Frontier chief says Verizon deal moving forward: Acquisition is expected to be complete by April 2010

Nov 04, 2009 (Charleston Daily Mail - McClatchy-Tribune Information Services via COMTEX) -- FTR | Quote | Chart | News | PowerRating -- CHARLESTON, W.Va. -- Frontier Communications Corp.'s acquisition of Verizon's wire line business in West Virginia and 13 other states "is progressing as planned on all key fronts," said Maggie Wilderotter, Frontier's chairwoman and chief executive officer.

Wilderotter spoke about the $8.6 billion transaction on Tuesday during a conference call after Frontier announced its third-quarter financial results.

Frontier earned $52.2 million on revenue of $526.8 million in the just-ended quarter. During the same period a year ago, Frontier earned $47 million on revenue of $557.9 million.

Frontier's target date to close the Verizon deal is April 30, 2010.

Wilderotter noted that the transaction received overwhelming support from Frontier's shareholders on Oct. 27 and was approved last week by regulators in Nevada, South Carolina and California. For the transaction to be completed, approval also must be received from the Federal Communications Commission and state regulators in Arizona, Illinois, Ohio, Oregon, Washington State and West Virginia.

The West Virginia Public Service Commission, the regulator here, has scheduled hearings in Charleston Jan. 12-14.

"We are making progress in West Virginia," Wilderotter said, noting that it will be Frontier's largest market after the deal is done. "Frankly we will have just about the entire state from a telephone and broadband perspective," she said.

"Because of the significance of our presence in West Virginia, the process that the Public Service Commission is going through in that state is a process that has a lot of comment, testimony, etc.," she said. "If you remember, we are the second-largest phone company in West Virginia today."

As of June 30, Frontier had approximately 142,000 access lines and 48,000 high-speed Internet customers in 38 West Virginia counties, said company spokesman Steve Crosby.

Verizon has always been the largest telecommunications provider in West Virginia. The company has about 617,000 access lines in 47 counties in the state, said Verizon spokesman Harry Mitchell.

Wilderotter said Frontier is "doing a very good job" in West Virginia. "So our track record is really helping us from a regulatory perspective," she said. "Just to give you an example, we're at 92 percent reach on broadband in the state of West Virginia. The properties that we're acquiring from Verizon are around 60 percent reach. In addition to that, we don't have complaints at the Public Service Commission. We have very high satisfaction rates from our customers in the state. And all of those things are leading, I think, to a good outcome.

"But we don't believe that we will see a ruling in West Virginia until after the first of the year," Wilderotter said. "And we continue to work with the different constituencies that have been asking questions about how we're going to deliver broadband, how we're going to be the right type of provider in that marketplace."

The Communications Workers of America, which represents many Verizon and Frontier employees, is engaged in a "stop the sale" campaign, claiming that Frontier is trying to do too much, too fast.

In what was perhaps the only reference to the union's opposition, Wilderotter said she sees a lot of partnering going on in the state "and we feel good about that. We do have noise in the system though, too, that we're going to have to deal with because we are so large. That is just part of the basic approval process we see in states like this."

Frontier plans to convert from Verizon's systems to its own in West Virginia when the deal closes. It plans to make the conversions in other states over an extended period of time.

"Our full-time dedicated integration team is working extremely hard on the required pre-merger initiatives and post-merger plans," Wilderotter said. "The West Virginia transition is progressing nicely and we do not see any impediment to transitioning this state to our financial and billing systems by closing."

Contact writer George Hohmann at business@dailymail.com or 304-348-4836.

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