All of Verizon’s landline assets in San Bernardino County are being taken over by Frontier, part of Verizon selling off its wireline operations in California, Florida and Texas.
Verizon will continue to deliver cellular phone service in those territories.
“The transaction includes Verizon’s FiOS Internet and Video customers, switched and special access lines, as well as its high-speed Internet service and long-distance voice accounts in these three states. Frontier will continue to provide video services in these states after the completion of the transaction,” Verizon said.
This development is of import to current Verizon customers as well as Verizon employees. In other states such as Delaware and Vermont where Verizon sold off substantial chunks of its wireline customer base, problems with the quality and availability of service ensued in some areas, with landline phone service ceasing altogether in some districts. Such difficulties are not anticipated in this takeover, as Frontier is seeking to vantage itself as a primary line service provider nationally.
Questions remain as to how the $10.54 billion sale will shake out with regard to those currently working in Verizon’s landline divisions in the three states.
One controlling factor in this regard may prove to be the policy of Frontier CEO Maggie Wilderotter, who has enunciated a philosophy that embraces community responsibility and contributions to the positive progress of the wider economic milieu in which the company must function. Wilderotter, for example, has stated she is in favor of keeping Frontier’s domestic employees with the company rather than hiring less expensive labor overseas. Initial statements given to local Verizon workers was that their employment status would be maintained throughout the continuum of the Frontier takeover.
At present, Verizon workers in Southern California are represented by the Communication Workers of America on a contract that runs through 2016. The lion’s share of Frontier workers are represented by the International Brotherhood of Electrical Workers. Verizon currently employs 15,473 workers in California in both its wireline and wireless divisions. 11,000 Verizon employees will transfer to Frontier in all three states pursuant to the spin off. It is unclear whether those wireline employees who will transition into being Frontier employees will change unions after the current employment contracts they are working under expire.
Under its former CEO Ivan Seidenberg, Verizon took a two-track approach, aggressively moving into the provision of wireless service while doubling down on the wireline market by installing high speed fiber optic systems in areas where an existing customer base demanding such service already existed and in areas where residential and commercial growth was anticipated.
While the wireless side of the equation paid off mightily for Verizon, the investment in fiber optic infrastructure was far less profitable, as the lingering recession from 2007 onward prevented new development from occurring in many areas, including San Bernardino County.
By offloading its landline division in places like California, Verizon can surge forward at least temporarily as it is making much more money from its wireless operations while it is paying its wireline employees more than its wireless workforce.
Verizon lost $2.23 billion in its most recent quarter and committed to spend $10.4 billion in an auction of wireless airwaves last month.