Fairness at FairPoint

The broader issues confronting workers and the overall state of the American labor movement and those faced by the mid-sized to large corporations or organizations that employ many of them are present to a remarkable degree in the current standoff between FairPoint Communications and the two unions - the Communications Workers of America and the International Brotherhood of Electrical Workers - which represent about 2,000 employees at the telecommunications company. FairPoint supplies landline telephone service and much of the Internet connectivity in Vermont, as well as New Hampshire and Maine, so the specter of a strike there has widespread implications.

FairPoint has indicated it has plans to bring in workers from outside the state as well as other contingencies in place to avoid major disruptions in service. But, to what degree that's a long term solution, should a strike be called and go on for more than a couple of weeks, is hard to measure.

At the moment, both sides have reached an impasse, or at least FairPoint declared it so towards the end of last week, when it rejected the last proposal from the unions. Workers have authorized a strike, but that card has not yet been played. That could change at any moment.

In response to FairPoint's dismissal of their most recent contract proposal, the unions accused the telecommunications company of negotiating in bad faith and filed a complaint last week with the National Labor Relations Board.

FairPoint says it needs to cut labor costs to remain competitive, while the unions want the company to curtail its use of non-union contract workers. They are also at loggerheads over the familiar terrain of salaries and benefits.

So - in a nutshell - we have some classic issues, but ones also with a contemporary twist given FairPoint's role providing access to high speed Internet service and the polarizing wealth gaps which are hollowing out the American middle class. Can a communications company remain competitive when its "blue collar" workforce makes more than many managers in other industries? But if competitiveness is to be achieved by slashing pay rates and bringing in nonunion labor - who may in many cases be just as skilled as their union counterparts and willing to work for less - how will workers in the broad middle of the American economy start to see their take home pay rise again after years of stagnation?

From FairPoint's perspective, it is imperative that their labor costs be reduced, otherwise, its a legitimate question as to whether the company can remain viable. It acquired, as many will recall, Verizon's old landline business in 2007 just as cell phones were demolishing the profitability of that (similar in many ways to the plight of the newspaper business, which is struggling to adapt to the digital tomorrow while remaining profitable in a world that still wants, if in declining numbers, a printed newspaper). While FairPoint has attempted to position itself for the post-landline world, its 15 months in bankruptcy, from which it emerged from in October, 2009, served as a cautionary tale. It would not be surprising if FairPoint entered this round of contract negotiations resolved to hold fast on salary and benefit issues, as well as seeking more flexible hiring and firing rules, because it has seen the future, and it's challenging. Ugly might be another word to describe it. Or exciting, depending on your perspective.

FairPoint is hardly the biggest player in the communications field, and is a minnow to the bigger fish like Time Warner and Comcast. But minnows like FairPoint can serve a useful purpose in keeping consumer prices lower than they might be, if only a handful of big fish control the market. That's especially important in a fast changing business like communications, where technical advances mean recouping investments in legacy infrastructure can be tricky. What goes over copper wire today is likely to be beamed by satellite dish tomorrow.

FairPoint plays an important role in managing the "backbone" of Vermont's Internet network today. Some places are more robustly wired and backed up than others. Many businesses, and places like hospitals (and newspapers), have come to depend on more or less reliable high speed broadband Internet service. Even short term outages are costly. A dug-in management stance that sees toughing it out now to preserve a company for later will likely not be without its inconveniences, if it comes to that.

At some point, the earning power of the ordinary worker has to resume an upward trajectory if the economy is to break out into higher growth rates. Shareholders are entitled to their fair share, but technology and globalization have tipped the balance of power in business to their favor. There was a time, back in the 1950s, when unions were too powerful, and restricted innovation and made their industries uncompetitve, like the U.S. automobile business, for example. Years of painful downsizing and restructuring have finally begun to fix that. Too many unions still seem locked into preserving outsized pay, pension and medical benefits that will continue to result in a steady erosion of jobs unless modified. Where the fairness is reached in the FairPoint case is hard to tell from the outside, but a starting point might be more hiring flexibility in return for enhanced retraining and severance payments to employees who are victims of history.

The demise of FairPoint would serve no one, workers and consumers alike.


If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.

Powered by Creative Circle Media Solutions