CenturyLink Nixes Commissions On Some Accounts; Partners Protest Potential ‘Disastrous’ Impact

Amid the financially-crippling COVID-19 pandemic, CenturyLink is cutting off commissions to agents on rural healthcare accounts. That's because of a 2019 FCC order that partners say is a misinterpretation on behalf of CenturyLink that could be hugely detrimental to some agents.

Telecom giant CenturyLink told its channel partners that it is ending payment on commissions to agents on rural healthcare accounts, prompting immediate backlash from a group of the telecommunication provider’s partners.

CenturyLink told partners verbally that it will eliminate the rural healthcare commission once current contracts expire in order to comply with a 2019 Federal Communications Commission order called Order 19-78.

The FCC order -- which goes into effect July 1 -- seeks to prevent Universal Service Administrative Company (USAC) consultants from getting paid by rural healthcare organizations to prepare USAC applications, while also being paid commissions from the service provider for recommending their services that qualify for USAC -- essentially, double-dipping.

Partners counter that the agent involved in the deal serves as the sales person for connectivity, not the consultant on the back end. They say CenturyLink is misinterpreting the FCC order with unintended “disastrous” results for both agent partners and healthcare providers.

"The FCC doesn’t realize that in addition to providing labor and project management, agents leverage market competitive knowledge on behalf of clients without charging the health care provider for services," according to a letter from a group of partners that have formed to fight the issue that was reviewed by CRN.

Garrett Gee, senior vice president of indirect sales for CenturyLink said in a statement to CRN that the carrier greatly values its relationship with its Partner Program members. "[CenturyLink]will continue to honor all valid sales commissions in accordance with applicable laws, legal requirements and our contractual agreements. CenturyLink is committed to supporting our indirect sales community and to working with the FCC on the new rural health care program rules, but we must adhere to changes in government regulations regarding the payment of sales commissions," Gee said.

Shane Stark, chief operating officer and director of vendor and channel relations for Carrier Access, a Clive, Iowa-based CenturyLink partner, said that the Monroe, La.-based carrier right now is working with partners on the matter. "There is a group of us working together with CenturyLink trying to figure all of this out. A lot of people have interpreted the order and it seems that opinions vary from person to person. The agent community is just trying to protect ourselves and prevent any monetary losses in the situation,” he said.

[Related: CenturyLink’s New Channel Partner Program Agreement Incentivizes Partners To Sell Strategic Services]

CenturyLink so far is the only carrier that confirmed to partners it will cut off commissions for these accounts.

Partners say if the CenturyLink interpretation on the FCC order stands it will be a windfall for the telecom provider to the detriment of the CenturyLink channel.

"That could be $10 million in recurring revenue out there and [CenturyLink] is paying an average of 15 percent of that every month. You start doing the math, it's $1.5 million a month that they will just keep," said one longtime CenturyLink partner that asked to remain anonymous. "They have no reason to help us.”

It will be the healthcare providers that suffer if CenturyLink stops paying agent commissions, according to the partner letter that urges fellow partners to contact their congressional representatives and commissioners of the FCC.

"With COVID-19, the last thing our health care providers need is a government mandate that will create an impediment for them to save money and will negatively impact their ability to focus on patient care. This FCC order will truly hurt providers who are already laying off workers and are stretched so thin," the partner's letter said.

The rural healthcare controversy comes as agents have already being hit hard by the loss of business from the COVID-19 pandemic.

"Some agents are concerned they'll have to close -- for some folks, 80 percent of their business is rural healthcare customers. It could be catastrophic," the longtime CenturyLink partner said.

Even partners that don't specialize in serving rural healthcare customer could be affected because the order states that even if one location of a multi-site healthcare organization has applied for rural healthcare federal funding, USAC consultants will effectively be blocked from being paid on the entire account, including metro locations.

"That whole customer is suddenly off limits," the CenturyLink partner said. "Even agents that aren't specializing in rural healthcare may feel an impact and they don’t even know it."

The COVID-19 pandemic has severely impacted agent cash flow, said another CenturyLink partner. "It's not a good time to lose commission dollars."