Windstream has dipped into its pocket book during the holiday season, quietly announcing a deal to acquire New York-based CLEC MassComm.
MassComm provides telecommunications and connectivity management, consultation and development solutions for voice, data, and networking technologies to midsized global enterprise customers.
The New York-based CLEC is authorized to provide competitive local exchange service and/or interexchange service in California, Connecticut, the District of Columbia, Florida, Illinois, Massachusetts, Michigan, New York, Pennsylvania, and Texas.
After meeting customary closing conditions, including receipt of necessary federal and state regulatory approvals, the acquisition is expected to close in the second quarter of 2018. Financial terms were not disclosed.
According to an FCC filing (PDF), the proposed acquisition of MassComm is an all-cash transaction in which Windstream will purchase all of the issued and outstanding capital stock of MassComm. MassComm will exist as a wholly owned subsidiary of Windstream after the transaction closes.
Windstream said that by purchasing MassComm it will gain a broader portfolio of services it can deliver over its growing fiber-based network.
“The combination of MassComm’s innovative services and customer base with Windstream’s larger CLEC operations and fiber network will enable the combined company to increase its competitiveness by expanding its portfolio of services, generating efficiencies that benefit customers, and serving more customers over its own facilities where it can,” Windstream said in the FCC filing.
The service provider told the FCC that the acquisition of MassComm will not harm competition because unlike Windstream, the CLEC exclusively rents facilities from other carriers to deliver services to business customers.
“Because MassComm does not own any last-mile facilities, there is no concern that there will be a reduction in competition based on overlapping last-mile facilities. Instead, this transaction will enhance competition in the market for medium-sized business,” Windstream said. “By combining MassComm’s customer base with Windstream’s presence and fiber network, the combined company will have the opportunity to serve more of MassComm’s current customers on Windstream’s own last-mile facilities.”
Windstream added that the acquisition of MassComm will not change the way the company’s current customers are served.
“The transaction itself is not expected to adversely affect the rates or other terms of service that customers currently experience, nor is it expected to have any adverse effect on the already high quality of service that MassComm’s customers currently receive,” Windstream said.
What could also be compelling for MassComm’s existing customers is that Windstream would be able to extend its broader on-net portfolio of network access options to support SD-WAN and other managed services. While MassComm also provides services like private line and fiber-based Ethernet via other providers’ rented lines, Windstream could potentially gain greater control over the customer experience by migrating these customers over to its own network facilities.
The acquisition of MassComm may not be nearly as large as EarthLink or Broadview, but for Windstream it is significant in that it will help the provider further expand its managed services customer base.