The company has no intention of pulling its wireless operations out of West Virginia, so its thousands of cell phone customers likely won't notice any changes in service. But Verizon is planning to sell all its landlines in the state to Frontier Communications, a New York-based company that bills itself as one of the nation's largest independent telecommunications providers.

If you talk to officials from both companies, it's a match made in telecommunications heaven. Verizon wants to focus largely on its cell phone operations. Frontier wants to provide telephone and high-speed Internet access to those rural areas most other providers avoid.

Both pledge the deal will be as painless for customers as they can make it.

"When you're doing a transaction like this, you want to keep your friends and neighbors happy," Frontier spokesman Steve Crosby said.

But it is a deal that has some people worried, particularly a union that represents employees in both companies. And union officials are getting plenty of ammunition from a similar deal in New England that has turned into a headache for regulators and customers there.

"There is a pretty established track record that is not so good," said Elaine Harris, a spokeswoman and Charleston representative for the Communications Workers of America.

The West Virginia Public Service Commission doesn't plan to take up the matter until early next year, so neither side has had a chance yet to officially make its case. But what is certain is the deal represents one of most significant business transactions in the state in recent years.

It also has long-term ramifications for efforts to expand high-speed broadband Internet access in a state that some say is sorely lagging the rest of the nation in joining the digital age.

Certain Horizon

Verizon may be best known to the public for its commercials, which feature a bespectacled spokesman traveling to remote corners of the nation and asking on his cell phone, "Can you hear me now?"

The idea of the commercials was to communicate the wide range of the company's cell phone coverage. But those commercials also represented a change in corporate philosophy.

Verizon got its start in 2000, when telecommunications corporations Bell Atlantic and GTE merged to form a single company. According to the company's Web site, the name itself was a merger between two words: "veritas," a Latin word connoting certainty and reliability, and "horizon," signifying forward-looking and visionary.

The new company had what officials called a 21st century vision for communications. Verizon would focus on three areas in particular: wireless communications; broadband Internet delivery, particularly to larger urban areas; and global IP.

The move made sense to company officials. During the past few years, many customers, particularly younger ones, had given up their landline telephones for cell phones. Also, much of the nation's landline infrastructure is old and needs significant upgrading, whereas a company otherwise could service a large area with just a handful of cell phone towers.

"The landline (component) isn't a liability per se," said Keith Fulton, president of Verizon West Virginia. "It is a part of the business that generates some revenue, but it is a declining business for many."

Frontier doesn't necessarily see it that way. The company specializes in providing telecommunications to rural areas and smaller urban areas that larger companies mostly ignore because they believe they can't make a profit.

Frontier officials believe many people in rural areas will continue to use landlines and that same infrastructure could be used to provide high-speed Internet services to areas that otherwise wouldn't get them.

Crosby said Frontier already is an established presence in the state, serving 145,000 residents.

"We have been a steady player there for a long time," he said.

Switching Lines

In a deal announced May 13, Verizon declared its intention to get out of the landline business entirely in West Virginia.

Under the terms of the deal, Verizon will transfer to Frontier its wireline operations in 14 states: Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin. It also will relinquish some of its assets in California.

The all-stock transaction between the two companies was valued at about $8.6 billion. Verizon announced it would establish a separate, newly formed entity -- SpinCo -- for its local exchanges and related business assets in 14 states. SpinCo will be spun off to Verizon's shareholders and simultaneously merged with Frontier.

Frontier painted the transaction as a good one for both companies -- and for customers.

Having been in business for more than 70 years, Frontier currently has 2.8 million access lines and high-speed subscribers in 285 cities in 24 states. The company also processes millions of transactions and calls each day.

Frontier is a Fortune 1000 company with $2.2 billion in revenues. Officials say they have successfully integrated numerous past acquisitions, including those of Verizon predecessor GTE in West Virginia in the 1990s.

Crosby said before the transaction, Verizon was split among a number of different operations. Now both companies can focus on what they believe they do best.

"We don't have anything distracting us from our goal," he said.

West Virginia Verizon customers may see a change that customers in other states won't see. Crosby said the billing system now used by Verizon in the Mountain State must be changed to fit Frontier's system. Otherwise, customers should notice no changes in service.

"In West Virginia, our goal is no customer impact," he said.

New England Woes

Reassurances from company officials have done little to assuage the worries of elected officials and others.

House Speaker Richard Thompson, D-Wayne, and 30 other members of the state House of Delegates asked the PSC in July to make sure there is a "full and comprehensive" review of the proposed sale of landlines by Verizon to Frontier.

"Given the struggling economy, the critical importance of maintaining quality jobs and the need to make sure that West Virginians have access to the tools of the 21st century, a complete review of all aspects of this important proposal is critical," House members wrote.

The PSC has scheduled that review to occur in January, although company officials had hoped for a hearing before then. Currently, the commission is tied up in several large cases, including a review of a proposed high-voltage electric line running through north-central West Virginia.

Most of the criticism so far has come from the CWA, which represents 200 state Frontier employees and 2,000 state Verizon employees.

CWA's Harris pointed to three New England states, where a previous acquisition of Verizon's landlines by a company called FairPoint Communications has generated many bad feelings. FairPoint took over Verizon's landline operations in Maine, New Hampshire and Vermont earlier this year in a deal that left the smaller company with a lot of debt and numerous complaints from dissatisfied customers.

Vicki Weatherwax, FairPoint vice president of business solutions, appeared before regulators from all three states in a Sept. 9 hearing and told them it would be at least another two months before the company developed a plan to solve customer service and billing problems, according to a Forbes.com report.

Then there is Hawaii, where a similar transaction led to the company that acquired Verizon's assets declaring bankruptcy, Harris said.

She believes the payoff for Verizon is it cannot only make money selling off its assets, but it can take advantage of a federal tax loophole that allows tax-free mergers between companies. The smaller companies are left saddled with debt and, as a result, can't make the necessary upgrades to existing infrastructure, turning off customers and ultimately leading to work force reductions as dissatisfied customers turn somewhere else.

"If there is not a strong customer base, guess what?" she said. "You don't need the workers."

Frontier painted itself as being in a strong financial position to acquire Verizon's assets. Officials said the company debt load would decrease from 3.8 to 2.6 after the transaction, a ratio that they said is approaching investment grade.

They also plan to reduce the company's dividend by 25 percent at the close of the transaction, which they said would give them added financial flexibility.

Broadband Frontier

One morsel Frontier is dangling out to sweeten the deal is the possibly of expanding broadband Internet services to the state's underserved areas.

Maps of broadband availability show that much of the state is without access to high-speed Internet (although critics contend such maps don't consider small, local Internet providers). Gov. Joe Manchin has made the expansion of broadband Internet a priority and appointed a board to come up with ideas of how to expand access.

Broadband is seen as vital not just to homeowners who want to watch streaming media on their computer but to businesses that need it for reaching customers and for hospitals and clinics that need it for records sharing and telemedicine.

Frontier is proposing to expand broadband in West Virginia through DSL and other means. To show they are good on their commitment, the company recently applied for federal stimulus funding earmarked for high-speed Internet expansion.

"We see it as a win-win: If we get broadband to customers, they will use it," Crosby said.

The federal government has allocated $7.2 billion for broadband expansion across the nation, with much of that to go to rural areas. However, the details about where the money is going are still unclear, and government officials have not yet made any announcements about recipients.

In the meantime, Frontier will need to wait until next year before it knows whether it will have a chance to spend any of that money on new landlines. Crosby noted that the company has said all along the deal wouldn't close until 2010, but still it would have been nice to get the regulatory review out of the way.

"For us, the sooner the better, but sometimes you can't exactly get that done," he said.