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Windstream to Cut In Half Commissions on Some PaeTec Accounts

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Edward Gately**Editor’s Note: Click here for a list of August’s important channel-program changes you should know.**

A number of Windstream agents say they were caught off guard by a letter from the telco stating that their commissions could be reduced by 50 percent.

Windstream's Jason DishonIn a letter dated Aug. 26, Windstream said it plans to reduce by 50 percent commissions for PaeTec accounts that are currently outside of their contract terms to the extent that those accounts are not renewed for full additional terms and for at least 12 months. Windstream acquired PaeTec in late 2011.

Any renewal pricing to be presented to a customer by the agent will be subject to an “upfront profitability analysis” by Windstream to ensure the pricing meets the telco’s financial strategy, the letter said.

Windstream also said commissions will be reduced by 50 percent on PaeTec accounts that will reach the end of their contract terms either during or after a 90-day notice provided in the letter.

Windstream said it is reducing commissions because of “financial uncertainty” related to revenue derived from PaeTec accounts outside of their respective contract terms, as well as “increasing costs inherent in changing technologies and/or providing services that are not current with the most up-to-date available market technologies.”{ad}

One of the agents who received the letter, who spoke under anonymity, said this is a “major commission hit with deep ramifications to our ability to operate.” He chose to speak anonymously because the letter says all information contained is confidential.

“Of course we’ll need to adjust our business practice accordingly, but in some way we’ve seen something like this about to transpire,” he said.

Jason Dishon, Windstream’s channel chief of enterprise sales and operations, tells Channel Partners that this is part of the telco’s effort to refine its channel-partner strategy.

“Earlier this year we announced a complete redesign of our channel service model to give partners dedicated support and access to additional resources, information and tools,” he said. “The investments are part of a long-term strategy to simplify and strengthen our channel program to give partners and customers more efficiency, better prioritization and an improved customer experience.”

As part of the initiative, Windstream identified channel partners who may have customer accounts that are …

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… outside of, or near the end of their respective contract terms, and who haven’t yet renewed for a minimum 12-month term, Dishon said.

“As a result, we recently notified our channel partners that any customer account that is outstanding and not renewed within the renewal window will see their commission rate paid for that customer reduced by 50 percent,” he said. “Ultimately our goal is to help our channel partners migrate customers with out-of-date contracts to new contracts with minimum 12-month terms.”{ad}

The intent isn’t to eliminate certain types of customers or contracts, but “to help get the customers renewed,” Dishon said.

“We’re also giving channel partners a one-time, 90-day renewal extension window to migrate their customers to new contracts,” he said. “Our goal is to migrate all customers to new contracts, which will bring added stability and predictability to both Windstream and our channel partners.”


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