|
Attorney general, CUB oppose planned Verizon sale
October 21, 2009 Springfield—A number of government officials, consumer advocates and potential competitors raised red flags this week about Verizon's plan to sell off its local landline phone service in Illinois.
Kurt Erickson, Lee Statehouse Bureau Chief In the first round of testimony submitted Tuesday to state regulators, Attorney General Lisa Madigan and the Citizens Utility Board argue the proposed sale of Verizon's lines to Frontier Corp. could negatively affect nearly 600,000 customers. "We recommend that the Commission reject the Frontier purchase of Verizon's telephone lines in Illinois because of serious concerns about Frontier's ability to manage these assets," noted a memo issued by Madigan's office Wednesday. The opposition comes just a week after a spokesman for Connecticut-based Frontier said he hoped the sale wouldn't become a contentious fight in Illinois. The proposed sale of local access lines through scores of Illinois cities and towns is part of an $8.6 billion deal Verizon announced in May. The company wants to sell a total of 4.8 million local access lines in 14 states. The sale needs the approval of state and federal regulators. The ICC hopes to make a decision by next May. The attorney general and CUB argue the deal is lopsided in favor of Verizon and that Frontier will take on debt that will put pressure on the company to raise rates. The memo also says Frontier has neither the manpower or experience to take on the additional customers. And, it questions whether Frontier can successfully expand broadband service in Illinois. "Its broadband promises are unenforceable hot air," the memo notes. Company spokesman Steve Crosby dismissed those claims, saying Frontier has been around for 70 years and has the experience and financial know-how to take over when Verizon pulls out of the landline business. "It's a very, very positive deal for the state of Illinois," Crosby said. But, even the U.S. Department of Defense chimed in with testimony, raising questions about the track record of previous Verizon spin-offs in which the companies taking over local landlines spiraled into bankruptcy. Crosby said Frontier shouldn't be compared to other companies. "It's a completely different transaction," he said. Not all objections are meant to completely scuttle the sale. Rather, regulators could impose a series of conditions on the companies aimed at assuring customers won't be negatively affected. ICC analyst Samuel McClerren testified that some of Frontier's plans are "troubling," leaving him unable to say whether the sale will hurt customers. But, McClerren suggested that certain conditions could be imposed on Frontier to help ward off future problems. Crosby said both Verizon and Frontier are hopeful no conditions are attached to the approval. "I would prefer a very clean approval with no conditions," Crosby said. Kurt Erickson can be reached at kurt.erickson@lee.net or 217-789-0865 |