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Verizon Sells Huge Chunk Of Network To Frontier
$8.5 deal offloads swath of 'unprofitable' markets...
by Karl Bode 09:26AM Wednesday May 13 2009
Frontier Communications will pay $5.3 billion in common stock and take on $3.3 billion in debt in order to acquire Verizon's DSL and landline networks in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin -- and some rural assets in California. Roughly 11,000 Verizon employees will be transferred to Frontier as part of the transaction, according to the companies.

In an effort to focus on FiOS and Wireless in more profitable markets, Verizon recently also offloaded their Maine, New Hampshire and Vermont networks to Fairpoint Communications -- a deal that's not working out particularly well for consumers. The newly fused Fairpoint still hasn't proven they can handle the massive increase in size, has struggled financially, and users in those markets don't get the chance to see next-generation FiOS connectivity.

"This is a truly transformational transaction for Frontier," Frontier CEO Maggie Wilderotter said in a statement. "With more than 7 million access lines in 27 states, we will be the largest provider of voice, broadband and video services focused on rural to smaller city markets in the United States." Wilderotter insists she's "confident that we can dramatically accelerate the penetration of broadband in these new markets."

Frontier has struggled of late to deliver even 3Mbps worth of connectivity to many of its rural users according to posts in our forums, but Verizon CEO Ivan Seidenberg issued a statement saying Frontier would apply their "laser focus" on the needs of rural customers to ensure a smooth transition and quality service.

Verizon Wireless and Verizon Business services in the listed states are not impacted, though FiOS service in 41 local franchises and the state of Indiana will be transferred to under Frontier's control. Just don't expect any additional FTTH expansion, given Frontier just isn't going to have the necessary resources. According to the two companies, the deal is expected to take about a year to close.


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