Frontier Favors Verizon Purchase

(11/28/2009)

I recently read an article dated November 17, 2009 WV PSC Advocates Oppose Sale of Verizon to Frontier and I felt it was necessary to set the record straight and address certain concerns.

On May 13, 2009, Frontier Communications announced an agreement to acquire Verizon's local wireline operations in 14 states. Frontier already operates in 11 of the states, including West Virginia, and we look forward to welcoming new customers and employees into our company. We have a lot to offer: In West Virginia, 92 percent of our current customers have broadband availability, compared to 60 percent for Verizon. We have innovative marketing programs that distribute free home PCs & netbook computers. In fact in West Virginia we have delivered more than 11,000 computers to its citizens for high-speed access. It's a great feeling to help a student, homebound customer or a small business connect to the Internet.

This transaction will move West Virginia forward.

Frontier plans to make Charleston its Southeast regional headquarters staffed by a regional senior vice president and 30 to 40 new jobs. This transaction is about keeping and adding jobs, not cutting frontline workers. Frontier will honor all existing labor contracts and has committed to a no-layoff policy for all installers and technicians in West Virginia for 18 months after the acquisition closes.

You're hearing and seeing a lot from opponents who claim, over and over: "there's no way you can approve a plan like this when the company making the acquisition doesn't know how it's going to serve all its customers" or "the company doesn't have a plan to deal with multiple risks that threaten Frontier's financial health, and, consequently, customer service."

These claims are just plain wrong!

Frontier is a 75-year-old, Fortune 1000 company in the S&P 500 Index with a long record of successful acquisitions. Frontier serves more than 2 million customers in 285 cities in 24 states - including more than 142,000 access lines and 48,000 high-speed customers in 38 West Virginia counties. Frontier had 2008 revenues of approximately $2.2 billion.

This transaction will make Frontier a larger and financially stronger company, providing it with enhanced scale and scope, improved positioning, a stronger balance sheet and the capability to generate greater cash flow. Frontier's debt ratio will decrease from 3.8 times to 2.6 times after the transaction, a level that is very close to investment grade. Frontier will even reduce its dividend by 25 percent at the close of the transaction to have added financial flexibility to make capital investments in the new properties and expand broadband speed and availability.

Frontier has extensive experience in integrating systems of acquired companies and successfully consolidated seven billing and ordering systems in the past five years alone, including a conversion nearly the same size as West Virginia. Customer records from Verizon in West Virginia will move onto Frontier's existing systems that are fully expandable.

The bottom line: Frontier's management team has deep experience in running a landline network company and it plans to build on that experience to invest in providing high-quality service and increase broadband penetration in West Virginia. Frontier is ready, willing and able to continue and expand our service to all of West Virginia.

Sincerely,

Steven C. Crosby
Frontier Communications Corp.
Senior Vice President
Government & Regulatory Affairs and Public Relations