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CWA, Consumer Groups Raise Concerns about Verizon Landline Sale in California, Texas, Florida

18 Apr, 2015

In comments to the FCC, the Communications Workers of America (CWA), consumer groups The Utility Reform Network, the National Association of State Utility Consumer Advocates, the Center for Accessible Technology, and the Greenlining Institute all raised concerns about the impact of the $10.5 billion transaction on consumers and workers.

Earlier this year, Verizon agreed to sell its landline assets in California, Texas, and Florida to Frontier Communications. The FCC and the California Public Utilities Commission (CPUC) are reviewing the deal to ensure it serves the public interest.

“This is a large and significant transaction, one that requires careful scrutiny by the Commission to ensure that it serves the public interest in the provision of quality telecommunications service, expansion of high-speed broadband, and good jobs,” CWA told the FCC.

CWA and TURN both emphasized that Verizon and Frontier have not provided the FCC with sufficient information to determine whether the proposed sale serves the public interest.

CWA raised key questions that the FCC must address in its review, including:

  • Broadband Expansion. A full 46 percent of the lines that Frontier will acquire from Verizon do not have high-speed broadband connections. What are Frontier’s plans to upgrade and expand high-speed broadband?
  • Service Quality. Verizon has neglected its copper wireline networks as it shifts resources to wireless. The California Public Utilities Commission has identified serious service quality problems in Verizon’s existing network. What will Frontier do going forward to ensure a high-quality network and prompt reliable service?
  • Capital Expenditures. Initial review of Frontier’s projected capital plans after the transaction raises concerns about the level of capital intensity post-transaction.
  • Verizon Transition Commitments and Financial Responsibility. The Verizon/Frontier Securities Purchase Agreement requires Verizon to continue capital spending and marketing prior to closing. Is Verizon meeting its obligations? Verizon bears financial responsibility for past neglect of the copper network prior to closing.
  • Integration and Conversion. How will Frontier avoid the types of transition problems that plagues its acquisition of AT&T’s landline network in Connecticut just a few months ago?
  • Jobs. What concrete commitments will Frontier make to ensure that the transaction will not lead to any reduction in employment levels, workers’ living standards, and service to customers?
  • Transfer of assets and liabilities. What exactly is being transferred in this transaction? Are pension assets and liabilities being allocated in an equitable manner?

CWA emphasized that it is hopeful that the FCC review will result in concrete, verifiable commitments in each of these areas to protect and advance the public interest.

 

Communications Workers of America comments to FCC (CWA, Apr. 13, 2015)

Consumer groups' joint comments to FCC (TURN, NASUCA, CforAT, Apr. 13, 2015)

Greenlining Institute's Petition to Deny (The Greenlining Institute, Apr. 13, 2015)

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