Frontier's ambition to become one of the largest independent service providers through acquiring Verizon's rural lines hit a snag this week when an administrative judge in Illinois ruled that its state's regulators should not approve the deal. With nearly 600,000 customers, Illinois is a sizeable market in the 14-state territory that Frontier wants to acquire from Verizon.
Administrative Law Judge Lisa M. Tapia said that the amount of debt Frontier would take on would inhibit it from being able to properly manage its lines and provide a consistent customer experience.
"The proposed reorganization will diminish Frontier's ability to provide adequate, reliable, efficient, safe and least-cost public utility service," Tapia wrote in her order.
Now, the deal is in the hands Illinois' Commerce Commission. According to the Herald-Review, the regulator will make a decision to either amend or adopt Tapia's report by late April.
Illinois is not the only state to question the Frontier-Verizon deal. In West Virginia, unions and the attorney general also questioned Frontier's ability to maintain customer service and expand broadband availability.
Despite the protests to the deal Verizon argued that its sale of its lines to Frontier is in the public interest and should be approved. "Based on the record in this case, we believe the commission should not adopt the administrative law judge's recommendation, but instead should issue an order that approves the transaction, as regulatory commissions in six other states have already done," said Carl Erhart, president of Verizon's Central region in a statement.
- see this Herald-Review article
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