39 billion merger between AT&T and T-Mobile. Like many developments in this Great Recession, it has the potential to add millions more to the pockets of the already wealthy while hurting those struggling to get by.
The merger should be rejected outright because it would create an anti-competitive wireless market, resulting in lost jobs and higher monthly bills for customers. But if the government needs further convincing, it should reject the merger because of the harm it would cause the most vulnerable in our society, which tragically -- but predictably -- includes too many Latino and African-American families.
A recent Pew study paints a grim picture of how the economic crisis has devastated brown and black families. It found that average median household wealth for Latino families plummeted 66 percent from 2005 to 2009 and fell by more than half during that same period for African-American families.
By removing the lowest-cost national competitor -- T-Mobile -- from the wireless market, the merger would make it more difficult for families of color, who make up about half of T-Mobile's customers, to find a foothold in today's digital society. The merger would create a duopoly, leaving AT&T and Verizon with control of nearly 80 percent of the wireless market. At a time when people are already under economic distress, the merger would make it even more difficult for Latino and African-American families to find affordable wireless service.
This is especially important because Latinos and African Americans disproportionately rely on mobile devices to access the Internet. The digital divide could widen since the cost of Internet access is a primary reason why so many people of color remain disconnected. And as job hunters will tell you, finding work without Internet access is extremely difficult.
T-Mobile customers should expect their wireless bills to go up if AT&T's multi-million-dollar lobbying blitz is successful in pressuring the federal government and the Obama Administration to cave in -- once again -- to corporate interests.
It's no accident that nearly half of T-Mobile customers are people of color since the company offers the most affordable plans of the four national carriers. Meanwhile, AT&T plans are the most expensive.
Malkia Cyril, executive director of the Center for Media Justice, wrote earlier this year that the merger could place a "financial burden" on "struggling" workers, leaving "them without the access they need - and one step farther away from a higher wage or a better education."
If the merger is approved, thousands of people of color would likely lose their jobs at a time when the unemployment rates for African Americans (15.9 percent) and Latinos (11.3 percent) are much higher than the national average (9.1 percent).
Those numbers will climb, as AT&T intends to cut $10 billion in "synergies" (read: as many as 20,000 employees) from the merged companies; people of color make up 48 percent of T-Mobile's workforce.
"This acquisition would lead to layoffs as the United States is trying to rebuild its vulnerable workforce," recently wrote Alex Nogales, the president of the National Hispanic Media Coalition. "Countless Latinos and others stand to lose their jobs as a result of AT&T's plans to embrace the so-called synergies."
AT&T has enlisted many respected nonprofit groups to trumpet the supposed benefits of the deal to the communities served by these organizations.
But AT&T's true motives for pursuing a merger were disclosed last week when the company mistakenly released unredacted, confidential information it filed with the FCC, according to press reports. The information torpedoed AT&T's main argument -- that the merger is necessary to expand the company's 4G network to reach 97 percent of the population. The leaked document, however, showed that the task could be accomplished for just $3.8 billion -- one-tenth of the merger's cost.
So why would AT&T pay a 900 percent markup to achieve that goal? The company would rather take out a competitor than compete for customers.
To get this merger through, AT&T is willing to spend millions to buy support for its bogus arguments. And there's no shortage of lobbying firms and politicians lining up to exploit the financial opportunities this merger presents.
But while AT&T and its friends are raking in more money, you'll come to find they've been taking it out of your pocket.
Take action and tell President Obama to stop the merger.
The Morning Email helps you start your workday with everything you need to know: breaking news, entertainment and a dash of fun. Learn more