CUB Reviewing Proposed Acquisition of Frontier Oregon
Posted on July 19, 2019 by Mike Goetz
Tags, Telecommunications
In early June, Frontier Communications – one of two incumbent telephone companies operating in Oregon that also offers business and residential internet access service (the other is CenturyLink) - agreed in principle to sell its Northwest (Oregon, Washington, Idaho, and Montana) assets to Northwest Fiber LLC, a relatively new Internet Service Provider (ISP) out of Seattle.
Whenever a merger or acquisition is proposed that involves one of Oregon’s investor-owned electric, natural gas, or telecommunications utilities, the proposed transaction must be approved by the Oregon Public Utility Commission (PUC). As Oregon’s residential utility customer advocate, CUB’s role in such cases is to conduct a thorough review of the proposed transaction to determine whether it is in the public interest. We have weighed in on several proposed mergers and acquisitions over the years, extracting substantial benefit for customers along the way.
We have also expressed public concern regarding various proposed transactions that did not serve customers and were eventually denied, such as the Texas Pacific proposed takeover of PGE in 2005, and last year’s saga between Hydro One and Avista. In short, analyzing merger transactions is not new to us, and we are willing to take hard line stances to ensure that customers’ interests are protected.
The proposed transaction between Northwest Fiber and Frontier is no different. While Oregon’s legal standard governing the approval of a proposed merger for telecommunications utilities is different than that for energy utilities—the former requires a “public interest, no harm” finding while the latter requires a net benefit—CUB will nevertheless conduct an in-depth review of the proposed transaction to ensure it is in Frontier customers’ best interest.
Northwest Fiber is a northwest-based ISP that will be jointly owned by two separate investment fund entities for the purpose of effectuating the proposed transaction. Northwest Fiber claims to have significant experience building and delivering fiber-based high-speed internet networks. For its part, Frontier has decades of history providing both voice and internet access services over its fiber-optic and traditional copper networks. Both entities support the proposed transaction.
In the same way CUB advocates for residential energy utility customers in Oregon, we represent residential customers who require access to and use of safe, reliable, affordable, and technologically up-to-date voice and internet access service in order to participate in an increasingly digitized and internet-driven economy.
While many Oregonians can benefit from improved availability of high-speed internet access networks, many households, particularly older adults and those in rural communities, still use copper-based networks to operate their landline telephone and/or DSL internet service. CUB’s advocacy throughout this proceeding will seek to ensure representation for all use cases. Replacing aging network infrastructure is a good thing, but it shouldn’t be done in a manner that leaves behind those customers that simply need safe, affordable, and reliable landline telephone service.
The proposed transaction was filed before the PUC on June 28, and the procedural schedule has yet to be adopted. Stay tuned to the CUB blog for updates on this process as we continue to advocate for the interests of residential customers.
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07/18/19 | 0 Comments | CUB Reviewing Proposed Acquisition of Frontier Oregon