Thursday, March 27, 2014

The FCC Should Reject CWA’s Job Protection Pleas, Again

Since the Federal Communications Commission opened its docket seeking comment on Frontier Communications’ application to acquire AT&T’s wireline business and statewide fiber network assets in Connecticut, only one comment objecting to the transaction has been filed. Communications Workers of America (“CWA”) argues that among other negative impacts, the transaction, if approved, could adversely affect employment levels and worker living standards. The Commission may consider the impact of the transaction on service quality, consumer access to service, and other factors when evaluating a merger proposal. But it is improper for the Commission to consider job loss and other employment related impacts during a transaction review, and job protection should not be imposed as a condition on transaction approval.

Under Section 214(a) and 310(d) of the Communications Act, the Commission must determine whether a transaction will serve the public interest, convenience, and necessity. FSF scholars have often commented on how the public interest standard, by virtue of its ambiguity, has been interpreted in an abusive way to justify the Commission’s unsavory practice of, in effect, “regulating by condition.” Yet even among the range of factors the Commission has included in its determination of whether a transaction is consistent with the “broad aims of the Communications Act,” whether and how a proposed transaction will affect employment practices is not a proper one.

CWA currently represents 2,900 workers who are employed by AT&T’s affiliate in Connecticut, and 3,800 employees at Frontier nationwide. CWA urges that the Commission should insist that AT&T and Frontier provide “detailed and granular employment data” and “assurances” that the transaction will not lead to any reduction in employment levels and workers’ living standards. CWA argues in its comments that the Commission has considered “whether a proposed transaction will lead to public interest harms with respect to employment practices” in the past and should do so again in reviewing Frontier and AT&T’s application.  

Notably, CWA only cites short statements from FCC Chairman Genachowski and a handful of Commissioners to support this argument; CWA does not point to any of the plentiful public interest standard jurisprudence available. Although Commission officials may have noted the impact of transactions on employment, the FCC’s statutory authority to review transaction proposals should not be construed to allow Commissioners to weigh employment as a factor in its determination, nor have courts interpreted the public interest standard to include such a consideration. And the FCC cannot, and should not, impose job protection conditions on the transaction, as CWA has requested for other transactions.

In its comments objecting to the T-Mobile/MetroPCS merger several years ago, CWA also argued that the Commission should consider the impact of the transaction on employment practices. CWA also requested that the Commission impose job protection conditions on the transaction. FSF President Randolph May responded to CWA’s arguments on the FSF blog: "[T]he FCC has no business abusing its merger review authority by conditioning the merger on adoption of the job protection plan put forward by the CWA. Regardless of whether the Commission has abused its authority this way in the past, such a condition is simply too far afield from any legitimate view of the Commission's exercise of its merger review responsibilities."

The Commission’s public interest authority may be broad, but not so broad as to include the management of the size and composition of company workforces. And the Commission’s authority to impose conditions that promote the public interest does not enable it to extract job protection conditions upon approval of a transaction. Doing so would be an abuse of its regulatory authority and would likely open the Commission to a barrage of requests for job protection plans in other contexts.

While it is unclear whether the Frontier-AT&T transaction will affect employment, and certainly no one wants to see jobs lost for any reason, job protection is just not within public interest purview.