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.
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