AT&T Sells Connecticut Operations to Frontier for $2 Billion

AT&T agreed to sell its Connecticut landline unit, including Internet and TV services, to Frontier Communications for $2 billion, letting the company focus on the more lucrative wireless business.

Frontier will get all of AT&T’s phone customers and U-verse television and broadband subscribers in the state, as well as satellite-TV users. The move continues AT&T’s shift away from its roots as Ma Bell, the dominant provider of US landline phone service. “AT&T has been trying to sell its rural wireline businesses for some time,” said Gerard Hallaren, an analyst with Janco Partners Inc. “It looks to me like Frontier cherry-picked a nice asset at a nice price from AT&T.” It might seem surprising that AT&T is selling lines that have already been modernized at a time when the company is devoting considerable attention to upgrading its network infrastructure nationwide through Project Velocity IP. But the deal isn’t so surprising considering what’s happening – or more precisely isn’t happening -- on the policy front in Connecticut. AT&T has been lobbying hard for legislation to deregulate telecom in states where it offers landline service and in many states has succeeded. As the company noted in a press release about the deal with Frontier today, the company’s goal is to transform its operations to “an all-IP, wireless and cloud network.” The legislation that AT&T has succeeded in getting passed in some states gives the company more flexibility to phase out traditional services. But efforts to pass that type of legislation in Connecticut have not been successful – and that reality may have played into AT&T’s decision to get out of the landline business in that state.