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CWA Urges Congress to Assess Telecom Mergers, Foreign Ownership on Basis of Quality Universal Servic
The Communications Workers of America called on Congress to expand the benefits of the current global telecommunications market for consumers and workers and to reject proposals that would arbitrarily restrict entry by foreign-owned telecom companies with more than 25 percent government ownership into the U.S. market.
Testifying before the House Telecommunications Subcommittee, CWA President Morton Bahr said all companies seeking to do business in this country should meet high standards for the delivery of quality, universal services and should contribute to building the nation's communications network through investment and quality job growth. "These standards should be applied in all merger and takeover situations" regardless of the ownership status of a company, he said.
"Proposals to prevent foreign government-owned companies from investing in U.S. telecom companies fly in the face of" the World Trade Organization accord our country signed in 1997, in which we agreed to open our telecommunications markets to foreign companies, including government-owned companies, Bahr pointed out.
Not only would this proposal invite retaliatory action by other countries, the European Commission and the WTO that would keep U.S. companies from entering foreign markets, but it it is inconsistent with U.S. policy that has allowed foreign ownership of U.S. firms, including the partial ownership of Sprint Corp. by Deutsche Telekom and France Telecom, and other U.S. trade policy.
Virtually all major U.S. telecommunications companies have expanded abroad and most companies have direct investments in foreign government controlled communications companies, as well as those previously controlled by foreign governments, Bahr noted.
Concerns about national security-- raised by some of the proposal's sponsors-- have been thoroughly addressed, with safeguards already in place to assure a level playing field for competitive telecommunications, Bahr noted.
No fewer than four federal agencies and organizations are required to review any proposed purchase of a U.S. telecommunications firm by a foreign entity: CFIUS, the Committee on Foreign Investment in the United States, which includes representatives from several key government agencies; the Department of Justice; the Federal Bureau of Investigation; and the Federal Communications Commission, he pointed out, with the Department of Defense, if requested, also able to participate in this national security review process.
With such procedures already in place, Bahr called on lawmakers and policy makers to focus their attention on advancing improvements in service, product quality, employment and workers' rights that will benefit U.S. consumers and workers. Our public policy "should promote quality, universal service, encourage network investment, assure competitive neutrality and provide for the growth of good jobs," he said.
In fact, "preventing foreign government-owned companies from entering the U.S. market could deny U.S. consumers the benefits of quality competitors," he added. Specifically, the presence of Deutsche Telekom "could yield some substantial benefits for workers and consumers and will create a positive competitive dynamic in the U.S. telecommunications industry," Bahr said.
Deutsche Telekom recognizes the rights of workers to form and join labor unions and honors its collective bargaining agreements, and as a result, has a very positive relationship with the union that represents its workers, Bahr noted. "If the boards of U.S. telecommunications companies were structured along the lines of Deutsche Telekom, I believe we would spend less time fighting for the rights of union workers to jobs in emerging technologies and more time building a cutting edge telecommunications infrastructure," he added.
Bahr noted that while currently, about 60 percent of the share capital of Deutsche Telekom is owned by the government, that share continues to drop as the company continues its transformation to a totally private stock corporation.
Testifying before the House Telecommunications Subcommittee, CWA President Morton Bahr said all companies seeking to do business in this country should meet high standards for the delivery of quality, universal services and should contribute to building the nation's communications network through investment and quality job growth. "These standards should be applied in all merger and takeover situations" regardless of the ownership status of a company, he said.
"Proposals to prevent foreign government-owned companies from investing in U.S. telecom companies fly in the face of" the World Trade Organization accord our country signed in 1997, in which we agreed to open our telecommunications markets to foreign companies, including government-owned companies, Bahr pointed out.
Not only would this proposal invite retaliatory action by other countries, the European Commission and the WTO that would keep U.S. companies from entering foreign markets, but it it is inconsistent with U.S. policy that has allowed foreign ownership of U.S. firms, including the partial ownership of Sprint Corp. by Deutsche Telekom and France Telecom, and other U.S. trade policy.
Virtually all major U.S. telecommunications companies have expanded abroad and most companies have direct investments in foreign government controlled communications companies, as well as those previously controlled by foreign governments, Bahr noted.
Concerns about national security-- raised by some of the proposal's sponsors-- have been thoroughly addressed, with safeguards already in place to assure a level playing field for competitive telecommunications, Bahr noted.
No fewer than four federal agencies and organizations are required to review any proposed purchase of a U.S. telecommunications firm by a foreign entity: CFIUS, the Committee on Foreign Investment in the United States, which includes representatives from several key government agencies; the Department of Justice; the Federal Bureau of Investigation; and the Federal Communications Commission, he pointed out, with the Department of Defense, if requested, also able to participate in this national security review process.
With such procedures already in place, Bahr called on lawmakers and policy makers to focus their attention on advancing improvements in service, product quality, employment and workers' rights that will benefit U.S. consumers and workers. Our public policy "should promote quality, universal service, encourage network investment, assure competitive neutrality and provide for the growth of good jobs," he said.
In fact, "preventing foreign government-owned companies from entering the U.S. market could deny U.S. consumers the benefits of quality competitors," he added. Specifically, the presence of Deutsche Telekom "could yield some substantial benefits for workers and consumers and will create a positive competitive dynamic in the U.S. telecommunications industry," Bahr said.
Deutsche Telekom recognizes the rights of workers to form and join labor unions and honors its collective bargaining agreements, and as a result, has a very positive relationship with the union that represents its workers, Bahr noted. "If the boards of U.S. telecommunications companies were structured along the lines of Deutsche Telekom, I believe we would spend less time fighting for the rights of union workers to jobs in emerging technologies and more time building a cutting edge telecommunications infrastructure," he added.
Bahr noted that while currently, about 60 percent of the share capital of Deutsche Telekom is owned by the government, that share continues to drop as the company continues its transformation to a totally private stock corporation.
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