Zayo is going private in a $14.3 billion deal that an analyst expects to get regulatory OK. It agreed to be bought by Digital Colony Partners and EQT Infrastructure IV fund affiliates, and "the Zayo team would continue to execute the Company’s strategy and remain headquartered in Boulder, Colorado." It appears CEO Dan Caruso and other management will remain, Wells Fargo's Jennifer Fritzsche wrote investors after Tuesday's announcement. Digital Colony Managing Partner Marc Ganzi said the takeover target's "highly-dense fiber network in some of the world’s most important metro markets" can "meet the growing demand for data associated with the connectivity and backhaul requirements of a range of customers." The transaction is expected to close in the first half of 2020. MoffettNathanson's Nick Del Deo doesn’t "anticipate any challenges to garnering shareholder or regulatory approval for this deal, nor ... a topping bid," he wrote. "Zayo’s business trajectory and valuation never hit the levels management or more bullish investors hoped for after its" initial public offering. The company continues having "E-Rate traction," said a presentation (see page 8) on the quarter ended March 31. Revenue of $647.2 million was little changed from the year-ago quarter, Zayo reported. Profit rose 48 percent to $34.7 million. The company canceled its quarterly conference call that had been set for this week. It didn't comment further.
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
Citing the U.S. "race to 5G," Incompas wants the FCC to "deny USTelecom’s petition" on unbundled network elements forbearance (see 1905060025), Incompas CEO Chip Pickering and a representative from Allstream told Commissioner Mike O'Rielly. "Networks being built using unbundled network elements as a bridge to fiber support 5G, in addition to gigabit-speed broadband service to small businesses and residential users," Incompas wrote, posted Tuesday in dockets including 18-141. It said companies using UNEs as such a bridge "are building more fiber in the areas they operate than either the incumbent or cable." A USTelecom spokesperson emailed Wednesday that its senior vice president-advocacy and regulatory affairs “Patrick Halley’s most recent blog and filing on Monday reinforces the policy rationale and facts supporting USTelecom’s UNE forbearance petition.” Wednesday, Allstream owner Zayo agreed to be taken private (see 1905080021).
Chairman Ajit Pai asked FCC staff to "carefully ... monitor" a Frontier Communications "development" -- a Minnesota investigation -- he wrote the state's U.S. senators. Democrats' Amy Klobuchar and Tina Smith noted a January report (see 1901140002) on the telco's customer service issues. The Minnesota Commerce Department "questions whether the information provided by Frontier to the" FCC "proves sufficient for regulators to execute oversight of the company and to determine whether Frontier is meeting performance obligations," the legislators wrote Pai March 13. "Frontier has reported to the FCC that it has met or exceeded each of its deployment milestones in" Connect America Fund-eligible areas in the state and the Public Utility Commission "has annually certified to the" FCC "that Frontier used the high-cost funds appropriately," Pai replied April 26, posted Monday. "Nevertheless, the FCC will remain vigilant to ensure that our rules are observed and taxpayer funds respected." The "letter speaks for itself," responded a Frontier spokesperson Tuesday.
Fifth U.S. Circuit Court of Appeals Judge Jerry Smith approved lifting a stay on a proceeding by inter-exchange carriers on access charges imposed on them by LECs (see 1904050033), said a Friday order (in Pacer), docket 18-10768). The stay was automatic when Windstream filed for Chapter 11 bankruptcy protection, and the telco asked for it to be lifted after a U.S. bankruptcy court's modification of the automatic stay to let the company proceed with the LEC litigation.
ITTA representatives and CenturyLink said submissions opposing the association’s petition (see 1905010181) mischaracterize the declaratory ruling it seeks. The petition, they told the FCC Wireline and Consumer and Governmental Affairs bureaus, seeks a ruling that “it is and always has been permissible for a carrier recovering [Telecommunications Relay Service] TRS Fund contributions via an end user cost recovery fee line item (or the like) on customers’ bills to include TRS, among other references, in the line item description,” said a filing posted Tuesday in docket 03-123. It said an order should make clear that carriers “should not double recover their TRS costs through both rates and non-specific line items” but they could recover some costs through rates and some through a non-specific line item.
The FCC Wireline Bureau is seeking comment on two applications to transfer companies to Macquarie subsidiary MIP IV Midwest Fiber, said a public notice (see 1901150052). One of the deals would transfer fiber network PEG Bandwidth from Uniti Fiber to Midwest, contingent upon a second transfer to Midwest of Missouri Network Alliance (dba Bluebird Network) from MNA Holdings, the PN said. “Because the transactions are more complex than usual, in order to analyze whether the proposed transactions would serve the public interest, these applications will not be streamlined,” the PN said. Comments are due May 17, replies May 24.
USTelecom renewed its request the FCC OK the group's unbundled network elements (UNE) request of forbearance from requiring incumbent LECs unbundle and resell access to some of their networks. Commissioners approved parts of the association's petition last month, forbearing from a duplicative pole attachment rule and some long-distance service and other old reporting requirements, a USTelecom blog post noted Monday. In making that 5-0 vote, FCC members sought action on things like the UNE request, which if not acted on by Aug. 2 would be granted (see 1904120058). "Now it’s time to roll up our sleeves and tackle the rest of the Petition" rather than requiring ILECs sell access at "below-market rates set by regulators rather than the marketplace," blogged Patrick Halley, USTelecom senior vice president-advocacy and regulatory affairs. "After nearly a year, detractors have been unable to show why one-time 'incumbent' wireline providers, whose market shares have declined precipitously and who lag wireless and cable competitors, should continue to bear the weight of intrusive regulatory mandates that do not apply to their rivals," Halley filed Monday, in docket 18-141. The FCC declined to comment. Some groups have concerns about USTelecom's request (see 1806220027). Incompas called this "a brazen move" by "AT&T and Verizon’s trade association." USTelecom is trying to "revamp its initial filing for a competition cut off that will result in massive price hikes on broadband customers," Incompas said. The FCC should reject this, said Incompas CEO Chip Pickering.
The FCC should disregard Sorenson’s rule modification proposals related to equipment for the video relay service, ZVRS filed, posted Monday in docket 10-51. Sorensonwantslanguage that “would collect in one place various disparate statements the Commission has made in TRS orders over the years,” said a filing posted Friday. ZVRS responded that the proposals would negatively affect VRS users and providers and the commission shouldn’t consider them because “stakeholders have had no opportunity to consider and evaluate them” due to the “imminent sunshine period.” Revised VRS rules are to get a vote at Thursday's FCC meeting (see 1904170049).
Groups representing deaf and hard of hearing and Gallaudet University asked the FCC to rethink a videophone provision in the video relay service report and order and Further NPRM set for a vote by commissioners Thursday. Others also made late filings in docket 10-51 posted through Friday. The agency proposes to require VRS providers to obtain, from anyone responsible for ensuring compliant use of a videophone, certification that the responsible individual “will make reasonable efforts to ensure that only registered VRS users are permitted to use the phone for VRS calls,” the filing said: That's likely to result in restricted access to enterprise videophones by deaf and hard of hearing and speech-disabled individuals who may not be registered in the telecom relay services user database. Telecommunications for Deaf and Hard of Hearing, the National Association of the Deaf, Cerebral Palsy and Deaf Organization and Hearing Loss Association of America were among signers. Sorenson asked that the item be revised “to be more explicit with respect to service and non-service related equipment” covered.
The FCC alerted consumers to reported scam robocalls targeting specific area codes “in bursts, often calling multiple times in the middle of the night.” Friday, the agency warned consumers not to call back these “One Ring” or “Wangiri” calls, as they often result in per minute toll charges. It said recent reports indicate the calls are using the 222 country code for Mauritania.