Verizon's (NYSE: VZ) impending $8.6 billion rural line sale to Frontier Communications (NYSE: FTR) has one more hurdle to clear: a mandate by West Virginia's Public Service Commission (PSC) to dedicate $72.4 million to improve the state's wireline voice service. Along with the FCC, West Va. is the last state approval Verizon needs to wrap up the deal.
The West Va. PSC wants Verizon to put these funds in an escrow account to make repairs to existing copper-based network, hire more technicians and maintain existing rights of way.
Although Verizon agreed in December 2008 to update its wireline network, the PSC said that "Verizon's efforts have been neither sufficient nor consistent." Verizon, however, maintains it has stuck to its end of the deal. Since December '08, Verizon said it hired more technicians and dedicated $11.9 million to improve the state's service quality.
West Virginia has been one of the most vocal opponents of the Frontier-Verizon deal. Unions and consumer advocate groups have argued that the $8.6 billion deal would not only take jobs out of the state, but Frontier would not be able to properly maintain service levels because it would be taking on more debt than it could handle.
For more:
- Charleston Gazette has this article
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