Connecticut PURA Approval for Frontier Deal Seen Likely, But Not Quick
The Connecticut Public Utilities Regulatory Authority (PURA) appears likely to approve Frontier Communications’ proposed acquisition of AT&T’s wireline, broadband and video assets in the state, after a recent agreement between Frontier and state officials, but that approval is unlikely to come swiftly, industry observers said in interviews Thursday. The office of Connecticut Attorney General George Jepsen, a Democrat, and the Office of Consumer Counsel (OCC) reached an agreement with Frontier Tuesday on public interest conditions related to the deal (CD Aug 13 p13).
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Frontier’s agreement included a commitment not to change its basic primary residential rates for affected customers for at least 36 months after the deal’s close. The telco also committed to investing $63 million between 2015 and 2017 on broadband improvements in Connecticut. PURA must approve that agreement as part of its review. PURA is the only regulatory body that still needs to approve the deal for it to close; the FCC approved the deal in late July (CD July 29 p14).
Support from Jepsen’s office and the OCC “should seal the deal” for PURA to approve the Frontier transaction, said Guggenheim Partners analyst Paul Gallant. “Frontier’s commitments around pricing and investment levels look pretty meaningful.” The Connecticut Business and Industry Association (CBIA), which supports the Frontier deal, also believes PURA will approve, said CBIA Associate Counsel Eric Brown. That belief partially stems from the lack of remaining “significant opposition” to the deal, he said. The Communications Workers of America, District 1, originally had significant concerns with the deal, but shifted in June to support it after the union and Frontier reached an agreement extending CWA’s existing contract for affiliated Frontier workers to April 2018 (CD June 27 p11).
PURA is unlikely to move quickly to conclude its Frontier review even with the telco’s agreement with Jepsen’s office and the OCC, an industry lawyer with experience in PURA proceedings said. It would be “unusual” for PURA to vote on a proposed settlement in a deal as large as the Frontier transaction soon after parties had filed, the lawyer said. PURA could seek further comment from participants on that agreement, including written filings, along with an evidentiary hearing or technical review on the agreement, the lawyer said. The Frontier deal “remains under review,” a PURA spokesman said. Frontier continues to anticipate it will close the deal in Q4, a spokeswoman said, saying the telco believes it would be “unrealistic” to expect PURA approval before September.