Verizon landline purchase good for W.Va., Frontier CEO says

Oct 30, 2009 (The Charleston Gazette - McClatchy-Tribune Information Services via COMTEX) -- FTR | Quote | Chart | News | PowerRating -- CHARLESTON, W.Va. -- Frontier Communications Corp.'s purchase of Verizon's 617,000 telephone access lines in West Virginia would boost the state's economy by creating jobs and expanding broadband Internet service, Frontier CEO Maggie Wilderotter said Thursday in Charleston.

"Frontier is very good for West Virginia, and West Virginia is very good for Frontier," said Wilderotter, who attended Gov. Joe Manchin's Summit on Global Competitiveness at the University of Charleston. "It's a win-win for customers and employees. We're here to grow, and growth is about job creation and sustaining jobs."

The Communications Workers of America has sharply criticized the proposed deal. The union says Frontier doesn't have the financial resources to take on Verizon's landlines in West Virginia and 13 other states.

Wilderotter dismissed that criticism Thursday. She said Frontier would have less debt and become a stronger company after the transaction.

"We are a very financially healthy company, and this makes us even more financially healthy," Wilderotter said. "This reduces our debt."

Frontier has 2.4 million landline customers in 24 states. The company successfully purchased wire lines from Verizon and other telephone companies in the past, Wilderotter said.

"We know how to do this," she said. "We're good at this, and we're customer focused."

Frontier already has more than 100,000 small-business and residential customers in West Virginia, and 92 percent of those have access to broadband. The Stamford, Conn.-based company employs about 300 people across the state.

"We have a great track record in West Virginia," Wilderotter said. "We're committed to continuing to invest in people, jobs and technology to keep the state competitive."

During Thursday's education summit, Wilderotter told audience members that high-speed Internet access was important for learning throughout life.

"Our technology can provide for education from womb to tomb," she said.

Also Thursday, Verizon announced that state regulators have approved Frontier's purchase of Verizon's telephone wire lines in California, Nevada and South Carolina. Public utility commissions in the three states approved the sale by unanimous votes, Verizon said.

"Regulators in California, Nevada and South Carolina have acted in the best interest of consumers in approving the acquisition," said Timothy McCallion, president of Verizon's western region.

"This transaction will further each company's strategic focus, and it holds numerous benefits for consumers and small businesses in the states whose operation are being acquired by Frontier, including increased broadband availability."

Frontier and Verizon expect other states to follow suit in the coming months. The Federal Communications Commission also is reviewing the $8.6 billion deal.

The West Virginia Public Service Commission plans to hold hearings on the proposed sale, starting Jan. 12.

Regulators have called the merger the most significant telecommunications deal in West Virginia history.

The Raymond James investment group issued a report Thursday, saying a recent comparison of the Frontier-Verizon deal to a similar transaction in New England lacks merit.

Earlier this week, FairPoint Communications filed for bankruptcy. The company purchased Verizon landlines in three New England states in 2007.

The Communication Workers of America has said that Frontier also could wind up in bankruptcy court if regulators approve the deal.

Raymond James said FairPoint's bankruptcy filing should have no bearing on Frontier's ability to acquire more Verizon wire lines.

The investment group said Frontier is much larger than FairPoint and has successful billing and information-technology systems already in place.

Reach Eric Eyre at ericeyre@wvgazette.com or 304-348-4869.

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