Verizon Communications will sell all its local wired operations in California, Florida and Texas for $10.5 billion, citing uncertainty around federal Internet regulation (also known as net neutrality) as a major reason they're leaving. Following the sale to Frontier Communications, Verizon will concentrate its operations in the Northeast where its wireline business is growing faster, company executives said. The sale includes Verizon's voice, DSL, and FiOS fiber-optic Internet and TV services for residential and business subspscribers, but will keep Verizon Wireless and Verizon Enterprise Solutions operational.
Local wireline, or pots line, phone service has been a shrinking business for several years, as VoIP and cellular services have been paving the road of the future. Every major telecom provider knows that regular old pots lines are no longer viable to maintain or sell. Verizon Chairman and CEO Lowell McAdam also cited the Federal Communications Commission's upcoming net neutrality proposal as another threat to the growth of wired services. The agency's efforts to re-regulate the Internet have created uncertainty in the telecom industry, McAdam said.
"Washington should be very thoughtful how they go forward here," he said. "This uncertainty is not good for investment, and it's not good for jobs here in America."
The Frontier sell off, as well as a deal to sell or lease more than 11,000 of its wireless towers, will help the carrier sharpen its focus and create value for shareholders, Verizon said. Last year, Verizon Communications bought out Vodafone's 45 percent stake in Verizon Wireless for about $130 billion, but also taking on billions in debt to do so. Selling it's wired services to Frontier will help to restore Verizon's credit rating and help it sharpen it's focus in. In the three states, Verizon has about 3.7 million voice connections and about 2.2 million high-speed data customers, including 1.6 million on FiOS Internet and 1.2 million on FiOS Video.
On April 1, Verizon services in California, Texas and Florida will move to Frontier. That means if you currently have Verizon for your Internet, TV or Voice services–including FiOS®–it will be now provided by Frontier Communications.