Since 2017, AT&T has received not only a $ 42 billion tax break courtesy of the Trump administration, but billions more in regulatory favors from the Trump FCC, including the repeal of net neutrality, the erosion of much of the FCC’s authority to police natural telecom monopolies, and the elimination of broadband-specific privacy rules. In exchange, AT&T promised thousands of “high paying jobs” and a massive spike in investment. Instead, AT&T fired more than 42,000 employees and trimmed its overall 2020 investment. It’s nice work if you can get it.
And AT&T’s not done yet. AT&T spent roughly $ 175 billion DirecTV and Time Warner mergers thinking it could buy its way to streaming video domination. But that’s not working out so hot, and AT&T’s now doing everything in power to trim its balance sheet. That includes plans to sell DirecTV for a huge loss, and thousands more layoffs across Time Warner, HBO, and other recently acquired properties:
“AT&T’s WarnerMedia is restructuring its workforce as it seeks to reduce costs by as much as 20 percent as the coronavirus pandemic drains income from movie tickets, cable subscriptions and television ads, according to people familiar with the matter. The overhaul, which is expected to begin in the coming weeks, would result in thousands of layoffs across Warner Bros. studios and TV channels like HBO, TBS and TNT, the people said.
COVID will provide cover for AT&T, but these layoffs had already been in the works after investor backlash at AT&T’s merger mania. COVID will also create cover for the fact that this is all stuff that opponents of the AT&T Time Warner merger repeatedly warned would happen before being promptly ignored by regulators at the FCC and elsewhere. These mindless megadeals always come bearing ample promises about next-level innovation, right before delivering layoffs and higher prices for consumers and competitors alike.
The company’s promise that the deal wouldn’t result in price hikes for consumers? False. The company’s promise the deal wouldn’t result in higher prices for competitors needing access to essential AT&T content like HBO? False. AT&T’s promise they wouldn’t hide Time Warner content behind exclusivity paywalls? False. The idea that the merger would somehow create more jobs at the company? False. Falsehoods that were all taxpayer subsidized and rubber-stamped thanks to regulatory capture.
This being America, you can expect nobody, on absolutely any level of punditry, press, or government, to learn absolutely anything from this experience.