Oregon Regulators Not Thrilled With Frontier Deal - 'Lots of risk, but very little upside..'
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tenpin784 @ 6th Nov 09:06AM:
Don't you mean
Frontier deal?
I hope one of those states denies the deal. Look what happened to us in New England.....
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cdru @ 6th Nov 09:15AM:
Sell off in stages
I wonder if both sides and/or regulators would be willing to sell off the same areas, but in stages. 3 states have already approved the deal. Get those states switched over and see how Frontier handles the influx of customers. If they handle that, do another batch. Frontier may be able to handle tripling in subscriber count over a period of time, but the same influx all at once could be too much.
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Van @ 6th Nov 09:15AM:
moderately (indebted) company
Yes, I am sure that is right around the corner
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TKJunkMail @ 6th Nov 09:16AM:
Re: Don't you mean
said by tenpin784 :
Frontier deal?
I hope one of those states denies the deal. Look what happened to us in New England.....
1 or a couple states non-approval may not stop sales in other states. This deal may not be an all or nothing proposition no matter what Frontier's rep says:
according to Whitehouse, Frontier’s treasurer.
And he said there’s no chance that Verizon and Frontier might renegotiate the sale to exclude Oregon and Washington, should regulatory approval prove unobtainable.
“It’s all or nothing,” Whitehouse said.
That is a negotiating tactic to try and buffalo the state regulators.
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TKJunkMail @ 6th Nov 09:17AM:
Re: Sell off in stages
said by cdru :
I wonder if both sides and/or regulators would be willing to sell off the same areas, but in stages. 3 states have already approved the deal. Get those states switched over and see how Frontier handles the influx of customers. If they handle that, do another batch. Frontier may be able to handle tripling in subscriber count over a period of time, but the same influx all at once could be too much.
That is a pretty good idea.
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TKJunkMail @ 6th Nov 09:20AM:
Re: Sell off in stages
said by TKJunkMail :said by cdru :
I wonder if both sides and/or regulators would be willing to sell off the same areas, but in stages. 3 states have already approved the deal. Get those states switched over and see how Frontier handles the influx of customers. If they handle that, do another batch. Frontier may be able to handle tripling in subscriber count over a period of time, but the same influx all at once could be too much.
That is a pretty good idea.
Another possibility is something called "ringfencing", which some regulators are considering. Here is a description of what that is:
»www.investopedia.com/terms/r/ringfencing.asp
Basically it separates the debts by state so that a collapse of Frontier would not affect the operation and debts of the individual subsidiaries in the different states. The link above explains how that works.
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Mannus @ 6th Nov 09:43AM:
Re: Sell off in stages
said by cdru :
I wonder if both sides and/or regulators would be willing to sell off the same areas, but in stages. 3 states have already approved the deal. Get those states switched over and see how Frontier handles the influx of customers. If they handle that, do another batch. Frontier may be able to handle tripling in subscriber count over a period of time, but the same influx all at once could be too much.
I was thinking the same thing earlier this week. Let them prove themselves capable first by giving them a year to meet specific open, transparent, and tangible performance goals in the states that have already approved the sale.
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morbo @ 6th Nov 09:58AM:
apparently Washington and Oregon aren't stupid
It's nice to see some push back on this horrible deal. I wish they would be more vocal about how terrible it really is.
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hottboiinnc @ 6th Nov 10:05AM:
Re: Don't you mean
And if these 2 states block the deal there VZ could just file and abandon the network and WA and OR would be SOL.
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S_engineer @ 6th Nov 10:07AM:
Re: Don't you mean
then give them nothing....if the deal goes through it will be only a matter of time before those states will be stuck with nothing anyways!
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tshirt @ 6th Nov 10:42AM:
Re: Sell off in stages
That would be a start. I wonder if verizon could be forced to carry some of the debt for 5 years or so as a secondry lender. i.e. if frontier fails verizon gets less/little back.
It would give them incentive to be sure they aren't setting Frontier up to fail and gives frontier some breathing room on debt service, seems a reasonable cost to verizon / the price of abandoning responsiblities in these areas.
Since they are already getting a huge write off, the cash cost SHOULD be much lower to Frontier
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funchords @ 6th Nov 10:45AM:
Great job, OREGON! My home!
(I'm a Portlander doing temp duty in DC. Yes, I know how to pronounce Willamette, damnit!)
We want Verizon.
Verizon is a top-drawer network with top-drawer performance and the Silicon Forest deserve better than a choice between Comcast and whoever-they-are.
Remember, what passes for telecommunications competition in this country is the number of essentially monopoly-acting providers operating within the borders. If two providers is a "vibrant" telecom marketplace, certainly three is 2.5x as good, right?
Reject this deal, please. Frontier isn't even a good airline.
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tshirt @ 6th Nov 10:53AM:
Re: apparently Washington and Oregon aren't stupid
said by morbo :
It's nice to see some push back on this horrible deal. I wish they would be more vocal about how terrible it really is.
Not stupid YET! so far, just slow (at least the WUTA won't get to a final vote until late december, even that could be delayed.)
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funchords @ 6th Nov 10:55AM:
Compare the Ratings
Verizon FIOS: 84%
»User reviews - Verizon FIOS
Frontier: 62%
»User reviews - FrontierNet Internet Access ... just read through these reviews, many are just terrible! Even Verizon's own totally ignored and rotting DSL service rates higher than Frontier's service.
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klipko @ 6th Nov 11:53AM:
Close to a rejection
Nice to see that regulators are seeing what we consumers see as a bad deal. Maybe Frontier could pull off the purchase of Verizon's networks but the scale that the two are pursuing I feel is to big to handle. My two cents.
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SuperJoker @ 6th Nov 12:25PM:
Re: apparently Washington and Oregon aren't stupid
said by morbo :
It's nice to see some push back on this horrible deal. I wish they would be more vocal about how terrible it really is.
Good for them, Hopefully California will join those two and not be stupid...
I'd hate to wind up with more expensive service at a slower speed, or be told something like this: "Sorry Yer too far from the CO for DSL" load of crap.
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iansltx @ 6th Nov 12:45PM:
Re: Don't you mean
Then the networks get flipped to someone else. Windstream maybe...
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hottboiinnc @ 6th Nov 12:47PM:
Re: apparently Washington and Oregon aren't stupid
No instead you'd get a notice from VZ stating that within 30-90 days you're going to lose everything until someone else decides to take over.
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iansltx @ 6th Nov 12:48PM:
Re: Great job, OREGON! My home!
Ahem. Frontier is a fne airline. They just don't have a hub in Portand.
Frontier Communications on the other hand...they could do things right, but they can also do things horribly wrong. The thing is, they haven't done things particularly right so far and thus have the predilection to doing something very wrong.
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Sammer @ 6th Nov 12:52PM:
Re: Don't you mean
said by hottboiinnc :
And if these 2 states block the deal there VZ could just file and abandon the network and WA and OR would be SOL.
It doesn't work that way with regulated public utilities. If Verizon abandons the network the states will take it over and sell it to someone else. Out of the proceeds of such a sale will come the states' expenses before Verizon sees a dime. Not only should all regulators in all the states reject the Verizon-Frontier deal but after Hawaii and New England any regulators who approve it should be investigated and prosecuted for corruption!
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iansltx @ 6th Nov 12:52PM:
Re: Compare the Ratings
Apparently their DSL network isn't being totally left out to pasture. There are a handful of markets in Texas that are getting DSL service right now, though whether that's for a sellout to some local company is another question entirely.
I'm guessing the reason Verizon is launching DSL in some of these markets is they know it'll have a relatively quick ROI. There's no DSL there, the equipment isn't that expensive (they can probably serve ten houses with DSL for the price of one FiOS installation) though they can't get nearly the monthly revenue from DSL that they can from FiOS.
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PDXPLT @ 6th Nov 01:18PM:
Re: Great job, OREGON! My home!
said by funchords :
We want Verizon.
Speak for yourself. No one in may area does. We're looking forward to seeing VZ disappear.
The only service VZ is willing to sell us is landline phone. No one under the age of 80 cares about landline phone anymore; cellphones are better and cheaper.
VZ is a useless company as far as we're concerned. I wish we were over the line in Qwest territory, because they've had DSL for years. But Verizon has essentially said they'll never deploy broadband to us. They can't leave the state fast enough, as far as we're concerned. No matter how badly Frontier does, they can't do any worse.
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tschmidt @ 6th Nov 01:51PM:
Re: Sell off in stages
said by TKJunkMail :
it separates the debts by state so that a collapse of Frontier would not affect the operation and debts of the individual subsidiaries in the different states.
Interesting idea. Wonder how well it would work in practice but since each state imposes its own regulatory regime, keeping each one separate seems like a good idea.
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funchords @ 6th Nov 01:53PM:
Re: Great job, OREGON! My home!
said by PDXPLT :
The only service VZ is willing to sell us is landline phone. No one under the age of 80 cares about landline phone anymore; cellphones are better and cheaper.
VZ is a useless company as far as we're concerned. I wish we were over the line in Qwest territory, because they've had DSL for years. But Verizon has essentially said they'll never deploy broadband to us. They can't leave the state fast enough, as far as we're concerned. No matter how badly Frontier does, they can't do any worse.
Just so people get the picture: (google maps link)
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tschmidt @ 6th Nov 01:55PM:
Re: apparently Washington and Oregon aren't stupid
said by hottboiinnc :
No instead you'd get a notice from VZ stating that within 30-90 days you're going to lose everything until someone else decides to take over.
That is the conundrum facing regulators. I have some sympathy for regulators in VT/NH/ME when faced with the same situation. If the incumbent says they no longer want to do business in your state - how much leverage does the government have to compel them to stay. If they kill the sale what sort of investments can you expect from the incumbent?
/tom
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karlmarx @ 6th Nov 01:56PM:
Re: Sell off in stages
Yes, but 'reasonable' isn't a word in the megacorp lexicon. Lets be honest about the entire proposal. Verizon KNOWS that Frontier (like Hawaii, Fairpoint, etc), WILL go bankrupt. They don't care. Period. They want to get the best tax writeoff they can. Verizon will insist it's an 'all or nothing' deal. That's their strongest argument. Guess what, I will guarantee you that at some point in the near future, the 'regulators' (after some bribes from Verizon), will sign off on the full deal. Everyone wins! Oh, wait, everyone except the customers.
The solution is to deny the deal. AND force Verizon to maintain/upgrade their networks. Lets be honest, if Verizon doesn't think they can make money, then they don't want to do it. BUT.. and here's the big BUT, BUT VERIZON WAS FORMED (as part of Ma Bell) to PROVIDE SERVICE TO EVERYONE. Why does everyone keep forgetting that WE THE PEOPLE gave these companies monopolies in the first place to provide universal service? Ma Bell might be dead, but it's coming back. Just because they are not 'Ma Bell', does not give them the right to screw the customer. Verizon WOULD NOT EXIST if we didn't give them HUGE (think 10's of Billions) of concessions over the years. Verizon was FORMED by the breakup of the Bells. Verizon owes it's existence to Ma Bell. Guess what, we should hold Verizons feet to the fire, and force them to actuall provide the TAXPAYERS a return on their investment (via the MASSIVE TAX BREAKS) they have gotten over the years.
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funchords @ 6th Nov 02:03PM:
Re: apparently Washington and Oregon aren't stupid
said by hottboiinnc :
No instead you'd get a notice from VZ stating that within 30-90 days you're going to lose everything until someone else decides to take over.
Really?
What would such a letter say? "Although Verizon is in $62 Bn of debt along side $120 Bn of other bills, we're going to turn off our income stream." Its a bad enough message that VZ is walking away from these new FIOS buildouts in the NorthWest, now they're willing to walk away from the value?
Okay, if so, then I hope they go ahead and do it. We'll get the government to condemn whatever they leave behind and sooner rather than later, we'll have our publicly-owned data infrastructure.
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darcilicious @ 6th Nov 02:14PM:
Re: Great job, OREGON! My home!
said by PDXPLT :said by funchords :
We want Verizon.
Speak for yourself. No one in may area does. We're looking forward to seeing VZ disappear.
Well eight miles away and we certainly DO want Vz to stick around.
I feel your pain. I lived in Vernonia for several years, had a leased line put in (dug the ditch myself, by hand) back in the mid-90s and shelled out the monthly fee (not cheap) plus the cost of two 54k modems (one for each end) just to have reliable Internet access.
But guess what? Living in Vernonia was a lifestyle choice. If I were to move from Forest Grove, my broadband choices would have a significant impact on where I chose to move.
VZ is a useless company as far as we're concerned. I wish we were over the line in Qwest territory, because they've had DSL for years.
Well then, get packing :p
P.S. if everyone in Banks is so hot for broadband service have you all looked into municipal-run fiber?
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rifleman69 @ 6th Nov 02:34PM:
Re: Great job, OREGON! My home!
+1
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Dolgan @ 6th Nov 02:34PM:
Re: Don't you mean
If the sale is blocked, the areas will be spun off as their own entity called SPINCO [similar to what happened when Sprint spun off its landlines as EMBARQ]. Verizon no longer wants the service areas and are too lazy to do the work necessary to have higher RoI. Kinda funny that the FIOS areas being spun off have the highest take rates, but what else do we expect from the "Enlightened Executives" at Verizon? They are still more worried about making the stock price look higher than it should be with all of the CapEx spending going on...gotta preserve those bonuses for Ivan and the boys!
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DarkStarPDX @ 6th Nov 02:45PM:
Re: Great job, OREGON! My home!
Well, put me in the +1 crowd for wanting Verizon to stay.
I would support Frontier if it was ringfenced, as if they go out of business it would be easier to possibly form a PUD to manage the network without a disruption in service...
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beavercable @ 6th Nov 02:58PM:
Re: Great job, OREGON! My home!
Look at it this way Darci I know you can't stand comcast but its not like you live in a metro city. As a matter of fact the only thing distinguishable feature between forest grove and banks is pacific university. And that relatively small school is the only reason in my oppinion the "Grove" didn't get cherry picked over by verizon. As for the frontier deal I hope it fails. I want to see fios everywhere Comcast is.
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openbox9 @ 6th Nov 03:25PM:
Re: Sell off in stages
said by karlmarx :
BUT.. and here's the big BUT, BUT VERIZON WAS FORMED (as part of Ma Bell) to PROVIDE SERVICE TO EVERYONE. Why does everyone keep forgetting that WE THE PEOPLE gave these companies monopolies in the first place to provide universal service?
If you really want to play that game, we the people should put Ma Bell back together and actually recreate the monopoly.
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darcilicious @ 6th Nov 03:37PM:
Re: Great job, OREGON! My home!
said by beavercable :
Look at it this way Darci I know you can't stand comcast but its not like you live in a metro city.
Correct, I live in the suburbs. Also, it's not so much that I hate Comcast, it's just that they provide subpar service in every way (well, except maybe billing ;-) ) compared to Verizon.
As a matter of fact the only thing distinguishable feature between forest grove and banks is pacific university. And that relatively small school is the only reason in my oppinion the "Grove" didn't get cherry picked over by verizon.
The population of Forest Grove is substantially more than Banks, close to 15x more populated (residing students, btw, are not counted among the permanent population in the census).
As for the frontier deal I hope it fails. I want to see fios everywhere Comcast is.
BTW, do folks really believe that Frontier is going to have the resources to bring DSL to Banks? Really?
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rifleman69 @ 6th Nov 04:31PM:
Re: Great job, OREGON! My home!
said by beavercable :
Look at it this way Darci I know you can't stand comcast but its not like you live in a metro city. As a matter of fact the only thing distinguishable feature between forest grove and banks is pacific university. And that relatively small school is the only reason in my oppinion the "Grove" didn't get cherry picked over by verizon. As for the frontier deal I hope it fails. I want to see fios everywhere Comcast is.
You will never see FiOS everywhere Comcast is.
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N O Y B @ 6th Nov 05:28PM:
Re: Great job, OREGON! My home!
Or even municipal-run WiMAX (no last mile cabling).
Even a group of you could get together and set up WiMAX and resale service.
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Bob61571 @ 6th Nov 05:32PM:
Re: Sell off in stages
said by karlmarx :
BUT VERIZON WAS FORMED (as part of Ma Bell) to PROVIDE SERVICE TO EVERYONE.
Historical Note: Verizon was formed by merging Bell Atlantic, a RBOC, and GTE(a large Non-RBOC) in 2000.
An extremely large % of this Verizon sale to Frontier is former GTE territory.
I believe that West Virginia is the only ex-Bell Atlantic territory involved in this Verizon-Frontier change. Is that correct?
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Bob61571 @ 6th Nov 05:39PM:
A Gradual Rollout
makes more common sense, than a sudden 1 day cutover from Verizon to Frontier.
This way, Frontier gets a chance to prove what they're saying now. If it goes great, they can keep it rolling. If it goes bad, it will minimize the pain for all concerned.
If this scale of project was attempted in private, it would be done in smaller pieces.
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dsldude08 @ 6th Nov 08:36PM:
Re: Sell off in stages
And GTE territory is HORRIBLE. Existing tariff's and rates there are astronomical which = bad for customers for pricing. The systems are very OLD, weren't maintained well by GTE, and need updated, so yeah, of course Verizon doesn't want to touch that, it costs money...
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perki @ 7th Nov 04:00PM:
oh boy
could this be the death of a local phone company?
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mike1965 @ 7th Nov 08:52PM:
Re: Compare the Ratings
said by iansltx :
Apparently their DSL network isn't being totally left out to pasture. There are a handful of markets in Texas that are getting DSL service right now, though whether that's for a sellout to some local company is another question entirely.
I'm guessing the reason Verizon is launching DSL in some of these markets is they know it'll have a relatively quick ROI. There's no DSL there, the equipment isn't that expensive (they can probably serve ten houses with DSL for the price of one FiOS installation) though they can't get nearly the monthly revenue from DSL that they can from FiOS.
they are launching DSL in our area in new places too.....problem is they are overselling the CO's and will not upgrade the equipment.....dumoing too much money in FIOS I guess
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iansltx @ 7th Nov 10:10PM:
Re: Compare the Ratings
Overselling = not providing advertised speeds? Sheesh, that sucks.
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millerzone @ 9th Nov 11:56PM:
Re: Sell off in stages
said by dsldude08 :
And GTE territory is HORRIBLE. Existing tariff's and rates there are astronomical which = bad for customers for pricing. The systems are very OLD, weren't maintained well by GTE, and need updated, so yeah, of course Verizon doesn't want to touch that, it costs money...
That might be true in some areas, but I am in ex-GTE territory and (a) remember GTE quite fondly and (b) have FiOS internet and TV.
I think most of WA and OR are in that category, actually. I guess Verizon wants to divest of WA and OR simply for geographical reasons - -just too far away from their "core" territories.
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gower2352 @ 10th Nov 01:48AM:
frontier approached verizon
What we must remember is that Frontier approached Verizon to purchase these lines. Verizon just saw a great money making deal and agreed. I can assure you Verizon will not abandon any state it currently serves as it would not be in Verizon's best interest. They still make a small profit off of landlines.
I still believe though that this deal should be shot down because Frontier has no experience in FIOS and fiber. And we don't want to become another Fairpoint disaster.
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