Telco job cuts catch new scrutiny

AT&T announced late last year that it will cut about 12,000 jobs amid economic downturn and in an effort to become more competitive. More than 400 of those job cuts are expected to come in Connecticut, where labor forces, the state's Attorney General and others are up in arms, and looking to the Connecticut Department of Public Utility Control to keep AT&T from laying off workers by claiming the act will be detrimental to customer service.

Can Connecticut-or any state-do such a thing? In an age when much telecom regulation is in the hands of the federal government, the vague area of customer service is still the domain of many state regulatory commissions. State-level customer service rulings tend to make the news only when a service provider is fined over a service outage or disciplined over billing problems. If a state regulator were to attempt to stop a service provider from laying off its own employees, the move could have broad implications throughout the country, the telecom industry and perhaps other industries. State regulators across the U.S. could take it as inspiration to toughen up on any telco within their borders that is seeking to cut jobs.

It is not clear that the Connecticut DPUC will act on the urgings of state AG Richard Blumenthal, the Communications Workers of America union and others to try to block AT&T's lay-off plans. It also is not clear how the DPUC would be able to reach a determination of how job cuts would directly affect AT&T customer service. Meanwhile, AT&T can point directly to shrinking landline counts and related revenue as a reason why it would need to cut jobs, and also why customer service would not suffer-because fewer lines need fewer employees to support them, as AT&T told The Hartford Courant.

Yet, the campaign to block AT&T's job cuts in Connecticut (a state which has been tough on AT&T in the past over video franchising) comes at a time when the federal government, under a new president, may become much tougher on corporate regulation, and public criticism of how many companies are run is reaching a fever pitch. It also comes at a time when labor forces are outraged by cuts in retiree benefits across telecom and other industries. Meanwhile, the alarm over how bailout funds have been spent and could be spent amid broad economic turmoil for average citizens is growing, and while that does not have much to do directly with one company's decision to cut jobs, scrutiny of corporate actions has entered a new age. Companies like AT&T will find that they have a tougher fight on their hands in and around the country's 50 state capitols, a fight that at the very least will hold them more accountable for any actions they are set to take.

-Dan

For more:
- The Hartford Courant has this story

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