Minnesota OKs Frontier Reorg, Probing 'Virtual Separation'

The Minnesota Public Utilities Commission voted 4-0 to clear Frontier Communications' bankruptcy reorganization but pledged to investigate the impact of the carrier’s “virtual separation.” Chair Katie Sieben was absent. Communications Workers of America raised concerns nationally about virtual separation, saying it could mean separating fiber deployment from copper operations, possibly to some areas’ detriment. Frontier sought to reassure policymakers it’s only an internal exercise (see 2009090055). At Thursday’s livestreamed virtual meeting, Commissioner John Tuma proposed an investigation as an “early warning system” to notify local governments if Frontier doesn’t invest in fiber in their areas. Frontier officials disagreed with requiring the inquiry in the same order clearing the reorg because they said it might prevent them from emerging from Chapter 11. Citing her experience with bankruptcy cases, Commissioner Valerie Means agreed that might be problematic. Tuma at first disagreed, saying it didn’t create a condition on the commission’s approval, but later agreed not to mention the probe in the decision. Instead, Tuma announced he was making a “clear signal” the “investigation will be opened ... before bankruptcy is completed.” Minnesota Assistant Attorney General Richard Dornfeld supported approving the deal despite no most-favored-state provision and lingering concerns about service quality, especially rural. Frontier earlier got OK from U.S. Bankruptcy Court for the Southern District of New York, plus several states. Reorg remains under review by others and federally (see 2009210055).