By PETER HUSSMANN
State regulators were given assurances that Windstream will maintain Iowa Telecom's Newton campus following the merger of the two companies, one of the considerations regulators used in granting approval of the Little Rock-based company's acquisition of the Newton telecommunications firm.
Late last month, the Iowa Utilities Board entered an order granting the merger of the two companies in a $1.1 billion cash, stock and assumption of debt deal following testimony from the two companies on the impact of the combined operation.
Windstream and Iowa Telecom officials told state regulators that a combined company would provide the economies of scale that will make Iowa Telecom more financially stable, provide additional product offerings to customers, keep rates stable and maintain service quality standards.
"The board finds that the public interest will not be detrimentally affected by the proposed transaction," the April 30 order states.
However, Windstream testified to state regulators that "there will be some changes in staffing" after the merger is approved, though an expansion of the call center operations is likely.
"Windstream testified that the customer service operation will not see any material changes in the staffing of local operations, technicians, or sales personnel," the order says. "It appears that it is not likely that Windstream will reduce its technicians, staffing for the call center in Newton, or staffing to maintain timely response to customer complaints."
Windstream also testified to state regulators that it will review the Newton call center's operation and capacity for growth with the idea of expanding its use.
"Windstream claimed that given the call center's presence in the Central Time Zone and current successful operation, it is reasonable to believe Windstream would want to expand the Newton call center to include other Windstream markets after the companies' systems are fully integrated," the order states.
In granting approval, the Utilities Board did acknowledge that "there are some unknowns with this merger," including the precise number of employees who will lose their jobs.
"Windstream explained that while there is no set figure for how many employees will lose their jobs, Windstream is starting a lengthy study that will review which functions will remain local," the docket order states. "The results will not be known for months.
"Iowa Telecom testified that Windstream will maintain Iowa Telecom's Newton campus which has come to symbolize economic development in that community."
Utility board members also noted the severance packages planned to be offered to displaced corporate staff. Employees who will be eliminated within a year of the close will receive at least a 60-day notice prior to termination and a severance package with no less than eight weeks of base pay up to 26 weeks, based on years of service.
The merger is expected to be completed by mid-year.