Frontier’s purchase of Verizon is a step in a competitive direction, says California attorney general

by Steve Blum • , , ,

The decision to allow Frontier Communications to buy Verizon’s wireline systems in California was based partly on an opinion by the California attorney general’s office. The California Public Utilities Commission, which had the final say, asked the AG whether or not the purchase would be anti-competitive. On the contrary, came the reply, it should result in more competition

We find that this acquisition has the potential to increase competition among competitive local exchange carriers. If indeed Verizon California has allowed its copper infrastructure to fall into disrepair, Frontier is likely to improve and maintain Verizon California’’s copper networks in a manner that may not have occurred absent the transaction. Moreover, Frontier’’s demonstrated commitment to expanding rural broadband will lead to accelerated broadband build-out to California rural areas that otherwise would not receive such access. Indeed, intervenors have acknowledged that in light of Verizon’’s apparent retreat from its California wireline business, Frontier’s acquisition is likely to benefit consumers through the improvement of copper networks and expansion of broadband access.

Plus, when wireless service is taken into account, getting Verizon out of the wireline business would also be a plus…

Verizon today has a lower incentive to aggressively market its Verizon Wireless products against its Verizon California voice services. By extension, the de-affiliation of Verizon Wireless and Verizon California is likely to enhance competition among voice communication services as the independent companies will be incentivized to aggressively compete to win voice customers.

Replacing Verizon with Frontier will not magically usher in a golden age of telecommunications in California. Although Frontier is not tiny, it lacks Verizon’s size, Bell System legacy and financial resources. So there will be times when Frontier will make hard and unpopular choices. But more competition means that consumers will also have greater opportunity to choose.