Windstream Partners Unhappy with ‘Intimidating’ Agreement Notices

Intimidating Businessman

… the single biggest risk of the agent model. It’s a great business from a cash-flow standpoint; it’s even become attractive in terms of the potential for selling your agency. But as an agent you have far fewer sources of payment, so if one of your provider partners goes under and decides to reject your agent agreement as part of bankruptcy process, then you’re out of luck.”

The problem for agents is that as part of the bankruptcy process, Windstream “can put conditions on the assumption of agent agreements, like they’ve done here where the agent has to produce a certain amount of revenue within the first six months and their base can’t shrink beyond a certain percentage,” Bronston said.

Agents have a difficult decision to make regarding whether they’re willing to sign the agreement because Windstream is “holding these commitments over [their] heads, and it’s very difficult to sell Windstream right now because people either know they’re in bankruptcy or they’ve had bad experiences reqarding network performance or billing, or what have you,” he said. “My thought is agents should sign the revised agreement and live to fight another day because if they don’t, Windstream will cut them off and they’ll have nothing.”

As for evergreen, Bronston said “an evergreen clause is critically important for any agent agreement assuming the provider is going to stay in business, but if it goes bankrupt, all bets are off.”

“The bigger producers are the ones a bankrupt company are going to want to keep happy, so they are often the ones that end up coming out whole or close to it [post-bankruptcy],” he said. “The smaller guys are the ones who oftentimes end up getting left out in the cold.”

When contacted by Channel Partners, Allen said his company sent amendments to existing agreements outlining the program, which includes “significantly enhanced compensation for our strategic products.” He also said “we are pleased with the initial response from partners to the amended agreements.”

Windstream's Curt Allen

Windstream’s Curt Allen

“The new program will be smaller in number of partners, but will be larger in engagement and revenue production with no reductions in program resources, and we will invest more as we go forward,” he said. “Our ability to deliver resources to a more focused, manageable number of partners will greatly benefit the partners in the program.”

One of the principal responsibilities in the reorganization process is a fiduciary duty to review all executory agreements, including agreements with vendors, landlords and with partners, Allen said.

“We think the amended terms we settled on balances that fiduciary responsibility with reasonable engagement
requirements by our partners,” he said.

As for whether partners are having a harder time selling Windstream, Allen said his company continues to see “strong growth in our strategic sales, including SD-WAN and UCaaS.”

“Many of our partners are more engaged now,” he said. “We are confident that upon completion of the reorganization process we will be even better positioned to invest in our business, expand our speed and capabilities for our
customers, and compete for the long term.”

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