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AT&T Sells Landline Service To Stamford Company; AG Jepsen Says He’ll Evaluate Deal

by Christine Stuart | Dec 17, 2013 10:55am
(9) Comments | Commenting has expired
Posted to: Business, CT Tech Junkie

(UPDATED 2:30 p.m.) AT&T sold its Connecticut landline phone business Tuesday to Frontier Communications Corp. for $2 billion in cash. The announcement had Attorney General George Jepsen and U.S. Sen. Richard Blumenthal concerned about possible impacts on prices, competition, and public safety for people still using landlines.

—More from CTTechJunkie: Who Is Frontier Communications?

Frontier, which is headquartered in Stamford, also will acquire AT&T’s U-Verse video and satellite TV customers in the state.

“We have deep experience in acquiring and migrating large-scale operations onto our networks and systems, adapting them to our sales model, and extending our brand into new communities,” Frontier President and CEO Dan McCarthy, said in a press release. “AT&T’s Connecticut business is substantial, well-defined and covers nearly the entire state. Based upon our track record, we are extremely confident that we will leverage this opportunity to deliver an excellent customer experience and shareholder value.”

The move will give AT&T greater flexibility to concentrate on its wireless business as it migrates away from its roots as the dominant provider of landline service.

“AT&T remains committed to Connecticut; and will invest in the state to provide wireless service on the nation’s fastest and most reliable 4G LTE network and networking, application solutions and professional services for Connecticut business customers,” Patricia Jacobs, president of AT&T New England, said.

She said the transaction isn’t expected to close until the second half of 2014 and until that time there will be no impact on customers.

“We will work closely with Frontier to make the transition for customers as seamless as possible,” Jacobs said. “Frontier is a Connecticut-based company, which will help ensure a smooth transition — and Frontier will honor customers’ existing contracts.”

Shortly after the announcement of the sale, Jepsen’s office released a statement from the Attorney General.

“The proposed transaction could have substantial impact on the quality and affordability of wireline telephone, internet broadband and video services for residential and business customers throughout Connecticut,” Jepsen said. “I will closely examine this deal and fight to ensure that the interests of the state of Connecticut and its residents are fully protected.”

Jepsen continued, “My focus will be on evaluating the effect that this transaction will have on quality of service provided at reasonable rates, as well as the impact on competition, Connecticut’s workforce, and the state’s efforts to streamline and improve the use and control of utility poles. Reliable and affordable wireline telephone service remains a critical public service in Connecticut. Even with the expanding use of wireless, landline service maintains a vital place in public safety and in the lives of many, many Connecticut residents, including our elderly and more vulnerable populations.”

Blumenthal, the state’s previous Attorney General before Jepsen, also issued a statement:

“While this deal may be good for AT&T and Frontier, I want to make sure it is right for consumers,” Blumenthal said. “I look forward to reviewing what it means for the people of Connecticut, and I will fight to make sure their interests are protected as DOJ and the FCC review this transaction.”

Blumenthal also said Frontier will be required to file with the U.S. Department of Justice, Federal Communications Commission, and Connecticut Public Utilities Regulatory Authority to ensure the deal doesn’t violate antitrust regulations.

Related:

Senior Citizens vs. AT&T

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(9) Comments

posted by: ocoandasoc | December 17, 2013  12:40pm

The CT Legislature left AT&T no choice but to sell off their landlines. Folks should remember that when their service declines and their prices shoot up. But, hey, it’s mostly the elderly and businesses that will affected.

posted by: Sol | December 17, 2013  12:50pm

Hopefully frontier will keep the same line crews - we’ve always had excellent ‘POTS’ (analog, “plain old telephone system”)  landline service.

But I’d heard from an ATT lineman that ATT was going to switch everyone over to DSL service (digital, necessitating installation & fee of a DSL modem/phone converter in every house) to digitize everything from the phone to the central office.  The foreseeable problem with this is that while a lot of lines are quite sufficient for POTS, they fail at the quality level required for carrying digital communication.

It is widely known that DSL is distance-dependent from the central office (over copper wires, that is.  lossless over fiber optic but that isn’t available everywhere) and it will be “interesting” to see how much they say it will cost us if they implement ‘100% DSL’ and completely eliminate analog telephone service.

posted by: AMDC | December 17, 2013  1:56pm

More corporate shenanigans to ensure low service and high prices.  Who will stop the corporate takeover of all our utilities?

posted by: JamesBronsdon | December 17, 2013  2:37pm

Umm, AMDC, utilities are corporations.

posted by: AMDC | December 17, 2013  3:17pm

Utility corporations should be govt-controlled if it is an essential commodity

posted by: JamesBronsdon | December 17, 2013  3:57pm

All utilities are heavily regulated by government agencies, and those agencies and the AG have a lot to say about sales of the businesses from one corporate entity to another. Many would say health insurance is much like a utility in that it is essential. How’re we doing with more government control over that business?

posted by: JamesBronsdon | December 17, 2013  4:15pm

AMDC, Communist China is getting out of the utility ownership business.  From Wikipedia: Before 1994 electricity supply was managed by electric power bureaus of the provincial governments. Now utilities are managed by corporations outside of the government administration structure.

To end the State Power Corporation’s (SPC) monopoly of the power industry, China’s State Council dismantled the corporation in December 2002 and set up 11 smaller companies. SPC had owned 46% of the country’s electrical generation assets and 90% of the electrical supply assets. The smaller companies include two electric power grid operators, five electric power generation companies and four relevant business companies. Each of the five electric power generation companies owns less than 20% (32 GW of electricity generation capacity) of China’s market share for electric power generation. Ongoing reforms aim to separate power plants from power-supply networks, privatize a significant amount of state-owned property, encourage competition, and revamp pricing mechanisms.[3]

It is expected that the municipal electric power companies will be divided into electric power generating and electric power supply companies. A policy of competition between the different generators will be implemented in the next years

posted by: AMDC | December 18, 2013  9:07am

Privatizing will artificially lower prices for a short time,  till the new corporations establish control and dominance,  ala Comcast Cable. I just don’t think essential things should be profit-making enterprises.  I think China will rue the day it decided to join the corporatist, capitalist rat race.  They have 1 billion people they want to turn into consumerist drones and they can never satisfy those wants once they create them.  We are a good example of materialism gone wild,
BTW,  now that ATT is out of landlines in CT,  who will be servicing the wires and who will maintain the inside wires that I pay a monthly fee to have?

posted by: JamesBronsdon | December 18, 2013  11:09am

AMDC, do you think AT&T is a public/government entity?  The AT&T to Frontier transfer is corporation to corporation. Whether the shares of one might be privately held vs. publicly traded is immaterial.
Food is essential. Would you like government to control the farmlands and ranches and the distribution system?