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Verizon sells its Tampa Bay TV, Internet, landline phone services to Frontier

In the past, Verizon customers complained about confusing bills and poor customer service. The company has worked hard in recent years to elevate its service quality to where it ranks among the best nationally in recent J.D. Power customer satisfaction surveys. [SKIP O'ROURKE   |   Times (2008)]
In the past, Verizon customers complained about confusing bills and poor customer service. The company has worked hard in recent years to elevate its service quality to where it ranks among the best nationally in recent J.D. Power customer satisfaction surveys. [SKIP O'ROURKE | Times (2008)]
Published Feb. 6, 2015

So long, Verizon. Hundreds of thousands of Tampa Bay Verizon customers are about to meet a new service provider.

Verizon Communications said Thursday it will sell its TV, Internet and landline phone business in Florida, California and Texas to Frontier Communications.

The deal is valued at $10.54 billion. For 3,000 of Verizon's 10,000 employees in Florida, it means Frontier becomes their new boss when the deal is completed in early 2016. In all three states, 11,000 Verizon employees will join Frontier.

"These properties are a great fit for Frontier and will strengthen our presence in competitive suburban markets and accelerate our recent market share gains," Frontier CEO Maggie Wilderotter said.

Verizon Wireless, the nation's largest mobile phone business, is not affected by this deal.

Executives for both companies said the transition to Frontier should be seamless for most current Verizon customers. Frontier has purchased Verizon's business in a number of other states in prior years and on Thursday cited its experience in operating TV, Internet and landline phone systems.

One early sign to watch is the level of customer service — in an industry infamous for poor service — as Verizon hands its regional business over to Frontier. While Verizon used to be commonly scorned by customers here, the company has worked hard in recent years to elevate its service quality to where it ranks among the best nationally in recent J.D. Power customer satisfaction surveys.

Those same surveys give Frontier generally lower marks.

Ranked by "overall satisfaction," Verizon received top marks as "among the best" while Frontier received a below-average grade.

On Thursday's teleconference, Frontier expressed optimism it could please consumers.

"We expect to build on Verizon's momentum as a formidable competitor in these areas," said Frontier president Daniel McCarthy.

The arrival of Frontier shakes up a TV/Internet/phone market in Tampa Bay that has long been tightly controlled by Verizon and Bright House Networks, with additional competition provided by cable TV providers Comcast, Wow and satellite TV providers DirectTV and DISH, among others.

The deal also comes as residential customers increasingly are turning to the Internet for their entertainment options and talk of "cutting the cord" — canceling cable TV service — gains popularity. But what customers may be willing to sacrifice in traditional TV is being replaced by rising demand for faster Internet speeds to assure the ability to watch movies or play games online.

Verizon, which arose from the 2000 purchase of GTE by Bell Atlantic 15 years ago, spent billions in the Tampa Bay market expanding its highly popular FiOS fiber optic network. But Verizon's FiOS coverage never reached all of the metro area, leaving chunks of Pinellas County, for example, with Verizon only able to offer TV services via the DirecTV satellite service.

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Frontier, based in Stamford, Conn., is a publicly traded corporation operating in 28 states, but remains vastly smaller than Verizon. It is known as a largely rural provider of broadband services and on Thursday characterized its deal in Florida and other states as bigger game.

Thursday's deal alone will double Frontier's size.

Verizon said it is selling its services in three states because the company operates in detached markets. Now it plans to concentrate on providing service in nine East Coast and mid-Atlantic states where its FiOS fiber optic networks are closely linked.

"Our FiOS footprints are small in these three large states," said Verizon spokesman Bob Elek in Tampa. Thursday's deal also includes Frontier taking over Verizon's small business and long distance services.

In 2010, Verizon sold Frontier 4 million phone lines in 14 states for $5.3 billion.

Verizon in a separate deal is selling $5 billion in leasing rights to 11,300 cell towers. Combined, the two transactions generate $15.5 billion to buy back stock and help pay down large debts incurred when the company completed its purchase of Vodafone, a large European wireless service provider.

Contact Robert Trigaux at rtrigaux@tampabay.com. Follow @venturetampabay.

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