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CWA Urges FCC to Block Alltel-Aliant Deal `Bad for Workers and Consumers'
The bid by Alltel Corp. to take over Nebraska-based Aliant Communications Inc. would harm both consumers and employees and should be rejected, CWA 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 represents some 700 Aliant workers and has had a good working relationship and good rapport with the company, said Denny Martin, president of CWA Local 7470. The local negotiated a contract last fall with Aliant that will be in effect into 2001.
In contrast, Alltel has been demanding cuts in union workers' health care coverage throughout its operations, and company officials have publicly stated they want to operate as a non-union company. For the second time in two years, Alltel helped orchestrate a decertification election vote at a plant in Dalton, Ga.; CWA has filed charges with the National Labor Relations Board over the company's actions.
CWA officials will meet with members of the Nebraska state legislature in Lincoln to discuss the very negative impact this merger will have on communities throughout the state and Aliant employees and will testify before the state public utility commission on the harm this merger will cause to consumers, because of Alltel's pattern of absorbing so- called "excess dividends."
A coalition of community groups and unions, including the Lincoln central labor council, also is focusing public attention on concerns of consumers and workers, and is calling on regulators to protect the interests of Nebraska citizens. Activities are planned for the April 27 Aliant shareholders meeting in Lincoln and the Alltel meeting in Little Rock.
CWA 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 represents some 700 Aliant workers and has had a good working relationship and good rapport with the company, said Denny Martin, president of CWA Local 7470. The local negotiated a contract last fall with Aliant that will be in effect into 2001.
In contrast, Alltel has been demanding cuts in union workers' health care coverage throughout its operations, and company officials have publicly stated they want to operate as a non-union company. For the second time in two years, Alltel helped orchestrate a decertification election vote at a plant in Dalton, Ga.; CWA has filed charges with the National Labor Relations Board over the company's actions.
CWA officials will meet with members of the Nebraska state legislature in Lincoln to discuss the very negative impact this merger will have on communities throughout the state and Aliant employees and will testify before the state public utility commission on the harm this merger will cause to consumers, because of Alltel's pattern of absorbing so- called "excess dividends."
A coalition of community groups and unions, including the Lincoln central labor council, also is focusing public attention on concerns of consumers and workers, and is calling on regulators to protect the interests of Nebraska citizens. Activities are planned for the April 27 Aliant shareholders meeting in Lincoln and the Alltel meeting in Little Rock.
CWA 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."