Broadband Cable Association of Pennsylvania


April 4, 2012

AT&T Inc. faces the possibility of a walkout by 40,000 wireline employees Sunday morning if the union can't reach an agreement with the telecommunications giant on a new contract.

Members of the Communications Workers of America voted over the weekend to authorize CWA President Larry Cohen to call a strike after the union's contract with the company expires on April 7. CWA members staged a two-week strike against Verizon Communications Inc. in August and have yet to reach an accord with the New York-based company. AT&T, which is based in Dallas, is seeking increases in workers' health-care premiums and co-payments, pension cuts and other benefits changes, according to the union. "Everything leads me to believe that we're in the same position today with AT&T that we were with Verizon last year," said Chuck Simpson, president of CWA Local 2204 in Salem, Va. "Like so many companies, they want to shift more costs to the employees."

On its website, AT&T said employees' medical costs rose 54% from 2004 to 2010 and 8% in 2010 alone. "AT&T seeks to reach fair agreements with our union partners that enable a competitive cost structure reflecting current market realities," the company said on the site. "Our goal is to do everything in our power to protect those careers," said AT&T spokesman Marty Richter. A CWA spokeswoman said a strike-authorization vote is no guarantee a strike will be called. The union or AT&T could seek to extend the existing contract while talks continue, she said.

AT&T has been preparing for a possible strike for more than two years, partly by training nonunion managers to step in for workers who are out on the picket line, Mr. Richter said. The company has "a substantial work force of well-trained managers and vendors in place," he said. Operating income at AT&T's wireline unit plunged 7.2% to $7.3 billion last year, and its operating revenue declined 2.5% to $59.8 billion. More customers are canceling traditional home-telephone service in favor of mobile phones, helping AT&T drive profits for its fast-growing wireless division. An additional 30,000 wireline workers represented by the International Brotherhood of Electrical Workers and CWA have contracts expiring on June 23 and Aug. 4, respectively, according to AT&T. All told, the company has about 256,000 employees. Wall Street Journal

Online retailer Inc. added its streaming films and TV shows to Sony Corp.'s PlayStation 3 console, playing catch-up with rival Netflix Inc. The PS3 is the first game device to get Amazon Instant Video film and TV rentals, Bill Carr, the Seattle-based company's vice president of video and music, said today in an interview. The service is already available on televisions, Blu- ray players, TiVo Inc. and Roku set-top boxes, he said.

The deal also includes Amazon Prime, a $79-a-year two-day shipping service that provides 17,000 television shows and older movies at no extra charge. Amazon Prime will join Tokyo-based Sony's PlayStation Network, giving customers access through the PS3, which has sold about 20 million units in the U.S. through February, according to Sony. "A lot of our customers have been asking us to make our services available on the PlayStation 3 for a long time," Carr said. "It's all about building the best digital video service available."

Amazon is chasing Netflix, which has 21.7 million U.S. streaming viewers paying $7.99 a month and is on devices including the PS3, Microsoft Corp.'s Xbox and Nintendo Co.s Wii. Carr wouldn't say whether Amazon Prime was coming to the Xbox, the top-selling video-game console for the past two years. Amazon Prime has 3 million to 5 million subscribers, people with knowledge of the matter said in February.

Netflix, based in Los Gatos, California, offers more than 20,000 film and TV titles. The company has been trying to distance itself from competitors by adding exclusive content, including the recently released "Lilyhammer," "House of Cards," scheduled late this year, and new episodes of cult television favorite "Arrested Development." Amazon rose 0.8 percent to $199.66 at the close today in New York, and has added 15 percent this year. Netflix lost 0.9 percent to $112.96 and is up 63 percent so far in 2011.

The relatively late move onto video consoles may mean Amazon's costs are higher to secure new customers, Anthony DiClemente, an analyst with Barclays Capital in New York, said in an interview. "They're not a first mover, so the product has to be very solid," DiClemente said. "That means they need to make the right content investments and perhaps spend a little more than a first mover might have to spend." DiClemente lowered his rating on Netflix to "equal weight" today from "overweight," citing increased competition and rising content costs. Amazon's U.K. business, Lovefilm, offers streaming titles on the Xbox 360 and Apple Inc.'s iPad, Carr said. A software maker Amazon acquired last year called Pushbutton created the applications for the PlayStation and Xbox services, he said. Bloomberg