Loud Men Talking at a Starbucks Boiler Room Table

On the morning of February 3, 2015, ten aspiring entrepreneurs, all men, ranging in age from their mid-thirties to their mid-fifties (“I’ve been in this business for forty years. There is nothing you can say that will hurt me,” said the oldest man), gathered at a Brooklyn Starbucks to discuss their great plans. They took up the entirety of a long table constructed of affordable wood and talked extremely loud.

The men confused this common space for a boiler room. They seized one stool, a precious seat in a crowded place, because some arcane section in the business plan required that one of their sparsely packed backpacks could not rest on the floor. After all, these men were not riff raff. They were meant to be tycoons.

These men believed themselves to be paragons of originality, altogether different from other captains of industry. Yet not a single man at the table sported a suit, much less a tie or a shirt selected with an iota of care. Indeed, the men had not bothered to dress well at all. They regularly looked down at their laptops and often made references to “being on the same page.” They swapped such invaluable tips on how to send an Excel document to other colleagues by email and the best way to swallow a cough drop.

They were the team. They meant business, even though it often took ten minutes to set up a five minute meeting. They were going to kill.

What follows is an actual transcript of their conversation. It is presented here as a litmus test, a way to determine whether the men who are talking loudly in your Starbucks are, indeed, on the same page:

“Let me do my damn job!”

“I want you to do your damn job.”

“I have to do my damn job!”

“Relax. I want you to do your damn job. We’ll get you cold-calling tomorrow. Now about this guy…”

“Yeah.”

“He’s a good guy. But he’s very predictable.”

“Not like us.”

“No. But if he talks about salmon, you talk about salmon. If he talks about brisket, you talk about brisket.”

“Right.”

“And you’ll be able to do your damn job. Because you’re an original.”

“Alright, so let’s say Friday. We’re going to say 8:30. Now what time is the meeting?”

“Let’s be realistic. He’s on a train. You’re on a train. Let’s say it’s a 4:00 drop dead time on Friday.”

“Well, I should think we should have the meeting a little bit earlier.”

“We had a 4:30 cutoff on Friday. Realistically…”

“Listen. 2:00.”

“I don’t care. I’ll come home at 7.”

“Doesn’t matter.”

“We’re getting snowed in.”

“Let’s say we do a 4:30. We can concentrate on the meeting.”

“Is that okay with everybody?”

“Okay. 8:30 we meet, 4:30 we eat.”

“Nice rhyme.”

“Thanks.”

“Alright. So the next thing that we got throw at us. The Brooklyn Initiative. The theme is pretty much handling the scheduling on that, which is fine by me. Now here’s the thing with that. What day is it? February 3rd? What day do we got?”

“Not March.”

“We sat down with them and put together a strategy.”

“The Brooklyn Initiative.”

“Yes. These guys are conversating. The way I see it, they get compensated.”

“They get compensated?”

“In forty or so accounts.”

“We have the list.”

“The problem is that the person in charge of this Initiative wants more, which is pretty much impossible from a logistics standpoint. It’s going to be intricate changes. Impossible. So I’m going to make the Wednesday meeting with one of you guys.”

“Here’s the deal, guys. These guys are seasonal businessmen. I mean, it’s criminal. With that said, there’s not a lot of business out there. But those guys have about a twenty to twenty-two week season. So here’s the deal. Their owners start coming back in March. Whatever it is. By April, they’re back. These guys want to start. These guys gotta start putting their deals together.”

“Swinging.”

“Right. Swinging. But the moral to the story is — well, this is…”

“That puts it through to the end of April.”

“Right.”

“They’re going to start fluffing their pillows at the end of March.”

“I think we have four to five weeks with them tops.”

“Here’s more on that note. Thank you for opening that door for me. Because I’m going to walk through it. I need to make out the items that we’re going to sell.”

“We got beat up on Friday for saying that. I’ve seen the invoices.”

“So take ’em. This is all I suggest to you. Because the veterans of this table know about planning. No plan has failed.”

“An extra pair of eyes never hurts.”

Why Did Scott Pilgrim Tank?

The Expendables was the top grossing movie over the weekend, raking in $35 million, and beating out Eat Pray Love‘s $23.7 million. The Other Guys finished at third, with $18 million, followed by Inception at $11.4 million and, somewhat astonishingly, Scott Pilgrim vs. The World at $10.5 million. The results have caused some to scratch their heads, while others have reacted with the fury of an aging FOX News anchor just a few steak dinners short of a myocardial infarction.

Scott Pilgrim‘s box office failure over the weekend has little to do with Jeffrey Wells‘s deranged dichotomy of “the rank-and-file” warring with “the elite geek-dweeb set” — an impractical characterization that one expects from a paranoid schizophrenic looking for a few magic beans that will grow a tin foil vine. But it was evident from some of the film’s early reviews that the old reactionary guard — which included the hysterical Wells and the frumpy David Edelstein — were going to trash the movie for its audacious syntax — namely, the very visual language that allowed Kick-Ass to make nearly $20 million in its opening weekend back in April.

I don’t think the lackluster business had much to do with Michael Cera. But it’s worth observing that Cera has yet to prop up a phenomenally successful Hollywood movie on his presence alone. He’s found commercial success as a supporting character, although Nick and Norah’s Infinite Playlist, a $10 million movie that grossed $33.5 million, might qualify as a modest success. But when one considers that Scott Pilgrim‘s budget was closer to $100 million, the decision to use Superbad/Juno momentum as a selling point wasn’t terribly wise. Cera, assuming audiences haven’t tired of him by now, will probably be just fine if he can figure out a way to reinvent his one-note Williamsburg hipster schtick and keep his acting roles confined to second bananas. The man lacks leading man gravitas, and now has the commercial track record to prove it.

On the other hand, it’s possible that Cera can’t entirely be blamed for Scott Pilgrim‘s failure. One only needs to look at the moronic marketing quacks who pushed this movie as if they were lame ducks. Not only did the film’s bright red poster do everything possible to occlude Cera’s presence in the movie, but it failed to communicate what the movie was about. The “epic of epic epicness” tagline tells someone in the dark nothing at all about Scott Pilgrim. And you have to wonder how much money some Universal wordsmith was paid to whip up such anti-commercial inanity.

The first big mistake made by Universal — and there were many — was in failing to market this as a quirky date movie that a young couple might agree upon. (Or perhaps not. Abigail Nussbaum has offered a provocative post suggesting that Scott Pilgrim is misogynistic.)

The second big mistake was in opening Scott Pilgrim during a weekend in which the audience division came down to gender lines. If you were a man, you were expected to see The Expendables. If you were a woman, you were expected to see Eat Pray Love. The Expendables Call to Arms trailer, released a good month before the movie, permitted enough time for these demographic lines to become fixed. And Universal, rather catastrophically, failed to create a Scott Pilgrim trailer that used the movie’s humor as a self-deprecatory selling point to avoid both movies. (I should also point out that, despite my numerous requests to attend a New York press screening, Universal publicists failed to respond by telephone or email. This is not something I can say about the people at Lionsgate, who were very quick to respond, extremely friendly and accommodating. Guess which film received a 1,400 word essay here.)

While it’s true that Scott Pilgrim received a big Comic-Con buzz, it’s very clear that this didn’t translate into mass moviegoers paying to see the flick. It’s also clear from both Scott Pilgrim and Kick-Ass‘s respective takes that a more daring comic book movie isn’t going to translate into an Iron Man 2-style box office bonanza, even as audiences have signaled their desire to be challenged by plot-heavy movies like Inception. A risk-taking comic book movie with a $20 million budget can certainly make a healthy profit, but it’s a harder sell at four or five times the budget. This weekend certainly isn’t the end of movies like Scott Pilgrim. Just don’t expect future movies of this type to have large budgets or originate from the studio system in a good long while. Indeed, had Scott Pilgrim not been up against two pandering movies, it might have attracted more of the crowd. But apparently there’s gold to be panned when you use the Internet to pigeonhole prospective moviegoers into predictable demographics.

The Bat Segundo Show: Gary Rivlin

Gary Rivlin appeared on The Bat Segundo Show #340. Mr. Rivlin is most recently the author of Broke USA: From Pawnshop to Poverty, Inc. — How the Working Poor Became Big Business.

Play

Condition of Mr. Segundo: Considering the advances of a seductive loan shark.

Author: Gary Rivlin

Subjects Discussed: [List forthcoming]

EXCERPT FROM SHOW:

Rivlin: One in every five customers is taking twenty or more payday loans a year. So suddenly this effective interest rate of 400% becomes the actual interest rate. I mean, if you’re taking out twenty payday loans a year, that’s pretty much a loan every two weeks. And so you’ve got a couple million people a year in this country who are essentially paying 400% for their money to put it into dollars and cents. For that $500 loan, they’re paying $2,000 in fees for the year. So it’s the trap that a payday loan becomes, that I focus in on.

Correspondent: I wanted to talk about Martin Eakes, the man behind Self-Help and the Center for Responsible Lending. He offers a more reasonable APR through his credit union. His crusading has helped to initiate reform in numerous states. High-interest loans. Mortgage premium penalties. He’s been on it. His opponents, they point to his self-interest in creating caps that are uniquely beneficial to Self-Help. I want to address this. I mean, what of a credit union’s interest fees on overdrafts? Just to give you an example, if a consumer gets a hit, the median overdraft fee is about $27 on a $20 debit card transaction. They repay the charge in two weeks. And, according to the FDIC, that’s a 3,250% APR. That far outshines that $33 per $100 cap in Indiana. That works out to 858% on a two week loan. So I’m wondering if credit unions are, in some way, just as problematic. Or perhaps even more problematic on the overdraft charge than payday lenders, when we consider this?

Rivlin: Right. You’re giving the argument that the payday lenders make that I was starting to make myself before. That you could look at our 400% interest rate. But go start doing the math. As you just did. On bounced checks or late credit card fees. And again, that’s a legitimate point. Martin Eakes is one of the main characters in my book. He’s just a really interesting, quirky fellow. A few fun facts. He claims he’s never had a sip of alcohol in his life. He testifies all the time before Congress. Gives speeches. He owns a single suit to save money. His wife cuts his hair. My favorite quote from him is “Half the people I know would take a bullet for me and the other half would fire the pistol.” And that’s accurate. He’s really been out there as a leading crusader, not the leading crusader, against subprime mortgage abuse. Against the payday lenders. Against some of the more abusive policies.

Correspondent: And the people who work for him have salary caps as well. It’s not exactly a lucrative prospect to work for him.

Rivlin: The payday lenders and others try to tar Martin Eakes. But he’s a little bit Ralph Naderish in that way. He’s hard to tar. There’s a rule within his credit union that no one can be paid more than three times more than the lowest paid employee. And that means that this guy, who runs essentially a billion dollar operation — they’ve done a lot of home loans — is getting paid $69,000 a year. I guess everybody roots for the receptionist to get a raise.

Correspondent: Yeah. Well, hopefully the MacArthur money was disseminated around. But you do have to make some kind of money. And as we’ve determined with this overdraft situation, that’s quite an interest.

Rivlin: Well, a few things. One way you misspoke was that his credit union doesn’t offer payday loans. His colleagues in North Carolina. The big North Carolina credit union for teachers and state employees. They offer a payday loan with an effective annual interest rate of 12%. 12% versus the 400%. And I met with the fellow who runs that credit union. And he called it the single most profitable loan that they offer. But getting back to the criticism that they level at Martin Eakes — that isn’t he just a competitor? Isn’t he just fighting the payday loan industry because he’s looking out for the bottom line of his own credit union? Well, one problem with that is — it was in 2001 that Martin Eakes and others in North Carolina kicked the payday lenders out of the state. Martin Eakes’s credit union — you’re only eligible to participate if you live in North Carolina. So he won the fight in 2001. Why is he still fighting the payday lenders across the country given that his bottom line is only affected in North Carolina? I find the argument — I heard it from every payday lender I met with — that Martin Eakes is just a competitor; it’s just very specious. He’s a crusader. He might see the world in black and white, where these things should be outlawed period. But I think he’s genuine in his criticism. I don’t think it has anything to do with his credit union. His credit union doesn’t even offer credit cards to rack up the late fees.

Correspondent: But how much does he charge for overdraft fees?

Rivlin: Twenty bucks.

Correspondent: Twenty bucks.

Rivlin: I was really curious about that question too.

Correspondent: I mean, that’s just — you’re still dealing with a pretty substantial APR. When does that $20 kick in?

Rivlin: Yeah. Well, you know, the problem with APRs on a bounced check is that it depends upon how long it takes for you to become whole again. I mean, there’s that $20 fee. But then there’s interest and other penalties when you’re late. But we can just say it’s enormous. It’s typically higher than 400% for the payday.

Correspondent: It’s below the median rate. That’s for sure.

Rivlin: Martin Eakes runs a not-for-profit credit union. He charges a bounced check fee like everybody charges a bounced check fee. It’s lower than the average, but still high. You know, I don’t know what to say about that. But I do think, as long as we’re talking about Martin Eakes, that this credit union he started, dating back to the 1980s, they’re a subprime mortgage lender. I mean, I hasten to add, given the association people have that he’s a different kind of subprime mortgage lender and started charging four or five or six or seven percent above the conventional rate. He charges 1%. You know, his loans didn’t have huge up-front fees. He made sure that you could pay it back. That if you make $25,000 a year, that you’re buying a house for $50,000, let’s say, rather than a $300,000 house that you’re never going to be able to afford. But this credit union is specifically for those of modest means. About half his customers are single moms. About half the people who bought homes using loans from him are people of color. He’s making loans in rural communities. People who live in trailers who can move into a modest-sized house and have, as he would put it, a bricks-and-mortar savings account. A home. He is doing a lot of good. Thousands and thousands of North Carolinans are living in a home who wouldn’t otherwise.

The Bat Segundo Show #340: Gary Rivlin (Download MP3)

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The History of Verizon, Part One (April to August 2000)

[EDITOR’S NOTE: This is an experiment to see how blogging might be used to make sense of a rather enormous series of events. In an effort to understand why Verizon (formerly Bell Atlantic) became such a dominant force in the telecommunications industry, I am initiating the first in an open-ended series of inquiries that will be relying upon newspaper articles, public records, interviews, and any additional information I can get my hands on. My first step is to assemble a timeline with the available information. From here, I will then begin interviewing related parties to put these facts into perspective. I will be updating all of the posts as new information comes in. Please feel free to contribute any additional thoughts or leads in the comments section.]

[Subsequent installments: Part Two (August 2000). Part Three, which covers the months of September and October 2000, can be found here.]

In April 2000, Bell Atlantic was working out the details of a merger with GTE it had initiated the previous year. The deal was nearly done, awaiting FCC approval. But Bell Atlantic’s wireless communication unit needed a new name. Bell Atlantic’s wireless unit was in the process of merging with the wireless division of Vodafone AirTouch.

Bell Atlantic had been formed in 1983. It was one of seven Baby Bells that had been formed in the aftermath of an antitrust suit filed against AT&T by the Department of Justice. Seventeen years later, with the Bell Atlantic-GTE merger set to make the new entity the largest local telephone carrier in the nation, Bell brass believed that the Bell brand was too old school, too dowdy, to fit in with the then contemporary emphasis on cutting-edge technology.

“‘We believe that we need to separate ourselves on a going-forward basis from the tradition and the limited perspective that a Bell name assigns to us,” said Bell Atlantic executive Bruce S. Gordon at the time.

The new name was Verizon, a clever case of lexical blending between “veritas” and “horizon” that was to find its way in only a few short years onto millions of cell phones, the logo attached to the apices of many skyscrapers.

Bell Atlantic had been perfecting an ambitious advertising campaign over several months that hoped to convert both Bell Atlantic wireless customers and Vodafone customers over to the new Verizon brand. Bell had employed the services of the Bozell Group, part of True North Communications. Bozell was best known at the time for its milk moustache campaign, which had featured pop culture figures such as Austin Powers and Lisa Simpson smiling with a thin strip of milk just above their upper lip. (When True North purchased Bozell in 1997, the deal made True North the sixth largest advertising company in the world. Bozell had rejected an offer from Omnicom, but True North had pledged to respect Bozell’s autonomy. This purported autonomy, however, proved incompatible with economic realities. In 2001, Bozell laid off 6% of its staff and “restructured” the creative department.)

The early Verizon logo featured the “V” sign in red, an attempt to mimic the Nike swoosh symbol. Was it an accident that both Vodafone and Verizon began with a V? According to New York Times reporters Stuart Elliott and Seth Schiesel, one person close to the campaign revealed that it was not.

By June, Lucent Technologies was named the primary equipment supplier to Verizon Wireless. Its stock jumped up from 3 1/4 to 59 7/8 a share on June 15, 2000. According to a letter of intent issued by Lucent, Lucent would provide network equipment to Verizon. And this relationship would then help Verizon to expand from the wireless business to high-speed Internet services, among other telecommunications possibilities. Verizon hoped that the Internet access might be one way to encourage customers to use their phones more frequently.

Two days later, on June 17, 2000, the FCC approved the Bell Atlantic-GTE merger, with the proviso that GTE would agree to spin off its Internet backbone operations. Verizon became the nation’s largest local telephony company.

Numerous documents about the merger, including the FCC’s specified conditions, can be located here. In his statement issued after FCC approval, FCC Chairman William E. Kennard noted, “By requiring that the Internet backbone asset be spun-off and through the other merger conditions, we have preserved the fundamental incentive structure of the Act, sought to stimulate competition, and to promote more and better service offerings for consumers. For these reasons, I support this merger.” In light of recent Verizon developments that have called these “more and better service offerings” into question and Verizon’s current presence on the Internet (to say nothing about the way in which Verizon skirted around the GTE condition, described below), and notwithstanding Kennard’s competitive position as a member of the Board of Directors at Sprint Nextel, one wonders whether Kennard would still support this merger. I hope to contact Kennard and see if he might offer an answer.

However, it’s worth observing that Kennard joined the Carlyle Group as a managing director shortly after resigning from the FCC in February 2001. Carlyle purchased Verizon Hawaii for $1.65 billion. On May 22, 2004, Kennard was quoted by the Honolulu Star-Bulletin about this deal: “A big part of our plan is to return Verizon Hawaii to its roots as a local phone company, empowering local management. It’s sort of a version of ‘Back to the Future,’ if you will.” Whether this flippant comparison to a Hollywood blockbuster movie was intended to insult the journalist who posed the question is unknown. But the purchase did earn the endorsement of Verizon’s union, even if competitors and Hawaiian locals expressed dismay with the Carlyle Group’s inexperience and connections with high-level political contacts. By 2007, however, Hawaiian Telecom (the new name of the company) had experienced serious problems when BearingPoint, Inc. — the consulting firm hoping to overhaul Verizon’s systems — couldn’t make it work and was ousted in favor of Accenture, Ltd. — best known for its role in Enron. If this was a case of Back to the Future, perhaps Kennard was more accurate than he realized. Relying on outside consulting firms seemed decidedly against Kennard’s promise to “empower local management.” And indeed, earlier this year, Hawaiian Telecom’s CEO was ousted in favor of interim CEO Stephen Cooper (Kenneth Lay’s replacement), more than 100 positions were axed, and Hawaiian Telecom was still pursuing a decidedly nonlocal restructuring plan to recover from its problems.

Whatever Kennard’s current feelings are for Verizon, one thing is beyond dispute. The FCC’s approval of the Bell Atlantic-GTE merger made Verizon the 2nd largest telecom company (after AT&T), permitted it to become the nation’s largest wireless operation, and made it a local telephone juggernaut. Verizon now had 63 million landlines across the country. In its first day of trading, Verizon’s stock rose $4.625 to $55 a share.

On July 4, 2000, the New York Times reported that Verizon was trying to sell off its GTE cable systems in Florida, California, and Hawaii. And to get new customers hooked, Verizon cut the prices of DSL by 20% in some parts of the United States. So while the GTE cable backbone was, per the FCC condition, technically being cut off, Verizon managed to augment its Internet services through the phone lines. Verizon, in other words, was merely swapping one type of broadband services for another. (And, indeed, that same month, the New York Times‘s Seth Schiesel would report that Verizon hoped retake ownership of Genuity, the cable network in question, in a few years.)

But it wasn’t enough for Verizon to use its legerdemain to flaunt the deal of the Bell Atlantic-GTE deal. Verizon’s legal team also felt compelled to rail against the FCC. On August 21, 2000, William Barr, the top attorney for Verizon and a man who had served as the 77th Attorney General under President George H.W. Bush, fulminated against the FCC at the Progress & Freedom Foundation’s Aspen Summit 2000 conference. In a panel titled “Perspectives on the Future of Telecom Regulation,” Barr took issue with the language of the 1996 Telecommunications Act: specifically, the manner in which the Bells were instructed to charge competitors at affordable prices in order to use their networks and discourage monopolization.

“Rather than letting the market drive competition,” said Barr, “[the] FCC has issued a host of rules to try to manage that competition and, in doing so, they have preserved a siloed approach.” This “siloed approach” also extended to the FCC’s organization itself, which was divided into separate divisions devoted to wirelsss, broadband, and telecommunications. “This comes at direct expense of intermodal communications, and it is disfiguring the telecom landscape as it evolves into the Internet landscape.”

(Eighteen months later, Barr would get his wish. At the beginning of 2002, the FCC began a campaign to reorganize its bureau. A Wireline Competition Bureau was established, containing the vestiges of the Common Carrier Bureau. In March, additional structural changes were made. The impact of these internal structural changes at the FCC, as they pertain to Verizon and the telecommunications industry, will be revisited in a future installment.)

Meanwhile, with AT&T facing both the burgeoning success of Verizon, as well as SBC Communications’s entry into the long-distance business in Texas, AT&T chairman C. Michael Armstrong was starting to get nervous. The man who had made IBM shine was now fighting for his life, working 18 hours a day, trying to figure out a way to combat flagging revenue. But what Armstrong didn’t know was that long distance plans were about to change in a very big way.

But Armstrong wasn’t going down without a fight. In July 2000, AT&T filed a federal complaint charging that Verizon was steering its customers illegally to its own long-distance service. AT&T charged that Verizon had failed to offer new phone customers a listing of long distance providers, as required by law.

Adding insult to injury on the long distance front, on July 18, 2000, a Federal appeals court ruled in a case that has serious consequences for AT&T and granted Bell Atlantic a great victory. The court, overturning rules established by the FCC, ruled that outside long distance companies (such as AT&T) using copper lines owned by a local telephone company (such as Bell Atlantic) would have to pay an increased fee to the local telephone companies. Thus, with Verizon offering long distance service through its “local” landlines, it could evade the fees. But AT&T customers would have to pay.

Verizon was also looking to wireless data as a source of revenue. The company had observed the success of Sprint PCS’s Wireless Web, which had been in place since November 1999. (And while Sprint was then the wireless web leader, its wireless network ranked fourth behind Verizon, SBC, and AT&T Wireless. It did not help Sprint any when it was forced the next month to abandon its attempted $115 billion merger with WorldCom.) But how could Verizon get customers to pay a monthly fee of $7 to $10, along with a per-minute fee through wireless data? Web access? With the telecoms engaged in aggressive price wars, they were looking to any possible form of additional income to obtain some leverage. And the then snail-paced wireless web access was having difficulties catching on with consumers. The wireless data revenue would come later through an unexpected source that nobody had anticipated: text messaging. But this was still sometime away.

There was some concern over the relationship between third-party vendors offering products to Verizon and Verizon’s dominance in the telecom industry. In July 2000, the New York Times reported that Audiovox, a mobile handset provider, was selling 80% of its handsets to Verizon. “When you have one customer that controls 80 percent of your revenue, they’re basically telling you what to price it at,” said a portfolio manager who had sold 50,000 of her 300,000 Audiovox shares. Sure enough, this portfolio manager’s predictions proved true. In February 2004, Audiovox sold off its cell phone division to Curitel, a Korean manufacturer. Was Verizon’s advantage here one of the motivating factors that caused Audiovox to sell? It’s worth noting that Toshiba had a 25% ownership of Toshiba. One clue into the internecine struggle might be divined by this press release. David Kerr, Vice President of the Strategy Analytics Global Wireless practice, was quoted as follows:

Toshiba wished to be free to exploit its own strong brand with flow-through impacts from its high performance notebooks and other electronics product portfolio. Now, Toshiba is faced with bowing to the wishes of a threatening competitor targeting the same segment Toshiba has traditionally targeted. Toshiba, a minority interest holder at Audiovox, is likely to lose its opportunity for garnering a meaningful share of the 19 million units flowing through to end users at Verizon Wireless.

While Verizon expanded and earned more profits, its workforce was becoming increasingly unhappy. On July 28, 2000, the Communications Workers of America authorized its leaders to call a strike at 12:01 AM on August 6, if Verizon would not meet its demands.

With both Verizon and the unions unable to settle upon a new contract, telephone operators and line technicians walked off the job. Two unions — the CWA and the International Brotherhood of America — represented 33% of Verizon’s workforce. (The CWA represented 72,500 Verizon workers.) One of the major stumbling blocks for this strike involved the employees at Verizon Wireless, the majority of whom did not have union representation. The CWA’s Jeff Miller pointed out at the time that there was a staggering pay difference between a union-covered customer service representative (topping out at a $44,000 annual salary) and a non-union CSR ($33,000). There were also concerns by the unions about undue stress placed upon CSRs. The workers weren’t getting adequate breaks and were often working forced overtime. And the nonunion workers were paying out of pocket for their health plans. In the days before the strike, Verizon took steps to prevent pro-union literature from being distributed at call centers and further asked which of its workers supported the unions. Like the treatment that Verizon would extend to its customers, Verizon was insisting on a five-year contract instead of a short-term contract accounting for the rapid changes in the telecom industry.

Of course, just as it had eluded the FCC, Verizon also had a plan in place to deal with its workers that would eventually involve outsourcing its labor to India. And the exact way in which Verizon overhauled its workforce will be taken up in future installments of this series.