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.
