PSC approves Frontier buying Verizon lines
The West Virginia Public Service Commission (PSC) has approved the sale of all landline telecommunications services owned and operated by Verizon WV to Frontier Communications of Stanford, Connecticut.
In a split decision, the PSC order approving the sale was issued on Thursday, May 13.
If approved by the Federal Communications Commission, the $8 billion deal will give Frontier control of an additional 600,000 landline customers now serviced by Verizon WV. Frontier already serves 140,000 customers in the state.
West Virginia is the ninth and final state to approve the transaction, joining Arizona, California, Illinois, Nevada, Ohio, Oregon, South Carolina and Washington.
In a May 13 press release, Frontier Chairman and Chief Executive Officer Maggie Wilderotter said, “Today’s approval is a welcome and important step. Our goal is to gain the approval of the FCC so that we can close the transaction and begin bringing its benefits to consumers and businesses.”
The sale by Verizon to Frontier was opposed by the Communications Workers of America, who called the deal “Good for Wall Street, Bad for West Virginia.”
In a press release, the union said they are in the process of evaluating the 82 page order.
The union has 10 days to file a motion for reconsideration. If that motion is turned down, the union has 30 days to file an appeal to the State Supreme Court.
Approval with conditions
The PSC order places a number of costly conditions on Frontier.
Frontier has committed to spend $231 million between now and 2014 on capital expenditures in West Virginia.
Frontier agreed to spend an additional $48 million exclusively for expansion of broadband internet access through 2014 to achieve broadband access for 85 percent of households in the Verizon WV service territory.
Frontier agreed to honor all existing agreements between Verizon WV and third parties, including the current collective bargaining agreement with the CWA.
The PSC order said, “Increased investment in broadband internet access is a net benefit to the citizens and the State from the Transaction.”
Expensive deal
Frontier will pay Verizon $3.3 billion in cash and compensate Verizon shareholders with new Frontier shares proportionate to a value of approximately $5.247 billion.
The PSC order states, “The complexity and magnitude of the Transaction justify requiring quarterly reports to the Commission on the financial health of Frontier after the merger as well as reports on the integration of Frontier with Verizon WV for the first year after closing and annual reports for the following three years.”
