Illinois Judge Wants to Nix Verizon-Frontier Sale

An Illinois judge on Tuesday recommended that state regulators not approve Verizon Communications Inc.’s (VZ) landline sale to Frontier Communications (FTR).

The move could block the pending deal, which stands to impact 600,000 customers in Illinois alone.

Administrative Law Judge Lisa M. Tapia said the transaction will hurt consumers because Frontier will shoulder too much debt to properly manage its network and customer service obligations, the Herald-Review reported. Frontier has 2.3 million customers now and hopes to inherit another 4.8 million local access lines, 2.2 million long-distance users and 1 million broadband customers.

“The proposed reorganization will diminish Frontier’s ability to provide adequate, reliable, efficient, safe and least-cost public utility service,” Tapia wrote in her order.

Utility commissioners in Illinois are set to act on Tapia’s report by late April, the Herald-Review said. They could change it or adopt it.

Verizon is trying to sell its wireline assets in 14 states to Frontier so it can focus on its lucrative wireless service. The entire acquisition is worth about $8.6 billion. Regulators in several states, including Arizona and Ohio, already have approved the takeover but Tapia’s action throws a big wrench into the works.

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