Cutting the land line
Do you remember rotary telephones? I’ve never owned one, but I remember my parents having a couple. Spinning the dial took forever if you compare it with today’s speed dial and voice-activated wireless devices, but there was something about guiding your finger to its destination in the cycle, as well as the satisfying sound of the spinning dial that followed. Now that’s the mark of a technological dinosaur. In fact, wired land lines are becoming antiquated, and some of the biggest telecommunications companies in the land are letting them go.
The recent Verizon and Frontier Communications deal is a case in point. Verizon is selling their land lines to Frontier Communications so they can focus on other areas of their business. It will no doubt save them money in the long run, just as cutting the land line (well, VoIP is OK) can keep you from having to take out that extra installment loan or use the credit card each month.
An $8.6 billion dollar deal
An Agence France-Presse report in the Sydney Morning Herald states that Verizon and Frontier Communications have entered into an $8.6 billion dollar deal where Verizon announced agrees to sell its land line service in 14 American states to Frontier Communications. This is an all-stock deal; Verizon shareholders will get $5.3 billion in Frontier shares, which will give them a 68-percent stake.
Verizon said that the sale of its traditional telephone business “will allow the company to concentrate on providing wireless, broadband and high-speed Internet services.”
Wireless and FiOS in Verizon’s future
“This transaction is part of our multi-year effort to transform our growth profile and asset base to focus on wireless, FiOS fiber-optic services and other broadband development, and global IP (Internet Protocol networks),” said Verizon chairman/CEO Ivan Seidenberg.
Arizona, Illinois, Indiana, Idaho, Michigan, North Carolina, Nevada, Oregon, Ohio, South Carolina, West Virginia, Wisconsin, Washington and part of California are included in the land line package between Verizon and Frontier Communications. In total, Verizon states that 4.8 million local access lines for residential and small business customers are a part of the deal.
Frontier has big plans, too
“This is a truly transformational transaction for Frontier Communications,” said chairman/CEO Maggie Wilderotter. “With more than seven million access lines in 27 states, we will be the largest provider of voice, broadband and video services focused on rural to smaller city markets in the United States.”
According to Phillip Dampier in the anti-bandwidth cap advocacy Web site “Stop the Cap!” aggressively campaigning against cable companies like Time Warner, who experimented with such a usage cap. Rightly, Frontier Communications takes the position that companies that do this are extorting the general public. Wilderotter sent the following message to Frontier customers, regarding the current economy and cable Internet rate increases (bolds are mine):
Dear Frontier Customer,
We are in tough economic times. As you look for ways to save money, I want to assure you Frontier is dedicated to providing you with robust, value-added voice, high-speed data and video products.
Now, more than ever, Frontier is committed to the communities we serve. As a significant employer and a major taxpayer, Frontier takes pride in our active role in our markets. Our local managers and front line employees are highly visible and involved in many community organizations and events. They stand ready to suggest ways to use our services and resources wisely.
We provide innovative solutions and products for all types of communications needs. Fast, reliable communications technology, especially broadband, has never been more important. Customers tell me that as their budgets get smaller, the value of using our services in the home increases. Many families rely on Frontier products for their jobs, education and entertainment. Whether it’s Digital Voice, Data, or Video, we are here to help you explore different product and pricing options. Just visit any Frontier location or give us a call at (800) 921-8101 and our customer care representatives will help you.
Despite recessionary times, Frontier continues to invest in the technology that gives you the power to connect at home, in the office or on the go with speed and reliability. We are committed to your complete satisfaction. Unlike our Cable Operator competitors, we don’t depend upon an annual rate increase; in fact, Frontier provides price protection plans so you know what to expect during your agreement term. We are proud to offer the best products at the best prices in our markets – with unparalleled service to make the customer experience the best it can be. Frontier is local, financially solid, and optimistic about the future.
Although none of us know when it will happen, I do believe better times are ahead. We have been tested before and emerged stronger. We will get through this, and Frontier is here for you in good times and challenging times.
Thank you again for your business and support. We take it seriously and all of us at Frontier will continue to work hard to provide you with the best communications products and services.
Sincerely,
Maggie Wilderotter
Chairman and CEO
Frontier Communications
Clearly, Frontier Communications is a company with some fight to it. In a difficult economy, rate hikes are not what we need. We don’t need rate hikes that require us to hit up for installment loans and inflate our credit card bills. Perhaps the FCC will see this and find a way to open up the telecom wars, break up the giants a bit (Monopolies? No… way…) and get consumers both broadband access and fair rates.
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Discussion of Verizon and Frontier Communications Make $8.6 Billion Deal