Frontier currently provides phone, video, Internet and broadband services to more than 2 million customers in 24 states, according to a company news release. The deal would make the company the nation’s largest pure rural communications provider.

“We are confident that we can dramatically accelerate the penetration of broadband in these new markets during the first 18 months” Maggie Wilderotter, Frontier communications chairman and CEO, said in the news release. “We know that broadband is a catalyst for a healthy local economy and job growth.”

A relatively large percentage of West Virginia doesn’t have access to broadband Internet services compared to many other states. State officials have pushed for greater broadband access for the state’s rural areas, and the economic stimulus package recently passed by Congress includes $7.2 billion for expanding broadband throughout the country.

The all-stock transaction between the two companies is valued at about $8.6 billion. Verizon will 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.

The transaction has been approved by both company’s boards of directors. Frontier’s shareholders still must approve it. Both companies expect the transaction to be completed in about a year.

The West Virginia Public Service Commission would need to approve the transfer in West Virginia. The PSC had not received an official filing as of May 13, according to spokeswoman Sarah Robertson.

Frontier would acquire Verizon's local wireline operating territories in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin under the deal.

In addition, the transaction would include a small number of Verizon's exchanges in California, including those bordering Arizona, Nevada and Oregon.

As of the end of 2008, the operations acquired by Frontier served about 4.8 million local access lines; 2.2 million long-distance customers; 1 million high-speed data customers, including about 110,000 FiOS Internet customers; and 69,000 FiOS TV customers.

About 11,000 Verizon company employees – those who primarily support the local phone business that is being acquired – would continue employment with Frontier after the merger, according to the news release. Frontier and Verizon both said they would provide a smooth transition for employees.

Frontier said it would honor union labor agreements in the 14 states and expects to work constructively with union leaders.

A Verizon transition team will work with Frontier in the coming months to ensure customer accounts, billing information and other assets from the operations will be successfully transferred to Frontier.