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  • Merger Forms One of the Largest CLECs in US
Feb 2006
WALTHAM, Mass. and ROCHESTER, N.Y., Feb. 10, 2006 -- CTC Communications and Choice One Communications today announced they will merge in a 50-50 partnership, creating what they say is one of the largest competitive local exchange carriers (CLECs) in the US, and the largest privately held CLEC in the Northeast. Officials said the move was made in order to compete with the recent "mega-mergers" of companies such as AT&T and SBC and Verizon and MCI.

The specific terms of the deal were not disclosed. The combined company is expected to generate over $550 million in annual revenues and serve more than 100,000 customers over a combined network that will consist of 7000 route miles of fiber connecting 630 collocations. The current shareholders of Choice One and CTC will each own exactly 50 percent of the combined firm.

"It has become clear that in order to prosper in a competitive sector we should respond to the recent mega-mergers of the dominant incumbent phone companies," said Kenneth D. Peterson Jr., chairman of CTC and CEO of Columbia Ventures, sole owner of CTC. These former "Baby Bell" phone companies lease their copper networks to local exchange carriers like Choice One and CTC.

Choice One, headquartered in Rochester, offers bundled voice and data services, web hosting and design and development in 29 markets and 12 states in the Northeast and Midwest. CTC, headquartered in Waltham, has been the fastest growing CLEC in the Northeast this past year, completing the acquisitions of Lightship Telecom in May 2005 and Connecticut Broadband in October 2005. The company has been providing carrier-class VoIP (voice over IP) services for five years, and offers voice, Internet and data services to businesses in 11 states throughout the Northeast and Mid-Atlantic, as well as the District of Columbia. The two companies' networks overlap in seven states from Maine to Pennsylvania.

Peterson will serve as chairman of the board of the combined organization, which will consist of an equal number of directors appointed by the shareholders of each company. Thomas J. Casey, currently chairman and CEO of Choice One, will serve as CEO, while CTC President and CEO Ray Allieri will be company president. The merger is subject to customary closing conditions, including regulatory approval and the refinancing of existing bank debt. The name of the new company has not yet been determined.

While the companies say the merged business will "continue to maintain a significant presence" in both Rochester and Waltham, with senior executives in each location, the announcement made no mention of what would happen to the combined companies' approximately 1700 employees.

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