Feds and Texas say yes to Frontier purchase of Verizon system

by Steve Blum • , , , ,

Fiber and copper, but no strings.

Frontier Communications’ purchase of Verizon’s wireline telephone systems – copper and fiber – in California, Texas and Florida can go ahead, with no particular conditions attached, according to the Federal Communications Commission. On the whole, the public will benefit from the purchase because Frontier will improve landline broadband service and Verizon won’t, according to the FCC’s order approving the deal

We conclude that Frontier is more likely to accelerate broadband service in the transaction market areas than Verizon would be absent the transaction, and that this potential for acceleration represents a tangible public interest benefit. First, Frontier’s history of deploying broadband supports its assertion that it intends to expand broadband services in the transaction areas above Verizon’s existing 73 percent availability rate. In particular, Frontier’s 92 percent broadband availability rate demonstrates a steady and significant improvement above the approximately 62 percent availability rate that existed at the time Frontier acquired mostly rural incumbent LEC operations in 14 states from Verizon in 2010…

To specifically demonstrate its prior experience in expanding broadband in California, Frontier filed information showing that, when it acquired 12 Verizon rural exchanges in California in 2010 serving 17,700 households, broadband had been deployed to about 4,200 households, or about 24 percent of households in the exchanges. As of 2015, Frontier states that broadband service is available to 14,700 households, or 82 percent of households in the acquired exchanges.

Texas utility regulators have also approved it and there’s no state level review in Florida at all. The California Public Utilities Commission is still considering whether to okay the acquisition, and the condition of Verizon’s copper networks is a major concern.

The FCC is correct in its assessment: there’s a far better chance of infrastructure upgrades with Frontier in charge than if Verizon’s let it rot on the poles style of neglect continues. The best thing the CPUC could do is likewise approve the deal with no strings attached other than an enforceable requirement that Frontier fulfils the promises it’s already made.