LANSING ? SBC, the state’s largest local telephone provider, announced it was cutting some 1,000 jobs in the state as it consolidated network centers in its 13-state region. Michigan was not considered for any of those consolidations because of its expensive regulatory climate, officials said.
But a member of the Public Service Commission said some of the blame for regulatory delays that SBC complains of belong to SBC. Competitors also pointed the finger at SBC, saying SBC has cut its Michigan workforce every year since it took over from Ameritech, which took over for Michigan Bell.
SBC is eliminating or moving 500 jobs in the coming weeks and another 500 over the next two years, said SBC spokesperson Matt Resch. But he said the moves would not affect customer service in the state.
“The negative business climate here in Michigan made the decision to move the jobs out of state easier than it should have been,” he said. “The regulations here are unclear.”
Resch in particular noted the time it takes to resolve regulatory issues in the state as a reason Michigan was not considered for any of the consolidated centers, which he said are instead going to all of the other Midwest states.
“We have a system here that unfortunately encourages a lot of very expensive litigation. I’m not sure there an example of a decision that comes out of the Public Service Commission that doesn’t end up in litigation,” he said, noting they company is still months away from resolving a cost case that has already been in process for 26 months. Similar cases in Wisconsin and Indiana were resolved in eight months, he said.
“States that are less tough to do business, when consolidation happens, happens in those states. You’re going to move to the place where regulations are clear and less expensive.”
Public Service Commissioner Robert Nelson said it was often SBC’s fault when issues dragged on. “They’re the ones that always appeal it,” he said. “Virtually every order we issue regarding SBC they appeal.”
David Waymire with the Michigan Association of Competitive Local Exchange Carriers, said it was SBC, not the regulatory system, that delayed the cost study case.
“The reason the cost case took so long is because they withdrew it and then when they resubmitted it, they resubmitted information that was useless,” he said. “So SBC dragged its feet, not the Public Service Commission.”
And Nelson said that a number of recent PSC decisions, including the cost case, have worked out in SBC’s favor, though the company has disputed that, noting it did not receive the wholesale rate increases it had said were necessary to cover its costs for providing the service.
Nelson said that SBC has acknowledged a strong competitive market in the state with its recent filing requesting the end of retail rate regulation in the state. The law requires that there be a showing of competition for the PSC to consider such a filing.
“We’re somewhat surprised that they blaming us for this decision,” he said. “They have cut back their workforce every year since they took over Ameritech.”
Waymire said the layoffs had nothing to do with the regulatory climate, but was a modus operandi for SBC. “That’s what they like to do, they like to lay off workers,” he said. “Their financial status has nothing to do with their propensity to layoff workers.”
He said the competitive service providers have filled some of the void, creating some 5,000 jobs over the last couple of years.
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