The Communications Workers of America (CWA) says that the FCC’s latest business data services (BDS) proposal will reduce new broadband investments for businesses and drive ILECs like AT&T, CenturyLink and Frontier to cut more of their workforce.
“The drastic rate cuts – as much as 20 percent over three years -- will create pressure on companies to cut existing jobs and reduce capital outlays in fiber networks, subverting the very goals the FCC aims to achieve in this proceeding,” said Chris Shelton, president of the CWA, in a statement. “Because the proposal will lead to less investment in broadband networks, overall job growth in this critical industry will be stagnant.”
Shelton added that Wheeler’s proposal “will have a devastating effect on the investment necessary for broadband expansion, especially in rural areas.”
On Friday, FCC chairman Tom Wheeler made his long awaited BDS proposal public. While the proposal would offer a light touch regulatory regime for next-gen Ethernet and packet-based services new competition from cable and CLECs is emerging, TDM services would continue to be governed by existing “price cap” regulation.
Under Wheeler’s proposal, the FCC proposed implementing a one-time 11 percent price cut that would be phased in over three years, beginning in July 2017. Specifically, this includes 3 percent in the first year, 4 percent in year two, and 4 percent in the third year. This is less than the 15 percent cut proposed by Verizon and Incompas.
CWA isn’t the only union group speaking out about the commission's BDS plans.
Working in tandem with Frontier Communications, the International Brotherhood of Electrical Workers (IBEW) recently told the FCC during a meeting that the regulator's proposal to cut BDS prices could have repercussions on the ILEC's union workforce.
CWA and IBEW have pointed out CenturyLink’s recent job cuts as evidence of the effect that price cuts have on legacy TDM services.
Shelton said in an earlier letter that “potential job losses are not idle thinking,” citing CenturyLink’s move to lay off 3,500 employees -- or as much as 8 percent of its workforce -- due to a decline in its legacy TDM-based revenues.
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