Iowa Approves Sales of Iowa Telecom to Windstream

By Dave DeWitte

DES MOINES - The sales of Iowa Telecom to Windstream Corp. was approved Wednesday by the Iowa Utilities Board, which said the deal would allow for expanded services.

High speed broadband Internet service is a key component to the future of Windstream's core business, according to the board. It said economies of scale will allow Windstream to expand broadband offerings into more rural areas.

Little Rock-based Windstream announced a $1.1 billion deal last November to acquire Newton-based Iowa Telecom. Because Iowa Telecom is a state-regulated utility, the acquisition required state approval.

Windstream testified in the case that the merged operations will continue to maintain a strong local presence in the service area, and said the customer call center in Newton will be expanded. It said personnel in Newton will receive the same general pay and benefits as they currently receive.

No Iowa Telecom asset is to be removed from Iowa or transferred to a non-regulated environment other than certain wireless spectrum that may be sold, the company told the board.

In its order, the board said it appears Iowa Telecom's overall financial position will improve. That improved financial position should help customers, it said, as both Iowa Telecom and Windstream contend the reorganization will not cause rates to go up or sacrifice service quality.

Iowa Telecom had about 255,000 access lines, 95,000 high-speed Internet customers and 26,000 digital television customers as of Sept. 30, 2009.

The Iowa Utilities Board's full decision can be found in the order posted on its web site.

Iowa Telecom has about 350 employees in Newton. An undetermined number are expected to lose their jobs as many headquarters functions are moved to Little Rock.

The sale is expected to close in mid-2010.
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