Home » Communications » Mergers » Frontier-Verizon

Sale of Verizon Wireline Assets
to Frontier Communications

 

Background

On March 23, 2015, Frontier Communications and Verizon filed an Application with the CPUC requesting approval for the sale and transfer of Verizon California's wireline assets, operations, and customers to Frontier. The Joint Applicants claim benefits of the merger, including:  

  • Operational efficiencies  
  • Increased financial strength of Frontier 
  • Expanded and enhanced broadband services 
  • Improved customer service 
  • Rate stability and other economic benefits 

See the Map of California Regions affected by the sale of Verizon wireline assets to Frontier Communications.   

During July and August 2015, the CPUC held Public Participation Hearings and workshops around that state, including in Claremont, Garberville, Hoopa, Long Beach, Mammoth Lakes, Orleans, Rancho Mirage, Ridgecrest, Santa Barbara, Santa Clara. 

Evidentiary Hearings were held at the CPUC on September 24, 2015. 

 

ORA Position

ORA performed an in-depth review of Joint Parties' request to ensure that ratepayers would benefit from the sale of Verizon wireline assets to Frontier. ORA recommends the proposed transaction should be approved only if certain conditions are required by the CPUC that will ensure benefits to the public, including: 

  • Verizon should be financially responsible for the cost of upgrading its network, which it allowed to deteriorate. 
  • Frontier should be required to upgrade the broadband network so that at least 98% of its households receive the minimum speed set by the FCC: 25 Mbps download and 3 Mbps upload. 
  • Frontier should be required to furnish VoIP customers with battery back-up power, at no charge, so they can 911 during a power outage. 
  • Frontier should be required to track and report its service quality performance for voice, VoIP, and broadband services. 
  • Frontier should be required to fund an ORA-managed independent survey that would conduct multi-lingual customer satisfaction surveys, and provide results to the CPUC on a quarterly basis so that problems can be identified early.  

These conditions provide a performance-based approach toward addressing significant concerns with the sub-par level of service quality and reliability provided by Frontier and Verizon. 

Under state law [P.U. Code § 854 (b)(2)], ratepayers are required to receive, at minimum, 50% of the net benefits derived from the transaction by Frontier and Verizon.  ORA recommends ratepayers’ share of the net benefits be used to repair Verizon’s deteriorated wireline network and upgrade Frontier’s and Verizon’s broadband network in order to ensure a minimum speed of 25 Mbps download and 3 Mbps upload is available to at least 98 percent of the combined service territory by 2020, including rural and tribal areas.    

See ORA’s July 28, 2015 Testimony with the results of ORA’s full analysis of the Application. 

See ORA's April 27, 2015 Protest to the Application. 

 

Proceeding Record

See the Proceeding docket. 

Subscribe at the docket to receive proceeding updates.