With 36,000 East Coast communications and electrical workers from Massachusetts to Virginia on strike since Wednesday morning, Verizon has put a temporary hold on new fiber optic network installations and activated non-union employees and business partners to help with customer service.
"Our focus today is serving our customers," Verizon spokesperson Eric Wilkens told us. "Since Wednesday [April 13], thousands of non-union Verizon employees from around the nation have been deployed to garages, call centers and other network operations facilities in our wireline footprint."
After nearly 10 months of unsuccessful negogiations with union members of the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW), Verizon had contingency plans in place when workers called a strike this week.
Unable To Reach Agreement
The striking unions say they have been unable to reach agreements with Verizon over issues including the offshoring of jobs, use of lower-wage contractors over union employees, and extended job transfers that require workers to spends months away from their families.
Verizon said that it has already proposed "wage increases, continued retirement benefits (including a generous 401(k) match) and excellent healthcare benefits," however, union leaders decided to call for a strike rather than work toward resolving the remaining issues.
"It's regrettable that union leaders have called a strike, a move that hurts all of our employees," said Marc Reed, Verizon's chief administrative officer, in a statement. Reed claims Verizon has been working diligently since last June trying to reach agreements that would be good for employees and good for customers, while making the wireline business more successful overall.
"Unfortunately," Reed said, "union leaders have their own agenda rooted in the past and are ignoring today's digital realities. Calling a strike benefits no one, and brings us no closer to resolution."
Reed noted that CWA president Chris Shelton claims its leaders have tried 'everything' to get a path to a contract, but the union's "failure to agree to FMCS mediation suggests otherwise."
Profits and Politics Take Focus
We reached out for comment to both the IBEW and CWA -- the two unions behind the strike -- but have not yet received responses. However, in statements on its Web site, the IBEW noted that "Verizon has posted profits of $1.8 billion per month so far this year, and $39 billion over the last three years, all while the company is seeking draconian cuts to employee pensions, health care, job security and benefits for workers injured on the job."
Verizon launched its Fios high-speed networking program in 2005, but halted expansion of the service to new areas in 2010. Earlier this week, however, the company announced it would begin installing a fiber-optic network in Boston. According to the IBEW's statement, union members have long been calling on Verizon to expand the fiber service to other areas.
"For years we've been encouraging Verizon to continue the build-out of high-speed FiOS Internet and television service to communities up and down the East Coast," IBEW's broadcasting and telecommunications department director Martha Pultar said in a statement. "It's good for employees. It's good for customers. It's good for the company. People out there are begging for this service, and we're going to keep fighting for broadband build-out in the entire Verizon footprint."
The dispute between Verizon and the unions has also become a political issue. Last month, 20 members of the U.S. Senate sent a letter to Verizon chairman and CEO Lowell McAdam urging the company to "work toward progress in the current round of collective bargaining with its unions." And this week, both contenders for the Democratic presidential nomination -- Bernie Sanders and Hillary Clinton -- showed up at strike locations to voice their support for the workers.
Fiber Now Leads Wireline Business
Changes in the industry underlie the disagreement. As mobile and wireless services have grown, telecoms have struggled with their legacy wireline businesses. In 2014, for instance, Verizon reduced its wireline business workforce by 2,300, with the aim of improving efficiency.
Yet, despite industry changes, Verizon has continued to see wireline revenues grow. Fueled in part by its Fios fiber-to-the-home network service, Verizon's wireline business revenues totaled $16.1 billion in 2015, compared to $15.6 billion in 2014.
In its most recent quarterly earnings statement for the fourth quarter of 2015, Verizon noted that its Fios services now account for 80 percent of wireline-based consumer revenues, and showed year-on-year growth of 6.6 percent. Fios has some 7 million Internet subscribers and 5.8 million video subscribers, the company said.
Rather than putting in equipment for new customers, now that union installers and other workers are on strike, Wilkens said Verizon's current focus is on "serving our existing customer base." However, he added, "We fully expect to resume Fios installations in short order."