Frontier gets California PUC approval to acquire Verizon assets

Frontier gets California PUC approval to acquire Verizon assets

Frontier received approval from the California Public Utilities Commission (CPUC), clearing the final obstacle to complete its acquisition of Verizon’s (NYSE: VZ)  wireline assets in the state.

The CPUC joins public utilities commissions in Florida and Texas in approving the deal.

News of the CPUC’s approval should not be all that surprising. In November, an administrative judge with the commission issued a favorable Proposed Decision recommending the deal be approved.

Set to close at the end of March 2016, the service provider has already gotten approval for the $10.5 billion acquisition — which includes Verizon’s wireline, broadband and video operations and FiOS networks in California, Florida and Texas — from the FCC, the U.S. Department of Justice and the Public Utility Commission of Texas.

The telco has also gained approval for the acquisition from the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) unions in California, Florida, and Texas.

California is an interesting market for Frontier. The state’s wireline infrastructure, which is operated primarily by AT&T and Verizon, has come under attack by the CPUC.

In September, the CPUC launched an investigation into AT&T’s (NYSE: T) and Verizon’s management of copper networks. Citing instances of substandard service quality, the CPUC voted four-to-one to examine the physical condition of the two telcos’ copper networks in the state. It set a six-month timetable to conduct an examination of their copper networks.

Frontier has not commented on the CPUC investigation.

At the same time, Frontier has set an aggressive plan to upgrade California’s broadband and overall wireline network infrastructure. Part of its efforts in California will get a boost from Verizon’s conditional acceptance of $32 million in CAF-II funds.

In addition, Frontier also accepted $283 million in annual CAF-II support from the FCC that it says will enable it to build out broadband service to over 650,000 rural locations.

Those funds combined with its own capital will be used to expand not only its traditional copper-based VDSL2 and ADSL2+ services, but also deepen the penetration of the existing FiOS FTTH services in California, Florida and Texas.

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