As president and chief operating officer for Stamford-based Frontier Communications, Sandy Hook resident Dan McCarthy has a unique vantage point as his company moves through the process of taking over Connecticut’s residential phone and communications services and infrastructure from AT&T.
On December 17, 2013, Frontier Communications announced an agreement to acquire AT&T’s wireline properties in Connecticut. Mr McCarthy expects the transition to close in the second half of 2014 while AT&T continues to provide service to its local customers.
The latest development in the process occurred on February 21 when Frontier received notice from the Federal Trade Commission of the early termination of a required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The expiration of the waiting period satisfies one of the conditions of the completion of the transaction and moves the process one key step closer to completion.
The initiative is ultimately subject to the approval of the Federal Communications Commission and the Connecticut Public Utilities Regulatory Authority.
“We are pleased about the news from the Federal Trade Commission and look forward to providing service in Frontier’s home state,” Mr McCarthy said in a release.
Frontier will pay AT&T $2 billion in an all-cash transaction.
“We have deep experience in acquiring and migrating large-scale operations onto our networks and systems, adapting them to our sales model, and extending our brand into new communities,” he said in a company statement. “AT&T’s Connecticut business is substantial, well-defined, and covers nearly the entire state. Based upon our track record, we are extremely confident that we will leverage this opportunity to deliver an excellent customer experience and shareholder value.”
Randall Stephenson, AT&T’s chairman and chief executive officer, said, “Frontier has proven both its ability to execute sizable transactions and a commitment to the communications needs of urban, suburban, and rural markets. Frontier has a strong track record of providing high quality service, and we look forward to them doing so in Connecticut after we close this transaction.”
Maggie Wilderotter, Frontier’s chairman and chief executive officer, said she was particularly excited about the acquisition since the company has been headquartered in Connecticut since 1946.
Familiar Products, Services
In an interview with The Newtown Bee, Mr McCarthy said Frontier’s Connecticut customers will have the same products and services that they currently enjoy, including the U-verse suite of products.
Mr McCarthy and his family have called Newtown home for about ten years. He is a native of Brooklyn, N.Y., and began his career as a marine engineer working on projects involving electrical production and electricity and natural gas distribution.
“It was kind of natural for a marine engineer to go into the energy business,” he said. “When you think about a ship, it’s a self-contained city in itself.”
He also served as a design engineer for the US Navy and worked in power plant operations.
Mr McCarthy currently serves on the Board of Trustees at Sacred Heart University, The Committee for Economic Development in Washington, DC, and a trustee for Western Connecticut Health Network. In his 24 years with Frontier, he worked in Hawaii running the electric production facility and the distribution grid for the island of Kauai.
“Today, my responsibilities include overseeing day-to-day operations, from customer relations around the country to the technicians, engineers, call centers, IT infrastructure — virtually the entire company except the financial operations,” he said.
He said much of the hardware and systems Frontier will receive date back beyond AT&T’s presence in the state, to when Southern New England Telephone (SNET) provided information and phone-related services. The only part of Connecticut that will not be included will be a small area in southwestern Greenwich, which is served by a New York provider.
Frontier will enhance some of those hardware and services, however.
“In addition to what AT&T customers already receive, we will be adding our own set of products we know will give customers more choice,” he said. “Today, you can’t buy broadband service ala cart. But we sell a lot of that service as Frontier Broadband across the country for as low as $29 a month.”
The company will also offer a robust suite of security products from simple identity protection to sophisticated cyber-security systems for personal to large-scale commercial clients.
“We’ll also be focusing on the business community in a big way by bringing smaller companies the same level of bandwidth and services previously only reserved for the big guys,” he said. “No matter where you are, you should be able to access the highest bandwidth available if you need it.”
Good Existing Infrastructure
From an existing hardware standpoint, Mr McCarthy said AT&T and SNET left Connecticut with good stock.
“There’s a lot of good infrastructure, and existing broadband access to 96 percent of the state. But there’s an opportunity to improve speed and capacity, which is kind of our specialty,” he said. “One of the things you will see with Frontier is our turning back the clocks by putting general managers back in to the communities. We’ll have five of them managed by a state leader in Connecticut.”
The general mangers are tasked with becoming intimately familiar with the needs of Frontier’s local customers. The company will also establish a three-state subheadquarters in New Haven, and will keep local call centers to serve the state.
Following the close of the AT&T to Frontier transaction, Frontier will operate in 28 states. The company will welcome approximately 2,700 employees, the majority being represented by the Communications Workers of America.
Frontier already has more than 200 employees at its headquarters in Stamford. The acquisition will deliver approximately 415,000 data, 900,000 voice, and 180,000 video residential connections of AT&T in Connecticut, as well as AT&T’s local business connections and existing carrier wholesale relationships.
A full conversion of AT&T’s Connecticut operations onto Frontier’s existing systems and networks is planned at the time of close. The company’s most recent conversion covered operations across 14 states and was completed approximately one year ahead of schedule.