Judge Urges Illinois to Reject 'Risky' Verizon-Frontier Sale

An administrative law judge recommended that the Illinois Commerce Commission reject the proposed merger of Frontier Communications and Verizon Communications. Verizon wants to sell its landlines in 14 states to Frontier in a deal that CWA says would be a disaster for consumers, workers and quality service.

Judge Lisa Tapia said the sale "will diminish Frontier's ability to provide adequate, reliable, efficient, safe and least-cost public utility service" and will weaken Frontier's ability to raise the capital it will need. Frontier will take on an "enormous" $3.3 billion in debt as part of the deal, another indication that "this transaction is too risky to undertake," the judge said. 

"The risk level is so great that it warrants rejection outright," she added.

CWA and the IBEW have been fighting the proposed merger in several states, and called on the ICC, other state regulators and the Federal Communications Commission to pay close attention to this recommendation.

The deal is under close scrutiny in West Virginia, where Gov. Joe Manchin (D) and law makers have raised serious concerns about customer quality service and access to high speed broadband and other telecommunications innovations.

The judge also criticized Frontier's "risky" dividend policy and noted that Verizon's past deals with Hawaiian Telecom and FairPoint Communications were "failures," resulting in a deterioration of service and lost jobs. Verizon wants to sell its lines to Frontier to take advantage of the Reverse Morris Trust tax loophole.

Visit www.verizonfrontierdeal.org and www.bad4WVA.com for more information.