A new-wave broadband firm dials up Frontier Communications

General Telephone, GTE, then Verizon and Frontier — what’s next for our legacy phone company?

Steven Weed, CEO of WaveDivision Capital.

Steven Weed, CEO of WaveDivision Capital.

EVERETT — Last year, Steve Weed, then the CEO of Wave Broadband, sold the Kirkland-based company that he founded in 2003 for $2.36 billion.

The buyer, TPG Capital, is one of the largest private equity firms in the world, according to financial experts.

But the sale of the company didn’t sever Weed’s ties to telecommunications.

As CEO of WaveDivision Capital, a private equity firm he launched in 2003, Weed has continued to invest in broadband providers.

Now he’s about to jump back into the local broadband scene.

Kirkland-based WaveDivision and Searchlight Capital Partners, which has offices in New York, Toronto and London, announced last week they’re buying the Northwest operations of Frontier Communications for $1.36 billion.

“Our plan is to invest further in our markets, specifically by extending fiber to more homes and businesses, to bring them the high speeds they want,” Weed said in a news release.

Beyond that written announcement last week, WaveDivision declined to comment or elaborate “due to regulatory requirements,” a company spokesman said.

Weed’s company is buying what was once the Everett area’s legacy landline telephone company.

Today, Frontier Communications offers television and internet services in addition to phone service. But the origin of the business, two owners ago, was General Telephone & Electronics Corp., the largest independent phone company during the days of the massive Bell Telephone system, when landline telephone service was a regulated monopoly.

General Telephone eventually changed its name to GTE. GTE Northwest, which served Idaho, Montana, Oregon and Washington, was founded in 1964 as one of GTE Corp.’s operating companies.

Deregulation eventually freed telephone providers and cable TV companies to compete and provide the full range of telecommunications — TV, internet, landline phone and cellular service. In 2000, Bell Atlantic Corp. and GTE merged to become Verizon Communications.

In 2010, Verizon sold its landline phone assets to Frontier Communications.

Today Frontier serves about 156,000 residential and business customers in Washington and another 194,000 in Oregon, Idaho and Montana, according to the Washington Public Utilities and Transportation Commission. In Washington, Frontier serves customers in Snohomish, Skagit and Whatcom counties and eastern portions of the state.

The company’s Western Washington headquarters is in Everett, in a building GTE had built in 1981 at 1800 41st St. In 2018, Frontier employed about 590 here.

Frontier sold the building in 2012 but still occupies the north tower. (The Daily Herald and its parent, Sound Publishing, leases part of the third floor of the south tower.)

For Frontier, based in Norwalk, Connecticut, the cash deal with Weed’s company helps reduce debt. The deal is expected to close by the end of the year and is subject to approval by the Federal Communications Commission, the U.S. Department of Justice and the Committee on Foreign Investment in the United States.

Frontier said it will continue to operate the business and serve customers with existing products and services until the transaction closes.

WaveDivision said no immediate changes are planned that would affect customers or regional Frontier employees.

WaveDivision has investments in telecom companies all over North America. They include Hargray Communications in South Carolina; Metronet Communications in Evansville, Indiana; and RCN/Wave/Grande, serving parts of Massachusetts, Chicago, Pennsylvania, New York City, Washington, D.C., Texas, Washington, Oregon and California; and Xplornet based in New Brunswick, Canada.

WaveDivision’s managing directors include former Wave Broadband executives Harold Zeitz and Wayne Schattenkerk.

Janice Podsada; jpodsada@heraldnet.com; 425-339-3097; Twitter: JanicePods.

Talk to us

More in Herald Business Journal

Roei Ganzarski, CEO of magniX, poses with a production electric engine, the magni500, at the  company's new office on Seaway Boulevard on Monday, Jan. 18, 2020 in Everett, Washington.  (Andy Bronson / The Herald)
Maker of electric airplane engines gets $74M NASA grant

MagniX of Everett is one of two companies tapped to advance electric propulsion systems to power aircraft.

Employees work on a Boeing 787 Dreamliner during final assembly of the airplane at the Boeing Co. factory in Everett, Wash., on May 28, 2013. MUST CREDIT: Bloomberg photo by Patrick T. Fallon.
Boeing finds faulty titanium parts in latest setback for 787

The FAA said it is in touch with Boeing over the issue and that it doesn’t affect immediate flight safety.

A Boeing 737 Max 10 prepares to take off in Seattle on June 18, 2021. MUST CREDIT: Bloomberg photo by Chona Kasinger.
Boeing cash shines while 787’s factory woes weigh on results

Restarting Dreamliner deliveries that have been halted for months is key to a financial turnaround.

Everett Farmer’s Market canceled Sunday due to weather

Organizers cited a high-wind advisory. It is to reopen Oct. 31 for the final market of the season.

David Simpson (left) and Scott Murphy.
Port of Everett candidates spar over transparency

An incumbent, David Simpson, is challenged by Everett City Councilmember Scott Murphy.

FILE - In this May 26, 2020, file photo, a sign at the headquarters for the Washington state Employment Security Department is shown at the Capitol in Olympia, Wash. Washington state's rush to get unemployment benefits to residents who lost jobs due to the coronavirus outbreak left it vulnerable to criminals who made off with hundreds of millions of dollars in fraudulent claims. (AP Photo/Ted S. Warren, File)
Washington’s unemployment rate in September was 4.9%

Employers added 17,600 jobs last month, a 7.3% increase over August.

Rendering of the new terminal that Propeller Airports plans to build at Paine Field in Everett. The terminal, which will serve the general aviation community, will replace Castle & Cooke Aviation's existing building at the Snohomish County-owned airport. (Propeller Airports LLC)
Propeller Airports to acquire Castle & Cooke at Paine Field

Propeller, which owns the nearby passenger terminal, plans a new complex for private aviation.

With the Olympic mountains in the background, the first passenger flight by Alaska Airlines Flight 2878 departs for Portland on opening day of the Paine Field Terminal on Monday, March 4, 2019 in Everett, Wash. (Andy Bronson / The Herald)
Alaska Airlines stalls plan for extra flights in Everett

Business has been sluggish, but the airline says it will offer 12 flights a day at Paine Field in the new year.

Hillside homes in Mukilteo are seen from the ferry line on Oct. 20. (Andrea Brown / The Herald)
Mukilteo asks for input on housing density, and it’s complicated

Here’s a guide to what voters should know about the advisory ballot measure. What does it actually do?

People hold signs in protest of the vaccine mandate after Boeing announced it would terminate workers who do not comply on Friday, Oct. 15, 2021 in Everett, Wa. (Olivia Vanni / The Herald)
Some Boeing workers protest in Everett over vaccine mandate

The Boeing Company announced earlier this week that its workers must be vaccinated by Dec. 8.

FILE - In this file photo dated Monday, March 11, 2019, rescuers work at the scene of an Ethiopian Airlines plane crash south of Addis Ababa, Ethiopia.  The number of deaths in major air crashes around the globe fell by more than half in 2019 according to a report released Wednesday Jan. 1, 2020, by the aviation consultancy To70, revealing the worst crash for the year was an Ethiopian Airlines Boeing 737 MAX on March 10 that lost 157 lives. (AP Photo/Mulugeta Ayene, FILE)
Former Boeing test pilot pleads not guilty in 737 Max case

He’s the first person to be charged with a crime in connection with the Indonesia and Ethiopia crashes.

FILE - In this March 14, 2019 file photo, Ethiopian relatives of crash victims mourn at the scene where the Ethiopian Airlines Boeing 737 Max 8 crashed shortly after takeoff killing all 157 on board, near Bishoftu, south-east of Addis Ababa, in Ethiopia. Relatives of some of the passengers who died in the crash will mark the two-year anniversary of the disaster on Wednesday, March 10, 2021, by seeking a reversal of government orders that let Boeing 737 Max jets fly again.  (AP Photo/Mulugeta Ayene, File)
Boeing pilot involved in Max testing is indicted in Texas

He’s accused of giving the FAA false information about systems that played a role in two deadly crashes.