VERMONT -- Labor unions representing more than 500 Vermont employees of Verizon Communications, Inc. are gearing up for a major battle in light of growing speculation, supported by published reports, that the company is considering the sale of its entire land-based telephone network in northern New England.
The possible sale of Verizon's local-access lines in Vermont, New Hampshire and Maine would be part of a larger strategy by the New York-based telecommunications giant to expand its holdings in the wireless and broadband arenas, while getting out of the traditional phone business, according to a May 10, 2006, story in The Wall Street Journal. The rumored deal, with an as-yet-unnamed buyer, could be worth an estimated $8 billion, the Journal reports.
On July 5, Vermont's three congressional representatives sent a letter to Verizon Chairman and CEO Ivan Seidenberg expressing grave concerns over the "far-reaching consequences" that such a deal would have on Verizon's customers, employees and the economic future of rural Vermont. Verizon is in the midst of a major expansion of its broadband service and has pledged to provide 80 percent of its Vermont customers with DSL capability by 2010.
"The possible sale of Verizon's access lines throughout Vermont raises serious questions about Verizon's commitment to bridging the digital divide found primarily in rural America -- and so evident in the most rural areas of our state," the letter reads. "High-speed Internet access is essential to the economic growth of rural Vermont, and is integral to our state's plan to build healthy Vermont businesses for the new century."
Verizon would neither confirm nor deny published reports of an impending deal, except to say that the company is "evaluating the sale of access lines, but certainly no decisions have been reached." As of press time, Senators Patrick Leahy and Jim Jeffords and Representative Bernie Sanders had not yet received a reply from Seidenberg. A similar letter, sent on June 16 to Verizon's CEO by Maine Governor John Baldacci, had also gone unanswered, according to a press spokesperson for the governor.
"Verizon evaluates all of its assets and its properties to make sure that they strategically fit our business and their financial performance," Verizon's New York spokesman John Bonomo told Seven Days last week. "And frankly, many times we're approached by others regarding possible deals. Sometimes those discussions lead to transactions, and other times they don't. There's no agreement to make any change in the New England region at this point."
For more than 100 years, Verizon and its predecessor companies have built and maintained Vermont's telephone network, which now totals more than 337,000 access lines. The company employs 650 people statewide, according to Verizon's Vermont spokesperson Beth Fastiggi, including about 250 in South Burlington alone.
Fastiggi wouldn't comment on news that Verizon recently lost its contract with the state of Vermont to provide emergency 9-1-1 services. That contract was awarded to MicroDATA GIS, a 9-1-1 software company based in St. Johnsbury, according to David Serra, executive director of the Vermont Enhanced 9-1-1 Board.
Despite Verizon's tight-lipped responses, the two unions representing the company's employees in northern New England are talking. Both the Communication Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) are vowing to fight the sale "tooth and nail," not only to protect their own jobs but to look out for the interests of Verizon's customers, especially in rural Vermont.
"In this state, being in touch means everything," says Mike Spillane, business manager for IBEW Local 2326, which represents 450 Verizon technicians, operators and engineering people throughout Vermont. "Like during the ice storm, we could bring hundreds of people to a little area, maximize the effort and restore service fast. A lot of the smaller companies don't staff the way we staff."
Darlene Stone, who works in Verizon's business office in South Burlington, has been with the company for more than 27 years. Though company management has said nothing, she's heard that the network may be sold to either CenturyTel, Inc. or Citizens Communications, Co., both of which are smaller telecom companies. Regardless of which company buys the network, Stone fears that Verizon's departure from Vermont would have negative repercussions for local telephone users.
"Honestly, Verizon has the deep pockets," she says. "I can't see another company coming in here and being able to do what Verizon can do, which is provide broadband to 80 percent of the state."
Stone is also chief steward for CWA Local 1400, which represents 127 business office employees. She says the sale could lead to major service delays for Verizon's customers. Stone points to the recent sale of Verizon's land line network in Hawaii to the Carlyle Group, which took effect a few months ago. According to recent press reports, customer-service calls there, which once took only one to two minutes to be answered, are now resulting in waits of more than 30 minutes.
"It'd be like leaving us in the lurch," Stone adds. "It's not fair to the consumer."
The economic impact of Verizon's departure from Vermont would also ripple through the state's economy. Spillane, who's been with Verizon for 22 years, says a sale of Vermont's telephone network would cost the state some of its highest-paying jobs; for instance, some telephone operators earn as much as $900 per week.
"Our top guys are making 25 bucks an hour. Plus, with overtime, you've easily got guys busting 100 grand a year -- and they're earning it," Spillane adds. "If we were to lose our jobs in Vermont, there's no way to replace them."
Spillane also notes that more than 700 independent contractors currently work for Verizon on a regular basis, from landscapers to electricians.
Based on reports in the business press, Verizon is looking to unload its traditional phone lines in order to help the company finance upgrades to its more profitable wireless network. Since "fiber-to-the-home" technology is less profitable, particularly in rural areas, critics of the sale have dubbed it "rural telecom redlining."
"The ratepayers, through their bills for the last 100 years, paid for this network to be built," says Steve Early, international representative for CWA in Woburn, Massachusetts, "and these characters want to put it on the auction block, sell it to the highest bidder and walk off."
Early says the unions intend to ask lawmakers in all three states to push for legislation requiring each state's utility review bodies, such as the Vermont Public Service Board, to conduct an economic impact study on what effects the sale would have on universal access and future economic development in the region. Early, whose union represents 3100 Verizon employees in three states, says that several years ago labor and consumer groups in New York helped scuttle a similar deal by Verizon to sell its landline telephone operations in upstate New York.
For his part, Spillane thinks the unions and the public could stop a sale here as well. As he puts it, "I think we have a good shot of beating this down in Vermont."