Several members of Congress on Thursday penned a letter to President Obama and urged his administration to embrace the AT&T and T-Mobile merger, arguing that it will help spur job creation.
"On September 8th, you came before a Joint Session of Congress and asked us to focus our efforts on solving America's jobs crisis by working to reduce unemployment, encourage private investment and promote new and innovative technologies that will drive job creation," Rep. Heath Shuler, a North Carolina Democrat, wrote to Obama. "One opportunity rests squarely before you with the proposed transaction between AT&T and T-Mobile USA."
The Department of Justice recently filed suit, seeking to block the proposed $39 billion merger, arguing that it would hurt competition in the wireless industry. However, Shuler, and the 14 other members of Congress who signed the letter, argued that "the merger will reduce unemployment."
The letter pointed to AT&T's promise to bring 5,000 call center jobs back to the U.S. should the T-Mobile deal close, as well as a recent report that said the merger could create up to 96,000 new jobs. Shuler and others also said the deal "will engender new private investment to deploy wireless high speed Internet access services to 97 percent of the U.S. population."
Rival Sprint, however, recently released a report that slammed AT&T's job creation claims. The carrier partnered with David Neumark, director of the Center for Economics and Public Policy at the University of California at Irvine, and found AT&T's promises of job creation to be "completely unfounded."
In defending the merger, AT&T has referenced a May study from the Economic Policy Institute (EPI) that suggested AT&T could create between 55,000 and 96,000 jobs over the next seven years if it acquires T-Mobile. But that would only happen if AT&T follows through on a promise to invest $8 billion in its infrastructure during the same time period.
Neumark, however, said that "AT&T has actually told investors and the federal government that the merger would lead to reduced capital expenditures on net. If you take EPI's own logic and apply that net reduction in capital expenditures to the data, you predict fewer jobs, not more jobs."
In a Thursday statement, a Sprint spokesman insisted that "AT&T's proposed takeover of T-Mobile will eliminate tens of thousands of jobs across the country."
"At the moment, this matter is before the Courts, not Congress, and we are confident that the Department of Justice decision to prosecute this unlawful transaction is the right one for consumers, for competition, and for the economy as a whole," Sprint concluded.
Sprint has also sued to block the merger. A hearing in the Department of Justice's case, meanwhile, is set for September 21.
For more, see On AT&T/T-Mobile Merger, Justice is Served as well as 7 Alternative Buyers for T-Mobile.