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Verizon, Frontier: 110 reasons to approve landline deal
Mar 13, 2010 (The Charleston Gazette - McClatchy-Tribune Information Services via COMTEX) --
CHARLESTON, W.Va. -- Verizon's bid to sell its telephone landline business in West Virginia to Frontier Communications Corp. includes 110 "indisputable facts" that support approval of the deal, the companies told the state Public Service Commission on Friday.
The 110 statements range from Frontier's financial strength and proven track record in similar transactions to its commitment to expand high-speed Internet broadband across West Virginia.
Verizon and Frontier said allegations that the sale "would harm consumers runs counter to both the facts and common sense."
"Through literally thousands of pages of testimony, exhibits and answers to contesting parties' minutely detailed questions about every possible facet of this transaction, Frontier and Verizon have built a comprehensive, compelling case for why the Public Service Commission should approve it," said Verizon spokesman Harry Mitchell.
Frontier plans to purchase Verizon's wire lines in West Virginia and 13 other states as part of an $8.6 billion deal. Only regulators in West Virginia, Illinois and Washington haven't decided whether to approve the sale.
In Friday's filing, Verizon and Frontier also disputed allegations that the companies failed to file proper documents with the PSC.
Last month, the PSC's staff and Consumer Advocate Division urged the commission to reject the sale outright because the companies only submitted "general information" about the transaction.
Verizon and Frontier responded Friday that the consumer advocate "plainly misrepresented the facts."
"If anything, Verizon and Frontier have provided an excess of material and information far beyond that which is relevant to how the transaction will impact West Virginia and the current and future customers of Verizon and Frontier," the companies wrote.
Verizon and Frontier also took issue with claims that Frontier wouldn't be financially strong after the deal closes.
"Frontier will be even stronger after the transaction," the telecommunications companies said.
Frontier and Verizon rejected the PSC staff's and consumer advocate's recommendation that Verizon set aside $150 million to $300 million to improve the company's landline network across the state.
The companies said the "arbitrary" fee would send a "strong negative message to businesses considering investing here."
Frontier and Verizon asked the Public Service Commission to approve the proposed merger "quickly." The PSC has said it expects to decide the case by May.
"The transaction will bring substantial benefits to consumers in West Virginia," the companies said. "Delayed approval means delayed benefits."
Also Friday, the PSC's staff, Consumer Advocate Division and the Communications Workers of America union filed briefs with the PSC, reiterating their opposition to Verizon's plan to sell 617,000 residential and small-business wire lines to Frontier in West Virginia.
The CWA said Frontier and Verizon want to "cut corners" by taking advantage of a federal tax loophole called the Reverse Morris Trust.
"The need for a major tax concession indicates the lack of viability of the transaction, and that at a higher price, the deal simply would not have been reached," said Vince Trivelli, the union's lawyer, wrote in Friday's filing. "The fact that tax subsidies of this magnitude are required should be a clear warning sign to the commission that this deal is deeply flawed."
Reach Eric Eyre at ericeyre@wvgazette.com or 304-348-4869.
To see more of The Charleston Gazette, or to subscribe to the newspaper, go to
http://www.wvgazette.com. Copyright (c) 2010, The Charleston Gazette, W.Va.
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