FCC Gives Nod to Frontier's $8 Billion Verizon Deal For Rural Telephone Lines

The Federal Communications Commission has approved the sale to Frontier Communications Corp. from Verizon Communications Inc. of nearly five million telephone lines located mostly in rural and outlying areas across 14 states, a deal worth more than $8 billion that the federal agency said advances its plan to extend high speed Internet access to millions more people.

The FCC said that it approved the transaction, in part, based on commitments offered both by Frontier and Verizon that allayed some of its concerns associated with the exchange.

Some of those issues percolated to the surface in early April when communications workers in West Virginia protested the proposed sale in meetings with the FCC, arguing that similar deals by Verizon in other locales had resulted in lost jobs, broken broadband promises and inadequate service.

Frontier is far smaller than Verizon, prompting the issue as to whether or not the company is sufficiently financially fit to maintain the landlines.

Maggie Wilderotter, Frontier chairman and chief executive said that the “The FCC’s approval is a significant milestone in a transaction that is overwhelmingly in the public interest. We share the Commission’s goal of closing the broadband availability gap in rural and small city areas and have committed to the FCC that we will be focused on increasing broadband deployment and penetration.”

Frontier pledges more broadband, better service

To cement the transaction, Frontier agreed to extend faster broadband to more people in its served areas, deploy fiber to libraries, hospitals and other so-called anchor institutions and provide the FCC with ongoing reports to substantiate its progress toward high-speed Internet access and other compliance commitments. In addition, both vendors agreed to honor any existing contracts with wholesale customers.

“Today the Commission approves, subject to conditions to protect the public interest, a transaction with the promise of significantly improving broadband availability to millions of consumers—as well as small businesses and anchor institutions—in rural and small-town America,” said Julius Genachowski, FCC chairman.

“I am pleased by Frontier’s robust commitments to increase private investment in broadband in rural America,” he said.

FCC Commissioner Michael J. Copps, who attended the meeting in Washington, D.C. with the West Virginia workers, called the decision “wrenching and difficult.”

He said that the FCC was compelled to “consider the financial viability of the acquiring company, the effect of the transaction on customers, the transition of operations from one company to another, the continuity of E911 services and the impact on jobs.”

Copps said that “approving the transfer of the operations to Frontier appears to provide the better opportunity for delivering broadband to the affected rural communities, which have gone without it for too long.”