Telco TV

Job Cuts Could Help Make Verizon’s Case for Cable Deal

6/11/2012 12:01 AM Eastern

Washington — The International
Brotherhood of Electrical
Workers, deadlocked in contract
talks with Verizon Communications,
is using recent job cuts at
the telco in New England and
New Jersey to argue against
the government approving the
phone company’s planned purchase
of wireless spectrum
from cable operators in the
SpectrumCo coalition.

Verizon contends the two issues
are unrelated, and that
any suggestion otherwise is not
true. But the job cuts could potentially
help Verizon Wireless
make its case for buying spectrum
from cable operators.

The IBEW said that the more
than 600 job cuts announced
by the telco last week threaten
future buildouts of Verizon
FiOS TV and Internet services,
something about which activist
groups and some legislators
have expressed concerns.

VOLUNTARY CUTS FIRST

Speaking on background, a Verizon executive said the
goal is to cut about 1,700 jobs in New England, Mid-Atlantic
states and in the Southern region through a voluntary
buyout, with layoffs coming into play if that target
isn’t reached. Employees who take the buyout will leave
by the end of June or mid-July.

The union made a direct link between the cutbacks
and the cable-spectrum
deal.

“At the same time Verizon
is cutting its workforce,
the company’s wireless division
continues to lobby for
its proposed monopoly with
Comcast and Time Warner
— a deal which would end
competition, raise prices
and discontinue the development
of a high-speed Internet
infrastructure,” the
union said.

“[The deal] will give Big
Cable an unfair advantage
in the marketplace,
which means higher rates
and fewer options for consumers,
while stranding
many communities with a
20th century telecommunications
system,” IBEW local
827’s Bill Huber said in a
statement. “If this deal goes
through, it’s the end of genuine
competition.”

“Big Cable” in this case
consists of Comcast, Time
Warner Cable, Cox and
Bright House Networks, which have struck a deal to collect
just south of $4 billion for advanced wireless services
spectrum they bought at auction in summer of 2006.

“There is absolutely no connection between this reduction
and SpectrumCo or any other program or effort going
on at Verizon, and it is inaccurate to portray it in any such
way,” Verizon spokesman Richard Young said.

There may be no causal connection, but two things are
clear: The wireline business is on the wane, and Verizon
and other wireless companies are under pressure from
the Obama administration to boost wireless-broadband
buildouts. And those deployments take money and people
that have to come from somewhere.

While FiOS still sees “solid growth” as copper voice
lines continue to decline, Young said, the fiber deployments
require fewer maintenance workers. “We continually
adjust our workforce based on the needs of our
customers and the needs of the business,” he said.

Verizon isn’t saying it publicly, but it could certainly argue
that the cable spectrum deal is a way to reassess that
business and respond to the growing shift from landline
to wireless and Internet-based telephony.

HOMES CUTTING CORD

In an unrelated blog item last week, the Technology Policy
Institute pointed out that by June of last year, almost onethird
of American households were wireless-only, according
to Census Bureau figures. That will clearly take a toll on
landline service and the employees who provide it.

The job cuts had nothing to do with Verizon Wireless,
Young maintained. “That said, a growing number of Americans
are wireless-only,” he said. “In addition, many have
several wireless devices [smartphones, iPads etc.] And those
devices are using more and more spectrum.”

Verizon executives remain the FCC and Justice Department
will eventually approve the deal and that the
related cross-marketing agreements will also survive.

September