CHARLES E. SCHUMER
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WASHINGTON, DC 20510
September 8, 2011
Julius Genachowski, Chairman
Federal Communications Commission
445 12th Street, SW
Washington, DC 20554
Dear Chairman Genachowski,
BANKING
D£MOCAATIC POLICY & COMMUNICATIONS
FINANCE
JUDICIARY
RULfS
I write today concerning Proceeding 11-142, the application filed with the Federal
Communication Commission (FCC) for the transfer ofcontrol of PAETEC Holding Corporation
to Windstream Corporation. PAETEC communications has an 850-employee workforce in
Monroe County, New York; hundreds more New Yorkers would potentially be employed to
construct PAETEC's planned new headquarters in downtown Rochester.
PAETEC owns and operates a 36,800 route-mile fiber infrastructure trusted by government
entities, carriers, and enterprise organizations nationally. As such, PAETEC and its subsidiaries
have been providing telecommunications services to governmental entities, such as the
Department of Defense and Defense Information Systems Agency. FAA. Department of
Treasury. Department of Veterans Affairs, U.S. Army, Air Force and Navy, U.S. Courts, and the
Department of Homeland Security.
These agencies require reliable telecommunication capabilities and, under PAETEC and its
Monroe County, NY workforce, they received high quality and dependable service.
Under Section 214(a) ofthe Communications Act, the FCC has the authority and the obligation
to review industry mergers while section 31O(d) establishes the FCC's authority to review the
"public interest" provisions ofa merger, including its economic consequences. Section 214(c)
enables the FCC to safeguard the "public interest" by imposing conditions on mergers and
transactions that are consistent with applicable law.
In this case. the proposed acquisition of PAETEC by Windstream has several public interest
consequences affecting not only the local Rochester, New York economy, which is currently
home to PACTEC's corporate headquarters, but also the telecommunications systems ofour
military and national defense agencies. While Windstream Corp reportedly foresees maintaining
a strong workforce presence in Monroe County. Windstream officials have publicly stated they
intend to reduce PAETEC's current 850-employee Monroe County workforce.
A workforce reduction in any case may be against the interest of the public, but it is particularly
concerning here because of PAETEC's integral role in the provision of services to agencies and
institutions throughout the country. It remains in the public's interest to ensure that workforce
reductions are not pervasive and do not negatively impact service provided by a future merged
company.
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Additionally, the merger may jeopardize current plans to e-onstruct a new PAETEC facility in
downtown Rochester. Prior to the announced merger. conslruction was to begin on Lhe new
facility on October 2011, in order to streamline PAETEC's business operations and improve
efficiencies by bringing its entire local workforce under one roof. While the new facility would
help improve PAETEC's bottom line and had a strong business justification, the facility also
stands to anchor the redevelopment of Rochester's downtown corc. New York State and the City
of Rochester, in consultation with PAETEC, invested over $60 million to demolish the former
moribund 8-acre Mjdtown Plaza site to make way for new private sector investment including
PAETEC's planned $55 million headquarters. Prior to the announced merger, PAETEC signed a
land disposition agreement with the City of Rochester sening out the parties' obligations and
timetable to complete the construction of this new dmvntown facility by 2013.
I request that the FCC carefully consider these issues as it reviews this merger to protect the
public's interest and avoid negative consequences to the state's workers and to the economy in
the Monroe County region. In considering any potential conditions to the merger, the FCC
should ensure that Windstream intends to assume and honor both the spirit and terms of
PAETEC's land disposition agreement and to afford the City of Rochester every opportunity and
consideration to work with Windstrearn to complete the new facility in the interest ofboth the
public and the new company's bonom line.
Charles E. Schumer
United States Senator