CWA seeks regulatory conditions in Connecticut on Frontier's bankruptcy reorganization

Frontier Communications
Communications Workers of America calls on Connecticut utilities regulatory authority to impose conditions on Frontier Communications' bankruptcy plan. (Frontier)(Source: Frontier)

The Communications Workers of America (CWA) is seeking conditions be imposed by a Connecticut government agency in regards to Frontier's Chapter 11 reorganization plan.

On Monday, the CWA submitted a brief to the Connecticut Public Utilities Regulatory Authority (PURA) that sought to make sure the bankruptcy plan improved services and kept jobs in Connecticut. PURA is tasked with reviewing Frontier's bankruptcy plan.

Frontier said it has received regulatory approval, or "favorable determination," from 11 of the 25 states in its footprint. Those states include: Arizona, Georgia, Illinois, Minnesota, Nebraska, Nevada, New York, South Carolina, Texas, Utah, and Virginia. 

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The CWA submitted an opening brief on Monday asking PURA to impose conditions to the bankruptcy plan that insures Frontier Communications of Connecticut (SNET) improves service quality for customers while also preserving union jobs.

The CWA represents more than 1,600 Frontier employees who are working as technicians and call center representatives in Connecticut. In April of 2016, CWA represented 2,397 employees in Connecticut. Over the last four years, the company has cut 740 positions, or 30% of the workforce.

"CWA technicians have watched in frustration as Frontier has failed to invest in its network and workforce in recent years, leading to the declining condition of Frontier’s Connecticut plant," CWA said in its press release. "Significant cuts in staffing have meant fewer technicians in the field to provide critical maintenance and respond to customer issues."

While the CWA didn't mention it, automation has played a role in some job reductions across the telecoms industry.

RELATED: Bankruptcy court gives Frontier's restructuring plan its stamp of approval

“The CWA members who work at Frontier know firsthand what the company needs to do to come out of this bankruptcy process stronger and ready to provide quality service to its customers,” said CWA Local 1298 President Dave Weidlich, in a statement. “That’s why we want to make sure that PURA uses its oversight process to hold Frontier accountable to its consumers and workers — not Wall Street hedge funds like Elliott Management that only care about making a quick buck.”

RELATED: Frontier Communications drops into Chapter 11 bankruptcy

Frontier Communications filed for bankruptcy on April 14 to start a prearranged $10 billion debt-cutting proposal backed by its largest bondholders. In August, the U.S. Bankruptcy Court for the Southern District of New York approved Frontier's plan for reorganization.

"Frontier is seeking to restructure under Chapter 11 to eliminate more than $10 billion of debt and nearly $1 billion in annual interest obligations," a Frontier spokesperson said in an email to FierceTelecom. "The company’s successful restructuring will enable it to make investments in its network and operations, and to continue to be a competitive provider of communications services in Connecticut and twenty-four other states. 

"We look forward to addressing all appropriate issues in our few remaining approval states, including Connecticut."

CWA's brief also raised "serious" concerns about the future of the company under its proposed new owners. According to the proposed bankruptcy plan, four investment firms will own between 20% and 28% of the new company: Elliott Management, Franklin Mutual, Golden Tree Asset Management, and HG Vora.

Last year, Elliott Management stirred the pot at AT&T by sending an open letter to its board of directors that criticized its debt load and work in wireless, among other concerns. Earlier this month, Elliott announced it would be selling its stake in AT&T.

RELATED: Windstream shakes free from Chapter 11 bankruptcy

Elliott Management is also the largest stakeholder in the newly formed Windstream, which emerged from its Chapter 11 bankruptcy in September as a privately-held company.

The CWA has asked PURA to do the following:

• Impose strict, enforceable conditions that require the profits and cash flow generated in Connecticut be reinvested in the network coupled with service quality and employment requirements.

• Require SNET to maintain the current level of capital spending and in-state employment at the least through 2024. SNET should also consider requiring the approval of any acquisitions or divestitures by Frontier in other jurisdictions.

RELATED: Union questions whether Frontier will split-off fiber assets as part of its re-org plan

In August, the CWA and The Utility Reform Network (TURN) filed comments with the FCC that raised concerns that Frontier would split off its more profitable fiber assets, among other items, as part of its restructuring plan.