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The largest telecommunications union in the world, representing over 700,000 men and women in both the private and public sectors
Represents workers at Verizon, Verizon Wireless, T-Mobile, AT&T, AT&T Mobility and many other telecommunications companies
On January 26, 2012, an overwhelming majority of the 282 Cablevision technicians in Brooklyn, NY voted to join CWA CVC technicians have unique insight into Field Service Operations, including physical plant weaknesses, inefficiencies in operations, and daily interaction with customers
By leveraging their front-line workforce, management should utilize their knowledge, skill and customer relations to help turn things around
But instead, over the past year, management has engaged in an escalating conflict with its Brooklyn techs to thwart their ability to win a union contract Numerous Unfair Labor Practices against its Brooklyn and Bronx workforce, most recently illegally firing 22 Brooklyn workers who sought a meeting with management The National Labor Relations Board announced on April 5th and April 10th that it would file complaints against CVC alleging illegal worker intimidation & other violations NYC Council investigating possible violation of CVCs cable television franchise agreements Top NYC elected leaders demand CVC cease its illegal behavior and negotiate a contract with CWA CVC management can easily end this dispute by negotiating a labor contract at very little expense
stiff competition ongoing recovery from Superstorm Sandy escalating programming costs subscriber losses significant capex needs shrinking cash flow burdensome debt load regulatory scrutiny in NYC
Cablevision continues to exemplify pressure on the MSO Model - Brean Capital, March 3rd, 2013
Investors and lenders need a coherent strategy to boost cash flow and protect shareholder value by:
improving customer service increasing product offerings stabilizing, if not growing market share
This growing [labor] conflict should cause concern and attention among investors. If left unresolved, the company risks facing an increased threat of labor disruptions, increased legal and regulatory scrutiny, and a negative brand impact for Dolan-associated companies, all of which could have a material impact on the companys financial performance.
-- Bill de Blasio, New York City Public Advocate
analysts predict that $2.98 RSN surcharge and $5 monthly broadband price increase could undermine customer retention
Similar to peers, programming costs are the biggest pressure point, with absolute growth expected to remain in the low-double digits.
-- Jason Armstrong, Goldman Sachs, 2/28/13
Cablevision reported a significant deterioration in operating and financial results in 4Q12. While Hurricane Sandy was a material issue during the quarter, excluding the impact of the storm underlying results continue to deteriorate due to higher programming costs, competitive pressures, and an increase in capital expenditures.
-- Todd Mitchell, Brean Capital, 3/1/13
CWA & Locker Associates | 8
"While Sandy impacted the quarter, the stock is reflecting some of the commentary about operating fundamentals. -- Vijay Jayant, ISI
This is a staggering loss, said Craig Moffett, an analyst at Sanford C. Bernstein. Tom Rutledge is the hands-down-best executive in the cable business.
The Dolans attempted a private buyout in 2007 for $36/share, but Class A shareholders rejected this offer as inadequate
Rumors of a potential CVC buyout have re-emerged
Citigroup analyst predicts a buyout in 12-18 months (March, 2013)
Since January 2012 CVC management has engaged in a confrontation with its Brooklyn unionized employees
282 technicians voted to join CWA over a year ago but company has stalled at the bargaining table and refused to reach a fair contract in 2012 CVC provided a unilateral wage increase of $2-9/hour to 10,000 of their technicians -- outside of Brooklyn management refuses to discuss a wage increase for Brooklyn technicians, in effect punishing them for joining a union in January of this year CVC illegally fired 22 Brooklyn union members after they requested a meeting with management in accordance with the companys open door policy mounting support for the fired workers encouraged CVC to rehire the employees
The cost of settling this dispute is minimal, but rather than settle, senior management has been distracted from more pressing matters
The National Labor Relations Board (NLRB) announced on April 5th, 2013 they will file a complaint alleging that CVC:
granted unlawful wage and benefit increases to Bronx technicians in the middle of a union election to discourage their support for CWA threatened to withhold training on new technology to Bronx workers if they voted to join the union, as they did to Brooklyn workers
The NLRB moved to dismiss a company-driven effort to decertify the union in Brooklyn
Franchisee shall recognize the right of its employees to bargain collectively through representatives of their own choosing in accordance with applicable law.
ongoing violations of this franchise clause could cause Cablevision to lose its NYC franchises
We will not stand for Cablevision-Optimums blatant disregard of New Yorks collective bargaining (requirement). -- Council Speaker Christine Quinn, 2/7/13
In spite of digital conversion and WiFi expansion, Brooklyns network requires additional capex to remain competitive CWA field reports indicate Brooklyn customers are faced with:
overstretched residential fiber network antiquated plant and equipment out of date home cable boxes 4200 HD overburdened residential junction boxes
In June 2012, CEO James Dolan told a group of Bronx technicians the company was leaving Brooklyn behind and the Brooklyn techs who voted to join CWA would not be trained in the new technologies
Random CWA survey of 700 Brooklyn customers in 3Q12 yields overwhelmingly negative responses
Service: 23% poor or terrible, 38% fair and 37% favorably Speed: 27% poor, 34% fair and 39% favorably Cost: 88% felt they paid too much
Survey also indicates CVC is falling behind NYC franchise service standards
over 33% report late service appointments nearly 25% said it took longer than 7 days to install their cable 25% had their services improperly terminated in the last year 33% experienced improper bill charges
Another CWA survey found that CVC Brooklyn internet speeds were 25% slower than CVC Bronx speeds
according to a 2003 internal company document, third party contractors had a 5.8% higher rate of missed appointments and a 14.1% higher rate of failed service appointments low contractor pay, inadequate training and incentive structure leads to poor service
CVC needs to focus on customer service and expanded product offerings in core markets like Brooklyn in order to stem further customer erosion
We need answers about the quality of service Brooklyn customers are getting. And we need Cablevision to do right by its workers and negotiate a fair contract in good faith. That what Brooklyn families, both customers and employees, deserve. -- Public Advocate Bill de Blasio, 1/3/13
Since January 2012 have met 27 times and spent 258 hours attempting to bargain a first contract, but to no avail
CWA seeks wage parity with the rest of CVCs 10,000 technicians Estimated economic impact of settlement: between $1 million and $3 million on an annualized basis
Instead of agreeing to wage parity for its Brooklyn employees CVC has
By settling this labor dispute, and partnering with its frontline employees,