Subscribe[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Connection Blocked PSA.flv[/flv]
Net Neutrality is the free speech issue of our times. Save the Open Internet! Visit http://wgaeast.org/savetheinternet to send a message to the FCC. (1 minute)
Retired employees of Embarq, an independent phone company bought by CenturyLink in 2009 for $11.6 billion dollars, are getting a Christmas “gift” they’d rather not receive: a permanently frozen pension.
Following some earlier moves by other telecommunications firms, CenturyLink is now notifying former Embarq employees that it will permanently freeze benefit accruals for employees not represented by unions as of Dec. 31.
“These changes align our retirement benefits closer to those offered by our competitors, many of whom have previously effected similar changes over the past several years,” CenturyLink said in a filing with the federal government.
It estimated that the changes will save the company about $20 million during the next five years.
CenturyLink apparently had $11.6 billion to acquire Embarq, but does not have $20 million to spare to pay former employees legitimate pension benefit accruals after decades of service.
It is not the first time Embarq’s former employees have suffered from benefits downsizing. In 2008, retirees were notified their health care benefits were being canceled, the company’s non-profit matching gift program was being thrown under the bus, and life insurance benefits for those most likely to need them were being capped at $10,000.
Many retirees, already having lost their savings in the Great Recession, and have no prospects for future employment, cannot afford to replace the lost benefits. Many are well into their 70s.
A daughter of one retiree reacted to the ongoing parade of canceled benefits and broken promises to retired employees:
Last night my mother called me in tears. Not with tears of sadness but with tears of rage.
She received a letter yesterday telling her that the company that took over the company that she worked at for 25 years is stopping almost all of her retirement benefits.
Now at 70 years old this tough woman who worked almost every day of her life, never taking a dime from anyone is upset and enraged. She raised two children on her own after her divorce and at 37 years of age became one of the first female telephone lineman in Michigan (1974) later moving to and working in Florida.
She worked all those years, for the most part, to build retirement benefits that she could depend upon and that would provide the security she had been promised by the American way of life.
During her retirement years she has watched her peers turn over property and monies to their children so that they could claim poverty and collect more assistance from the government and to avoid loosing property when it comes time to move into a retirement home. She considers this cheating and never considered it.
Now, with her small 401K (that lost over 100,000 a few years ago) and social security) she makes too much for additional medical benefits that others who did not work or that collected welfare can easily get. The margin of error here? About $100 she says.
To say she is angry is an understatement. There is no way that I know of to get other persons affected by this decision to join together than to somehow get some type of exposure to what has happened. Who will fight the system for these folks who, even if they could start some type of legal action, will probably be dead before anything is decided?
Talk about disenfranchised seniors!
Not every retiree will face the prospect of seeing their benefits terminated, however. Union employees are protected from CenturyLink’s actions, as are Embarq’s former top-floor executives.
Mike Fuller, the retired chief operating officer of Embarq Corp., keeps his package worth $24 million after leaving the Overland Park company.
Fuller received $2.7 million in severance and bonuses and will get $21.4 million in stock and other benefits over the next couple of years, according to documents filed with the U.S. Securities and Exchange Commission.
Dan Hesse, former chairman and chief executive, maintains a compensation package worth $5.9 million in 2006. He received $960,482 in salary, a $1.2 million bonus, various stock awards and other benefits. He has since gone on to become CEO of Sprint-Nextel.
Thomas Gerke, Embarq’s top lawyer, received $460,558 in salary and other benefits totaling $2.9 million.
Some current CenturyLink employees are also finding their Christmas spirit challenged by news some are being laid off.
In Galesburg, Ill., over a dozen call center employees will keep their jobs through Christmas, but not long after that.
The reason for the layoffs? “The company just needs to do business better,” said Company Market Development Manager Jack Moore.
“The center’s closing is part of the company’s overall plan to improve costs and gain operational efficiencies, by consolidating centers,” Moore said. “This consolidation allows the company to streamline customer service, and capture the synergies enabled by the merger of Embarq and CenturyLink.”
Qwest’s head of financial matters told Bloomberg News the company’s decision to sell out to CenturyLink made good financial sense because the telecommunications industry needs more industry consolidation.
Chief Financial Officer Joe Euteneuer said the time was right for Qwest to sell operations in the north-central and mountain west region because there were too many competitors in the marketplace. Euteneuer said the telecommunications market needs to resemble the cable-TV business, which has been heavily concentrated into two huge powerhouses — Comcast and Time Warner Cable.
Qwest’s merger with independent telephone company CenturyLink continues the consolidation underway among independent phone companies not affiliated with AT&T or Verizon Communications. The merged entity will challenge Frontier Communications’ position in the landline marketplace. Regulators in Qwest’s service area have been giving cursory review of the proposed merger and the company expects few problems in getting the merger deal approved in every state affected.
Euteneuer
The merged entity, tentatively to be called CenturyLink, has been spending most of its public relations efforts talking up the reshuffling of its management and executive office operations.
CenturyLink is promoting executives to new regional management positions the company unveiled Friday. CenturyLink’s new regional structure:
For both companies’ tens of thousands of employees, there is some trepidation about “cost savings” (translation: job losses) that are also expected from this deal.
In Nebraska, more than one thousand employees remain unsure whether they’ll still have jobs after the merger.
Qwest’s president for Nebraska operations, Rex Fisher, is not waiting around to find out. He’s leaving, saying CenturyLink’s plan to restructure management roles “weren’t opportunities I was interested in,” the 53-year-old executive said.
A Qwest spokeswoman told the Omaha World-Herald the change in itself will have minimal immediate impact on the workforce level in Omaha.
Joanna Hjelmeland told the newspaper specific changes for Omaha’s workforce will “become more clear down the road,” Hjelmeland said.
“We are combining two companies, and in some instances there are going to be redundancies,” she said. “Eventually there are going to be job reductions as a result of the merger.”
[flv width=”512″ height=”404″]http://www.phillipdampier.com/video/WKBT La Crosse WI CenturyLink moving regional headquarters out of La Crosse 12-1-10.flv[/flv]
WKBT-TV in La Crosse, Wis., reports the city is going to lose Qwest’s regional headquarters, formerly located in La Crosse, as part of the merger shuffle. (1 minute)
Brian Stading, current vice president of customer operations for Qwest in Denver, is now preparing to relocate to head the regional office in Seattle. He outlined some of the changes expected to impact Qwest/CenturyLink customers in the region.
“I think you’ll see the continued focus on providing the highest quality service at the best possible price, both from a local phone service as well as from a high-speed Internet perspective and you’ll see a continued emphasis on expanding our broadband capability both in the city as well as in regional areas,” Stading told the Puget Sound Business Journal.
Stading claims the company will be refocusing efforts to improve the reliability of its core business – landline service, and make incremental upgrades to broadband capability and speed.
“A lot of that does overlap with our high-speed broad deployment because any time we have the opportunity to go put in new fiber lines, it just provides additional quality throughout our backbone networks, so the two really do go hand in hand, both the expansion as well as the continued emphasis on reliability,” Stading said.
But there is every indication Stading is referring to middle-mile fiber infrastructure — cable that runs between telephone company central office facilities, and not to individual customer homes. CenturyLink, like Qwest, relies almost exclusively on DSL service delivered over standard telephone lines for broadband services. Qwest has also been deploying ADSL 2+ technology, a more advanced form of traditional DSL, in some areas in the Pacific Northwest and mountain west region. But many Qwest customers have no access to broadband at all, because of the remote areas the phone company serves in many states.
[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Qwest’s Euteneuer Says Industry Consolidation Was Needed 11-18-10.flv[/flv]
Bloomberg News talks to Joe Euteneuer, Qwest’s CFO about why Qwest merged with CenturyLink. (4 minutes)
Phillip "Of course you know this means war" Dampier
Sizing up the big winners from FCC Chairman Julius Genachowski’s latest Net Neutrality proposals is as simple as putting those praising Genachowski in column “A” and those outraged by downsized consumer protections into column “B.” It comes as no surprise Big Telecom, the employees whose jobs depend on those companies, their trade associations and lobbyists are all living it up on the “A” side while consumers and public interest groups sit in the dark in column “B.”
Among the high-five club is Kyle McSlarrow, the outgoing head of the National Cable and Telecommunications Association, the cable industry’s top lobbying enterprise.
On the NCTA’s blog, an indication of your broadband future has been placed front and center — a meter. Perhaps putting a coin slot on your cable modem or a credit card reader on the side of your monitor would be a bit too brazen, even for this industry.
McSlarrow, among others, heaped bountiful praise on the FCC chairman for his ‘enlightened’ views on Net Neutrality. That hardly a surprise considering Genachowski has opened his phone line, and apparently his heart, to industry propaganda and arguments.
Genachowski’s remarks about usage-based pricing, in particular, were a breath of fresh air to Wall Street and providers clamoring to dispense with unlimited broadband service for consumers to increase profits:
Our work has also demonstrated the importance of business innovation to promote network investment and efficient use of networks, including measures to match price to cost such as usage-based pricing.
“This approach reflects a responsible and considered view of a fast-moving and highly dynamic marketplace but it doesn’t assume that there is any one ‘correct’ answer,” McSlarrow wrote.
It’s also a view consumers strongly disagree with, but those opinions are off the FCC’s radar. Consumers don’t have the chairman’s direct phone number. If they did, they could argue the fact “matching price to cost” would mean a dramatic reduction in pricing for today’s unlimited broadband account. Instead, we have a lobbying effort to end “unlimited” entirely, backed by manufactured studies funded by providers expecting pre-determined conclusions. Too bad the FCC doesn’t read provider financial reports.
Writes McSlarrow:
Some consumers don’t see the need to go online. Others are constrained by cost. Still others want to use the service they have in cutting-edge ways. And the ability to pigeonhole companies and their business plans as being one thing or another is breaking down, particularly in an environment where Internet applications, content, and services change the way we behave as consumers, provide new opportunities for providers and consumers and alter how we all interact with both traditional and new devices and features.
The key point is that that we need to focus on what best serves consumers. With all this change, it is necessary to have the flexibility to test new business models – and perhaps new pricing plans – in order to see if they make sense.
A usage-based pricing model, for instance, might help spur adoption by price-sensitive consumers at the lower end of the socioeconomic ladder. As Sanford Bernstein analyst Craig Moffett noted in a report issued yesterday, “{u}sage-based pricing for broadband would have profound implications. At the low end, it would allow cable operators to introduce lower priced tiers that could boost penetration and help in efforts to serve lower income consumers.”
McSlarrow
Evidently, to chase the small percentage of Americans who either don’t have an interest in going online, or think it costs too much, the NCTA wants those already online to face Internet Overcharging schemes ranging from usage caps to metered billing. Is it flexible for consumers who face the end of broadband pricing as they’ve lived with for more than a decade or is it flexible for providers who can run to the bank with the higher profits rationed broadband delivers?
McSlarrow quotes Moffett’s quest for higher profits for his clients — Wall Street investment banks, but ignores the implications Moffett himself admits — consumer rebellions, self-rationing of usage, a stifling of online innovation from independent companies not connected with providers, and higher prices.
American providers look north for an example of Big Telecom’s pot ‘o gold — Canadian ISPs that have managed to wreak havoc on the country’s broadband rankings, forcing consumers to live with higher prices and, in some cases, declining usage allowances. Canada’s broadband innovation graveyard is an object lesson for Americans: usage-based pricing doesn’t deliver savings to anyone except the most casual users living under constrained speeds and paltry allowances as low a 1GB per month. For everyone else, broadband prices are higher, speeds are slower, and usage allowances deliver stinging penalties for those who dare to exceed them. What do Canadian providers do with all of the money they earn? A good sum of it goes towards acquiring their competitors, further reducing an already-poor competitive marketplace.
As one Ontario reader of Broadband Reports noted, “our largest cable company has the money to buy three professional sports teams but not enough to roll out DOCSIS 3 [to all of its customers.] Our largest phone company, Bell, has the money to buy half the news stations in Canada, but cannot seem to get users off of 3Mbps DSL service. The whole system is a scam.”
While the rest of the world is decidedly moving away from limited-use broadband, American providers have sold Genachowski that rationing the Internet is “innovation.”
Of course, you and I know real innovation means investing some of the enormous profits providers earn back into their networks to keep up with growing demand. Providers can innovate all they like to attract price sensitive customers, so long as current unlimited plans remain available and affordable. But as AT&T illustrated earlier this year, the first thing off the menu is “unlimited,” replaced with overpriced and inadequate wireless data plans that only further alienate their customers.
AT&T should take a lesson… from AT&T. While it gouges its customers on the wireless side, the company has managed to solve the affordability question all by itself, without resorting to wallet-biting. It dramatically reduced prices on its DSL services — now just $14.95 a month for its customers, which includes a free gateway and modem. That sure sounds like a solution for budget-conscious customers and delivered all without antagonizing those who want to keep their current unlimited service plans.
AT&T seems to have managed to solve the affordability question without overcharging their customers.
Cable companies deliver their own budget broadband plans, but it comes as no surprise they barely market them, fearing their premium-paying customers could downgrade their service.
In short, Internet Overcharging is a solution chasing a problem that simply does not exist in a responsible broadband marketplace.
McSlarrow says he’s not arguing for or against any particular model. All he is really confident about is that the marketplace is changing and that “companies will have to adapt to that change.”
But as is too often the case, McSlarrow, his industry friends and colleagues, and Chairman Genachowski have forgotten it’s ultimately consumers who have to adapt to change, and we promise it means all-out war if providers tamper with unlimited broadband service.
USI Wireless' TV Ad was rejected by Comcast
“Our competitor’s CEO made $27 million last year. Ever wonder why you pay so much for Internet?”
That question is posed on an enormous billboard over downtown Minneapolis. It comes courtesy of US Internet of Minnetonka, a tiny wireless provider competing against Comcast in Minneapolis. The Wi-Fi upstart has taken center stage in another dispute with Comcast that threatens to have national implications.
For US Internet, the cable giant is already big enough to throw its weight around, because the Wi-Fi competitor has been notified it is not going to get its television ads seen by Comcast subscribers.
That struck Joe Caldwell, CEO of USI Wireless, as anti-competitive.
“I spent thousands of dollars to get this ad produced, and now Comcast won’t run it,” Caldwell told the Minneapolis Star-Tribune. “I think maybe they’re mad at me because I said the CEO of Comcast made too much money.”
Although Caldwell’s billboard only names Comcast in fine print, barely visible from Minneapolis streets, his company’s door-hangers are more direct:
“We at USI Wireless would like to congratulate Qwest & Comcast for both having sports arenas named after them. Ever wonder why you pay so much for Internet?”
Comcast told Caldwell it could not run his ads because they are a competitor.
USI Wireless charges $14.95 a month for wireless access across the city. Comcast charges between $40-115 for its standalone broadband service.
It’s not the first ad controversy for USI, which irritated some residents back in May with some edgy billboards featuring a woman some described as a prostitute next to big, bold print: “Fast, Cheap, and Satisfaction Guaranteed.”
USI got into some controversy with its earlier billboards, which raised more than a few eyebrows.
Caldwell’s television ad features Fancy Ray McCloney, head of Minneapolis-based ad agency Chocolate Orchid Productions, as its pitchman, loudly asking, “Why pay $30 to $60 a month when you can get the same quality service for as low as $14.95?”
McCloney adds salt to USI’s wounded bank account because, as he tells it, it was Comcast that invited him to produce the ad and get it running on the system. McCloney claims a Comcast advertising representative contacted him after seeing the billboard and invited USI to buy TV advertising.
“They saw the billboards, and they asked if they could get some of that advertising business on Comcast cable,” McCloney told the Star-Tribune.
After Caldwell spent $7,500 producing the TV ad, Comcast now says it cannot run on their system.
A local Comcast spokesperson told the newspaper he didn’t know if McCloney’s story was true or not. A national spokesperson for the cable company said Comcast decides on a case-by-case basis whether to take advertising for services that compete with Comcast.
The dispute threatens to have national implications as Comcast pushes to have its merger with NBC-Universal approved.
With ownership of additional broadcast outlets, would-be competitors to Comcast could find themselves banned from advertising on broadcast stations with ties to the cable operator.
[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/USI Wireless Ad.flv[/flv]
USI Wireless’ “banned” TV ad, which makes no mention of Comcast by name, or the current controversy. (1 minute)
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