Lexington, KY - Communications giant AT&T, the nation's second largest wireless carrier, wants to merge with T-Mobile, ranked fourth in size among wireless carriers, in an estimated $39 billion deal. But the transaction has been stymied by a U.S. Department of Justice lawsuit.
"The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower-quality products for mobile wireless services," said deputy attorney general James Cole. "Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation's wireless carriers, particularly the four remaining national carriers," he concluded.
Naturally, AT&T disputes that. It claims the merger will expand 4G coverage to 97 percent of the U.S. population, improve voice and data service, bridge the digital divide and deploy broadband access in more rural communities, such as those in Kentucky.
AT&T seems confident of defending the federal lawsuit, which, if it isn't settled first, goes to trial in mid-February.
"We're optimistic that it (the merger) will move forward and that the outcome will be good for the country and good for Kentucky," said Brad Rateike, a spokesman for AT&T in Kentucky and Indiana. "It allows us to build out the 4G Long Term Evolution (LTE) network, which is incredibly fast, to more parts of the country."
A map produced by AT&T shows Kentucky's current 4G penetration and what it would supposedly look like under ideal conditions produced by a merger. Only a few remote areas of eastern Kentucky would not be covered by 4G, according to the map.
AT&T says the merger will also help ease an impending industry problem. With the explosive demand for mobile broadband and the growth of airwave-dependent devices like smartphones and tablet computers, the nation faces limits on the spectrum or range of available airwave frequencies.
Perhaps to sweeten the merger deal or to counter negativity created by the government's lawsuit, AT&T made a jobs promise on Aug. 31, saying it will return 5,000 wireless call center jobs to the United States that are currently outsourced to other countries.
"At a time when many Americans are struggling and our economy faces significant challenges, we're pleased that the T-Mobile merger allows us to bring jobs back and significantly increase our investment here," stated AT&T chairman and CEO Randall Stephenson.
"We are pretty sure that this is the largest commitment of its type by a major American company to bring jobs back to the United States since the economic crisis began in 2008," remarked AT&T spokesman Rateike.
AT&T has not yet determined where the new jobs will land in the United States. But when the company brought home call center jobs a few years ago, many ended up in Kentucky.
"In the past, of the jobs that we brought back, over 600 went to Grayson, Ky. And another 450 to 500 went to Louisville in support services," explained Dave Weller, a regional director for AT&T.
"If you lived in Paris or Winchester and had our high-speed broadband service and called for assistance, the place you would be routed to first would be Louisville," said Weller. "If you have our wireless service, such as for an iPhone or Android phone, you would likely get our center over in Grayson. These are jobs that we already re-populated in the United States."
The company also has a call center in Owensboro.
AT&T employs approximately 3,200 employees across Kentucky working in such areas as construction and engineering, installation and maintenance of the wireline and wireless networks, the AT&T retail stores and of course, call center representatives.
Many companies with call centers in foreign countries have fielded complaints about poor customer service. Weller addressed that issue.
"What we found was that American employees are not only more easily understood, they are more creative and inventive as far as listening to the customers and more quickly getting to solutions. Even though it costs more to employ people back in the United States, it has improved customer service to the point where it made it a smart decision," said Weller.
AT&T says it will not displace any of its current U.S.-based call center representatives to make room for the jobs being repatriated from around the world. Many AT&T employees are unionized and represented by the Communications Workers of America.
In addition, AT&T says the merger with T-Mobile would add $8 billion of private infrastructure investment, which will create additional jobs.
As for stifling competition and innovation, AT&T says the merger will maintain a "fiercely competitive wireless market with declining prices."
To top it off, the company also said the merger and its effects would help the United States achieve policy goals in communications. For example, President Barack Obama has identified technology as an essential ingredient in economic growth and job creation and has urged development of 21st century digital infrastructure such as high-speed broadband and 4G wireless networks, new health care information technology and a modernized national electrical grid.