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Verizon-Cable Monopoly Would Kill Jobs

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Fewer jobs, higher prices, less consumer choice and reduced service: That's what Verizon Wireless, America's largest wireless provider, and cable giants like Comcast and Time Warner have in mind for U.S. communities.


Sixteen years ago, major telecommunications companies pushed a deregulation bill through Congress, promising increased competition in return for less public scrutiny.


The companies got reduced oversight, but they haven't lived up to their end of the bargain: Now Verizon, Comcast, Time Warner, Cox and Bright House Networks are proposing a deal that would eliminate much of the competition we were promised.

Until now, Verizon's FiOS service -- America's only all-fiber optic commercial network -- has competed with the cable companies for television, internet and phone business. Now, Verizon Wireless and the cable companies are seeking approval from the Federal Communications Commission (FCC) and U.S. Justice Department to end that competition and jointly monopolize those services instead.

By combining instead of competing, these companies will be able to raise consumer prices, make even higher profits and pay even larger CEO bonuses.


Meanwhile, many communities will lose jobs at a time when we can least afford it. As a result of the deal, Verizon will lose the incentive to follow through with an expansion of FiOS service to customers and communities that don't have it already. More than seven million customers -- 30 percent of the area Verizon now covers with landlines -- will be left without the FiOS option for high speed internet and TV(1).


Thousands of construction techs, cable splicers, installation techs and call center and support workers in communities across 12 states and Washington D.C. could lose jobs as Verizon ceases its FiOS build-out. And jobs would be eliminated at other telecom companies that cannot compete with the Verizon Wireless/Big Cable behemoth(2).

The jobs impact would be particularly pronounced in cities like Boston, Baltimore, Syracuse, Buffalo, Albany, and other urban areas where Verizon has not yet built out FiOS to make it available to local consumers(3).


There will be multiplier effects to job losses in the fiber optic and telecom sectors. As all these workers are put out on the street, they will have less money to support other jobs and small businesses in their communities. In addition, education, health care, energy conservation and public safety will be cut further as badly needed-revenue declines in state and local governments.

Since 2010, Verizon has eliminated almost 15,000 frontline jobs in its wireline business -- a 25 percent cut(4). These are good middle-class jobs with pensions and health care benefits. At this time of high unemployment, families and communities cannot afford to lose even more jobs as a result on the Verizon/Big Cable deal.

Many elected officials, including nine upstate New York mayors and Boston Mayor Thomas Menino, oppose the deal in its current form.

As Menino and others have pointed out, low-income communities, minorities and start-up businesses would be deprived of access to FiOS -- as well as the jobs that building out the service would create -- while wealthy suburbs surrounding Boston and other cities already enjoy FiOS access.


Major consumer organizations, civil rights groups, worker advocates and independent telecommunications providers also are raising their voices against the Verizon Wireless-Big Cable monopoly plan.


We are urging the FCC, which by law must make sure any deal "serves the public interest," to consider employment impacts, as well as the effect on prices and consumer choice.


The Communications Workers of America (CWA), which represents Verizon workers, is asking the FCC to preserve competition by not allowing Verizon Wireless to market cable service where Verizon provides landline service. Verizon should be required to expand FiOS service to at least 95 percent of Verizon households in existing markets. In places where Verizon Wireless and the cable companies are allowed to offer each other's service and develop a common technology, they must agree to offer those services to other potential competitors to reduce their monopoly control.

Eliminating competition undoubtedly sounds like a great plan in the corporate boardrooms and on Wall Street. But the rest of us continue to struggle with job insecurity, hard times for small businesses and severe cuts in essential services. We simply can't afford to let this job-killing scheme move forward without conditions to protect workers, consumers and local communities.

References:
1) CWA research calculation based on data provided by Peter B. Davidson, Sr. VP, Verizon Federal Government Relations to Cong. Michael Doyle dated June 1, 2012. "Our announced plans of passing 18 million households represents 70 percent of homes in Verizon's wireline footprint."

2) CWA Comments and Reply Comments to the Federal Communications Commission, FCC WT Docket No. 12-4, Feb. 21, 2012 and March 26, 2012

3) Multiple citations. See Reply Comments of Boston MA to FCC, WT Docket No. 12-4, March 26, 2012; Reply Comments of Buffalo Community Organizations and Elected Officials to FCC, WT Docket No. 12-4, March 26, 2012; Letter of Elbridge James, Maryland NAACP to FCC, WT Docket No. 12-4, March 26, 2012; Reply Comments of Syracuse Community Organizations and Elected Officials, WT Docket No. 12-4, March 26, 2012; Comments of Citizen Action and Allies in Syracuse; WT Docket No. 12-4, March 26, 2012; see also Letter from 9 Upstate NY Mayors to FCC, WT Docket No. 12-16, 2012.

4) CWA and IBEW membership reports, 2010-present


Larry Cohen is President of the Communications Workers of America.