Washington State regulators approve Verizon sale to Frontier Communications with numerous conditions

Washington state regulators proposed numerous consumer protections in approving the sale of Washington's Verizon landline residential and commercial telephone business to Frontier Communications Corp. The Washington Utilities and Transportation Commission (UTC) imposed numerous consumer protections in accepting and modifying five separate multi-party settlement agreements.

The proposed merger does not include Verizon Wireless customers or Verizon's Internet-related business. The companies will now have 10 calendar days to accept the UTC's modifications and conditions to the multi-party settlement agreements signed last winter. A party may also appeal the ruling to any Superior Court within Verizon's service territory in Washington. In approving the landline-telephone transaction, the UTC is requiring local residential and business telephone rates to not increase for three years after the transaction is completed. Customers would receive credits if the company's service quality does not meet specific standards. The new company, to be called Frontier NW, also would be required to pay an additional $10 - from $25 to $35 - to residential customers for missed service repairs or installation appointments. In addition, customers would receive a $5 credit if their telephone line is out of service for more than two days. Another provision would allow a 90-day window for customers who use Verizon for their long-distance carrier to choose another provider without incurring a $5 switching fee. Current Verizon long-distance customers may retain Frontier as their toll provider in the future. Low-income customers who qualify for phone service through the Washington Telephone Assistance Program would receive a one-time $75 credit if the company fails to offer appropriate discounts or deposit waivers.

The commission adopted a number of other provisions to protect customers, including:

• A $40 million fund to be used by the company to expand high-speed Internet service in unserved and underserved areas.
• Frontier submitting detailed financial reports for regulatory review.
• Transition costs to be paid by stockholders, not ratepayers.
• An incentive plan to prevent any decline in service quality.
• Penalties if service quality deteriorates.