Doug on IP Comm – An independent voice on VoIP, telecom, and IP Communication

Analysis: Verizon/Frontier – Verizon’s side

Posted on: May 14, 2009

Earlier today, Verizon announced it was selling off 4.8 million access lines in 14 states — rural areas — shedding 11,000 employees, and expecting to clear around $8.6 billion, between losing debt associated with the operations and a Frontier stock “dividend” paid to its shareholders.

OK, what’s not to like?

While this may be the biggest shedding deal Verizon has conducted, it continues the company’s pattern of selling off rural/slow-growth/no-growth business a la Hawaiian Telecom and its Northern New England wireline ops.  In all cases, it’s been the wireline, consumer business that’s been tossed, while the company keeps its wireless chips.

About the only selling job that Verizon has to do is to convince shareholders that this is a Good Thing and Frontier stock won’t end up with FairPoint transition problems.

Regulators in affected states will likely complain and moan about how Big Bell is leaving them behind and make note that the Verizon/FairPoint transition didn’t do so hot.  Expect some growling from Senators and Congressmen in affected states, but at the end of the day, it’s difficult to see how anyone could de-rail the sale.


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