Local officials are scrambling to find out what the pending sale of New Haven’s historic phone company means for New Haven jobs and taxes.
Frontier Communications, a growing Stamford telecommunications company, has reached a deal to buy the phone company, Southern New England Telephone (SNET), from AT&T for $2 billion. The deal, struck in December, awaits state and federal regulatory approval, expected later this year. It would transfer the state’s landline telephone and U-Verse and satellite TV business from AT&T to Frontier, leaving behind AT&T’s statewide wireless phone and wi-fi business.
That’s big news for New Haven. SNET, founded here in 1878, founded the country’s first telephone exchange and created its first phone book. For much of the 20th century, it was among New Haven’s top, and most valued, employers. It has shrunk considerably since the phone business went into upheaval and SNET became a division first of SBC Communications in 1998, then AT&T (when SBC bought AT&T). SNET still employs 2,700 people in Connecticut.
Click here to read the documents AT&T and Frontier filed with state regulators.
New Haven state Rep. Pat Dillon said she is concerned about the deal’s potential impact on workers’ pensions, the potential job and tax revenue loss to New Haven. “New Haven’s tax base and our job base, including telecom, have changed over time through market forces,” she said. “What concerns me is the unwelcome changes driven by state actors, regulatory or in budget. “
Matthew Nemerson, city government’s economic development chief, said he and Mayor Toni Harp have a meeting with Frontier officials scheduled for next week.
“We thought it would be a good time to start the conversation,” Nemerson said. He said he’s “delighted” about the pending sale because Frontier specializes in landlines and has the money to invest in it.
“I’m going to try to persuade them that New Haven is a great place to move their national operations,” Nemerson said.
Frontier, which operates in 27 states, plans to keep its national operations in Stamford, according to spokeswoman Brigid Smith. And upon approval of the deal, it plans to move its state headquarters—now on New Haven’s Orange Street—up to Hartford. The idea is to make top execs available “to regulators and other decision-makers.” The company also sees the location as more central to reaching communities and customers outside the New Haven-Stamford corridor.
That said, according to Smith, Frontier plans to make New Haven its “regional headquarters” for three Eastern states: Connecticut, New York and Pennsylvania.
Smith said the company does not yet have details on what exactly will take place in the New Haven buildings, including the iconic 227,607 square-foot, 14-story 310 Orange St. current state headquarters, built in 1955 and assessed at $19.3 million. Frontier plans to keep on all 2,700 statewide employees honor all labor contracts with the Communications Workers of America, she said. It’s too early in the regulatory approval process to offer precise numbers or where the employees will work. (Click here for Dan Haar’s original Hartford Courant story detailing the deal, and here for Frontier’s summary.)
Statewide, AT&T will turn over to Frontier all but three of its buildings. One of the three it’s holding onto is in New Haven’s Science Park. (AT&T is currently negotiating to sell a Science Park building, pictured, to Highville Charter School.)
“Nothing’s at stake” for New Haven in the deal, claimed Smith, a Connecticut native who once worked an SNET directory-assistance switchboard in Bridgeport as a college student. “If anything, we will have a more enhanced presence in the state and in New Haven” because of the consolidation of East Region operations in town. “We look forward to becoming a part of New Haven’s vibrant community; we’ll even [make] employees in our 27 other states part of the Pepe’s vs. Sally’s debate,” she said with a chuckle.
AT&T made a gamble with this deal—that its future is in wireless communication—unloading all its old SNET wireline infrastructure and business to Frontier. SNET’s business includes your landline telephone, the U-Verse video service, as well as Internet connections that come into your home or office (even if it supports a wireless network inside). AT&T will stick with cellular data networks and mobile phones. The deal requires approval from the state Public Utilities Regulatory Authority as well as the Federal Communications Commission and U.S. Department of Justice.
AT&T refused to offer any public breakdown on how many New Haven employees work in the wireless division it’s holding onto, and how many work in the landline operations headed for Frontier.
“We are committed to keeping employees informed about changes and effects from this deal and we will work with Frontier to ensure the transition is smooth and that employees receive the support they need throughout the process,” AT&T spokeswoman Kate MacKinnon wrote in an email response to repeated questions about the company’s New Haven operations. But she would not disclose any numbers on how many people the company currently has working in the city or how many in its Orange Street building work in which divisions.
“Our buildings in Connecticut (including Orange Street) have multiple uses to support the business – some wireless, some landline,” MacKinnon wrote.
AT&T has lost 75 percent of its wireline business since 2000, and is part of a national trend of phone companies looking for regulatory approval to shift their emphases; click on this story by CT Tech Junkie’s Lon Seidman for more on that.