The Merger of The Merger of CenturyLink and QwestCenturyLink and Qwest

– – Implications for CWA MembersImplications for CWA Members

CWA Local Officer PresentationCWA Local Officer PresentationAugust 2010August 2010

Presentation for CWA Locals With Presentation for CWA Locals With Qwest and CenturyLink MembersQwest and CenturyLink Members

Overview and Status Report on Proposed Overview and Status Report on Proposed Merger Merger

A Tale of Two Companies -- Review of A Tale of Two Companies -- Review of Union Contracts at Qwest and CenturyLink Union Contracts at Qwest and CenturyLink

Meeting Challenges, Creating Meeting Challenges, Creating Opportunities – CWA’s Plans for Moving Opportunities – CWA’s Plans for Moving ForwardForward

Overview and Status Report on Proposed Overview and Status Report on Proposed Merger of CenturyLink and QwestMerger of CenturyLink and Qwest

Companies Claim Merger will Yield Companies Claim Merger will Yield Gains for Customers & ShareholdersGains for Customers & Shareholders

Increase availability of high speed Increase availability of high speed broadband access in largely rural footprintbroadband access in largely rural footprint

Expand availability of Internet TV servicesExpand availability of Internet TV services

Implement LTE wireless data accessImplement LTE wireless data access

Achieve significant savings through Achieve significant savings through “synergies” – elimination of duplicate “synergies” – elimination of duplicate services, increased economies of scale for services, increased economies of scale for costly capital expenditurescostly capital expenditures

Big Question: Can They Deliver?Big Question: Can They Deliver?

CenturyTel will be 8 times larger than it CenturyTel will be 8 times larger than it was before the Embarq purchase was before the Embarq purchase

High risk investment with lots of debtHigh risk investment with lots of debt– CTL will assume Qwest’s debt which is 5 CTL will assume Qwest’s debt which is 5

times more than it currently owestimes more than it currently owes

CTL is a rural local exchange carrier with CTL is a rural local exchange carrier with no experience with Qwest’s highly valued no experience with Qwest’s highly valued long-haul transport businesslong-haul transport business

Mergers Expand CTL 800% in 2 yearsMergers Expand CTL 800% in 2 years

0

2 ,0 0 0

4 ,0 0 0

6 ,0 0 0

8 ,0 0 0

1 0 ,0 0 0

1 2 ,0 0 0

1 4 ,0 0 0

1 6 ,0 0 0

1 8 ,0 0 0

C e n tu ry T e l3 Q 0 8

E m b a rq 3 Q 0 8 C o m b in e d3 Q 0 8

C e n tu ry L in k4 Q 0 9

Q w e s t 4 Q 0 9 C o m b in e d4 q 0 9

T o ta l Ac c e s s L in e s

Merger is Too Much, Too SoonMerger is Too Much, Too Soon

CTL has not yet completed its merger with CTL has not yet completed its merger with EmbarqEmbarq– Still integrating Embarq systemsStill integrating Embarq systems– Merger with Qwest will further distract themMerger with Qwest will further distract them

Failed to meet 1Failed to meet 1stst year broadband year broadband commitments, requested delay of FCC’s commitments, requested delay of FCC’s “1 Day Porting” order“1 Day Porting” order

Merger Must Be ApprovedMerger Must Be Approved

Federal Trade Commission determined Federal Trade Commission determined the merger passes anti-trust rulesthe merger passes anti-trust rules

Special shareholders meetings Aug 24Special shareholders meetings Aug 24

Federal Communications Commission Federal Communications Commission must determine if deal is in public interestmust determine if deal is in public interest

State commissions must ruleState commissions must rule

CWA to Express Concerns in FCC and CWA to Express Concerns in FCC and PSC ProceedingsPSC Proceedings

““determine whether… transaction serves the determine whether… transaction serves the public interest…”public interest…”

““specific and verifiable commitments to improve specific and verifiable commitments to improve service quality.”service quality.”

““concrete timetables and plans for systems concrete timetables and plans for systems integration”integration”

““assurances that the merged entity will not lead assurances that the merged entity will not lead to any reduction in employment levels, workers’ to any reduction in employment levels, workers’ living standards, and organizational rights.”living standards, and organizational rights.”

A Tale of Two CompaniesA Tale of Two Companies

A Review of Union Contracts at A Review of Union Contracts at

Qwest and CenturyLinkQwest and CenturyLink

Union Density Yields Union PowerUnion Density Yields Union Power

Non-Union

64%

Union

36%

CenturyLink

20,096 employeesQwest 30,138 employees

Non-Union

48%Union

52%

Combined Company

50,234 employees

Union

45%

Non-Union

55%

Union DensityBy Company

Union Power Delivers a Single Union Power Delivers a Single Contract at QwestContract at QwestQwestQwest

One ContractOne Contract51 Locals51 Locals14,384 CWA represented14,384 CWA represented100 IBEW100 IBEWIn 1989 bargaining, In 1989 bargaining, Pacific Northwest Bell, Pacific Northwest Bell, Mountain Bell and Mountain Bell and Northwestern Bell were Northwestern Bell were merged into a single merged into a single contract with USWest. contract with USWest. USWest was purchased USWest was purchased by Qwest in 2000.by Qwest in 2000.

CenturyLinkCenturyLink33 Contracts33 Contracts31 CWA Locals31 CWA Locals3,749 CWA represented3,749 CWA represented3,386 IBEW3,386 IBEWBoth CenturyTel and Both CenturyTel and Embarq are the results of Embarq are the results of many mergers and many mergers and purchases of smaller, purchases of smaller, rural companies over the rural companies over the years. years.

Union Representation at Qwest Union Representation at Qwest and CenturyLink Call Centersand CenturyLink Call Centers

6,438

497

4,997

5190

1000

2000

3000

4000

5000

6000

7000

Qwest CenturyLink CenturyLinkWork at Home

Union Workers Non Union Workers

Union Power Delivers Union Power Delivers Better WagesBetter Wages

$500

$600

$700

$800

$900

$1,000

$1,100

$1,200

Top Craft Customer Service Clerical

Top Wage Comparisons

Qwest CenturyTel Oregon Embarq Oregon

Union Power Preserves Better Union Power Preserves Better BenefitsBenefits

QwestQwest CTL CTL

Bargaining over Bargaining over BenefitsBenefits

Company must Company must bargain with union bargain with union over benefitsover benefits

Company must Company must notify union of notify union of change in benefitschange in benefits

PPO PremiumPPO Premium

(CTL: for those (CTL: for those earning $40-70K)earning $40-70K)

$47/month single$47/month single

$94/month family$94/month family

$34/month single $34/month single

$132/month family$132/month family

PPO Annual PPO Annual DeductibleDeductible

$250 single$250 single

$500 family$500 family

$300 single$300 single

$600 family$600 family

PPO Out of PPO Out of Pocket MaxPocket Max

$1,000/year single$1,000/year single

$3,000/year family$3,000/year family

$2,000/year single$2,000/year single

$4,000/year family$4,000/year family

Union Power Preserves Better Union Power Preserves Better Benefits (Continued)Benefits (Continued)

Network ServicesNetwork Services Qwest PPOQwest PPO CTL PPO CTL PPO

Office Visit Office Visit Co-PayCo-Pay

$25$25 $25$25

Inpatient Inpatient HospitalizationHospitalization 90/10 coinsurance 90/10 coinsurance

after deductibleafter deductible

$250 co-pay, then $250 co-pay, then 80/20 coinsurance 80/20 coinsurance after deductibleafter deductible

Prescription DrugsPrescription Drugs Generic/Formulary/NonFormularyGeneric/Formulary/NonFormulary

RetailRetail$10/ $30/ $50$10/ $30/ $50

$7/ 30%*/ 45%*$7/ 30%*/ 45%** *$35 min/$60 max ** $45 min/$100 max

Mail OrderMail Order $20/ $75/ $125$20/ $75/ $125 $15/ $80/ $140$15/ $80/ $140

CenturyLink’s Strategic Plan: Use CenturyLink’s Strategic Plan: Use Divide and Conquer to Gut ContractsDivide and Conquer to Gut Contracts

Current Arkansas NegotiationsCurrent Arkansas Negotiations

1% annual lump sums, no wage increases1% annual lump sums, no wage increases

Mgmt able to do bargaining unit workMgmt able to do bargaining unit work

Cutbacks in overtime payCutbacks in overtime pay

Concessions on disability, workers’ compConcessions on disability, workers’ comp

Challenges for CWAChallenges for CWA

Based on the Embarq experience, we knowBased on the Embarq experience, we knowwhat to expect:what to expect:

Company will move work to unrepresented Company will move work to unrepresented locations, where possible locations, where possible

Management will try to bargain contracts down Management will try to bargain contracts down to the lowest common denominator or lowerto the lowest common denominator or lower

Meeting Challenges, Meeting Challenges, Creating OpportunitiesCreating Opportunities

CWA’s Plans for Moving ForwardCWA’s Plans for Moving Forward

CWA Can Meet Challenges and Take CWA Can Meet Challenges and Take Advantage of OpportunitiesAdvantage of Opportunities

CWA’s Goal: Provide secure jobs with good CWA’s Goal: Provide secure jobs with good compensation throughout the companiescompensation throughout the companies

Union strength at Qwest has come from wall-to-Union strength at Qwest has come from wall-to-wall representation and one contract covering all wall representation and one contract covering all employeesemployees

CTL bargaining units can gain from experience CTL bargaining units can gain from experience of Qwest wall to wall representationof Qwest wall to wall representation

Success will depend on our ability to mobilize Success will depend on our ability to mobilize and organize to expand Union powerand organize to expand Union power

CWA’s Strategic PlansCWA’s Strategic Plans

1.1. Negotiate safeguards for workersNegotiate safeguards for workers

2.2. Educate and mobilize members to Educate and mobilize members to engage in community and political engage in community and political actionaction

3.3. Build power through organizing Build power through organizing unorganized unitsunorganized units

CWA’s Goals in NegotiationsCWA’s Goals in Negotiations

Employment guarantees Employment guarantees

Enhanced employment security provisionsEnhanced employment security provisions

Expand organizing rights in Qwest Expand organizing rights in Qwest contract to CTLcontract to CTL

Pave the way to share in company growthPave the way to share in company growth

Goal in Negotiations – Expand Goal in Negotiations – Expand Organizing RightsOrganizing RightsExpand Neutrality Language at Qwest to all CTLExpand Neutrality Language at Qwest to all CTL

The Company agrees to remain neutral during any organizing The Company agrees to remain neutral during any organizing campaign …campaign …

The Company agrees that when non-represented employees of the The Company agrees that when non-represented employees of the Company who perform duties similar to currently represented Company who perform duties similar to currently represented employees choose representation by CWA as a result of organizing employees choose representation by CWA as a result of organizing efforts, the Company shall apply this Collective Bargaining efforts, the Company shall apply this Collective Bargaining Agreement …Agreement …

In other instances in which employees of the Company choose In other instances in which employees of the Company choose representation by CWA as a result of organizing efforts (e.g., the representation by CWA as a result of organizing efforts (e.g., the Union has organized employees who worked for an acquired Union has organized employees who worked for an acquired company or who do not perform work that is similar to that of company or who do not perform work that is similar to that of existing represented employees), the Company shall apply the existing represented employees), the Company shall apply the grievance/arbitration procedures and other administrative provisions grievance/arbitration procedures and other administrative provisions of this Collective Bargaining Agreement to these newly represented of this Collective Bargaining Agreement to these newly represented employees unless otherwise agreed…employees unless otherwise agreed…

CWA Members Must Mobilize to CWA Members Must Mobilize to Express ConcernsExpress Concerns

Locals must educate and mobilize members to act in Locals must educate and mobilize members to act in their own intereststheir own interests

Raise concerns about risks of the deal for consumers, Raise concerns about risks of the deal for consumers, workers and communitiesworkers and communities

Contact Governors, State Legislators, Local OfficialsContact Governors, State Legislators, Local Officials

– Letters and visitsLetters and visits

Contact state PUCsContact state PUCs

– In states where CWA has not intervened, contact consumer In states where CWA has not intervened, contact consumer advocate and commissionersadvocate and commissioners

– In states where CWA has intervened, do NOT contact In states where CWA has intervened, do NOT contact commissionerscommissioners

CWA Locals Must Mobilize MembersCWA Locals Must Mobilize Members

In District 7 states:In District 7 states:

Educate and mobilize 5%-10% of membershipEducate and mobilize 5%-10% of membership

SIF funds available for lost timeSIF funds available for lost time

Generate handwritten letters to Governors, Generate handwritten letters to Governors, legislators (PSCs in non-intervention states)legislators (PSCs in non-intervention states)

Local Presidents to write Letters to EditorsLocal Presidents to write Letters to Editors

L/P coordinators set up meetings with key L/P coordinators set up meetings with key officialsofficials

Member-to-member action to get more lettersMember-to-member action to get more letters

CWA Locals Must Mobilize MembersCWA Locals Must Mobilize Members

In CenturyLink-only states:In CenturyLink-only states:

Educate and mobilize membershipEducate and mobilize membership

SIF funds available for lost timeSIF funds available for lost time

Generate handwritten letters to CWA Generate handwritten letters to CWA leadership for use in other statesleadership for use in other states

Local Presidents to write Letters to EditorsLocal Presidents to write Letters to Editors