Impact on CDN Ecosystem: Frontier’s Acquisition of Verizon’s Wireline Operations


Citizens Utilities Company was once a small time telephone company serving small communities and rural areas in the US. In 2000, they changed their name to “Citizens Communications Company”, and eight years later to “Frontier Communications Company”. Frontier has grown tremendously over the last few years, and is becoming a major RBOC/LEC (Local Exchange Carrier) in the US, especially now that they announced the acquisition of Verizon’s wireline operations in California, Texas and Florida for $10.5B.

Frontier generated $1.14B in sales ending September 30, 2014, and the acquisition will enable them to double its user base and revenue. The three states involved in the sale generated $5.7B last year, which means Frontier will generate $10B+ annually when the sale is complete. The acquisition will inject some life into Frontier, whose sales have been declining for the last several years. Included in the sale are the following:

  • 7M voice clients
  • 2M video clients
  • 2M broadband connection
  • Half of this network running on fiber (FiOS)
  • Three states under sales generated $5.B in 2014

This acquisition comes after Frontier Communications acquired AT&Ts wireline assets in Connecticut for $2B last year, and Verizon’s wireline operations in 12 states, a few years back.

What does this mean for the CDN

Today, when CDNs buy multiple 10Gbps Internet Ports from many carriers, rarely does the name Frontier Communications come into the conversation. That is definitely changing in the next 12-36 months, as Frontier is now a major LEC. Frontier is joining the ranks of AT&T, Verizon and CenturyLink as large, residential, last mile service providers in the US. For classification purposes, we call the group of large last mile providers “Tier 1”, as they own the residential last mile. All other carriers and CDNs must use the facilities of the Tier 1 to for content delivery. The “Tier 2” Carrier in the US is Level 3, and although Level 3 doesn’t own the residential last mile, they are always included in the carrier mix that CDNs use in their infrastructure, because they have a world class IP Transit footprint in place.

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