Verizon sale of FiOS and DSL network in three states clears FCC hurdle

Sale to Frontier in California, Texas, and Florida almost final.

Jon Brodkin – Sep 4, 2015 12:05 pm | 58

Credit: Verizon

Verizon’s proposed sale of wireline facilities in three states to Frontier Communications was approved by the Federal Communications Commission in an order issued Wednesday.

Verizon had already gotten approval from the Department of Justice. Now the company just needs the green light from regulatory authorities in California, Florida, and Texas, the states where it’s selling off copper and fiber networks to Frontier.

“With these approvals in hand, we look forward to promptly receiving the remaining regulatory approvals in the coming months,” Verizon said. Frontier said it expects to close the deal in the first quarter of 2016.

The FCC said the sale is “unlikely to result in any potential public interest harms outweighing any potential public interest benefits.”

Verizon and Frontier announced the proposed $10.54 billion sale in February, saying Frontier would take over networks serving 3.7 million voice connections and 2.2 million Internet customers. That included 1.6 million FiOS fiber Internet customers.

FiOS is available in about 54 percent of the three-state territory Frontier is taking over. Frontier has not said whether it will build more fiber in the soon-to-be-former Verizon areas.

While Verizon’s wireless network operates nationwide, the company is reducing wireline operations to focus on the Northeast US.

The Communications Workers of America union told the FCC that it’s worried Frontier won’t have enough money to expand fiber and maintain copper networks. The FCC, which reviewed Frontier’s financial records, said it is “not persuaded that the transaction is unduly risky or will result in specific public interest harms. We also agree with Frontier that it has not entered into this transaction with a disincentive to invest in its network and broadband infrastructure, which would impact its ability to compete against cable and wireless providers.”

Moreover, the FCC said it believes that “Frontier is more likely to improve service quality and invest in infrastructure improvements, including for voice services, than Verizon would be absent the transaction.” While many Verizon DSL customers are stuck on sub-broadband speeds, Frontier has committed to deliver 25Mbps download and 2Mbps to 3Mbps upload speeds to an additional 750,000 households by 2020, the FCC said. That includes Frontier’s entire territory, including but not limited to California, Florida, and Texas.

Verizon’s fiber-to-the-home FiOS service already provides speeds much higher than that, but Verizon had no specific plans to expand FiOS or improve broadband service and speeds in the three states “beyond satisfying any pre-existing obligations, the FCC said.

Frontier also bought AT&T wireline operations in Connecticut last year, but it messed up the changeover, leaving 3,000 customers temporarily without service.