Don't Sell Upstate NY Down the River!

Verizon has announced plans to sell off nearly 2.6 million telephone lines and abandon the local phone business in virtually the entire upstate New York region. The proposed sale would be a disaster for upstate New York workers and consumers.

5,500 good, union jobs would be directly affected. And upstate residents would lose out, especially if the network is bought by one of the private investment firms who've expressed interest. To these companies, the upstate network would simply be one, temporary investment in their portfolios. These firms have no interest in providing high-quality universal service to telephone consumers, nor are they likely to make the investments necessary to bring high-speed internet and other cutting-edge technologies to consumers in underserved areas.

If Verizon gets away with selling the upstate New York network, who'll be next? Allowing Verizon to shed territories and keep only the most lucrative markets will strike a serious blow against universal service.

The New York State Public Service Commission must approve any sale before it goes through. 5,500 union jobs and quality phone and Internet service are on the line.

Tell the Commission: Don't sell upstate down the river!

Sample Letter for Campaign

Subject: Don't sell upstate down the river!

Dear [ Decision Maker ] ,

The proposed sale of Verizon's upstate New York network would be a disaster for upstate workers and consumers.

If Verizon is allowed to sell its upstate network to Wall Street speculators more interested in a short-term profit than long-term service, the consequences will be: higher rates, deteriorating service quality, and less access to cutting-edge communications technology, like high-speed Internet.

Upstate communities could lose 5,500 good jobs at Verizon, as well as thousands of other good jobs and economic development opportunities. And universal service will be in jeopardy.

In an age when information and education are increasingly critical to economic opportunity, the consequences of a telecommunications policy driven purely by profits are clear: Large sections of the population will simply be left behind because they live in areas, like upstate New York, where the profit margins for building and delivering high-speed broadband simply don't match Wall Street's expectations.

It doesn't have to be this way. Currently, fewer than 7% of all Americans have high-speed hookups to the Internet. Contrast that with South Korea, where 70% of the public already enjoys broadband access at speeds of 1 to 2 megabits per second--5 to 10 times faster than current U.S. DSL or cable modem speeds. This is a consequence of a public policy of government subsidies and tax incentives that induced telecom providers to offer high-speed broadband at reasonable rates to the entire Korean public.

Indeed, despite having by far the largest economy in the world, U.S. broadband access rates rank 11th in the world, far behind those of most European and developed Asian nations. Is it really such a shock, then, that headlines have been filled lately with news of U.S. high-tech jobs migrating overseas?

There's a communications revolution happening, and upstate shouldn't be left behind. Please stop the sale of Verizon's upstate network and support policies to bring high-quality universal service to all New York residents.

Specifically, the PSC should:

1) Protect the public interest by rejecting the sale of the upstate network to any firm that would harm consumers or workers by cutting investment, workforce, or service quality.

2) Raise UNE rates significantly. The current policy of forcing Verizon to lease its network to competitors at very low "UNE" rates has resulted in significant cuts in investment, workforce and service quality. The low rates undoubtedly contributed to Verizon's decision to sell the upstate network. Higher UNE rates would stimulate more investment in the network, more facilities-based competition and better service qualtiy.

3) Develop a policy for universal access to broadband. The future economic health of our communities will be determined by the state of our telecommunications system. NY can lead the way for the nation by developing a policy to ensure universal broadband access. Such a policy would assist providers in developing a superior network while protecting consumers regardless of their location or choice of carrier. All providers should be subject to strict service quality standards, the same level of taxation, consumer protections, E911 access, and commitments to extend investment and access to broadband services.

By adopting these positions, the PSC would protect the public interest now and for the future.

Sincerely,

Campaign Launched:
April 15, 2004

Background Information

Don't Sell Upstate Down the River!

5,500 good, union jobs would be directly affected. The only potential buyers who have demonstrated interest thus far are private equity speculators who seek a quick buck on their telecommunications investments. They can be expected to do so either by piling on debt or by squeezing costs through cutting wages, slashing jobs, eliminating job security, and eliminating health care coverage for active and retired employers. The economic ripple effects of such cutbacks would be devastating to already reeling upstate communities in which the phone company has been one of the most important employers for a century or more.

The implications of the proposed sale are, if anything, more devastating to upstate telecommunications customers. The private equity companies, better known in the 1980’s as "leveraged buyout firms" or "corporate raiders," have no interest in providing high quality universal service to telephone consumers, nor are they likely to make the investments necessary to bring high-speed internet and other cutting-edge technologies to consumers in underserved areas.

To these companies, the upstate network would simply be one, temporary investment in their portfolios. Their interest is in milking basic telephone’s reliable cashflows to repay investors and in turning a quick buck by cutting costs—read that jobs and infrastructure investment. Private equity firms do not go into these deals without an exit strategy, whether it’s reselling the lines in a few years or issuing high yield or junk bonds against the projected income from the access lines.

Jobs and quality telephone and Internet service are on the line. The New York State Public Service Commission must approve any sale before it goes through.

Tell the Commission: Don't sell upstate down the river!