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The Association of U S West Retirees
 

 

 

CenturyLink's vow: ‘Business as usual'

 

By Ross Boettcher
WORLD-HERALD STAFF WRITER

Published Sunday March 27, 2011

 

 

Headquartered in Monroe, La., a city of about 50,000 in the northeast quadrant of the Bayou State. Large regional offices will be in Minneapolis, Denver, Seattle, Phoenix, Orlando, Fla., and Wake Forest, N.C.

The joint company will employ about 48,000 people across the country. About 28,000 of those will come from Qwest, 1,250 from Omaha. That number is expected to decrease as the company adds efficiencies and cuts overlapping positions.

Before the merger, CenturyLink had 7 million access lines and 2.2 million broadband subscribers in 33 states. When the deal is complete, the joint company will control more than 17 million access lines and 5.1 million broadband customers in 37 states.

CenturyLink, operating under the name “United Telephone Company of the West,” has 17,500 access lines in the Nebraska Panhandle of Nebraska. Qwest operates 235,000 access lines in Nebraska as well as intrastate long-distance services.

After the merger, CenturyLink will be the largest landline telecommunications provider in Nebraska and Iowa and the third-largest provider in the country, behind AT&T and Verizon.

ONLY IN THE WORLD-HERALD

Soon, Omaha's skyline is going to wear the signage of a stranger.

Qwest Communications' blue and its trademark “Q” will be traded for CenturyLink's green sunburst at the city's convention center-arena and a downtown office building to reflect the company's new ownership.

CenturyLink on Friday is set to become the largest telecommunications provider in Nebraska and Iowa in terms of total access lines. Its merger with Qwest will create the third-largest landline telephone provider in the country, trailing only AT&T and Verizon.

The deal, which has cleared all the necessary regulatory hurdles, is valued at $22.4 billion and will be executed through a $10.6 billion stock swap and the assumption of $11.8 million in Qwest debt.

To a majority of Midlanders, CenturyLink comes in as a largely unknown commodity.

Some Nebraskans already are troubled by the company's plans to rename the Qwest Center Omaha.

“I had actually never heard of CenturyLink,” said Erin Sorensen, 23, of Lincoln. “While big cities do see these changes on a pretty regular basis, Omaha isn't just a ‘big city.' Omaha is a big city with a small-town heart.”

To the general public, the downtown sign changes will be the most noticeable differences brought by the merger. But there will be others.

Customers and employees of the merged company can expect more local decision-making about their phone and Internet services, more initiatives to increase Internet access, possibly fewer jobs based here long-term and a generally lower corporate presence locally.

“We are in for a surprise,” said Anne Boyle, Omaha's representative on the Nebraska Public Service Commission. “I've lived in Omaha all my life and I'm used to the telephone company having a high corporate presence in our city.”

CenturyLink has never had major operations in Nebraska or Iowa and is now operating only 17,500 access lines around Scottsbluff and about 1,500 in northeast Iowa. The headquarters will remain in Monroe, La.

After the merger closes, Qwest residential and business customers won't see a difference in service, customer support or billing, said Danny Pate, who will be the merged company's vice president and general manager for Nebraska.

“It's business as usual for the customers of both CenturyLink and Qwest,” Pate said in a statement. “Our customers should continue to use our services and contact us just the same way they always have.”

Qwest and CenturyLink will continue to operate independently, just under one name. And the same Qwest network will continue powering landline phone, broadband and wholesale services.

The enlarged company also will begin to install a regional operating structure that puts marketing, pricing and infrastructure decisions closer to the community.

Under that model, Pate said, instead of orders trickling down from Qwest's corporate offices in Denver, more decisions — like pricing promotions and where to add rural broadband, for example — will be made by Pate, in Omaha, or Duane Ring, president of the Midwest region who will be based in Minneapolis, one of six regional headquarters for CenturyLink.

As a condition of the deal, CenturyLink over the next five years will spend $10 million in Nebraska and $25 million in Iowa boosting broadband services to underserved rural areas. Those amounts were determined by the number of customers in each state.

Areas likely to see changes are in north-central and northwestern parts of Nebraska, said Gene Hand, director of communications for the Nebraska Public Service Commission. Areas outside of Chadron, Valentine and in the Sand Hills would be examples of places that could benefit, he said.

CenturyLink also agreed to terms imposed by the Federal Communications Commission that will have the company expand Qwest's existing network so significantly more customers, businesses, schools and hospitals can access high-speed Internet.

“The commitments to broadband build-out are going to be the biggest thing you're going to see,” Hand said.

CenturyLink also will offer broadband access to low-income homes for less than $10 per month on subsidized computers it will sell for $150. Those terms will help increase broadband adoption rates, Hand said.

However, he and FCC regulators remain concerned about the seven-year timeline for CenturyLink to make the changes and about the ability of regulatory bodies to properly monitor the commitments.

One other area of concern is how the 1,250 Qwest employees in Omaha will be affected. The 475 workers in that group that are represented by the Communication Workers of America union already have made agreements with CenturyLink, so their jobs appear to be safe.

CenturyLink told the Iowa Utilities Board that as long as customer counts stay put, so should customer-related jobs. The company didn't make the same promises to Nebraska regulators, and Boyle said she expects CenturyLink to streamline Omaha operations.

The company has said some jobs will be eliminated after the merger because of overlapping positions.

“We have many employees who've been with us for several decades and will continue with the new company,” Pate said. “As technology evolves, the needs of the business evolve, too.”

Boyle said she's also concerned that CenturyLink will create headaches for businesses and residents who move and want to keep their old contact information.

Boyle said she has heard from state commissioners in areas where CenturyLink is operating that some customers there had issues with porting over of phone numbers.

Before CenturyLink's hearing with the Nebraska PSC, Boyle requested that a representative from the company be at the meeting to comment about how the company planned to solve the porting issues. Karen Puckett, CenturyLink's chief operations officer met with Boyle prior to the meeting, but no CenturyLink representative was at the meeting to give on-the-record answers.

“When they didn't do the one thing that was most important to us, it put up a red flag,” Boyle said.

In terms of complaint records, checks with two other states, Florida and North Carolina — CenturyLink's largest operating states after it acquired Embarq — indicate that customer service complaint numbers dropped after CenturyLink took control.

In Florida, AT&T operates about 2.5 times as many access lines as CenturyLink but recorded about eight times as many complaints each of the last two years when the Embarq lines were owned by CenturyLink.

Similar figures from North Carolina, which has the second-most CenturyLink access lines, reflect a similar trend. Complaints in 2009 were lower than in 2008, before the acquisition, but edged up slightly in 2010.

Still, compared with AT&T, which operates the most lines in the state, CenturyLink's ratio of complaints per access line is lower.

“I saw no major change in service or anything,” said Todd Brown, a spokesman for Florida's Public Service Commission who was an Embarq, now CenturyLink, customer. “The changes I saw were strictly branding changes. Other than that, I didn't see any changes.”

The company is expected to waste no time trying to win over its Midlands customers.

CenturyLink's home base in northeast Louisiana — 800 miles from Omaha — has some similarities to the Midlands.

There's a significant agricultural base for commodities like cotton and sweet potatoes. Hunting is a favorite recreational activity. And with three universities within a 35-mile radius, college athletics are king.

But like some major corporations in Omaha, CenturyLink and Monroe have difficulties recruiting talent to the area. People often assume that opportunities in Monroe, a city of 50,000, are scarce and the region is too rural for their taste, said Bruce Hanks, who worked at CenturyLink as chief operating officer and in other roles from 1980 until 2001.

Monroe's mayor, James “Jamie” Mayo, said he sees CenturyLink having the same impact on the small city that other giant corporations have had on other communities.

“I see CenturyLink doing for Monroe and our region what Walmart has done for Bentonville, Arkansas,” Mayo said.

In Monroe, CenturyLink's leadership and employees have a hand in most groups and organizations, said Janet Durden, president of the United Way of northeast Louisiana.

When Hurricane Katrina struck Louisiana in 2005, CenturyLink helped Durden and the United Way set up a call center in Monroe to answer an overwhelming number of calls and also made sure cell-phone operations were working in the southern half of the state.

“They are very commited to the community,” she said.

Hanks, 56, retired from the telecom to help the athletic department at nearby University of Louisiana-Monroe with its finances. Since then, he's remained on CenturyLink's board and now is a consultant for a financial planning and investment firm in Monroe.

“My parents are both from the Midwest, and I find there are a lot of similarities in terms of the Midwest and Monroe and northeast Louisiana,” Hanks said. “It's good people, and the work ethic is strong.

“The accents are a little different, but the people are a lot alike.”

Contact the writer:

402-444-1414, ross.boettcher@owh.com

twitter.com/rossboettcher