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  • 1. VOIP and Cable: A double threat to our jobs CWA – 2/2004
  • 2. What is VOIP?
    • VOIP = Voice over internet protocol.
    • Can be used instead of POTS
    • Voice sent over internet through cable modem or DSL
    • Uses regular looking telephone with internet device
    CWA Page
  • 3. VOIP Quality Good VOIP with quality service = 99.53% POTS = 99.999% Wireless = 97.1% - 98.9% CWA Page
  • 4. VOIP Offered By
    • Verizon, SBC, Bell South, and Qwest through DSL
    • Cable companies through cable modems
    • AT&T
    • VOIP only companies (Vonage, 8 x 8)
    • Universities, businesses, cities over private networks
    CWA Page
  • 5. CWA Page
  • 6. VOIP Gear Replaces Switches “ The opportunity most VOIP investors have been salivating over has been when VOIP gear replaces voice switches that connect right to customers. Instead of buying new class 5 switches AT&T, Verizon and the rest will use VOIP gear to connect directly to customers.” Mike Angell, Investor’s Business Daily January 29, 2004 CWA Page
  • 7. 4 of 5 CO’s to Close Verizon expects to close 4 out of every 5 central offices! The central offices that remain will be filled with computers, servers, and routers. Similar consolidation likely for every telco as VOIP likely dominant over next 3-5 years. CWA Page
  • 8. VOIP Gear vs. Class 5 Switches
    • Class 5 Switches
    • Size of refrigerator and up to $10 million
    • Call set-up, routing and sending
    • Volume: Class 5 switches installed in 25,000 locations in U.S.
    • VOIP Gear
    • Size of server and router
    • Call set-up and routing only. Call sent via high speed internet.
    • VOIP runs over existing high speed internet connection. Additional equipment only needs to be in a few centers.
    CWA Page
  • 9. VOIP Cost Advantage
    • Installation costs 50% less than POTS ($225 vs. $430 for POTS)
    • Subscriber pays no taxes or subscriber fees
    • Significantly lower monthly bill than POTS
    • Subscriber pays no universal service fund fee
    CWA Page
  • 10. Cable & VOIP Only Companies Have Regulatory Advantage Over Bells
    • VOIP not regulated
    • Cable modems not regulated
    • Existing DSL-Fiber to Premise (FTTP) regulated
    • New FTTP probably less regulated
    CWA Page
  • 11.
    • “It is not a telephone service, it is a voice application, completely indistinguishable from any other kind of application that can run on an IP network”
    • “If you’re going to say to me that voice over IP is something that needs regulations then you’re going to have to explain to me why e-mail isn’t also.”
    • Michael Powell, Chair F.C.C.
    CWA Page
  • 12. VOIP Allows Cable to go After Lucrative Voice Market
    • Video Market = $50 billion
    • Consumer High Speed Internet = $10 billion
    • Voice; Local & LD Market = $220 billion (excluding wireless)
    2000 } Total Revenue CWA Page
  • 13. Cable Ahead of RBOC’s on VOIP Expansion
    • Cable currently has 2% voice market (30% in areas heavily marketed)
    • Cable expected to have 20% voice market by 2005
    • RBOC’s running small VOIP trials, but slow to deploy DSL and FTTP
    CWA Page
  • 14. VOIP Jobs Non-Union
    • Cable industry non-union
    • Verizon, SBC, Bell South, and Qwest classify most VOIP related work on routers and file servers as management
    CWA Page
  • 15. VOIP Part of Bundling Strategy for Cable
    • Bundling is key strategy to capture and keep customers.
    • 70% of Verizon’s bundled customers say having the bundle makes them less likely to switch.
    CWA Page
  • 16. Cable and Bells Both Using Bundling Strategy CWA Page $149 27% Bell strength 41 Wireless 12% 18 Internet 28% bundle 41 Cable/Satellite 7% offer this 10 Long Distance 2% Cable can 2 Local Toll 25% $ 37 Local Phone % of Total Consumer Spending Cost Service
  • 17. Organizing/Bargaining in Cable Tough in Current Environment CWA Page 2,021 25 380 9 1,382 23 Total 115 2 75 1 -- -- MediaCom 11 1 12 1 42 2 Bresnan -- -- -- -- 11 1 Northland 15 1 -- -- 41 1 Charter 130 6 50 3 381 6 Adelphia 1, 750 15 243 4 907 13 Comcast Mem Units Mem Units Mem Units Decertifications In 1 st Contract Bargaining Have Contracts
  • 18.
    • RBOC’s behind on VOIP launch
    • RBOC VOIP jobs not union
    • Cable VOIP positioned to take off, grab 20% market
    • VOIP & cable not regulated DSL regulated
    • CWA members don’t currently have skill set
    • Elimination of universal affordable service
    • RBOC’s need significant capital expenditure for high speed internet expansion
    • CWA must bargain to include this work in our bargaining units
    • Real collective bargaining rights for cable workers
    • Treat all high speed internet providers the same. Either regulate or deregulate all.
    • RBOC’s encourage members to get VOIP training. CWA Nett/Academy provides.
    • Mandate high speed internet at affordable price for rural and urban America
    VOIP Threat Solution Strategy CWA Page
  • 19. What Can My Local Do?
    • Educate members on VOIP and future nature of jobs
    • Fight to make these jobs, at telco’s union job
    • Fight for a fair regulatory structure in my state
    • Fight to keep universal affordable service
    • Promote CWA/Nett Academy to upgrade member skills – www.cwanett.org
    CWA Page

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