W.Va. consumer advocate, staff oppose phone deal

AP News
Posted: Nov 17, 2009 3:35 PM

Some key state regulatory officials are opposing Frontier Communications Corp.'s plan to buy Verizon's wire line business in West Virginia and 13 other states.

The Public Service Commission's staff and Consumer Advocate Division recommended the merger's rejection in filings Monday with the PSC.

"It's not in the best interest of telephone customers in West Virginia," said PSC Consumer Advocate Byron Harris. "There's no way you can approve a plan like this when the company making the acquisition doesn't know how it's going to serve all its customers."

Harris said the Stamford, Conn.-based Frontier lacks the financial resources to make the $5.3 billion deal and correct service issues with Verizon's telephone lines in West Virginia.

Verizon Communications announced in May that it had reached a deal to sell about 4.8 million residential and business telephone lines and about 1 million broadband connections to Frontier Communications. The sale would include all of Verizon's phone lines in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin as well as some assets in border areas of California.

Frontier currently has about 2.3 million customers.

If the deal is approved, West Virginia would be Frontier's largest market with 617,000 customers. The company currently has 140,000 instate customers.

In a separate filing, the commission's staff said if the PSC approves the deal, then the sale should be conditioned on Verizon investing $300 million to upgrade its landline network in West Virginia.

Verizon spokesman Harry Mitchell said once the PSC reviews the proposed sale it will endorse the deal. The U.S. Department of Justice and the Federal Trade Commission and three other states have already supported it, he said.

Frontier spokesman Steven Crosby said the company hopes the PSC sees the benefit of expanded service in West Virginia.

The commission plans to hold hearings on the sale in January.