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Frontier Announces Stunning $30 Monthly Rate Hike for Basic Fiber TV Service in Oregon, Washington

Phillip Dampier January 5, 2011 Competition, Consumer News, Frontier, Verizon 5 Comments

"Too rich for my blood."

Former Verizon FiOS customers now served by Frontier Communications in Oregon and Washington are receiving word of astonishing rate increases of as much as 46 percent from the phone company.  The massive rate increase is being blamed on “increasing programming costs” charged by the cable networks carried on a cable system that competes with Comcast, which charges far less for the same channels.

Frontier’s rate hikes are so dramatic — $30 a month for the popular standard 200-channel package, some customers are wondering whether the company is trying to sabotage their own fiber-to-the-home service.

“They sent us a rate increase letter stating our former standard package, priced at $65 a month, is now going up to a ridiculous $95 a month for basic cable,” says Tom, a regular Stop the Cap! reader. “That’s a rate increase only my health insurance company could love.”

New customers face the new rates immediately, but existing customers have until Feb. 18 before the new high price kicks in.  Many are preparing to move back to Comcast, which raised rates this year as well — but is now a relative bargain at $63 a month for a similar package.

“As much as I love FiOS, Frontier has managed to screw it up as badly as the rest of their services and now I am going back to Comcast,” Tom says. “You have to wonder if they are purposely incompetent or if it’s part of a larger plan to sabotage the Verizon FiOS network they inherited.  Either way, they’ve priced their service out of the market.”

When Tom called Frontier to complain, the company offered to rip out the advanced fiber network Verizon installed and stick a DirecTV satellite dish on his roof instead.

“Frontier is a real ‘Back to the Future’ kind of company — they just don’t get it,” Tom said.  “The operator actually told me she couldn’t understand why I would want to cancel service.”

Customers receiving new customer promotional discounts will get a real case of sticker shock when Verizon’s original promotional rates reset to Frontier’s new regular price.

“Washington County better beef up their hospitals because there are going to be a lot of heart attacks when that bill arrives,” Tom says.

The Oregonian newspaper reports customers are not the only ones to be shocked by Frontier’s enormous rate increase.  Regulators promised more competition and cheaper prices as part of Frontier’s purchase of Verizon landlines feel had as well.

“[Frontier’s rate hike] is essentially a white flag surrender and an exit from the head-to-head video competition,” lamented David Olson, director of the Mt. Hood Cable Regulatory Commission.

That’s a far cry from what Frontier Communications CEO Maggie Wilderotter told the newspaper in September when asked if the company would raise FiOS rates.

“That is not our plan. If I look across the board at our basic service pricing, I don’t think we’ve raised prices anywhere in the last four or five years,” she said.

The Oregonian quotes a Frontier representative who says the company’s relatively small customer base disqualifies them from volume discounts Verizon used to receive.

“Part of the challenge we have, compared to other providers, is that our footprint is so small,” said Frontier spokeswoman Stephanie Beasly. “They’re able to spread it out over a much larger customer footprint.”

That can’t be the whole story, said Fred Christ, policy and regulatory affairs manager for the Metropolitan Area Communications Commission, which regulates cable TV in Washington County.

“There’s more to it than programming costs. Anybody in the industry can pretty much figure that out. What more there is, we don’t know yet,” he said. “Unless programmers are trying to run Frontier out of business, why would they jack their rates that much?”

Smaller companies like Frontier generally do not try and buy programming on their own, but join group-purchasing plans like those offered by the National Cable Television Cooperative.  Municipal providers routinely purchase programming at substantial discounts.  It is not known if Frontier is a member, but they could be.

Frontier’s New Rates for FiOS in Washington/Oregon (courtesy: The Oregonian)
  • Basic local service package, with local broadcast stations: Rises from $12.99 to $24.99
  • FiOS TV Prime HD (220 channels, including the most popular sports and entertainment networks): Rises from $64.99 to $94.99
  • FiOS TV Extreme HD: Rises from $74.99 to $104.99
  • FiOS TV Ultimate HD: Rises from $89.99 to $119.99.

No rate increases are planned for broadband or telephone service.

Verizon FiOS pricing increased at less than half the rate Frontier will demand from subscribers in 2011. (Source: Metropolitan Area Communications Commission, Tualatin Valley, Ore.)

Currently there are 5 comments on this Article:

  1. JoeIllinois says:

    Your point is valid about group-purchasing, but doubt that Frontier (a telephone company) would be accepted into the National Cable Television Cooperative. NCTC is a programming and hardware purchasing coop for Cable TV system operators.

    Would think that other purchasing coops are out there.
    Don’t know if Fiber to the Home Council or the American Cable Association offer group-purchasing for programming. Both groups would seem a better fit for Frontier.

    Small telephone companies throughout the US are gradually upgrading to fiber, and offering Pay TV. Doubt that they are charging rates this high.

    Regardless, the dramatic rate increase is out-of-whack, compared to others this year. Frontier doesn’t seem as if they have done their homework on budgets, planning, public relations, or vendor negotiation.

  2. Scott says:

    Between this and attempting to charge $99+ a month for 1.5mbit DSL or impose 5GB usage limits it seems like Frontier is determined to destroy their own company by driving away all their customers. Such drastic price increases nearly twice their competition is insane.

  3. Curious.. says:

    I’m not a fan of Frontier, but don’t you find it odd that a majority of the companies that have purchased a former Verizon “asset” has had to file Chapter 13; is insolvent; or has had to make moves like Frontier has announced?? I don’t know the answer, but if it walks like a duck & talks like a duck…. ?? Any thoughts/insight from anyone?

  4. Andrew says:

    For anyone who is stuck in a contract dont let that stop you from changing. I know i was price protected but i have had it with the customer service anyway. My friend just got me out of mine and into a pretty good package with a competitor (he works for them). I can get you in touch with my friend or you can do your own research. There ARE options out there.

    if you want to talk to him here is my email
    [email protected]

    PS, please title it frontier sucks or i might just delete it.

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