The Merger of
CenturyLink and Qwest
–
Implications for CWA Members
CWA Local Officer Presentation
August 2010
Presentation for CWA Locals With
Qwest and CenturyLink Members
Overview and Status Report on Proposed
Merger
A Tale of Two Companies -- Review of
Union Contracts at Qwest and CenturyLink
Meeting Challenges, Creating
Opportunities – CWA’s Plans for Moving
Forward
Overview and Status Report on Proposed
Merger of CenturyLink and Qwest
Companies Claim Merger will Yield
Gains for Customers & Shareholders
Increase availability of high speed
broadband access in largely rural footprint
Expand availability of Internet TV services
Implement LTE wireless data access
Achieve significant savings through
“synergies” – elimination of duplicate
services, increased economies of scale for
costly capital expenditures
Big Question: Can They Deliver?
CenturyTel will be 8 times larger than it
was before the Embarq purchase
High risk investment with lots of debt
– CTL will assume Qwest’s debt which is 5
times more than it currently owes
CTL is a rural local exchange carrier with
no experience with Qwest’s highly valued
long-haul transport business
Mergers Expand CTL 800% in 2 years
Total Access Lines
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
CenturyTel
3Q08
Embarq 3Q08
Combined
3Q08
CenturyLink
4Q09
Qwest 4Q09
Combined
4q09
Merger is Too Much, Too Soon
CTL has not yet completed its merger with
Embarq
– Still integrating Embarq systems
– Merger with Qwest will further distract them
Failed to meet 1st year broadband
commitments, requested delay of FCC’s
“1 Day Porting” order
Merger Must Be Approved
Federal Trade Commission determined the
merger passes anti-trust rules
Special shareholders meetings Aug 24
Federal Communications Commission
must determine if deal is in public interest
State commissions must rule
CWA to Express Concerns in FCC and
PSC Proceedings
“determine whether… transaction serves the
public interest…”
“specific and verifiable commitments to improve
service quality.”
“concrete timetables and plans for systems
integration”
“assurances that the merged entity will not lead
to any reduction in employment levels, workers’
living standards, and organizational rights.”
A Tale of Two Companies
A Review of Union Contracts at
Qwest and CenturyLink
Union Density Yields Union Power
Union Density
By Company
Union
36%
Non-Union
Union
48%
52%
Non-Union
64%
CenturyLink
20,096 employees
Qwest
30,138 employees
Union
45%
Non-Union
55%
Combined Company
50,234 employees
Union Power Delivers a Single
Contract at Qwest
Qwest
One Contract
51 Locals
14,384 CWA represented
100 IBEW
In 1989 bargaining,
Pacific Northwest Bell,
Mountain Bell and
Northwestern Bell were
merged into a single
contract with USWest.
USWest was purchased
by Qwest in 2000.
CenturyLink
33 Contracts
31 CWA Locals
3,749 CWA represented
3,386 IBEW
Both CenturyTel and
Embarq are the results of
many mergers and
purchases of smaller,
rural companies over the
years.
Union Representation at Qwest
and CenturyLink Call Centers
7000
6000
5000
4000
3000
6,438
4,997
2000
1000
497
519
CenturyLink
CenturyLink
Work at Home
0
Qwest
Union Workers
Non Union Workers
Union Power Delivers
Better Wages
Top Wage Comparisons
$1,200
$1,100
$1,000
$900
$800
$700
$600
$500
Top Craft
Qwest
Customer Service
CenturyTel Oregon
Clerical
Embarq Oregon
Union Power Preserves Better
Benefits
Qwest
CTL
Bargaining over
Benefits
Company must
bargain with union
over benefits
Company must
notify union of
change in benefits
PPO Premium
$47/month single
$34/month single
(CTL: for those
earning $40-70K)
$94/month family
$132/month family
PPO Annual
Deductible
$250 single
$300 single
$500 family
$600 family
PPO Out of
Pocket Max
$1,000/year single
$2,000/year single
$3,000/year family
$4,000/year family
Union Power Preserves Better
Benefits (Continued)
Network Services
Office Visit
Co-Pay
Inpatient
Hospitalization
Prescription Drugs
Retail
Mail Order
Qwest PPO
CTL PPO
$25
$25
90/10 coinsurance
after deductible
$250 co-pay, then
80/20 coinsurance
after deductible
Generic/Formulary/NonFormulary
$10/ $30/ $50
$20/ $75/ $125
$7/ 30%*/ 45%**
*$35 min/$60 max
** $45 min/$100 max
$15/ $80/ $140
CenturyLink’s Strategic Plan: Use
Divide and Conquer to Gut Contracts
Current Arkansas Negotiations
1% annual lump sums, no wage increases
Mgmt able to do bargaining unit work
Cutbacks in overtime pay
Concessions on disability, workers’ comp
Challenges for CWA
Based on the Embarq experience, we know
what to expect:
Company will move work to unrepresented
locations, where possible
Management will try to bargain contracts down
to the lowest common denominator or lower
Meeting Challenges,
Creating Opportunities
CWA’s Plans for Moving Forward
CWA Can Meet Challenges and Take
Advantage of Opportunities
CWA’s Goal: Provide secure jobs with good
compensation throughout the companies
Union strength at Qwest has come from wall-towall representation and one contract covering all
employees
CTL bargaining units can gain from experience
of Qwest wall to wall representation
Success will depend on our ability to mobilize
and organize to expand Union power
CWA’s Strategic Plans
1. Negotiate safeguards for workers
2. Educate and mobilize members to
engage in community and political
action
3. Build power through organizing
unorganized units
CWA’s Goals in Negotiations
Employment guarantees
Enhanced employment security provisions
Expand organizing rights in Qwest
contract to CTL
Pave the way to share in company growth
Goal in Negotiations – Expand
Organizing Rights
Expand Neutrality Language at Qwest to all CTL
The Company agrees to remain neutral during any organizing
campaign …
The Company agrees that when non-represented employees of the
Company who perform duties similar to currently represented
employees choose representation by CWA as a result of organizing
efforts, the Company shall apply this Collective Bargaining
Agreement …
In other instances in which employees of the Company choose
representation by CWA as a result of organizing efforts (e.g., the
Union has organized employees who worked for an acquired
company or who do not perform work that is similar to that of
existing represented employees), the Company shall apply the
grievance/arbitration procedures and other administrative provisions
of this Collective Bargaining Agreement to these newly represented
employees unless otherwise agreed…
CWA Members Must Mobilize to
Express Concerns
Locals must educate and mobilize members to act in
their own interests
Raise concerns about risks of the deal for consumers,
workers and communities
Contact Governors, State Legislators, Local Officials
– Letters and visits
Contact state PUCs
– In states where CWA has not intervened, contact consumer
advocate and commissioners
– In states where CWA has intervened, do NOT contact
commissioners
CWA Locals Must Mobilize Members
In District 7 states:
Educate and mobilize 5%-10% of membership
SIF funds available for lost time
Generate handwritten letters to Governors,
legislators (PSCs in non-intervention states)
Local Presidents to write Letters to Editors
L/P coordinators set up meetings with key
officials
Member-to-member action to get more letters
CWA Locals Must Mobilize Members
In CenturyLink-only states:
Educate and mobilize membership
SIF funds available for lost time
Generate handwritten letters to CWA
leadership for use in other states
Local Presidents to write Letters to Editors