The $10.54 billion deal, which includes Verizon’s FiOS networks in the three states, is expected to close at the end of March 2016.
In unanimously voting to approve the acquisition, the California Public Utilities Commission joined other regulators who have given the agreement the green light, including the Federal Communications Commission, U.S. Department of Justice and Public Utility Commission of Texas.
In California, Norwalk, Connecticut-based Frontier picks up approximately 2.2 million Verizon customers. Approval of the agreement was subject to conditions that will yield “significant improvements to the network, including expanded network redundancy in cases of emergencies, and more robust broadband deployment to rural areas,” according to a California PUC news release.
Not only will Frontier use state and federal programs, in conjunction with its own investment, to expand and improve broadband services in Verizon’s California service areas, the company must offer broadband service to all Verizon customers who are eligible for the Lifeline program, the state PUC said. Lifeline is a federal subsidy program for low-income consumers.
The agreement with Verizon “represents a significant transformation for Frontier,” Frontier Chief Executive Daniel J. McCarthy said in a statement. “We will transition our revenue to a more diversified mix, improve our growth prospects, create sustainable value for our shareholders and provide a great experience for our new Frontier customers in California, Florida and Texas.”
Calling the acquisition a “great fit for Frontier,” Chris Gellos, Frontier’s vice president of commercial channel sales and marketing, told us last month that the initial response to the deal from the company’s channel partners “has been exciting.”
“Agents have seen firsthand throughout the past two years that Frontier has invested heavily in the channel and demonstrated a strong commitment to serving customers and agents together,” he said.
According to a regulatory filing, Frontier is the nation’s fourth largest incumbent local exchange carrier with operations in 28 states.