No showstoppers for Frontier's purchase of Verizon's wireline network in California

2 December 2015 by Steve Blum
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But Verizon will have to clean up its mess first.

Frontier Communications’ proposed purchase of Verizon’s wireline telephone systems in California seems to be on track for approval by the California Public Utilities Commission, albeit with conditions. The draft decision approving the deal, written by CPUC administrative law judge Karl Bemesderfer, has gone through the standard public review cycle of comments and reply comments from the companies involved and other interested parties, particularly the CPUC’s office of ratepayer advocates (ORA) and various consumer and advocacy groups.

Most of the comments can be summed up as we’re okay with the draft decision except we’d like to make a few changes. In other words, it’s a deal they can live with.

ORA still wants Verizon to have to split some of the proceeds from the deal with telephone ratepayers, but hasn’t been successful so far in making the case that it’s required by state law.

As it typically does with any matter before the CPUC, Verizon put up a fuss about some of the conditions on the deal, particularly those that would require it to improve service quality to the level required by the CPUC before the transaction closes, and to do the same with its overhead lines or deposit money in an escrow account so that repairs can be made later.

The next step in the process is for Bemesderfer to draft a revised decision, addressing key points made during the review process and either incorporating those suggestions or giving a reason for not doing so. For now, expect that to be published sometime in the next 24 hours or so. The CPUC is scheduled to vote on the deal at its meeting tomorrow, but it’s possible that everything could be bumped by a couple of weeks, until the commission’s 17 December 2015 meeting.