| HeraldNet - Snohomish County's online news source |
 TUESDAY, FEBRUARY 9, 2010 5:52 am |
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Business 
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Verizon suitor makes case for land-line purchase Frontier Communications pledges to take care of customers if it gets approval to buy Verizon’s land lines. EVERETT — Frontier Communications is fighting a public relations battle in Washington and several other states across the country, trying to prove to Verizon land-line and broadband customers that things will only get better if it takes over rural service next year.The Connecticut-based telecommunications company arranged to buy 4.8 million phone lines from Verizon earlier this year, including those of about 518,000 customers in Snohomish County and other parts of northwest Washington. The $8.6 billion sale has yet to gain approval from state and federal regulators. If that happens, the sale will be finalized in the second quarter of 2010. Meanwhile, Frontier is trying to convince future customers that unlike past Verizon sales, this deal won’t turn sour. “Our biggest challenge is really getting people to understand who we are,” said Steven Crosby, senior vice president of public relations for Frontier. More specifically, that they’re not Hawaiian Telcom Communications or FairPoint Communications, two companies that recently bought up Verizon land lines in Hawaii and New England. Both companies struggled under the weight of added service accounts, with Hawaiian Telcom declaring bankruptcy in 2008. Frontier is telling Verizon customers it’s been in the telecommunications business for 70 years — and it’s not going to drop the ball if the deal goes through next year. “Frontier is a company that wasn’t started two or three weeks ago, or two or three years ago,” Crosby said. “We’ve been around a long time.” But the transaction would triple Frontier’s size — a red flag for critics of the plan. Both supporters and naysayers attended a public hearing at Everett Community College on Thursday night, part of the Washington Utilities and Transportation Commission’s ongoing evaluation of the plan. “My concern is about Frontier growing overnight,” said Verizon employee Steve Walcker. “It’s like going from a child to an adult without the (usual time) for growth.” Walcker and other Verizon employees said they’re worried by the debt Frontier is assuming with the sale — about $3.5 billion. Others said longtime Verizon workers are concerned about their pensions. “We’re worried,” said Kevin Morrison of Edmonds. “We’re mostly worried about the pension and whether we get a lump sum.” But supporters had their time at the microphone, too, with two chamber of commerce presidents from Snohomish County saying they met with Frontier executives and were impressed. Louise Stanton-Masten, president of the Everett Area Chamber of Commerce, said she liked Frontier’s dedication to developing broadband services in rural markets. “It’s our observation that they provide a very high level of service to their customers,” she said. One of Frontier’s top priorities is getting broadband service to rural customers, Crosby said. The company has given thousands of giveaway computers to new broadband customers. “We’ve been very aggressive in our marketing to get computers into people’s hands,” he said. He said the company is taking on more debt by buying the lines of Verizon’s customers, but it’s also taking on $4.2 billion in revenue. And Crosby said rate increases won’t happen. “We need to be competitive,” he said. “We don’t want to lose customers. If you hurt a customer, that customer will tell 10 people.” Amy Rolph: 425-339-3029, arolph@heraldnet.com. |
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COMMENTS
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In response to "give Frontier a shot", I'm wondering if you checked the latest 2009 JD Power Internet Service Provider customer satisfaction survey in regards to HSI (high-speed internet); here's the web site http://www.jdpower.com/Telecom/ratings/high-speed-internet-service-provider-ratings. Frontier ties for last place in the both the East and West regions in overall satisfaction. They weren't even mentioned in the North Central and South regions.
Why hasn't Frontier come into our local exchange market? They've been around since 1935 and are currently in 24 states. They claim that they will increase DSL(digital subscriber line a.k.a. HSI) availability by 90% (see WUTC filings). Who will subscribe to this "aged" service especially in light of the JD Power survey? How long will it take to deploy this technology? In this market I see DSL going the way of dial up modems. How will they stem the tide of landline loss? What is their record in other states?
Verizon, according to the same survey, came in 1st place in the East region and tied for 2nd in the West region along with Cox Cable and Cable One in overall satisfaction. Verizon currently offers both HSI and FIOS (Fiber Optic Service) in many serving areas. They also offer a facilities based video service (FIOS TV) as well as a partnership with a satellite provider where FIOS TV isn't available. They also offer a wireless/cellular option. Can Frontier make the same claim?
It's clear that Verizon is not a perfect company however they try to make good where a mistake is made even if it costs them something! Additionally they do make several offerings available to Washington consumers that Frontier currently doesn't offer in the markets they currently serve.
If the WUTC allows the sale to proceed you'll find a company strapped with more debt than they've ever had in their history while trying to reduce costs( see WUTC filings) and maintain and/or improve the product and services available to the Washington consumer. They claim that they'll have access to more revenue streams/cash than they currently enjoy. Will that be enough for their business model built around wireline services? Why did Verizon shift away from that business model? Will they be able to provide the state-of-the-art technology that many Washington consumers have come to rely upon? Have they "checked under the hood" of what they're buying? What about their experience with fiber optics to the premise? Do they currently have any outside of this sale?
The financial vehicle, called Reverse Morris Trust, that Frontier intends to use has proven to be disastrous for some. Fairpoint Communications declared bankruptcy Oct. 26th using this same vehicle yet their debt was only $2.7 billion. The Verizon/Frontier deal is $8.6 billion. Idearc also declared bankruptcy in March of this year. We can hardly afford more unemployment at this time.
At the end of the day I believe that the risk is too great to the consumers of Washington at this time. Apparently I'm in good company. The Attorney Gerneral for West Virgina, as of this writing, is against the sale as are several Legislators for that state. As well the Office of the Ohio Consumer Council lodged their opposition to the deal. We are only one of 14 states in the deal.
Let the WUTC know what your postion, for or against, is by writing a letter or sending a comment.
Steve Walcker | Nov 16, 2009 9:03 pm | 0 replies | Request removal
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Every aspect of the Verizon land line service has been a solid F- for us. It would be easy to say that they have short timers disease if they haven't been so unresponsive in every way for the years that we have had to deal with them. Give Frontier a shot, there is no way they could be worse than Verizon.
Joe Snow | Oct 16, 2009 5:03 am | 1 replies | Request removal
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I've looked into Frontier &, from what I've read, their customers are no happier with them than many around here seem to be with Verizon. They use antiquated technology & have no goal for improving it........just trying to spread it as far as they can. At least with fios it is possible to bring the latest & greatest to the customer. I doubt that would happen if the only choice we were left with is our local cable company.
Folks, lets face it. None of these companies really gives a damn about its customers..........only that they pay their bill. That's the bottom line. Knowing that, I'd rather have a choice of who to do deal with. If Frontier takes over they have no plans to expand, or even continue providing a competitive product. We'll be going backwards......back to the days when cable had no competition. Was that good for you?
Joe Scott | Oct 17, 2009 9:10 am | 0 replies | Request removal
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I understand Frontier would also get the FIOS fiber optic system as well as the land lines. FIOS for phone, internet and television is very popular in the areas it has been installed. It is currently being installed in my city, Shoreline.
How do we know Fronier can successfully operate, and continue to develop the hardware and software that supports this new system, with no track record for this state of the art technology?
I know I will be reluctant to sign up for FIOS knowing that it may be handed over to another company with unknown qualifications in this area. I don't think this transfer of ownership is in the public interest.
Ken Kortge | Oct 16, 2009 1:20 pm | 0 replies | Request removal
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I would have to echo the previous post. Verizon has been nothing but a bully to me as a customer over the years.
They blame everything on the customer and take no responsibility for their wrongdoing.
Ive had to contact the AG on several occasions and each time Verizon has been forced to respond to its unscrupulous practices.
There is far too much monopolization, I think Everett should start its own ISP and just use wireless to connect everyone.
Evan Briggs | Oct 16, 2009 9:00 am | 0 replies | Request removal
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