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The Communications Workers of America and the International Brotherhood of Electrical Workers, two unions representing employees at Verizon and Frontier, are skeptical about the benefits of Frontier acquiring telephone lines from Verizon.
In a joint statement, the two unions suggest the debt load from the deal will mean less money for broadband service deployment, not more.
The sale would move 4.8 million lines serving residential and business customers in 14 states to Frontier. The deal calls for Frontier to take on $3.3 billion in debt; Verizon gets that amount in debt relief. That leaves Frontier saddled with debt that will lessen the potential amount available for investment in high speed broadband deployment.
Similar tax-free transactions by Verizon, especially those involving the Reverse Morris Trust tax provisions, haven’t worked out so well, especially for consumers in New England now served by FairPoint Communications.
My hunch is that we’re at the beginning of a major restructuring of the broadband business as it peels away from both the telephone and content sectors. It won’t be a fun few years while all this nonsense sorts itself out (including TWC’s delusions of charging us by the bit), but I suspect that in the long run we’ll see a lot more competition for purely broadband service.