CWA to FCC: drastic cuts in business data rates will harm investment, good telecom jobs

Large cuts in the the rates companies charge businesses and wireless companies for dedicated data services would hurt jobs and investment, the Communications Workers of America (CWA)  warned in a recent letter to FCC Chairman Wheeler. The FCC plans to vote next month on a proposal that could slash the the rates providers charge for these business data services by 20 percent or more.

“A drastic cut in business data service rates will create disincentives for job-creating investment in high-speed data networks,” CWA’s letter read. “This is particularly true in rural America, which is characterized by higher-cost, lower-density places with fewer business customers.”

Moreover, the FCC’s proposal would amount to a wealth transfer from telecom companies that invest billions in high-speed networks and employ union workers to non-union companies like T-Mobile, Sprint, and Verizon Wireless. “The FCC’s proposals effectively require unionized incumbent carriers to subsidize the input costs of low-wage, non-union competitive providers and wireless carriers,” the letter read.

Just this week, CenturyLink announced plans to lay off up to 3,500 employees. The company’s CEO claimed that the jobs cuts are a response to the “decline in our legacy revenues” – a portion of which comes from business data services.

“Surely, we don’t want to see more of these headlines,” CWA said in a follow-up letter to Chairman Wheeler. “I know this is not the legacy you want for your tenure, but I fear we may see more of this if the Commission radically slashes rates of business data services.”

Links:

CWA letter to Chairman Wheeler on BDS (CWA, Sept. 14, 2016)

CenturyLink plans to lay off up to 3,500 (USA Today, Sept. 15, 2016)

CWA follow-up letter to Chairman Wheeler on BDS (CWA, Sept. 16, 2016)