Press Happily Parrots Verizon’s Claim That Its $20 Billion Purchase Of Frontier Will Be A Huge Boon To Consumers
Tell me if you’ve heard this one before: a major U.S. regional telecom monopoly is looking to buy another major U.S. regional telecom monopoly in a massive transaction that both companies insist holds vast benefits for American consumers.
This time it’s Verizon stating it intends to purchase Frontier in a massive $20 billion deal that would transfer ownership of Frontier’s fiber, voice, and DSL networks back to Verizon. The deal, Verizon insists in a press release, will make U.S. broadband better and (somehow) more competitive:
The acquisition of Frontier is a strategic fit. It will build on Verizon’s two decades of leadership at the forefront of fiber and is an opportunity to become more competitive in more markets throughout the United States, enhancing our ability to deliver premium offerings to millions more customers across a combined fiber network.
In telecom, pre-merger promises are always meaningless. These deals generally saddle companies with massive debt, resulting in the surviving company cutting corners and imposing countless layoffs to regain equilibrium. The consolidation exists simply as a way to temporarily boost stock valuations, drive massive new tax breaks, and give overcompensated executives the false belief they’re savvy deal makers and bold innovators who definitely haven’t run out of any actual, innovative ideas.
Frontier perfected something I affectionately call “fiber to the press release,” where a telco makes a bunch of fiber deployment promises nobody independently verifies, and the press happily parrots them. Every merger or request for tax cuts, subsidies, and deregulation is accompanied by a promise of massive fiber deployment that never actually happens at the scale that’s promised.
This deal — which will transfer Frontier’s 2.2 million subscribers across 25 states to Verizon — is particularly amusing because in 2015 Frontier bought a huge chunk of Verizon’s network making all the same promises. None of those promises came true; the transition was an historic mess resulting in Frontier’s bankruptcy, untold layoffs, numerous network failures, and terrible overall broadband service.
Such a transaction might wind up being a better deal for Frontier consumers if Verizon winds up being more competent in upgrading aging networks to fiber and improving abysmal industry customer service. But given the lack of U.S. broadband competition and the fecklessness of captured U.S. Telecom regulators, there’s very little real financial incentive for Verizon to do that.
I suspect the timing of this deal is mostly triggered by Verizon’s interest in getting Frontier’s share of the $42.5 Billion in BEAD broadband subsidy money soon heading to the states courtesy of the 2021 infrastructure bill. As per tradition, a good number of those states (like Pennsylvania) will largely just take that taxpayer money, dump it in Verizon’s lap for promised fiber network investment, then fail to follow up.
The “fun” part is if you peruse the U.S. press coverage of this deal, almost none of the outlets can be bothered to truly explain all of the numerous, terrible problems the last merger caused. Or the fact that both of these companies have zero credibility when it comes to promising much of anything, especially as it pertains to what major mergers will or won’t accomplish.
Nor can major press outlets be bothered to explain more generally that mindless consolidation and pathetic regulatory oversight is why U.S. broadband is patchy, expensive, and slow (with routinely awful customer service) in the first place.
None of that is deemed to be useful, relevant context for readership. They’ll just parrot the companies’ promises of untold new consolidation synergies because the primary focus is money — not tech, or broadband, or actual people, and certainly not the real world impact of a relentless attack on competition.
This is the U.S. Telecom industry: a rotating collection of massively unpopular regional monopolies that have carved the country into fiefdoms. All protected by a largely feckless regulatory apparatus disinterested in antitrust reform, and propped up by a lazy corporate press equally disinterested in documenting the impact of monopoly power or mindless consolidation.