Frontier, Verizon Respond to FCC Info Request on Wireline Transaction
Frontier and Verizon responded Wednesday to the FCC request for more information concerning Frontier's proposed purchase of Verizon's wireline services in California, Florida and Texas. The companies submitted a joint reply to the several questions the commission posed in a…
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June letter (see 1506180038) about the effects the purchase would have on particular aspects of each business. Frontier and Verizon said "there are no financial issues in the transaction that are expected or are likely to compromise Frontier's ability to maintain or improve its network and customer service quality beyond the ordinary market risks" of any business transaction. The letter said Frontier's acquisition of the wireline systems will "strengthen" their "already strong financial profile" so they might provide better services to customers, and give them more operating flexibility. In its information request, the commission asked for the details of the plan in place by the which the two companies will transition customers and back-office and billing systems. The telcos responded by citing the previous experience they have of transitioning customers and systems, including after their 2010 transaction moving wireline services in 14 states to Frontier. They said that a "cutover plan" is in place, which includes the testing of the data transfer and integration process. Prior to the information request, both companies said there would be a savings of $700 million in consolidated cost efficiencies, and in its request letter the FCC asked them to define exactly where the benefits would come from. The companies said in their response that $525 million would come from the elimination of Verizon corporate cost allocations, and the remaining $175 million in savings is based on the management of "other allocations and costs."