Reviews:
 ·Frontier Communi..
4 edits | reply to fAcEtIOUs
Re: What next? said by fAcEtIOUs:What the ICC should do is enforce reasonable promises for approval that would improve the chances for success: . . . . - & demand that the Verizon negotiated union contracts be abrogated and new Frontier ones be negotiated at lower costs. - . . . Verizon is selling poorly maintained assets and that Frontier will have its hands full just getting the system back up to spec. Having Frontier promise to start expanding broadband before these other tasks are done will only make things worse. But I expect NEITHER side here to recognize the reality. Frontier will over-promise and the ICC commissioners will demand things that can't be done. Class action lawsuits to follow within a year. 1) Chances of Illinois ICC demanding that the union contracts to be abrogated is just slightly this side of Zero.
MAR_03_2002, union strength in Illinois, and its state government, is strong. That's why this ICC ALJudge did what she did. She threw a bone to the Illinois IBEW and organized labor. It's just part of the Kabuki dance, to show Illinois Labor that State of IL govt on their side. But, that does not mean that Illinois ICC will formally reject the sale.
2)"Verizon's poorly maintained assets" . True, since the 2000 merger of GTE and Verizon. Verizon has chosen to invest in(and keep) the old GTE properties in Texas, Southern California, and Florida. It has ignored the Midwest, and its more rural areas.
3)"Frontier will over-promise and the ICC commissioners will demand things that can't be done. " Agreed on the Frontier promise and the ICC demands. State/local governments don't appreciate the advance of technology, and just want to keep feeding off the telcos. They look upon the telcos as proverbial golden geese.
4)ICC will eventually approve the deal, after some Frontier response. They just need political cover for the future.
5)Frontier's 13.7% dividend yield is not sustainable, nor is its expected post-acquisition 10% dividend yield
6)Ironic that 1 of 2 Verizon Super Head End(SHE) FiOS satellite farm facilities is located on west side of Bloomington, Illinois, when Verizon is selling their Illinois wireline properties and have no FiOS within 200+ miles of the farm.
7)Since these Illinois Verizon/Frontier areas are not located near Chicago, this case tends to receive minimal Illinois press coverage.
8) Illinois ICC finally put up the link to the ICC AL Judge's 46 page "Proposed Order" »www.icc.illinois.gov/docket/file···d=147716
The important point is that this is NOT the final word on this, and will be subject to more work at the Illinois ICC.
9) Some interesting points by ALJ Tapia:
--Disputed evidence whether Verizon and Frontier currently meet ICC minimum support standards.
--Frontier bond credit ratings are substantially below Verizon. They are below investment grade. By the way, bond ratings are extremely important for utilities, because they borrow lots of money. Major impact on their ability to pay debt. Similar to an individual's credit rating and the cost to borrow.
--ALJ found that Verizon South (1 of the 2 Verizon ILECs in IL) had not met the ICC 80% broadband availability req by Jan 1 2005, or even now. (Verizon South is the smaller country cousin ILEC in IL.) Oh, the required speed was the 200 Kbps . Wow, super speedy. I remember when that speed was a dream. Now, it's pitiful. |
