Frontier's Wilderotter is comfortable with Title II reclassification

Frontier Communications may be another traditional wireline telco that has to abide by a host of FCC rules, including the move to reclassify broadband under Title II of the Telecom Act of 1996, but that's just fine for CEO Maggie Wilderotter.

During the conference call announcing Frontier's $10.5 billion acquisition of Verizon's assets in three states, Wilderotter said that she's comfortable with "Title 2" regulation since the company already operates under those rules and in the markets it serves today.

The FCC signaled last week that its new net neutrality rules will reclassify broadband as a telecommunications service under Title II of the Telecommunications Act.

"From what we understand what Title II regulation is the banning paid prioritization and banning blocking and throttling of lawful content and services," Wilderotter said. "What it isn't is there's no rate regulation that's being offered up here in the proposal for Title II, no tariffing and no last mile unbundling so we're not forced to open up our networks to competitors."

Today, Frontier is not a content owner and it does not have any paid prioritization deals or blocking of content.

"We know that the devil will be in the details so we'll have to see what the order says and will the order get approved, but we'll wait and see and we'll adopt and implement based on what actually happens," Wilderotter said.  

Being a wireline telco that's been in business for over 80 years, Wilderotter added that Frontier is well versed in Title II regulation.

"Frontier is very seasoned in Title II laws, rules and compliance today, so we see no material overhead for our company on the issues in the net neutrality framework we have seen," Wilderotter said. "While we don't believe overlaying Title II 1936 regulation for monopoly phone service on broadband networks is the right path forward whatever happens we are in a position that it does not affect our basic business or this transaction."

Joining Frontier is competitive ISP, whose CEO Dane Jasper said in a TechDirt podcast that Title II is only a "regulatory burden" if you're an ISP that's doing things to harm consumers.

Alternatively, Verizon's (NYSE: VZ) Chairman and CEO Lowell McAdam said its sale of the wireline assets to Frontier was largely influenced by the FCC's Title II proposal and associated regulatory uncertainty was a big factor.

"An important consideration was the current regulatory uncertainty and the potential impacts on future investments of a reclassification of broadband under Title II," McAdam said.

For more:
- The Tampa Tribune has this article
WSJ has this article

Related articles:
Verizon's McAdam: FCC Title II proposal influenced $10.5B wireline asset sale to Frontier
Frontier acquires Verizon wireline assets in 3 states for $10.5B
Report: Verizon to sell $10B in wireline assets to Frontier
Report: Verizon could sell wireline assets as part of $15B sale
Verizon's McAdam: Some wireline assets would be better off in someone else's hands