tentatively approved the sale of Verizon-West Virginia to Frontier
Communications, despite concerns about Frontier’s financial stability
and ability to service the telephone customers in the state.
The Communication Workers of America, the union that represents about 1800 Verizon workers in West Virginia, has opposed the merger on the grounds that similar deals by Verizon in other states have ended in bankruptcy, lost jobs, the loss of high speed broadband access and overall reduced service quality.
The sale comes on the heels of a decision by the PSC that Verizon had
not provided an acceptable level of service to its customers. The company
was ordered to place $72.4 million into an irrevocable escrow account to be used over the next several years exclusively to improve the
company’s quality of service.
The money will be used for improvements in areas such as restoring
copper infrastructure, maintenance, additional employees, right-of-way
maintenance and vegetation control. The sale wil not affect Verizon’s wireless customers, but will
transfer certain long distance customers of Verizon Long Distance and
Verizon Enterprise to a new Frontier affliliate. In a
statement, the PSC said they the benefits of the merger
outweighed the risks. However, The sale was approved with certain
conditions. Some of these conditions include:
Frontier must honor all existing obligations of Verizon following the
sale
Make capital investments in Verizon of $30 million during the second half of 2010, $75 million in 2011 (including $12 million
targeted at service quality), $63 million in 2012 and $63 million in 2013.
Make additional capital investiments of at least $48 million to increase broadband service and to provide access to broadband service
to no less than 85 percent of the households in Verizon service areas
To locate Frontier’s Southeast regional headquarters in Charleston, making it the hub of operations in West Virginia, Tennesee, North Carolina, South Carolina, Mississippi, Alabama, Georgia and Florida.
Provide 911 functionality provided by Verizon prior to the sale.
Waive early termination fees for current Verizon customers participating in Verizon bundled service package for the first 90 days after closing.
Also included in the order from the PSC is the provision that Verizon will f und the pensions of employees moving to Frontier and remain responsible for employees who have retired.
Harry Mitchell, Director of Media Relations at Verizon, said the company is please with the ruling.
“The record developed in this case provides comprehensive evidence and assurances that the transaction with Frontier Communica-tions is in the public interest,” Mitchell said, adding that the merger will provide many benefits to West Virginia residents, including increased investment and broadband availability in the state, while protecting jobs and promoting employment.
Ron Collins, CWA District 2 Vice President, said the union feels the PSC’s decision to allow the purchase is a mistake, and is weighing its options of how to deal with the merger.
“We’re in the process of evaluating the order,” Collins said.
He said the union has 10 days to file a motion for reconsideration. If the ruling on that motion is unfavorable, CWA has 30 days to file an appeal with the state Supreme Court.
Collins told the Daily News the union is considering three options - to accept the motion as is, to appeal it or to file a motion for reconsideration.
“Of course, we’re disappointed but we’re heartened by the fact that at least one person on the three-member commission agreed with us and the more than 80 legislators and other organizations who stated that this deal is too risky and not in the public interest,” Collins said. “The split decision shows our arguments about the deal had validity.”
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