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Frontier Boosts Internet Speeds for its FiOS Customers in Oregon, Washington; But You Have to Ask for Them

Phillip Dampier April 6, 2015 Broadband Speed, Competition, Consumer News, Frontier No Comments

frontier fiosFrontier Communications customers lucky enough to have access to fiber to the home service will find broadband speeds have been increased to offer identical upload and download rates.

In FiOS areas of Washington and Oregon, symmetrical broadband speeds of 30/30, 50/50, 75/75, 100/100, and 150/150Mbps are now available.

Both the 75 and 150Mbps tiers are new to customers.

Existing customers will not be upgraded to the new speed tiers until they call Frontier and request them.

“Customers have been demanding faster upload speeds for access to the cloud, gaming and streaming applications, and Frontier is committed to fulfilling those needs,” said Vicky Oxley, Frontier vice president and Washington general manager. “This is something our competitors don’t offer.”

The majority of Frontier’s customers receive DSL service at speeds averaging 6Mbps.

Frontier Communications CEO Maggie “6Mbps is Plenty” Wilderotter is Out; Dan McCarthy Takes Over in April

Wilderotter is out.

Wilderotter is out.

Frontier Communications CEO Maggie Wilderotter will be replaced in April by the company’s current chief operating officer in a sudden transition of power one Wall Street analyst called “oddly timed.”

Wilderotter has led Frontier Communications for more than a decade, growing the phone company’s footprint through the acquisition of Verizon and AT&T landlines in more than two dozen states. Her business strategy has been to refocus the company away from traditional telephone service towards Internet services, without aggressive infrastructure upgrade spending on a scale undertaken by companies like AT&T and Verizon. The majority of Frontier customers still receive slowband Internet service that does not meet the FCC’s minimum 25Mbps threshold to qualify as broadband.

Under her leadership, Frontier paid careful attention to its dividend, which reliably paid investors for holding Frontier stock. But the company also piled on debt through its landline acquisitions, and is now shopping the junk bond market to finance as much as $7.9 billion of its recently announced $10.5 billion purchase of landline assets in California, Florida and Texas from Verizon.

Frontier has positioned the management change in a press release as a “planned transition,” but the sudden change in the middle of the company’s largest ever landline acquisition has raised some eyebrows on Wall Street. Elevation analyst Stephen Sweeney said the management change adds a “degree of risk” and should concern shareholders.

But at least one shareholder was pleased to learn Wilderotter was going to be replaced.

“‘Oddly timed or not, I’m hard pressed to imagine a more incompetent, self-aggrandizing CEO than the one now leaving,” said RG Perrin. “May I remind [readers] that, once-upon-a-time, Frontier’s forebear, Citizens Utilities, comprised electric, gas, water, and telephone utilities, and, moreover, had a rating from the Value-Line Investment Survey of A++ for financial strength. Now look at this poor excuse of a joint-stock company. This is what thirty or so years of doltish management can achieve, including the ten put in by the departing CEO, Maggie Wilderotter. Thanks for the memory, and goodbye, at long last.”

frontierWilderotter is expected to leave the CEO role by April, replaced by Daniel McCarthy. She will stay with the company as executive chairman of the Board of Directors.

McCarthy has been with Frontier Communications since 1990 and has served as its chief operating officer since 2012. McCarthy led the team that negotiated the recent Verizon landline purchase and has been an advocate of the company’s growth into 28 states with nearly 15 million possible customers.

But Frontier’s success at holding customers and attracting new ones has not been good. As of the end of 2014, Frontier had 3,214,800 residential customers, 304,700 business customers, 2,373,900 broadband customers and 586,600 video customers. Its most loyal customers do not have other choices for broadband service and many live in rural communities with limited cable competition. Many disconnect service as their legacy 1-3 year contract commitments with the company expire. Many others require “winback” or customer retention promotions to stay.

McCarthy

McCarthy is in.

The company’s broadband products are increasingly unattractive in areas where the company faces significant competition from cable operators that are increasing Internet speeds and offering discounted bundled service packages. Frontier still relies on traditional ADSL to reach most of its customers, with gradual expansion into bonded DSL and VDSL service in more populated areas.

The majority of its fiber to the neighborhood and fiber to the home-serviced customers came through acquisitions of Verizon FiOS and AT&T U-verse service areas. The company has refused to embark on similar upgrades for its legacy customers and has sought instead to compete on price. As a result, more than 80% of Frontier’s legacy residential base, excluding Connecticut, purchases slowband at the basic speed tier, which is 6Mbps in most areas.

While Frontier has committed more than $10 billion to acquire Verizon customers, it spends only a fraction of that on upgrades to its existing network. In the last quarter, Frontier’s capital expenditures were $159 million and the company spent an extra $33 million trying to “flash cut” AT&T customers in Connecticut to its billing platform. The company accepted $133 million in Connect America Fund payments, paid for by ratepayers, to expand or upgrade broadband to just 164,000 households. The company will allocate nearly four times that amount to cover the total integration costs of the latest $10 billion Verizon transaction, which will not bring improved broadband to anyone.

Frontier also announced last month it would not commit to any significant expansion of U-verse outside of the existing AT&T service area it acquired in Connecticut. It previously stated it has no plans to expand its acquired FiOS service areas. This means long-term Frontier customers should not expect any significant improvements in service in the near term, especially as the company’s attention turns to its latest acquisitions, which will add 3.7 million voice connections, 2.2 million broadband connections, and 1.2 million FiOS video connections.

West Virginia Legislature Won’t Consider Any Bill That Could Offend Frontier, GOP Delegate Claims

frontier loveThe Republican leadership of West Virginia’s House of Delegates is alleged to have quietly placed a ban on considering any bill that could potentially offend Frontier Communications, frustrating state lawmakers attempting to introduce broadband improvement and consumer protection measures.

In a press release posted to his Facebook page, Delegate Randy Smith (R-Preston) complained that the House GOP leadership told him his two broadband-related bills waiting for consideration would “go nowhere because it would hurt Frontier.”

“Frontier has its hands in the state Capitol,” Smith said in the release obtained by the Charleston Gazette. “The company knows how to play hardball with the legislative process.”

When asked to name names of those obstructing his broadband-related measures, Smith declined, at least for now.

“It was one individual,” Smith said. “He said leadership wouldn’t support this because they feel like it’s targeting Frontier. If it comes to the point I have to, I’ll give names. I know you’re wanting names.”

Last December, Smith’s frustration with Frontier boiled over.

Smith

Smith

“For too long, West Virginia has lagged behind other states when it comes to accessible computer technology and infrastructure,” Smith said. “We’ve been offered excuses about our state being too mountainous for improving conditions here. But it’s not the state’s rugged terrain holding us back. Although a few areas of the state have a choice of service providers, most are stuck with whatever Frontier decides is enough. And not only do I receive complaints about their service, there are multiple grievances about how they bill their customers. We can, and must, do more to create competition to drive the quality of services up and drive costs down.”

“This is not a Republican or Democrat issue. This is a West Virginia issue,” Smith said. “And we need to catch up to other states in the 21st century.”

For the first time in 80 years, Republicans won a majority in the House of Delegates, pledging to transform West Virginia into a “business friendly state.” But even Smith, an assistant majority whip for the new Republican leadership, seemed stunned by the willingness to grant Frontier de facto veto power over telecom-related legislation.

Last week he learned his two broadband bills were essentially dead on arrival, because they would not be supported by Frontier.

  • HB2551, co-sponsored by 10 GOP delegates, would prohibit Internet providers from advertising broadband service as “high-speed Internet” unless the company offered a download speed of 10Mbps or higher. The majority of West Virginia experiences real world speeds far slower than that from Frontier;
  • HB2552, intended to address chronic billing problems by Frontier, would allow Internet customers to take billing disputes to Attorney General Patrick Morrisey’s office, if the state Public Service Commission refuses to review their complaints.
Speed tests on Frontier's "High-Speed Max" Internet service aren't high speed at all.

Speed tests on Frontier’s “High-Speed Max” Internet service aren’t high speed at all.

When Smith’s accusations went public in the pages of the Gazette, Republican leaders scrambled to deny his allegations.

House Majority Leader Daryl Cowles (R-Berkeley) told the Gazette House Republicans have no “blanket position” against bills that Frontier opposes.

“There’s no policy by leadership that these bills should move or shouldn’t move based on who’s supporting them or who doesn’t,” Cowles said. “It sounds like Randy is frustrated. He, like many out there, are frustrated by their Internet speeds and service.”

“I was told Friday that there’s no way those bills were going to run,” Smith countered.

Frontier won’t deny its disapproval of Smith’s bills.

“We’re the only provider that chooses to serve much of rural West Virginia, and we see the legislation as having a negative effect on further development of rural broadband services,” said Frontier spokesman Dan Page.

Frontier customers in West Virginia are among the company’s most vocal critics nationwide, complaining about unavailability of DSL, billing errors, poor service, and most common of all: selling service and speed the company cannot consistently deliver. A statewide class action lawsuit against Frontier for failing to provide advertised speeds has attracted hundreds of Frontier customers. The suit maintains Frontier has engaged in “false advertising,” a violation of the state’s Consumer Credit and Protection Act.

Smith introduced the two broadband measures partly out of his own frustration with the company.

Cowles

Cowles

“I regularly conduct speed tests on my Internet connection and the results are laughable,” Smith told his mostly rural constituents. “I’ve had download speeds of around 0.20Mbps. No wonder they’re called Frontier. Those are the kinds of speeds you’d expect on the American frontier in the 17th century.”

Smith recognized some members of his own party will take Frontier’s side over his.

“Of course, my bills don’t go over well with some members of my own party,” Smith said. “But right is right and wrong is wrong.”

On cue, Cowles rushed to Frontier’s defense.

“Frontier has been trying to spend money to upgrade service, but it hasn’t been easy for those guys,” Cowles said. “We’re trying to expand broadband and improve the speeds everywhere we can. We try to nudge Frontier when we can, push them when we can, while we respect their investment.”

A considerable part of that “investment” came at the cost of U.S. taxpayers. Last fall, the U.S. Department of Commerce’s inspector general announced an investigation into how Frontier spent a $42 million federal stimulus grant in the state. The inspector general is reviewing thousands of pages of documents turned over by the company. Critics contend Frontier spent the stimulus funds to defray the cost of a statewide fiber network Frontier now owns and controls.

Cowles told the Gazette that despite the media attention on the issue, he remained unsure if Smith’s bills would ever reach the House floor for consideration.

At least three House members — two Republicans and one Democrat — work for Frontier.

Frontier’s Acquisition of Verizon Landline/FiOS Properties in Calif., Tex., and Fla. Called “Insane”

Frontier Communications today announced a $10.54 billion all-cash acquisition of Verizon’s wired networks, including landline and FiOS properties, in the states of Florida, California, and Texas.

Frontier will acquire Verizon’s wireline operations that offer services to residential, commercial and wholesale customers numbering 3.7 million voice connections, 2.2 million broadband connections, and 1.2 million FiOS video connections. The acquired territory is 54 percent served by FiOS fiber to the home service.

frontier expanded improvement

“This transaction marks a natural evolution for our company and leverages our proven skills and established track record from previous integrations,” said Maggie Wilderotter, Frontier Communications chairman and chief executive officer. “These properties are a great fit for Frontier and will strengthen our presence in competitive suburban markets and accelerate our recent market share gains. We look forward to realizing the benefits this transaction will bring to our shareholders, customers and employees.”

Dan McCarthy, Frontier’s president and chief operating officer, commented, “This transaction is an exciting opportunity for Frontier. We are well-positioned to maximize value for our shareholders and create a great experience for new customers. We have four FiOS markets today from our 2010 transaction with Verizon, and a high level of familiarity with the systems underlying these properties. We plan to flash-cut convert these properties to Frontier’s systems as we did in states including West Virginia and Connecticut.”

frontierBut Frontier’s “flash cut” conversions in West Virginia and Connecticut led to months of serious service and billing problems leading to two state-level investigations into Frontier’s performance. Problems are still ongoing in parts of Connecticut several months after Frontier transferred Connecticut territories from AT&T. Customers in West Virginia continue to criticize Frontier Communications for its underwhelming broadband performance.

Saibus Research, a Wall Street analyst, said they were “stunned” Frontier was repeating the same mistake it made back in 2010 when it acquired other former GTE service areas from Verizon.

“We remembered that its $8.7 billion wireline purchase in 2010 did not work out so well for it,” wrote the analyst. “When we consider that Frontier’s share price declined by nearly 60% from 2010-2012 after the deal closed before recovering those losses since 2012, we were shocked that Frontier’s share price increased by 10.6% in response to its announcement that it was buying assets from Verizon. Frontier’s pro forma revenue has declined by 30% since 2009, its residential consumer base declined by 33%, its operating income declined by 34% and its dividend declined by 60% since then.”

“Albert Einstein said that insanity is doing the same thing over again and expecting a different result and we think that Frontier’s CEO Maggie Wilderotter has come down with a serious case of insanity for her willingness to buy whatever Verizon is selling,” said Saibus Research. “As such, we think income-oriented telecom investors should consider accumulating shares of Verizon, and selling or shorting Frontier.”

Frontier will accumulate billions in new debt to fund the transaction, bad news for legacy Frontier customers still served by the company’s copper wire networks. Frontier hoped to realize $500 million in cost reductions from its 2010 acquisition of Verizon territories in the Pacific Northwest, West Virginia, and several midwestern states. Instead of savings, it ended up spending millions to rehabilitate deteriorating landlines Verizon underinvested in for years. The new unsecured debt load will likely cut into available funds to upgrade older networks, particularly in the northeast and inside New York, Ohio and Pennsylvania.

Frontier will get marginal improvements in programming costs from the greater volume discounts its larger customer base qualifies to receive. But outside of Connecticut (Frontier U-verse) and Washington, Oregon, Indiana and South Carolina (Frontier FiOS), the rest of Frontier’s customers will continue to be offered Dish Network satellite service and various flavors of DSL.

If approved by regulators, the transaction will be finalized in 2016.

California County Goes to War with Frontier Communications; Calls Company Officials ‘Liars’

Phillip Dampier January 7, 2015 Frontier, HissyFitWatch, Public Policy & Gov't 4 Comments
Greenville, Calif. is in Plumas County.

Greenville, Calif. is in Plumas County.

Frustrated officials in Plumas County, Calif. are at the end of their patience with local phone company Frontier Communications.

“You’re lying to me,” Supervisor Kevin Goss (District 2) told representatives from Frontier Communications in the latest heated exchange.

Goss and other community leaders are upset because Frontier is the company most likely to make or break the county’s beautification efforts by placing utility cables underground in Greenville.

County officials are certain they notified Frontier of their intent to transition to underground service throughout Greenville, with the full support of the area’s other utility, Pacific Gas & Electric.

But Frontier officials are now claiming they can’t find the paperwork and are unwilling to invest in the project. If Frontier will not join PG&E, the utility poles will stay in the ground and the project will be canceled.

“We did search all of our records and didn’t uncover any documentation,” said Charlie Born, the manager of government and external affairs for Frontier.

The project had been on the county’s public agenda since 2008.

Plumas_seal“It’s never going to pencil; it’s whether the company will do what’s right,” argued Board chairman Jon Kennedy.

It was the second heated meeting between Goss and Frontier’s representatives.

Frontier claims it was never notified about the extent of the project, despite sending a letter to county officials dated Oct. 1, 2014 where it acknowledged the project and indicated it was willing to talk, as long as “Frontier is not responsible for any costs.”

In November, Goss testily responded to Frontier’s sudden intransigence to cover its share of the underground project, despite being a part of a joint planning process underway for nearly seven years.

“Basically you don’t have any money?” Goss asked two Frontier representatives during a public hearing in front of the Board of Supervisors on Nov. 4.

Born complained the county was asking Frontier to pay $275,000.

“With 10 working lines, that’s about $27,000 per line,” said Born. “This chunk of money is a hard pill to swallow. We choose to put our money into improving services.”

In November, Goss publicly pondered Frontier’s refusal to invest in the project while finding plenty of money — $10 million — to spend on a high-profile campaign with its satellite partner DISH Network that claimed would “invigorate rural communities.”

The Plumas County News noted Frontier’s America’s Best Communities is a multistage, three-year contest that provides $4 million in seed money and other support to assist communities as they develop growth and revitalization plans. The top three communities will receive a total of $6 million in prize money.

Goss read from a statement written by Frontier CEO Maggie Wilderotter introducing the contest.

“Frontier is committed to the small cities and towns we serve, and one of the best ways to demonstrate that is through our new America’s Best Communities prize competition,” read Goss. “I don’t think she’s very committed when the rug is getting pulled out from under us in our small town. It’s frustrating to me; absolutely frustrating.”

The county is now hoping the California Public Utility Commission will intervene, but that has not happened yet, leaving the project in limbo.

“We’ve had no feedback from the California PUC in regard to our concerns with Frontier not financing,” said Public Works director Bob Perreault. “PG&E is in a holding situation and is supportive of the county.”

Cuomo: 100% of New York State Should Have Access to 100Mbps Broadband by 2018

ny broadbandNew York Gov. Andrew Cuomo has set a goal that every resident of New York State should have access to at least 100Mbps broadband no later than 2018.

The governor will kick off his latest broadband expansion effort with the launch of his $500 million broadband expansion program, dubbed the New New York Broadband Fund, a follow-up to the state’s $70 million public-private effort to expand broadband that began in 2012.

Much of the money awarded in the 2012 broadband expansion effort went to Wireless Internet Service Providers, institutional broadband networks, middle-mile fiber projects not accessible to the public, and emergency service network upgrades. Another $5.2 million was awarded to Time Warner Cable to expand broadband service to 4,114 households in the Capital, Central, Finger Lakes, Mid-Hudson, Mohawk Valley, NYC, North Country, Southern Tier and Western regions of New York State. In June, many of the top funding recipients also received honors from the governor’s office in the first annual New York State Broadband Champion Awards.

Gov. Cuomo

Gov. Cuomo

Despite the money, the 2012 effort did not make a significant dent in the pervasive problem of broadband availability in upstate New York.

While Gov. Cuomo is committed to a target speed of 100Mbps within the next four years, more than one million New York households still cannot access broadband that achieves the state minimum — 6.5Mbps. That includes 113,000 businesses.

The governor’s solution is to subsidize private businesses with more tax dollars to resolve the broadband problem, with a significant part of the next round of funding likely to reach more institutional and public safety networks off-limits to the public, middle mile network expansion that can build state-of-the-art fiber rings that do not connect to end users, and an even bigger amount handed to Time Warner Cable (or Comcast if the state approves a merger with Time Warner Cable) and rural phone companies like Frontier Communications. Much of the money awarded to last mile providers like cable and phone companies will placate those that have stubbornly refused to expand further into rural areas unless taxpayers pick up some of the expense.

“In some of these areas, there’s just not a business case for these [service] providers to build out,” said David Salway, director of the New York State Broadband Program office. “The cost far exceeds what the revenue might be for that area.”

An unintended consequence of the broadband funding effort could be taxpayers subsidizing the establishment of for-profit monopolies in rural corners of the state. Although Salway told Capital NY he wanted to make sure New Yorkers had a choice, he clarified he was referring to a choice in technology, not service providers.

twcGreenThat must come as a relief for Verizon. The state’s largest phone company has petitioned state officials in the past for a gradual mothballing of New York’s rural landline network in favor of switching customers to wireless voice and broadband over Verizon’s cellular network. Theoretically, taxpayers could end up subsidizing the demise of rural New York landlines and DSL if Verizon seeks money from the rural broadband fund to expand its wireless tower network in rural New York. Time Warner Cable almost certainly will also seek more funding, probably in excess of the average $1,264 paid to the cable company for each of the 4,114 additional connections it agreed to complete during an earlier round of funding.

While rural broadband remains an important issue in New York, the merger of Comcast and Time Warner Cable is on the front burner and Salway, like the governor, had little to say. But Salway did offer that he did not believe the merger “would reduce [access] as much as further our goal” for expansion.

Guidelines for grant recipients are expected to become available just after the governor’s State of the State presentation in January, with ground-breaking on projects likely to start by mid-summer of 2015.

Frontier Faces Lawsuit in West Virginia Alleging False Advertising, Undisclosed DSL Speed Throttling

The slow lane

The slow lane

Frontier Communications customers in West Virginia are part of a filed class-action lawsuit alleging the phone company has violated the state’s Consumer Credit and Protection Act for failing to deliver the high-speed Internet service it promises.

The lawsuit, filed in Lincoln County Circuit Court, claims Frontier is advertising fast Internet speeds up to 12Mbps, but often delivers far less than that, especially in rural areas where the company is accused of throttling broadband speeds to less than 1Mbps. The suit also alleges Frontier’s broadband service is highly unreliable.

“The Internet service provided by Frontier does not come anywhere close to the speeds advertised,” wrote Benjamin Sheridan, the Hurricane lawyer filing the lawsuit on behalf of three Frontier customers. The attorney is seeking to have the case designated a class action lawsuit that would cover Frontier customers across the state.

“Although we cannot guarantee Internet speeds due to numerous factors, such as traffic on the Internet and the capabilities of a customer’s computer, Frontier tested each plaintiff’s line and found that in all cases the service met or exceeded the ‘up to’ broadband speeds to which they subscribed,” Frontier spokesperson Dan Page told the Charleston Gazette. “Nonetheless, the plaintiffs filed their case in Lincoln County, where none of them lives. If necessary, we are prepared to defend ourselves in court and bring the facts to light.”

Frontier’s general manager in West Virginia, Dana Waldo, may have helped the plaintiffs when he seemed to admit Frontier was purposely throttling the Internet speeds of its customers, a move Sheridan claims saves Frontier “a fortune” in connectivity costs with wholesale broadband providers like Sprint and AT&T.

Sheridan

Sheridan

“If as you suggest, we ‘opened up the throttle’ for every served customer, it could create congestion problems resulting in degradation of speed for all customers,” according to Waldo as part of an email exchange with one of the class members cited in the lawsuit.

The lawsuit also cites a state report issued over the summer that found just 12 percent of Frontier customers receive Internet speeds that actually qualify as “broadband” under federal and state standards. Frontier’s speed ranking is the slowest of any provider in the state. That is especially significant because Frontier is the largest ISP in West Virginia, and is often the only choice rural residents have for broadband service.

Frontier dismissed the state’s report claiming it was based on voluntary speed tests performed by disgruntled customers.

“As we’ve said before, the speed tests are the result of self-selected, self-reported samples,” Page said. “People who take speed tests tend to be those with speed problems or low speeds.”

“Even if that were true, it doesn’t account for Frontier’s poor performance,” said Frontier customer William Henley. “If every person that ran a speed test in West Virginia was annoyed with their provider, Frontier still came in last place.”

Frontier’s competitors scored better:

  • lincoln countyComcast: 88% of customers met or exceeded state and federal standards;
  • Suddenlink Communications: 80%
  • Time Warner Cable: 77%
  • Shentel: 71%
  • Armstrong Cable: 67%
  • LUMOS Networks: 44%

“…Frontier’s practice of overcharging and failing to provide the high-speed, broadband-level of service it advertises has created high profits for Frontier but left Internet users in the digital Dark Age,” Sheridan wrote. “As a result, students are prevented from being able to do their homework, and rural consumers are unable to utilize the Internet in a way that gives them equal footing with those in an urban environment.”

Sheridan also accused Frontier of delivering its fastest speeds only in areas where it faces competition. Where there is none, Frontier can afford to go slow.

But slow speed is not the only issue. One plaintiff — April Morgan in Marion County — says she has to reset her modem up to 10 times a day to stay connected to the Internet. Her modem has been replaced several times by Frontier, but that has done little to solve her problem.

Frontier customers who check the company’s terms of service agreement may question whether Sheridan can get very far suing the company. A clause in the contract states customers must settle disputes only through binding arbitration or small claims court. Individual lawsuits, jury trials, and class-action cases are prohibited.

Sheridan points out customers have to go online to read the agreement – it is not provided to customers signing up for Internet service. A contract that forces customers to agree to its terms without getting informed consent may turn out not very binding under West Virginia law.

Lincoln County Judge Jay Hoke, assigned to hear the case, will likely face that matter in pre-trial motions.

West Virginia residents interested in the class action case can register here for updates.

J.D. Power & Associates Tie Vote! Hemorrhagic Fever vs. Comcast vs. Time Warner Cable

jd powerLove can be a fickle thing.

Take Comcast’s affair with J.D. Power & Associates, for example. In Comcast’s filings with regulators, it is very proud that J.D. Power cited Comcast for the most improvement of any cable operator scored by the survey firm. Comcast touted the fact it had managed to increase its TV satisfaction score by a whopping 92 points and Internet satisfaction was up a respectable 77 points. (Comcast didn’t mention the fact J.D. Power rates companies on a 1,000 point scale or that it took the cable company four years to eke out those improvements.)

Last month, J.D. Power issued its latest ranking of telecommunications companies and… well, the love is gone.

If customer alienation was an Olympic event, J.D. Power awarded tie gold medals to both Comcast and Time Warner Cable for their Kafkaesque race to the bottom.

The survey of customer satisfaction largely found only dissatisfaction everywhere in the country J.D. Power looked. While Comcast likes to cite its “customer-oopsies-gone-viral” blunders as “isolated incidents,” J.D. Power finds them epidemic nationwide.

skunkThe highest rating across television and broadband categories achieved by either cable company was ‘Meh.’ J.D. Power diplomatically scored both cable companies on a scale that started with “among the best” as simply “the rest.” Customers in the west were the most charitable, those in the south and eastern U.S. indicated they were worked to their last nerve.

“The ability to provide a high-quality experience with all wireline services is paramount as performance and reliability is the most critical driver of overall satisfaction,” said Kirk Parsons, senior director of telecommunications, in a statement.

Having competition available from a high-scoring provider also demonstrates what is possible when a company actually tries to care about customer service. In the same regions Comcast fared about as popular as hemorrhagic fever, WOW! Cable and Verizon FiOS easily took top honors. Even AT&T U-verse scored far higher than either cable company, primarily because AT&T offers very aggressive promotional packages that include a lot for a comparatively low price.

Other cable and smaller phone companies didn’t do particularly well either. Frontier and CenturyLink both earned dismal scores and Charter Cable only managed modest improvement. The two satellite television companies did fine in customer satisfaction for television service, but it was the two biggest phone companies that managed the best scores for Internet service. Among cable operators, only independents like WOW! (and to a lesser extent Cox) did well in the survey.

If J.D. Power is the arbiter of good service Comcast seems to claim it to be, the ratings company just sent a very clear message that when it comes to merging Comcast and Time Warner Cable, anything multiplied by zero is still zero.

J.D. Power ranking (Image courtesy: Reviewed.com)

J.D. Power ranking (Image courtesy: Reviewed.com)

Frontier’s Buyout of AT&T Connecticut Rejected By Regulators; Deal Offers Little Benefit to Customers

puraConnecticut’s tough Public Utilities Regulatory Authority (PURA) has rejected a settlement between state officials and Frontier Communications to acquire AT&T Connecticut, saying the deal offers very little to Connecticut ratepayers.

The settlement between Frontier, Connecticut’s Consumer Counsel and the Connecticut Attorney General’s office included commitments from Frontier governing contributions to state non-profit groups, phone rates and broadband expansion.

The Authority was told it could either approve or reject the settlement, but not suggest or require changes. It decided late last week to reject the settlement deal.

The regulator cited several reasons for its disapproval:

  • PURA_new_area_code_mapA landline rate freeze offers little benefit to Connecticut ratepayers because landline rates have been stable for years and any attempt to increase them will only fuel additional disconnections;
  • Frontier’s commitments to improve broadband service in Connecticut are vague, lacking specific speed improvements and rural broadband expansion targets to meet;
  • Frontier attempted to insert weakened rules governing pole inspections, which should be part of a separate regulatory proceeding;
  • The agreement might limit PURA’s ability to launch cost-recovery proceedings and flexibility to maintain oversight over Frontier’s performance in the state;
  • A contractual agreement requiring Frontier to make specific contributions to state non-profit groups is inappropriate and unenforceable;
  • A lack of information about how Frontier and AT&T will collaborate after the transaction is complete, particularly with AT&T’s U-verse offering;
  • No details about how Frontier U-verse intends to handle Public, Educational, and Government Access channels on its television platform;
  • A lack of a detailed disaster preparedness plan from Frontier to handle major service disruptions.

PURA’s Acting Executive Secretary Nicholas Neeley said the goal is to “improve the likelihood of success of Frontier as it assumes the duties, obligations and responsibilities currently held by AT&T in Connecticut.”

“(It seeks to) balance the interests of all parties affected by this transaction, promote competition and preserve the public’s rights to safe and adequate communications services,” Neeley wrote in a public notice. “The Authority hopes that such a session will produce an amended proposal from Frontier that would be deemed acceptable for consideration.”

The rejection also seeks to protect and preserve Connecticut’s regulatory oversight power over Frontier.

Frontier received a better reception from the Communications Workers of America. The phone company has traditionally maintained reasonably good relations with its unionized workforce. CWA approved of Frontier’s purchase of AT&T Connecticut after winning commitments for new union jobs, a job security program, a payout of 100 shares of company stock to each union member, and Frontier’s commitment to prioritize Connecticut-based call centers.

Wall Street is less impressed. This morning, Morgan Stanley downgraded Frontier’s stock to “underweight,” citing complications in the AT&T Connecticut deal and Frontier’s increasing debt load. Frontier is financing $1.55 billion of the $2 billion transaction by selling two groups of senior notes of $775 million each, due in 2021 and 2024. As of June 30, Frontier had amassed $7.9 billion in debt with just $805 million in cash on hand.

Frontier's proposed northeastern service areas would add almost the entire state of Connecticut to its holdings in mostly-rural upstate New York and Pennsylvania and the urban metropolitan Rochester, N.Y. 585 area code region.

Frontier’s proposed northeastern service areas would add almost the entire state of Connecticut to its holdings in mostly rural upstate New York and Pennsylvania and the metropolitan Rochester, N.Y. 585 area code region where the company got its name.

http://www.phillipdampier.com/video/Frontier Communications Connecticut 1-2014.mp4

Frontier Communications introduces itself to AT&T Connecticut customers in this company-produced video. (4:03)

Frontier Files Opposition to Time Warner Cable/Comcast Merger; Harms Video Competition

Frontier used Time Warner Cable's usage cap experiment against them in this ad to attract new customers in the spring of 2009.

Frontier used Time Warner Cable’s usage cap experiment against them in this ad to attract new customers in the spring of 2009.

Frontier Communications has filed a rare objection with the Federal Communications Commission opposing the merger of Comcast and Time Warner Cable, citing concerns the merger would further harm competition and prevent Frontier and other competitors from getting fair access to programming owned by the combined cable companies.

“Comcast’s appetite for market control threatens the competitiveness of the video market,” wrote Frontier. “Comcast is already the largest Internet provider and largest video provider in the United States. If approved, Comcast’s video subscriber base would be approximately 52-times the size of Frontier’s video subscriber base.”

As Stop the Cap! wrote in its own objections to the merger, would-be competitors can and will be deterred from competing for video subscribers if they cannot obtain reasonable wholesale rates for popular cable programming. Currently, the largest providers extend the best volume discounts to the country’s largest satellite and cable operators. They make up those discounts by charging smaller customers higher rates. Frontier, as we noted in our filing, has already experienced the impact of volume discounting in its adopted FiOS TV areas in Indiana and the Pacific Northwest. Losing volume discounts originally obtained by Verizon, Frontier faced substantially higher programming costs as an independent provider — costs so great the company began asking customers to drop its own fiber television product in favor of third-party partner DISH, a satellite provider.

“Small multichannel video programming distributors (MVPDs) like Frontier cannot achieve the scale necessary to drive down programming costs, which are based upon an MVPD’s subscriber totals, to the same levels that Comcast can with this transaction,” noted Frontier. “Further, Comcast would own an enormous share of the “must have” programming that customers demand and could exercise its market dominance to either outright deny such programming to its competitors or to functionally deny the programming by charging exorbitant rates for content.”

“While Frontier continues to grow its subscriber base organically by delivering a quality product in its markets and also by acquiring AT&T’s wireline assets in Connecticut, the cost of content for video programming remains staggering for new entrants that lack the scale and scope of cable companies like Comcast and Time Warner Cable individually, let alone that of the merged entity,” said Frontier. “It is no mere coincidence that AT&T announced its proposed acquisition of DirecTV shortly after Comcast announced its intention to purchase Time Warner Cable. AT&T recognized the need to improve its subscriber scale in order to compete with Comcast on video programming pricing.”

Frontier noted the Federal Communications Commission also expressed grave concerns over Comcast’s ability to affect video competition during its acquisition of NBCUniversal. That merger was approved only after Comcast agreed to several conditions to avoid anticompetitive abuse in the marketplace. But Frontier complained a further acquisition of Time Warner Cable would only exacerbate competition concerns, even as Comcast argues the FCC should not contemplate any further investigation of the subject during its current merger review.

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  • Joe V: You forgot to mention Phil that Comcast as horrible as they are, there's another telecom giant just as bad : AT&T-they also imposed usage-base...
  • lllllll: While yes Google can cause harm right now they aren't the problem. The main Problem is these corrupt ISPs that refuse to upgrade the Network and Expan...
  • Limboaz: Not happy times for Comcrap. Hopefully this signifies a new trend of activism when it comes to regulators overseeing companies that refuse to play fai...
  • Phillip Dampier: We know John Malone and Charter are still very interested, but the last attempt met with a hostile response from TWC management. There will need to be...
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  • lllllll: T-Mobile cut off limit is Somewhere over a few TBs/ Month. Also I'm not in a Semi Rural Area Either. I'm in a decent size City. Data Usage doesn't equ...
  • Phillip Dampier: I think what is unique is that Google can seamlessly switch between T-Mobile and Sprint, which is a good way to deal with both carriers' temperamental...
  • Phillip Dampier: I thought T-Mobile throttled unlimited users if they got 'out of hand', whatever that means. I assume IIIIIII is in a semi-rural area where tower cong...
  • Limboaz: Ironic a mobile phone company can deliver that kind of bandwidth while cable ISPs using a fiber-optic infrastructure have to be so miserly. The cable/...
  • lllllll: I used 321.37GBs last month from my T-Mobile Phone that's Unlimited. It's going to be more this month....
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