Radio advertisements that were slated to begin running Wednesday slam Verizon for reportedly failing to build out its fiber-optic FiOS network to numerous cities within its footprint and letting its traditional phone network deteriorate.
The timing of the 30-second ads coincides with heated contract negotiations between Verizon and two unions that represent 39,000 workers in nine eastern states and the District of Columbia: the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW).
The company and workers’ union representatives are seeking to hash out an agreement concerning pay, retirement security, health-care premium contributions and other benefits.
But the two sides appear to be far apart from reaching an agreement. The unions haven’t specified the “substantial” wage increases they desire, and union reps in New York, New England and the mid-Atlantic are proposing to nix any employee health-care contributions, Verizon’s chief administrative officer, Marc Reed, said in an internal email that Channel Partners obtained. Another proposal, Reed said, would grant new employees job security beginning on their first day.
Verizon characterizes itself as a generous employer. According to the company, an associate in the East receives an average annual salary and benefit package of $130,000. In the New York City/Long Island region, technicians receive a wage-and-benefit package worth more than $160,000 a year, Verizon said.
“We take our bargaining obligation seriously, as we are mindful of the uncertainty that the bargaining process creates for all Verizon employees, and their families,” Reed wrote. “We are also mindful of the fact that these negotiations present significant issues for our business that demand productive engagement by all parties. We commit to you that, for our part, we will continue to work through this process until we reach a resolution that addresses the needs of our dynamic and ever-changing business environment and also preserves good jobs with competitive wages and benefits that we provide to our employees.”
The unions claim Verizon is the one making such unreasonable demands as reducing retirement security, nixing a 20-year-old Family Care Leave policy, and sending call-center jobs offshore.
“At the bargaining table, management has refused to budge off harsh contract demands that unfairly penalize the hard-working men and women who make Verizon work,” said Bob Master, legislative and political director for CWA District One, in a statement. “We reject these demands, and …
… we’re fighting to ensure that Verizon’s workers and customers get the good jobs and good service they deserve.”
The workers’ contracts are set to expire on Saturday, and the majority of affected workers have voted to authorize a strike if necessary. The talks between Verizon and the unions can become impassioned, as occurred four years ago when 45,000 employees went on strike after the CWA and IBEW were unable to reach a new contract with the telecommunications company.
FIOS Claims, Copper Retirement
In a press release Wednesday, CWA painted Verizon as a highly profitable corporation (2014 profit: $9.6 billion) that has refused to build out its high-speed fiber network to such low-income cities as Baltimore, Buffalo, New York and Bethlehem, Pennsylvania.
“Years ago, they committed to make their high-speed Internet and TV service, now called FiOS, available across New York and New Jersey. But today, many communities have been left behind,” an ad that was scheduled to run in New Jersey and New York City proclaims. “And traditional phone service reliability is plummeting.”
Late last month, New York-based Verizon began running print and radio ads in the Northeast, highlighting the benefits of working for a company whose employee base totals 176,000. For instance, the company pointed out that the Military Times Best for Vets ranked Verizon the No. 1 employer; 12,000 military veterans work for the telecom giant.
The ads slamming Verizon “are once again a shallow, half-baked attempt by union leaders to distract attention from the real issues that still need to be resolved,” Verizon spokesman Richard Young said in a statement. “Since June 22, Verizon has made serious and consistent efforts to try and reach an agreement that is fair to all sides and will help keep the company’s landline unit on a path towards success.”
Responding to the FiOS allegations, Young said Verizon has actually exceeded its pledge 10 years ago to pass 18 million households and invest $23 billion in the fiber project.
“The reality is, since then, we’ve passed more than 20 million homes and businesses,” Young said, “clearly exceeding our original target.”
The unions aren’t just griping about FiOS investment — they claim Verizon has failed to …
… maintain its traditional copper network.
“In many areas of New York City, the legacy copper infrastructure is in such poor condition that copper failures due to weather conditions can cause long delays for service restoration and Commission service quality standards are missed,” according to an excerpt of a New York State Public Service Commission staff report that the CWA quoted.
Verizon is among a number of big phone companies that are phasing out their old, copper-based networks and replacing them with infrastructure that can deliver a fatter suite of services including speedy Internet access and pay-television. In a recent blog, David Young, a Verizon executive, cited the advantages of fiber over copper, and he opposed recent requests for Federal Communications Commission rules that he said would divert dollars to copper infrastructure.
“Specifically, some parties are asking the FCC to adopt rules to address ‘de facto copper retirement,’ a made-up problem based on the unfounded claim that copper networks are being allowed to deteriorate to the point of not being usable,” Young wrote in the blog.
He noted that Verizon’s trouble ticket for copper customers has fallen since 2011 to just over two problems per 100 lines. “This is well below the benchmark generally set by states that engage in service-quality regulation,” he wrote.
Jeff Kagan, an independent telecom analyst, said the investment community is more likely to welcome Verizon’s transformation to a wireless and Internet Protocol-based company than customers who are not yet ready. As of June 30, Verizon served 10.2 million residential voice customers, 5.2 million of whom obtain phone service over copper.
“Bottom line, this is the direction the industry is heading, but the entire industry does not all change at the same pace,” Kagan said in an emailed statement to Channel Partners. “Early adopters will be fine. It’s the vast majority of the rest of their customer base who will be affected.”
In the second quarter, Verizon migrated to fiber 51,000 customers who had been connected to its copper network. The company hopes to migrate 200,000 customers for the entire year. Verizon serves nearly 4.7 million FiOS voice residential connections; that’s up 5 percent over the year-ago period.
“True, copper network is yesterday while IP and wireless is tomorrow; however workers and customers don’t all change that quickly,” Kagan said. “A more gradual transformation would have worked better for Verizon and caused much less pushback.”
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