Illinois Next Up To Approve Verizon/Frontier Deal Though Judge's report finds the deal isn't good for consumers or Frontier Tipped by Randy 
According to a new 46 page Illinois study by a state Judge, Verizon's proposed sale of their networks in Illinois would harm consumers. The $8.5 billion deal immediately infuses Frontier, which has 2.3 million customers, with 4.8 million new residential and small-business phone lines and 1 million broadband connections. Such a huge influx of new customers will restrict Frontier's ability to offer low-price, quality service -- and to raise funds for upgrades, improvements and expansion: Lisa Tapia said in the 46-page report that allowing Frontier to purchase the Verizon lines in Illinois "will diminish Frontier’s ability to perform its duties to provide adequate, reliable, efficient, safe and least-cost public utility service." She also concluded the acquisition also could hurt Frontier’s ability to raise capital by taking on the additional financial obligations. Opponents and supporters filed hundreds of pages of testimony prior to release of the recommendation. Unions and consumer advocates continue to protest the deal, given the debt and huge influx of support issues will likely put broadband expansion and upgrades on the back burner. Of course the alternative (having Verizon stay in markets it doesn't want to upgrade) isn't particularly compelling either. Despite repeated warnings and studies within regulatory agencies showing the negative impact of the deal, regulators in six states have proceeded to unanimously approve the deal anyway. In other words, expect Illinois regulatory approval in short order.
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 |  |  AMDUSERPremium
join:2003-05-28
Earth
kudos:1
 ·RoadRunner Cable
| Re: hmmmmm.... There are just 3 more states left to approve the deal.. Illinois, Washington and West Virginia.
I agree with giving Verizon credit for reducing debt. Unfortunately, Frontier is going to find out Charters (8 Meg) is available to any [and every] person capable of getting cable tv in [Charters WI operations]. The same can not be said about the Verizon (soon to be Frontier) 7.1 Meg dsl.
The phone systems in Wisconsin [exGTE] were better off before the GTE / Bell Atlantic merger.. GTE was offering DSL in 1998 [using Fujitsu Frame Relay.. but it worked]. | |
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 ThrowDemsOutIf you can't convince 'em, confuse 'emPremium
join:2002-03-03
Mullica Hill, NJ
kudos:4 |  What next?
What the ICC should do is enforce reasonable promises for approval that would improve the chances for success:
- like demand Frontier pay less to Verizon for the assets in Illinois.
- & demand that the Verizon negotiated union contracts be abrogated and new Frontier ones be negotiated at lower costs.
- & allow prices to rise instead of demanding they stay the same.
The above would much better reflect the reality that 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. | |
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 ·Frontier Communi..
4 edits | Re: What next? said by ThrowDemsOut: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. | |
| | DolganPremium
join:2005-10-01
Sun Prairie, WI Reviews:
·Charter
| quote:
& demand that the Verizon negotiated union contracts be abrogated and new Frontier ones be negotiated at lower costs.
Why should the Union be forced to negotiate their contract when they are against this deal that benefits no one but Verizon and its shareholders? If any contracts need to be abrogated, and redefined, it would be the contracts the idiot execs at Frontier have--take away their golden parachutes and lets see if they still would want this deal.
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·WOW Internet and..
·Time Warner Cable
| Re: What next? Because what gives the union contracts power over any other contract? When Sprint bought Nextel; Sprint laid off much of Nextel; even the employees under contract; they had no obligation to keep them. So why does Frontier have to keep those union contracts? After all they didn't sign those contracts with Frontier; they were signed with VZ. The same as the contracts with any other merger/buyout. Those new companies say who gets to stay and who doesn't. The union should be no different. After all that's what turned this country- especially the Midwest- aka DT and Toledo into the problems they have now the unions and their contracts.
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www.twopugsbrand.com ONLINE STORE NOW ONLINE! up to 50% off SRP of Happy Tails Spa products. | |
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Sammer
join:2005-12-22
Canonsburg, PA | Are regulators corrupt? Everyone knows these Reverse Morris trust deals harm consumers but regulators all approve them anyway. It's time to criminally investigate such regulators who should probably being facing prison time rather than cushy future jobs from the telecommunications world. | |
| | Host:
Road Runner
PC gaming GAMES
PC gaming Tech
| Re: Are regulators corrupt? It's a problem of corporate money in politics for sure. Verizon lobbyists are hugely influencial. But I'm also sure that some of it is that these regulators may not be very bright. It may also be that that some of them are just looking at their options and figure that approval with conditions is better than leaving a company in place that has no interest in serving their constituents. | |
| | | | | Re: Are regulators corrupt? In Illinois it is all about the money, if you have enough of it, and if you can get it to the right person/people. | |
| | | | Sammer
join:2005-12-22
Canonsburg, PA | Re: Are regulators corrupt? Tell me about it, while it's hard to believe things could get worse than "W" our current President brought Chicago politics to the nation's capital. | |
| | | | | | | Re: Are regulators corrupt? said by Sammer:Tell me about it, while it's hard to believe things could get worse than "W" our current President brought Chicago politics to the nation's capital. I was born and raised in IL and no way I would ever vote for someone from IL to be president. In IL parties don't matter as they are both corrupt. | |
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cptmilesPremium
join:2004-04-22
Swayzee, IN | Bring Back Regulated Monopolies Competition works okay in the metro area. It's not really competition for the most part, but a duopoly with it's only regulation being the size of the competition (Big guy gutting small guy or two big guys playing the Coke vs. Pepsi game).
The FCC is coming out with the National Broadband Plan in the next week and they will make the announcement the USF is going to be transitioned to Connect America Fund which means that the 9 billion dollar fund will go to subsidize Broadband instead of Voice.
The FCC needs to go old school and recreate the monopolistic nature of the last mile, subsidize it, and allow competition for content. The ten year plan should be to deliver a 100M connection to everyone in the U.S. the same as they can receive a landline today.
If a large carrier can't do this because their area is too rural they should be allowed to walk away without carrier of last resort status and another company should be allowed to serve said territory with the guarantee of a subsidized monopoly.
It's the only way this is going to work and wireless. Oh, and wireless won't cut it for future aps. It's for convenience only at least for the next 50 years. | |
| | Sammer
join:2005-12-22
Canonsburg, PA | Re: Bring Back Regulated Monopolies said by cptmiles:The FCC is coming out with the National Broadband Plan in the next week and they will make the announcement the USF is going to be transitioned to Connect America Fund which means that the 9 billion dollar fund will go to subsidize Broadband instead of Voice. Except they also intend to propose adding a mobility fund that is really nothing but a slush fund for the major cell phone companies. | |
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