Nogales: AT&T Merger Will Hurt Latino Community

Posted July 28, 2011 at 3:23pm

I have recently read a number of headlines implying that all civil rights organizations support AT&T’s acquisition of T-Mobile. That is simply untrue.

After a piercing review of the facts, the National Hispanic Media Coalition and the National Institute for Latino Policy, two distinguished and long-standing national Latino advocacy organizations, jointly filed a petition to deny AT&T’s acquisition of T-Mobile. And NHMC and NiLP aren’t the only civil rights organizations with serious concerns.

The Center for Media Justice — along with 50 other organizations representing people of color, the poor and rural Americans — sent a letter to the Department of Justice and the Federal Communications Commission urging those agencies to block the acquisition.

Similarly, the Greenlining Institute, the Latino Business Chamber of Greater Los Angeles, the Black Economic Council, the National Asian American Coalition and others have expressed apprehension.

These organizations have good reasons for their trepidation. A horizontal acquisition of this nature — between AT&T, the second-largest mobile phone service provider in the U.S., and T-Mobile, the fourth-largest — would create a highly consolidated mobile phone market. Consumers, especially itinerant consumers (as many Latino workers are) who rely on national providers to ensure they can connect no matter their locale, would be forced to select from one of only three providers.

Less competition in the marketplace would lead to higher prices, fewer choices and worse customer service at a time when consumers can least afford it. This would disproportionately harm Latino consumers.

Latinos — more than any other demographic group — rely on mobile phones for communication, democratic participation, civic engagement and economic empowerment.

Mobile phones have become a necessity for many individuals and families, and with 25 percent of Latinos living below the poverty line, higher prices would be devastating. On average, Latinos pay $104 per month for mobile phone services — already significantly more than any other demographic group.

And of the four major national carriers, Latinos pay the highest rates with AT&T, averaging bills of $120 per month, and the lowest with T-Mobile, averaging $102. Thus, it should be no surprise that 21 percent to 25 percent of T-Mobile’s 34 million customers are Latino, compared with 12 percent of AT&T’s customers.

With approval of this acquisition, T-Mobile customers would have fewer choices for pricing plans and devices and would be subject to AT&T’s documented history of poor customer service.

In addition, this acquisition would lead to layoffs as the United States is trying to rebuild its vulnerable workforce. And while I welcome the increased number of union jobs that AT&T claims this acquisition would create, I firmly believe that those jobs should not come at the expense of layoffs and fewer overall employment opportunities in the telecommunications sector.

Unfortunately, countless Latinos and others stand to lose their jobs as a result of AT&T’s plans to embrace the so-called synergies that this acquisition would produce. In the past decade, both companies — as part of an effort to reach the burgeoning Latino market — have hired large numbers of Latinos to staff and manage their retail stores and to provide bilingual customer service for billing and other issues. AT&T is now proposing to consolidate retail stores and billing systems, necessarily leading to layoffs and eliminating various opportunities for prospective employees.

AT&T is held in high regard among many civil rights groups for various reasons, including its outreach to and generous philanthropic support of those organizations, as well as its history of employing, promoting and retaining Latinos and other people of color throughout its workforce.

Although I commend AT&T’s philanthropic and employment diversity efforts, I stress that it does not nearly compensate for the long-term harms that consumers, particularly Latino consumers, will feel as a result of this acquisition.

Alex Nogales is president and CEO of the National Hispanic Media Coalition.