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VOIP and Cable: A double threat to our jobs

VOIP and Cable: A double threat to our jobs. CWA – 2/2004. 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 2. VOIP Quality Good.

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VOIP and Cable: A double threat to our jobs

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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 2

  3. VOIP Quality Good VOIP with quality service = 99.53% POTS = 99.999% Wireless = 97.1% - 98.9% CWA Page 3

  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 4

  5. CWA Page 5

  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 6

  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 7

  8. 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. VOIP Gear vs. Class 5 Switches CWA Page 8

  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 9

  10. Cable & VOIP Only CompaniesHave 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 10

  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 11

  12. VOIP Allows Cable to go AfterLucrative 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 12

  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 13

  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 14

  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 15

  16. Cable and Bells Both Using Bundling Strategy CWA Page 16

  17. Organizing/Bargaining in Cable Tough in Current Environment CWA Page 17

  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 18

  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 19

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