Hearings sought in upcoming phone merger

Published 12:44 pm Monday, June 15, 2009

CHESAPEAKE — A consumer advocacy group wants to slow down the upcoming merger between Verizon Communications Inc. and Frontier Communications Inc.

That’s for the protection of the 435,000 Verizon customers in Ohio, including those in Chesapeake and near the Jackson-Lawrence County line, its says.

In the first part of May Frontier, based in Stamford, Conn., and Verizon, headquartered in New York City, agreed to allow Frontier to acquire almost 5 million access lines from Verizon in a deal worth just under $10 billion.

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It will create the largest rural communications service provider. Among the services from the new company to be called SpinCo. will be broadband, new bundled services and improved technologies to customers.

However, the Office of the Ohio Consumers’ Counsel wants the Public Utilities Commission of Ohio to take a closer look into the deal before it signs off on it.

“We just want to make sure it is in the public’s interest,” Ryan Lippe, Senior Communications Specialist for the OCC, said. “We don’t think it has gone through enough scrutiny. Verizon customers, in the recent past, there have been a lot of issues coming to the PUCO regarding service quality. We would want to make sure that Frontier is truly committing the resources.”

Lippe said the counsel is also concerned about the exact manner and extent in which Frontier plans to expand broadband into rural areas.

Recently, the OCC protested Verizon’s efforts to change regulations so it could have carte blanche as far as raising its phone rates without a PUCO review per rate hike.

Verizon had wanted the reg change for 24 exchanges in the state.

Only in three markets did the commission refuse Verizon’s request. Those were in Chesapeake, Portsmouth and Jackson.

Without a PUCO review the planned merger between Verizon and Frontier will go into effect in Ohio in 30 days or on June 10.

The consumers’ counsel wants to see hearings set up across the affected markets to get public input.

The OCC has suggested hearings in Ashland, Athens, Bowling Green, Bryan, Celina, Marion, New Philadelphia, Norwalk, Port Clinton, Portsmouth and Troy.

“We want to make sure this doesn’t get the rubber stamp,” Lippe said. “We think this is a merger that could have consequences. We want to make sure it is looked under a microscope.”

SpinCo would hold the local exchange and assets of 14 states. Verizon shareholders will get an undetermined amount of shares in the new company expected to have the value of $5.25 billion.