Last week the Frontier Communications Corporation finally got permission to proceed with its acquisition of the local wirelines operations of the Verizon Company in West Virginia. This is after the Public Service Commission of West Virginia approved, albeit with conditions, the transaction process of Frontier’s acquisition. The regulatory reviews required from all other states had also granted the approval to this procedure.

Earlier on, both companies had requested for the intervention of the federal bodies to invalidate the 1976 Hart-Scott-Rodino Anti-trust Improvements Act, which was barring them from executing the transaction. Both the Justice Department of USA and the Federal Trade Commission granted this request, allowing for early termination of the necessary waiting period. However, the companies must await the approval of some licenses by the Federal Communications Commission before the transaction can be wholly complete.

In a statement released to Verizon News Center, the president of the Verizon West Virginia, Mr. B. Keith Fulton expressed the companies’ satisfaction with the approval of the transaction by the commission. He said that the approval was evidence enough that the whole transaction was of great benefit to the public. Among the benefits portended by the Frontier Communications take over include more investments and wider broadband availability in West Virginia State. The current jobs of West Virginia residents will also be protected and more employment opportunities created.

The transaction, which was first agreed upon by both companies in May 2009, entails the acquisition of local wirelines operations in 14 states of the US belonging to Verizon Communications by the Frontier Communications Corporation. For Verizon, divesting from these lines that serve small business and residential customers in predominantly rural areas will help it to concentrate on providing fiber-based wirelines, wireless operations and provision of global internet protocol networks in densely populated localities. These are considered the fastest growing aspects of the communications business. Frontiers Communications on the other hand, will expand their services and strengthen their reputation as the leading communications provider in rural areas.

The law requires that the Public Service Commissions approves the transaction before the actual implementation and the West Virginia approval is a positive step in that direction. Frontiers Communications will pay an estimated total of 8.6 billion dollars to Verizon and its shareholders for the entire transaction. Apart from West Virginia, other states involved in the transaction include Wisconsin, Washington, South and North Carolina, Nevada, Michigan, Arizona, Illinois, Ohio, Idaho, Oregon and Indiana.

This transaction indicates that Frontier Communications will cater for more customers in 27 states with an additional 7 million access lines. Employment opportunities will increase with this expansion. To ensure that the transition runs smoothly for both clients, shareholders and long serving employees, Verizon will provide a transition team to work with Frontiers Communications. This is to avoid any mix up in client records and to ensure retention of jobs for the approximately 11,000 current employees in the affected states.

The companies are currently evaluating the order and conditions to be complied with, as provided by the Public Service Commission of West Virginia in its approval of their transaction on 13 May 2010.

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