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Friday, May 21, 2010

FCC gives Verizon the all-clear to exit Washington State, transfer lines to Frontier

A month after Washington's Utilities & Transportation Commission signed off on Verizon's plan to sell its Washington landlines to a small rural telecom provider, the Federal Communications Commission has followed suit (PDF):
Today, the Federal Communications Commission approved the transfer of 4.8 million lines in primarily rural and smaller-city areas to Frontier Communications Corp. from Verizon Communications Inc. This transaction -- which includes significant deployment commitments from Frontier -- will help advance the goals of the National Broadband Plan by bringing broadband to millions of consumers, small businesses, and anchor institutions in 14 states across the West, Midwest, and South.

The Commission issued the Order after carefully reviewing the record, requesting extensive additional data from the applicants, and accepting substantial commitments offered by Frontier and Verizon to mitigate potential harms and ensure public interest benefits.
For those who can't read between the lines (bureaucratese can be a bit confusing), here's a translation of the announcement in plain English:
Today, the Federal Communications Commission once again rubber stamped a tax-exempt, unjustifiable megadeal between a big telecommunications company (Verizon), which selfishly wants to concentrate on providing service to denser, wealthier neighborhoods and a smaller communications company (Frontier) eager to triple in size overnight by buying the bigger company's assets in fourteen states. This transaction — which was cooked up more than a year ago — is being allowed to proceed because we at the FCC are easily persuaded to believe that for-profit companies will put the public interest first if we let them do what they want.

(Also, we simply don't know how to say NO.)

The Commission issued the Order after carefully reviewing what Verizon and Frontier's executives had to say, requesting a lot of documents so we could say we did our homework, and allowing the applicants to proceed after getting them to agree to a set of wimpy conditions which we hope will prevent affected customers from being screwed.
In all seriousness, that rewritten excerpt is a more honest summary of what's going on. The FCC represented the last hurdle for Verizon and Frontier's transaction, which has already been approved at the state level by all the regulatory agencies with jurisdiction. The deal is expected to close this coming July 1st.

Verizon and Frontier Territories in the Pacific Northwest
Washingtonians, Oregonians, and Idahoans who currently receive service from Verizon will soon find themselves dealing with a different company. The majority of Frontier's new customers in the Pacific Northwest are telephone and DSL subscribers, but there are a significant minority who are FiOS subscribers.

Comcast has been trying to capitalize on potential confusion created by the deal by running ads in local newspapers proclaiming that "Verizon FiOS is Leaving Washington". (Similar ads are being placed in Oregon newspapers).

Technically, that's true, but Frontier isn't going to come in and pull the plug on its new FiOS customers; that would make no sense. Homes and businesses that already have FiOS probably don't have much to worry about. Those who should be really unhappy with this deal are the folks who don't have FTTP (fiber to the premises), because it's unlikely that Frontier will have the resources to bring FiOS service to additional neighborhoods in the Pacific Northwest. They're going into debt in order to pay Verizon for all those landlines.


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