Verizon is set to complete a sale of its wireline phone, Internet, and TV networks in California, Florida, and Texas to Frontier Communications. The $10.54 billion transaction, announced in February 2015, has received all the necessary regulatory approvals and is scheduled to be finalized March 31.
“We’re buying those assets, we’re bringing them in and actually cutting them into our network so they’ll be ready to go day one, April 1," Frontier VP Chris Gellos said in an interview with Channel Partners last week. Frontier has about 2.4 million Internet customers today, and it will get another 2.2 million or so with the purchase from Verizon.
When it approved the sale last September, the Federal Communications Commission concluded that "Frontier is more likely to accelerate broadband service in the transaction market areas than Verizon would be absent the transaction." The FCC approval said that Frontier plans to "expand fiber-based infrastructure within its network, upgrade network hardware, expand transport capacity in its middle mile and data backbone network in order to expand broadband, increase speeds available to customers, and improve the network for voice services."
Verizon and Frontier have since received all the needed clearances from regulators in the affected states, allowing them to close the deal.
While the three-state Verizon territory has fiber available to about 54 percent of customers, Frontier's pre-transaction territory has fiber available in only 14 percent. Frontier expects the purchase to improve its financial position, allowing it to make greater network investments.
There doesn't seem to be any clear commitments about expanding fiber-to-the-home deployments, but Frontier has said it intends to deploy "fiber distribution facilities closer to the premises." This could improve speeds for DSL customers, because data won't have to travel as far as over copper lines.
Frontier committed to provide broadband of at least 25Mbps download speeds and 2 to 3Mbps upload to another 750,000 households by 2020, FCC Chairman Tom Wheeler told US Rep. Raul Ruiz (D-Calif.) in a letter last week. To achieve that, Frontier will use a mixture of its own money and subsidies from the FCC's Connect America Fund, which is designed to expand Internet access in rural areas.
Frontier already operates some former Verizon networks thanks to a 2010 transaction with Verizon. After the sale, Verizon will still operate wireline telephone and Internet service in Connecticut, Delaware, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and Washington, DC.
Verizon, which has shifted its focus to wireless broadband, has faced many complaints that it has let its copper network decay, even in areas where it doesn't plan to upgrade customers to fiber. Though Frontier might end up expanding broadband availability, it has a spotty customer service record. When Frontier acquired former AT&T territory in Connecticut late in 2014, Frontier messed up the changeover and left some customers without service for weeks.