CHARLESTON, W.Va. -- The state Public Service Commission's staff and Consumer Advocate Division said Friday that Frontier Communications' application to buy Verizon's telephone landlines in West Virginia should be rejected outright because the companies failed to file any details about the proposed $8.6 billion deal.
The consumer division and PSC staff said Frontier and Verizon only submitted "general information" about the transaction.
"They didn't even file the merger agreement and 11 other associated documents," said Byron Harris, who heads the Consumer Advocate Division. "It was not put into evidence in the case. On that ground alone, the case fails from a legal standpoint."
Verizon spokesman Harry Mitchell said the accusations were "outlandish." Mitchell said all required paperwork and testimony was filed.
"We've done exactly what we needed to do to make sure the transaction is approved," he said. "We've met the conditions. We've laid out why this transaction benefits West Virginia and satisfies the commission's charge in the case."
If the three-member PSC doesn't dismiss the proposed purchase outright, it should reject the sale because it's not in the public's best interest, the consumer division and agency staff asserted in reports filed Friday.
Harris said Frontier wouldn't have the financial resources to keep promises to expand high-speed broadband Internet and improve phone landline services after the sale.
"We're still concerned Frontier didn't do its homework," Harris said. "Our overarching concern is that Frontier is less financially strong than Verizon."
Frontier said the exact opposite would happen, according to a 78-page report also filed Friday.
"The transaction will leave Frontier in a better financial position than it is today the way this is structured," Mitchell said.
Harris' office recommended that the PSC require Verizon to spend $150 million to "clean up the mess they have created in the state," if the sale is approved.
Mitchell said there is no "mess" to clean up. Verizon has spent millions to improve its West Virginia landline network and complaints have dropped significantly during the past year, he said.
"Frontier will get an excellent network and will continue to invest," he said.
CHARLESTON, W.Va. -- The state Public Service Commission's staff and Consumer Advocate Division said Friday that Frontier Communications' application to buy Verizon's telephone landlines in West Virginia should be rejected outright because the companies failed to file any details about the proposed $8.6 billion deal.
The consumer division and PSC staff said Frontier and Verizon only submitted "general information" about the transaction.
"They didn't even file the merger agreement and 11 other associated documents," said Byron Harris, who heads the Consumer Advocate Division. "It was not put into evidence in the case. On that ground alone, the case fails from a legal standpoint."
Verizon spokesman Harry Mitchell said the accusations were "outlandish." Mitchell said all required paperwork and testimony was filed.
"We've done exactly what we needed to do to make sure the transaction is approved," he said. "We've met the conditions. We've laid out why this transaction benefits West Virginia and satisfies the commission's charge in the case."
If the three-member PSC doesn't dismiss the proposed purchase outright, it should reject the sale because it's not in the public's best interest, the consumer division and agency staff asserted in reports filed Friday.
Harris said Frontier wouldn't have the financial resources to keep promises to expand high-speed broadband Internet and improve phone landline services after the sale.
"We're still concerned Frontier didn't do its homework," Harris said. "Our overarching concern is that Frontier is less financially strong than Verizon."
Frontier said the exact opposite would happen, according to a 78-page report also filed Friday.
"The transaction will leave Frontier in a better financial position than it is today the way this is structured," Mitchell said.
Harris' office recommended that the PSC require Verizon to spend $150 million to "clean up the mess they have created in the state," if the sale is approved.
Mitchell said there is no "mess" to clean up. Verizon has spent millions to improve its West Virginia landline network and complaints have dropped significantly during the past year, he said.
"Frontier will get an excellent network and will continue to invest," he said.
In a filing Friday, Stamford, Conn.-based Frontier reiterated its plans to spend $48 million to expand broadband access and $200 million to improve the state's wire line network.
Frontier said it's the ideal company to acquire Verizon. Frontier already has more than 144,000 landline customers in West Virginia.
Frontier plans to purchase Verizon's wire line business in West Virginia and 13 other states. Utility regulators in five states already have approved the sale.
Frontier would have more phone access lines in West Virginia than in any other state, after the deal closes. The company also plans to establish its southeast regional headquarters in Charleston.
Frontier has promised not to raise rates for at least a year.
The company said it would offer high-speed broadband to 85 percent of households in West Virginia. Verizon now provides broadband to 60 percent of its customers across the state.
"Frontier has the proven financial strength, technical capability and strategic imperative to serve lower-density areas like those in Verizon's West Virginia territory," the companies wrote in Friday's filing.
Also Friday, the Communication Workers of America union intensified its opposition to the Frontier-Verizon merger. The union urged the PSC to reject Frontier's plan to purchase 617,000 landlines from Verizon in West Virginia.
"The financial facts show a post-transaction Frontier will lack the resources needed to provide adequate and reliable telecommunications services," said Elaine Harris, a union spokeswoman. "This deal isn't about the best interests of West Virginia, but about increasing profit margins for Wall Street."
The PSC is expected to decide whether to approve the landline deal by May at the latest.
Friday was the deadline for the companies and others to file briefs in the case.
Reach Eric Eyre at erice...@wvgazette.com or 304-348-4869.
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