Frontier's AT&T Connecticut deal faces opposition from CWA union

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Frontier Communications' proposed deal to acquire AT&T's (NYSE: T) Connecticut wireline operations is facing its first protest from the Communications Workers of America (CWA) union, which says the service provider has not provided enough information to the FCC to review it.

"The Applicants fail to demonstrate concrete, verifiable public interest benefits from the proposed transaction," the CWA wrote in a filing with the FCC. "While the Applicants provide vague claims that Frontier will improve service and maintain and expand broadband, they do not give specific commitments to back up those claims. The Applicants do not provide specific information about planned post-transaction investment. The Applicants do not explain how Frontier will improve service quality."

One of the particular concerns that the CWA addresses in its filing is how it will maintain and expand AT&T's U-verse broadband and video service. When the deal closes, Frontier will immediately gain 900,000 voice customers, 415,000 broadband customers and 180,000 U-verse video subscribers.

"Applicants do not demonstrate the number of additional households, businesses, and anchor institutions that will gain access to high-speed broadband post-transaction, nor do they explain, given Frontier's limited experience in the video market, how Frontier will have the financial, technical, and human resources to maintain and expand upon AT&T's U-Verse service in Connecticut," CWA wrote in its filing.

Besides U-verse, the CWA added that Frontier did not provide what assets "are being transferred to Frontier and which will remain with AT&T." Under the terms of the agreement, the acquisition does not include AT&T's wireless assets and AT&T will continue to serve its multi-site enterprise customers via its CLEC business.

Frontier wrote in response to the CWA, which is the only entity that has protested the deal, that it has nothing to hide.

"The Commission's Part 63 rules expressly prescribe what information is to be provided in Applications of the type at issue here, and the Applicants provided all of the required information," Frontier wrote in an FCC filing responding to the CWA. "Among other things, the Applicants described in detail the authorizations and licenses they wish to transfer and provided extensive information regarding Frontier, AT&T Inc. ("AT&T"), the companies being sold, the post transaction ownership structure Frontier envisions, and the numerous reasons that the transaction will advance the public interest and increase competition."

While no acquisition is easy, Frontier's CEO Maggie Wilderotter said in a Forbes article not long after the deal was announced that the AT&T Connecticut acquisition is far less complex than the $8.6 million worth of access lines Frontier bought from Verizon (NYSE: VZ) in 2009.

"This deal is easy compared to others," Wilderotter said. "And these are also good assets, not fixer uppers." 

For more:
- see the CWA's filing (.pdf)
- and Frontier's response (.pdf)

Editor's Corner: Frontier's AT&T Connecticut deal could spur U-verse, Northeast expansion

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