In May, Verizon announced that it was selling its landline business in 14 U.S. states to Frontier for an approximated .6 billion. When the transaction closes next year, Fronter will be the largest rural triple play provider in the United States, with more than 7 million access lines in 27 states.
But all is not well in the Mountain State, West Virgina, where both the state legislature and communications union laborers are skeptical about the deal.
“Given the struggling economy, the critical importance of maintaining quality jobs, and the need to make sure that West Virginians have access to the tools of the 21st century, a complete review of all aspects of this important proposal is critical,” read a letter from the West Virginia House of Delegates to the state Public Service Commission.
While Verizon had plans for a FiOS deployment in West Virginia, many fear that those plans will be scuttled now that Verizon is divesting from its wireline business.
The Communications Workers of America and The International Brotherhood of Electrical Workers said, “The deal calls for Frontier to take on .3 billion in debt; Verizon gets that amount in debt relief. That leaves Frontier saddled with debt that will lessen the potential amount available for investment in high speed broadband deployment. Similar tax-free transactions by Verizon, especially those involving the Reverse Morris Trust tax provisions, haven’t worked out so well, especially for consumers in New England now served by FairPoint Communications.”
To address these concerns, Verizon spokesman Harry Mitchell issued a statement which said, “We believe that, at the end of the day, the commission and West Virginians will realize the many benefits of this transaction, including accelerated broadband deployment in the state.”
But this is not the CWA’s only concern. It has also criticized Frontier’s plan to cut back workers’ hours, saying “CWA believes Frontier is using the economic downturn as an excuse to cut workers’ hours in advance of its deal with Verizon…This shortsighted plan should be stopped now.”
Frontier CEO Maggie Wilderotter told the Charleston Daily Mail yesterday that West Virginia was the only state to present so much opposition to the deal.