One year to the day of the announcement of the $8.6 billion Frontier deal to buy 4.8 million Verizon access lines, the last remaining state needed for regulatory approval, West Virginia, gave their blessing today. Earlier this week, West Virginia required Verizon to put $72 million in an “… irrevocable escrow account to be used over the next several years exclusively to improve the Company’s quality of service.” That move sealed West Virginia’s approval for the Frontier deal. It’s basically an insurance policy to ensure Frontier can maintain former Verizon facilities after the deal closes.
The only remaining regulatory approval will come from the FCC. In an effort to quicken the FCC’s approval pace, Frontier is making additional promises. According to Stifel Nicolaus, “Frontier committed to a broadband deployment schedule that would bring 4 Mbps (download) service to at least 85% of the households by 2015 in the Verizon territories it’s acquiring, among other broadband commitments. Frontier also committed to various steps to assure the FCC and wholesale customers (e.g., CLECs) that there will be no drop-off in operations support system performance in these Verizon areas after the sale.”
Four megabits per second is the new rural broadband ‘golden rule’ as its the benchmark the FCC has selected to qualify for financial support under the national broadband plan’s Connect America Fund. Verizon and Frontier are hoping to get the deal closed by mid-June. The clock is ticking.