Down to the Wire

Utility poles and the wires strung between them are hardly the first thing that comes to mind for most Oregonians.

But the million-plus poles in the state are a big worry for the thousands of workers whose safety could be put at risk by having to work on rundown, decaying poles and equipment.

And the  plea—made by the phone company to state regulators in January—is a possible sign of trouble for consumers as well.

CenturyLink has asked the Oregon Public Utility Commission for permission to put off the routine maintenance because it says it cannot afford to do the work. Separately, CenturyLink also acknowledges its corporate debts have given it little financial room in which to maneuver.

The company's request concerns other utilities, who say putting off basic maintenance for a decade to cut costs sets a bad precedent.

"They are cutting corners," says Gary Nieborsky, operations manager for Central Lincoln People's Utility District in Newport, of CenturyLink's proposal. 

CenturyLink, based in Monroe, La., serves phone customers in 37 states and posted revenues last year of $18.4 billion. In 2011, the company bought out Qwest, the dominant landline provider in Oregon, for $24 billion.

According to state figures, CenturyLink serves 64 percent of Oregon landline customers, more than three times the market share of its next biggest rival, Frontier Communications.

But CenturyLink has been steadily seeing customers hang up on the company. 

The phone utility (and before that, Qwest) has lost more than half its Oregon customers between 2002 and 2011. Its in-state revenues declined by almost a third, from $925 million to $640 million over the same period.

Meanwhile, the company is carrying massive debt after its heavily leveraged buyout of Qwest.

CenturyLink cannot reverse the wireless revolution that has led consumers to abandon landlines. But it can try to cut costs.

In its annual report last year, CenturyLink noted that the heavy borrowing to buy Qwest and a similar phone company in Kansas had left the company heavily leveraged.

"Our high debt levels pose risks to our viability and may make us more vulnerable to adverse economic and competitive conditions, as well as other adverse developments," the company said in its 2012 annual report.

In PUC filings, the publicly traded company asked Oregon regulators to extend the time allowed to make repairs from two to 10 years "when such violations pose little or no foreseeable risk of danger to life or property," wrote CenturyLink's Oregon regulatory affairs director, Ron L. Trullinger. 

"The burdensome costs associated with the current operation of the rules are unnecessary and unreasonable," Trullinger added.

CenturyLink spokesman Martin Flynn said in a statement that the company simply wants extra time for repairs that "do not pose imminent danger to anyone. CenturyLink values public safety, the safety of its employees and we remain committed to the safety of our facilities."

Oregon's two biggest utilities, PGE and PacifiCorp, have taken no position on CenturyLink's request. 

But PUC staff opposes CenturyLink's request and has recommended that the three-member regulatory board, which is appointed by the governor, reject it. The request will get a hearing May 31.

Unions that represent communications workers are fighting the plan out of concerns about safety.

"There is no excuse for saying, 'We're going to push anything safety related out farther into the future,'" says Marcy Grail of the International Brotherhood of Electrical Workers Local 125, which represents 2,100 workers in Oregon. 

“When you are talking about risking people’s safety to maximize profits, it’s unacceptable.” 

WWeek 2015