Hanging up now: Verizon backs out of landline business in 14 states

In a deal valued at $8.6 billion, Verizon Communications has agreed to sell its wireline assets in Indiana, Michigan, Nevada, Wisconsin, North Carolina, Ohio, Oregon, South Carolina, Arizona, Idaho, Illinois, Washington, West Virginia and parts of California to Connecticut-based Frontier Communications.

Verizon will spin off its assets into an independent business called New Communications Holdings Inc. (creatively called "SpinCo") which will then merge with Frontier's existing model in approximately one year's time. Frontier will earn 4.8 million lines and incur $3.3 billion in debt.

According to the company, this transaction turns Frontier into "the largest 'pure' rural provider of voice, broadband, and video services with more than 7 million access lines in 27 states." Less than one percent of Frontier's coverage footprint will be urban areas, and the majority will be areas with 37 households per square mile. It will enjoy the greatest expansion in the Great Lakes area and Pacific Northwest.

"This transaction is part of our multi-year effort to transform our growth profile and asset base to focus on wireless, broadband, and global IP," said Verizon CEO and Chairman Ivan Seidenberg, "Frontier knows how to run wireline communications services well and has a top-notch management team to take these properties to the next level."