By Paul La Schiazza and Ann L. Crump
Everyone knows about the new, competitive world of telecommunications. Today
you can choose from numerous providers for traditional landline service or
from wireless, cable or Internet telephony.
But TDS Telecom favors an outdated world
based on regulation instead of competition. If TDS gets its way, Wisconsin
regulations will continue to reward the Chicago-based TDS parent company at
the expense of thousands of Wisconsin workers and the state’s economy.
SBC Wisconsin has asked the Public Service Commission of Wisconsin (PSC) to
adjust wholesale rates it must charge competitors such as TDS and MCI for
using its network. Currently, SBC Wisconsin’s rate is one of the country’s
lowest – and well below the company’s cost of providing service.
In opposing fair rates, TDS execs avoid one of most important facts – SBC
employs 6,100 people in Wisconsin, many times more than TDS employs in
competing here. And SBC employs more than 4,000 unionized workers in our
state alone – while TDS employs a mere 167 union workers across its 28
states. Many SBC Wisconsin competitors employ no union workers.
SBC recently approved new labor agreements offering excellent wages, health
benefits and union protections. One competitor actually argues that SBC
Wisconsin doesn’t need higher wholesale rates in part because it believes
SBC pays workers too well. We – and SBC Wisconsin’s 4,000 union workers –
strongly disagree.
SBC Wisconsin loses money on each of its 462,000 lines leased to competitors
because the current wholesale rate is below SBC’s cost to provide the
service. As a result, SBC Wisconsin last year suffered its first-ever
operating loss and negative return on equity.
SBC Wisconsin invested $1.2 billion in telecom infrastructure between 1999
and 2002, far greater than competing providers merely piggybacking on the
network. And SBC Wisconsin is the state’s technology leader, evidenced most
recently by the company’s unprecedented deployment of advanced fiber-optics
to every home at Pabst Farms. The company wants to further invest and grow
our economy, but being forced to lose money on leased lines makes major
investment difficult and puts family-supporting jobs at risk. SBC
Wisconsin’s network, by the way, was paid for by company shareholders, and
not by “taxpayers,” as TDS claims.
TDS misleadingly points to low SBC Wisconsin retail rates in arguing that
wholesale rates shouldn’t be adjusted. TDS fails to explain that state law
requires that SBC Wisconsin’s basic residential service rates be
price-capped. TDS offers no comparable low-priced stand-alone basic service
– mainly expensive and profitable retail packages priced well above the
current wholesale rate and SBC’s actual cost for the lines. TDS does not
intend or desire to serve low-income and underserved customers in SBC
Wisconsin’s service territory. Only SBC Wisconsin is required to serve all
customers in that area.
TDS demonstrates disrespect for policymakers by implying that bullying
affects their decisions. TDS’s threats to stop advertising for new
residential customers ring hollow. Most states have set wholesale rates much
higher, and numerous other providers are eagerly leasing lines at these more
equitable rates. TDS can always look internally to make its operations more
efficient if wholesale line costs – or any costs – rise. Or it can let its
sizeable profit margins dip a little.
TDS execs favor regulatory arbitrage and government-forced subsidies over
competition. Fortunately for the future of Wisconsin investment and
employment, policymakers and consumers prefer competition. The days of
government picking winners and losers are over. As conditions support SBC
Wisconsin’s increased investment in our state’s telecom future, Wisconsin
workers, consumers and businesses will be the true winners.
–La Schiazza is president of SBC Wisconsin. Crump is a Communications Workers of America, AFL-CIO, International
Staff Representative.
