The Arizona Corporation Commission unanimously approved on Thursday (Feb. 18) the transfer of the local wireline operations of Verizon Communications Inc. (NYSE: VZ) serving residential and small-business customers to Frontier Communications Corporation (NYSE: FTR).
Arizona becomes the fifth state to approve the transaction. The Ohio Public Utilities Commission voted unanimously in favor of the transaction on Feb. 11, following unanimous approvals last year by the California Public Utilities Commission on Oct. 29 and by the Public Utilities Commission of Nevada and the Public Service Commission of South Carolina on Oct. 28.
"By approving this transaction, Arizona regulators have acted in the interest of the state's consumers," said Tim McCallion, president of Verizon's West region. "The transaction allows Frontier and Verizon to concentrate on serving customers in the areas where the companies are strongest and will bring benefits, such as increased broadband availability, to consumers and small businesses in Arizona."
At the federal level, the Federal Trade Commission and the U.S. Department of Justice granted the parties' request for early termination of the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Further, Verizon has received a favorable ruling from the Internal Revenue Service regarding the tax consequences of the spinoff and subsequent merger with Frontier. The receipt of this ruling is one of the conditions to the closing of the transaction.
On May 13, 2009, Verizon announced plans to divest its local wireline operations serving residential and small-business customers in predominantly rural and small- to medium-sized areas in 14 states, and that Frontier would acquire these operations.
The operations Frontier will acquire include all of Verizon's local wireline operating territories in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin. In addition, the transaction will include a small number of Verizon's exchanges in California, including those bordering Arizona, Nevada and Oregon.
Regulators in Illinois, Oregon, Washington and West Virginia, along with the Federal Communications Commission, also must approve the transaction or related transfers. In addition, Frontier has received cable television franchise approval from the 41 communities the company will serve in Oregon and Washington State, subject to meeting certain conditions of such approvals.
Verizon Communications Inc. (NYSE:VZ), headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to mass market, business, government and wholesale customers. Verizon Wireless operates America's most reliable wireless network, serving more than 91 million customers nationwide. Verizon also provides converged communications, information and entertainment services over America's most advanced fiber-optic network, and delivers innovative, seamless business solutions to customers around the world. A Dow 30 company, Verizon employs a diverse workforce of approximately 222,900 and last year generated consolidated revenues of more than $107 billion. For more information, visit www.verizon.com.
NOTE: This news release contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The following important factors could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: the effects of adverse conditions in the U.S. and international economies; the effects of competition in our markets; materially adverse changes in labor matters, including workforce levels and labor negotiations, and any resulting financial and/or operational impact, in the markets served by us or by companies in which we have substantial investments; the effect of material changes in available technology; any disruption of our suppliers' provisioning of critical products or services; significant increases in benefit plan costs or lower investment returns on plan assets; the impact of natural or man-made disasters or existing or future litigation and any resulting financial impact not covered by insurance; technology substitution; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets impacting the cost, including interest rates, and/or availability of financing; any changes in the regulatory environments in which we operate, including any loss of or inability to renew wireless licenses, and the final results of federal and state regulatory proceedings and judicial review of those results; the timing, scope and financial impact of our deployment of fiber-to-the-premises broadband technology; changes in our accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; our ability to successfully integrate Alltel Corporation into Verizon Wireless' business and achieve anticipated benefits of the acquisition; and the inability to implement our business strategies.