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    HJM

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  1. Comment - West Virginia wants to stop sale of Verizon landline business

    (Jul 20, 2009 - 9:29 AM)

    Tim, there’s no evidence to back up your headline or your premise. You take a couple of news releases from the CWA – and a letter from 31 state legislators who urge the state Public Service Commission to do what it’s planning to do anyway (review the Frontier-Verizon transaction) – and from there breathlessly leap to the conclusion that West Virginia wants to stop the Frontier-Verizon transaction.

    A few points offer a different perspective:

    • This transaction will move West Virginia forward, as Frontier has said it will increase broadband availability in the state and establish a major presence in Charleston, including its southeast regional headquarters.

    • Frontier can best speak to this, but Frontier has a highly successful track record of acquiring, operating and investing in telecommunications properties serving rural, suburban and smaller-city areas. Frontier’s previous acquisitions include landline assets purchased from Verizon’s predecessor company GTE from 1993 through 2000. Frontier’s management team has deep experience in running a wireline network company.

    • Frontier has said that this transaction will make it a larger and financially stronger company. The transaction will provide Frontier with enhanced scale and scope, improved positioning, a stronger balance sheet and the capability to generate greater cash flow. This is a deleveraging transaction for Frontier, as its debt ratio will decrease with this transaction. Frontier has also stated that it will be reducing its dividend by 25 percent at the close of the transaction, which will give it added financial flexibility.

    • Verizon never made a commitment to deploy FiOS services in West Virginia.

    • The union’s opposition to Frontier’s furlough program is a bit confused as the Charleston Daily Mail pointed out that bargaining units elsewhere – including others in West Virginia – already have approved the policy.

    Harry Mitchell
    Director-Media Relations
    Verizon Communications