If you have not yet been able to attend a hearing regarding the Verizon’s proposed sale of its wireline, long distance and broadband assets to Frontier, the Fourth District is encouraging you to express your concerns to PUCO through mail, email or fax. Please share this message with your family and friends, as it is so important to all Ohio residents, not just IBEW brothers and sisters.

The sale will give Verizon shareholders $5.3 billion in Frontier stock and give Verizon $3.3 billion in cash. Because of a tax loophole, Verizon will not pay taxes on the $3.3 billion they receive. The proposed transaction must be approved by the Federal Communications Commission and the state utility commissions in ten states. There are serious questions about Frontiers ability to successfully operate and fun a new company three times its size. The sale poses significant risks to consumers, workers and our communities. The risks overwhelm any possible benefits from the deal.

The Bottom Line: The risks of the sale to Frontier outweigh any supposed benefits

Frontier promises to increase capital expenditures; improve service quality; significantly expand broadband availability; provide wholesale services to Competitive Local Exchange Carriers and do it all right away at significantly less cost than one of the largest and most experienced telecom companies in the world. 

Typically when companies run into problems they cut capital expenditures, layoff workers and attempt to increase rates. Consumers risk higher rates and/or diminished service. Workers risk loss of jobs and benefits. Communities risk worse service quality, diminished ability to respond to emergencies and less build out of the high speed Internet needed for development.

Take ACTION:

Please be sure to include the following case number on all comments: 09-454-TP-ACO

While we feel it would be most effective if after reading the background information below, you wrote your own comments, we have prepared comments for you to send. If you would like a prepared comment please either respond to this email or contact the district office.

Submit comments via the internet: https://www.puc.state.oh.us/secure/PicForm/index.cfm?intype=comment

or, via fax: (614) 752-8351

or, via mail, addressed to:

Alan R. Schriber, Chairman

Public Utilities Commission of Ohio

ATTN: Docketing Division

180 E. Broad Street

Columbus, OH 43215

Background information:

Verizon has a bad track record with pervious sales:

• 2008, sale in Maine, New Hampshire and Vermont: Verizon sold their operations in these states to FairPoint Communications. FairPoint has struggled to provide adequate service- prompting an unprecedented number of complaints to state regulatory commissions from frustrated consumers. FairPoint's finances are
  a mess: FairPoint stated it could be at risk of failing to meet an interest requirement on its debt, bankruptcy is a possible option. Since the deal was announced, FairPoint's stock price has declined by about 95% and the company has suspended dividend payments.
• 2005, sale in Hawaii: After the sale, Hawaiian Telecom experienced significant transition issues that resulted in major financial and customer service problems. The company lost 21% of their customers and in 2008, Hawaiian Telecom had to file for bankruptcy.
• 2006, sale of Yellow Pages to Verizon shareholders/Idearc: In 2008, interest payments on Idearc’s debt account for almost ¼ of its total revenue. Idearc filed for bankruptcy in March of 2009. 

Verizon’s sale to Frontier will put consumers, workers and communities at risk:

• Too Much: If the transaction is approved Frontier will have to deal with a 300% increase in access lines (2.2 million now, 7 million after the sale) and a 200% increase in employees (5,700 now to 16,700 after the sale).
• Debt: Frontiers debt will increase from $4.55 billion to $8 billion. Servicing this debt will be less money for infrastructure, service quality and high-speed build out.
• Questionable expense savings: Frontier claims it will cut operational expenses by $500 million or 21%. FairPoint (which is faltering in Maine, New Hampshire and
• Financing: Obtaining financing for a transaction of this size can be difficult. Frontier does not currently have financing for the additional debt it will be taking on if this transaction is approved.
• High speed internet: Frontier faces significant challenges with debt and running a larger company in the wake of a recession. Where will it get the money to invest in high speed fiber? Frontier has not made any commitments to deploy the finer needed to enable truly high-speed internet access.