5. The Proposed Merger Transaction

Joint Applicants state that the shareholders and management of Frontier-California, Frontier-Tuolumne, Frontier-Golden State and Frontier-Global Valley have authorized the proposed merger transaction. The Plan of Merger Agreement along with the shareholder and management approval documents are contained in Exhibit 7 to the Joint Application. Following approval by the Commission, the Plan of Merger and other supporting documents will be filed with the California Secretary of State. Following the consolidation, the new Frontier-California would serve approximately 155,000 access lines in 44 exchanges covering 7,902 square miles, and Frontier-California would continue to be regulated as an URF ILEC. Under URF, the combined entity would adhere to URF requirements and guidelines, including the required freeze on basic residential rates until January 1, 2009. Also, Joint Applicants would integrate existing rates and charges of Frontier-Golden State, Frontier-Tuolumne, and Frontier-Global Valley into Frontier-California's tariff.

Further, Joint Applicants state that they are focused upon successfully operating telecommunications companies in small and medium-sized rural markets. The consolidated company would continue to rely upon the local operational and management staff of Frontier-California, Frontier-Tuolumne, Frontier-Golden State and Frontier-Global Valley as augmented by personnel and resources of its other Citizens affiliates to manage the consolidated company following the proposed merger.