Verizon Holds Agent Kickoff Event Despite Contract Questions

Despite lingering questions and concerns about Verizon’s new agent agreement, about two-thirds of the agents invited to participate in the 2007 Verizon Solutions Partner Program attended the kickoff meeting Wednesday in Basking Ridge, N.J., the company said.

Nearly 100 agents – 60 percent of them former MCI Solutions Partners and 40 percent legacy Verizon agents – were sent invitations with contracts in mid-November. The agreements were changed following three conference calls between VSPP and its prospective partners with second drafts distributed right before the Thanksgiving holiday. In light of the change, the deadline for signing the agreements was moved back from Nov. 22 to Dec. 15. However, agents had to have a signed contract in hand to attend Wednesday’s orientation.

Because of the short review time, some agencies like ARG in McLean, Va., and master agency MicroCorp. Inc., in Atlanta, did not attend and are taking the extra two weeks to consider the contract. PHONE+ was unable to confirm rumors of an “organized” boycott of the meeting by former MCI partners that have expressed misgivings about the new terms Verizon has proposed. However, an effort, the “WE WILL NOT SIGN” Coalition, is under way to protest the agreement. An e-mail solicitation, which you can view online at NSP Strategist’s blog, requests agents to rally by responding to a hotmail address.

“We didn’t attend the meeting because we didn’t have enough time to do our due diligence. It would have been impossible,” said MicroCorp CEO Brad Miehl, noting that he is still reviewing the contract. “I am hopeful that all parties can come to terms and that everyone does the right thing.”

Greg Praske, CEO of ARG, agreed. “I don’t understand how anybody could that quickly review and sign an agreement. I can’t imagine that somebody could do that and appropriately represent their employees and their subagents,” he said.

One former MCI agent that did sign the contract and attended the orientation said he was not happy about the brief review period. “It was a tough call for me,” said Vince Bradley, CEO of master agency World Telecom Group. He added that “the second version of the contract had dramatic improvements and we will continue to request clarifications and amendments to the agreement through the review period and beyond – a practice that has been common and successful for us with other carriers.”

Bradley said WTG executives and lawyers completed a rushed legal review and did not feel significant additional changes that had already been requested and denied would occur in a few weeks. Finally, they felt that it was important to be at orientation meeting in person to meet with key Verizon leadership.

Shelley Murphy, vice president, Verizon Business Solutions Group, said her team is “well aware that some agents, including a number who had worked as agents for the former MCI, still have concerns about the program design.” She said VSPP is continuing its ongoing dialog with each agent in hopes of resolving outstanding issues.

“The contract’s extremely challenging,” said Praske, whose company is a former MCI agency. “We feel that how they are treating existing business that was put on the books through our previous agreement is simply not consistent with our agreement and especially not consistent with how MCI executives conveyed that agreement. We are very concerned about their restrictions on pursuing larger accounts. And, we totally disagree that the value of a renewal is so substantially less than new business. Renewing the customer takes every bit as much effort as new business, especially at the speed the technology is changing.”

Praske’s concerns largely are the same ones expressed by other agents who spoke to PHONE+ on condition of anonymity. “We need to secure the base we have now,” said one agent, noting that’s separate from the new conditions on selling new business.

The evergreen payment clause, which ensures payment to the agent on their accounts as long as they remain with the carrier, is a particular sticking point. It was included in former MCI contracts, but Verizon’s policy is any new service added to the customer’s account automatically puts it under the new Verizon contract, which does not have an evergreen clause.

The rules of engagement regarding pursuit of larger accounts requires agents to get permission of the local branch manager before being able to target accounts that bill 10,000 or more per month. One agent who spoke to PHONE+ on background said it was akin to getting permission to continue working with customers they have had for years. Not knowing this in advance, he added, makes it difficult to determine if you can meet set quotas.

Quotas, however, have not yet been shared with invited agents – another reason many are concerned about signing the 2007 agreement. Failure to meet quotas can result in termination of the agent agreement, according to VSPP Q&A documents.

The renewal comp plan is probably the most contested. Praske calculated renewal commissions at 70 percent to 80 percent lower than new sales commissions. “It definitely has an impact; we can’t continue doing what we are doing and get paid 70-80 percent less,” he said.

Another partner agrees, “We can’t fund our operation based on renewals at 70-80 percent less.” Renewals are paid at 4 percent to 6 percent depending on whether they are classified as core or growth products, agents said.

The likely result of such a policy, one agent told PHONE+, is that non-exclusive agents will renew their accounts on another carrier whenever possible to avoid losing the revenue. He is hopeful that Verizon eventually will budge on that front, citing movement from AT&T in a similar circumstance.

Another agent said any change of heart would require Verizon to abandon its incumbent mindset and recognize that the former MCI product set is subject to competition. “They have a model they know, and they’ve tried to apply it out of region,” he said.

ARG www.myarg.com

MicroCorp Inc. www.microcorp.com  

Verizon Solutions Partner Program https://www22.verizon.com/onesourcesystem/unprotected/VSPP/VSPP/welcome_partner.aspx

World Telecom Group www.wtgcom.com