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 one-third 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.