Search News
For the Media
For media inquiries, call CWA Communications at 202-434-1168 or email comms@cwa-union.org. To read about CWA Members, Leadership or Industries, visit our About page.
Alltel's Takeover of Nebraska Phone Company Would Harm Consumers and Employees, CWA Tells FCC
The bid by Alltel Corp. to take over Nebraska-based Aliant Communications Inc. would harm both consumers and employees and should be rejected, the Communications Workers of America told the Federal Communications Commission.
In its filing, CWA took note of the commission's strong emphasis on its public interest standard, which also holds that companies must prove that a proposed merger is in the public interest. Alltel clearly fails this test in its merger application, CWA said.
In fact, this merger would cause significant harm to consumers and rate payers in Nebraska, who "would experience a serious deterioration in the quality of local telephone service and delayed deployment of advanced networks and services," the CWA filing noted. Alltel's filing includes only "vague assertions of efficiencies" that could result from the merger, not the detailed documentation the FCC requires, CWA charged.
CWA also repeated its findings and concerns that Alltel would continue to use local telephone company operations-including Aliant- to subsidize other non-regulated operations. A CWA analysis of Alltel's financial records submitted to regulators found that for 1997, some $42.8 million was passed through to new businesses, including wireless, information services and product distribution, well in excess of the fair share of profits the regulated telephone operations should have contributed.
"CWA estimates that based on Alltel's past practice, post-merger Aliant's local telephone subsidiary would likely contribute $12.1 million annually in excess dividends to Alltel Corp.," the union said.
As Alltel continues to divert local telephone profits from the communities that generate these profits, consumers experience "a degradation in service quality due to Alltel's inadequate investment in the telephone network and in the personnel who maintain and service its local telephone operations," the CWA filing noted. In fact, in the 1998 J.D. Powers and Associates survey of local telephone service satisfaction, Alltel ranked last among the 12 largest local telephone companies in customer satisfaction, the union pointed out.
CWA also pointed to Alltel's past practice of cutting employee benefits in the companies it acquires, as well as cutting jobs. In its merger application, Alltel anticipated savings by eliminating `redundant costs in such areas as administration, customer service and sales,' the CWA filing noted, adding: "Given Alltel's already dismal customer service record, it is hard to imagine how Alltel can reduce customer service employment without further degrading the quality of the service that consumers receive."
###
In its filing, CWA took note of the commission's strong emphasis on its public interest standard, which also holds that companies must prove that a proposed merger is in the public interest. Alltel clearly fails this test in its merger application, CWA said.
In fact, this merger would cause significant harm to consumers and rate payers in Nebraska, who "would experience a serious deterioration in the quality of local telephone service and delayed deployment of advanced networks and services," the CWA filing noted. Alltel's filing includes only "vague assertions of efficiencies" that could result from the merger, not the detailed documentation the FCC requires, CWA charged.
CWA also repeated its findings and concerns that Alltel would continue to use local telephone company operations-including Aliant- to subsidize other non-regulated operations. A CWA analysis of Alltel's financial records submitted to regulators found that for 1997, some $42.8 million was passed through to new businesses, including wireless, information services and product distribution, well in excess of the fair share of profits the regulated telephone operations should have contributed.
"CWA estimates that based on Alltel's past practice, post-merger Aliant's local telephone subsidiary would likely contribute $12.1 million annually in excess dividends to Alltel Corp.," the union said.
As Alltel continues to divert local telephone profits from the communities that generate these profits, consumers experience "a degradation in service quality due to Alltel's inadequate investment in the telephone network and in the personnel who maintain and service its local telephone operations," the CWA filing noted. In fact, in the 1998 J.D. Powers and Associates survey of local telephone service satisfaction, Alltel ranked last among the 12 largest local telephone companies in customer satisfaction, the union pointed out.
CWA also pointed to Alltel's past practice of cutting employee benefits in the companies it acquires, as well as cutting jobs. In its merger application, Alltel anticipated savings by eliminating `redundant costs in such areas as administration, customer service and sales,' the CWA filing noted, adding: "Given Alltel's already dismal customer service record, it is hard to imagine how Alltel can reduce customer service employment without further degrading the quality of the service that consumers receive."
###