Self-Interest v. Public Interest

The Communication Workers of America (CWA) represents approximately 300K workers in the U.S. telecom and cable TV industries.  Of those workers, approximately half, or 150K, are employees of AT&T, including 45K in its wireless business.  In fact, AT&T Mobility is the only wireless company that is completely unionized.  In 2017, the CWA wholeheartedly supported the vertical tie-up of AT&T and Time Warner.  Chris Shelton, CWA President, stated that “This merger is about maintaining and creating good U.S. jobs and developing new and innovative ways to deliver technology and content.  A merged AT&T-Time Warner would provide much-needed new competition to companies like Google, Facebook and Amazon, where working people don’t have union representation.” 

Yet, in 2018-2019, the CWA is a vocal opponent of the T-Mobile-Sprint deal claiming that there would be nearly 30K job losses.  Most of those job losses would come from the closure of redundant retail and call center locations.  The union is also claiming that with fewer buyers in the labor market (4 to 3 firms), the market power of those who remain would increase.  This could put downward pressure on the price of labor (wages).  However, this depends on how you define the specific labor (resource) market.  Is the market for retail wireless employees?  If so, then, yes, there would be increased employer concentration (an oligopsony) if the merger was approved and that would contribute to lower wages, ceteris paribus.  But, are the skills needed to work in these stores, for example, much different than what is needed to work in a store like Best Buy?  I don’t think so.  As part of a much larger (tight) labor market, many employers are competing for talent.  As a result, wages would likely not fall.

In its protest of the merger, the CWA is directing its comments to the FCC (and not to the antitrust division of the DOJ).  Under the Communications Act of 1934, the FCC has the statutory duty to determine if the license transfers serve “the public interest, convenience, and necessity.”  For me, this means that the Commission should look at the potential impact the merger might have on the deployment of technology in rural communities (for example).  If there are concerns, it has the “obligation” to get commitments/concessions from the combined firm to make sure the public interest is protected.   I don’t think this extends to protecting retail service jobs (union or not).  The CWA, in its support of the AT&T/Time Warner deal and its opposition to this one, exemplifies how special interest groups put their own interests above those of the public.