An administrative law judge in Illinois has written in opposition of the proposed sale of Verizon local exchange assets to Frontier. The Illinois Verizon access lines in question amount to 600k of the total 4.8 million access lines in the deal.

The State Journal-Register newspaper in Springfield reports that Lisa Tapia said in a 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.”

Frontier cares to differ and offered a response to Tapia’s assessment. In a statement, Frontier says, “Today’s proposed order by an ALJ in Illinois ignores the numerous public interest benefits outlined in the complete record developed in the Frontier/Verizon transaction. This record fully addresses the issues raised by the ALJ. We are confident that once the full Illinois Commerce Commission reviews the record, they will vote to support the transaction.”

The transaction has not been voted on yet by the Illinois Commerce Commission. They will have the final say on the matter. Tapia’s 46 page report will certainly weigh in on their decision.

Unfortunately for Frontier, they are caught up in the back wash of Verizon’s other local exchange divestments. Both FairPoint and Hawaiian Telecom completed similar transactions, and are both now in bankruptcy.

Despite this turbulence, I suspect the Frontier-Verizon deal will ultimately be consummated. There may be additional conditions set on Frontier, and maybe Verizon as well, to ensure there isn’t a repeat of FairPoint.

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2 thoughts on “Frontier-Verizon Deal Hits Turbulence in Illinois

  1. Comparing Fairpoint and Hawaiian Telcom to Frontier Communications is like comparing apples and oranges. When Fairpoint merged they had a little over 300,000 customers, Hawaiian Telcom had even fewer. Right now Frontier has 2.4 million customers in 24 states. They are one of the largest phone companies in the country. Yes, Frontier is making a large purchase, but it is prepared in ways that the previous Verizon purchasers were not. They know how to manage and maintain large systems. In my opinion the biggest advantage they have is that they know what they are getting. These lines are crap. People act like Verizon is doing them some great service right now that Frontier can't continue with. Verizon hasn't maintained these lines in years. They don't want them. Now they are unloading them so they don't have to deal with it. Frontier knows they are going to have to put work into this and they are prepared to do it.

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