Ft. Wayne, Indiana

Outrage over enormous price increases for Frontier’s fiber optic television service in Indiana are being met with little more than a shrug of the shoulders by one company executive, who seemed to dismiss as an afterthought the state-of-the-art FiOS network it acquired from Verizon.

Frontier Communications’ president of its Midwest division, Don Banowetz, has been making the rounds with Fort Wayne-area reporters over news the phone company intends to boost prices for its FiOS TV service by $30 a month for most customers.

But Banowetz has done little to defend the price increases or the fiber network the company acquired with its purchase of landlines from Verizon.

“Look, we bought the whole company, right? All the assets. The FiOS part was part of that, so it was part of the deal,” said Banowetz.  “We couldn’t ride the previous arrangement. So in essence, it was what it was.”

WANE-TV reporter Aishah Hasnie seemed stunned with Banowetz’s response, finally asking what customers should do if they can’t afford the rate increases.

“Get DirecTV,” came the reply.

Starting February 18th, customers who subscribe to a FiOS TV basic package will see their rates go by up $12 per month. Customers who subscribe to other FiOS TV packages will see a $30 increase. The increase does not affect customers under a price protection plan.

That kind of price increase would normally provoke blanched faces in a corporate boardroom over fears of a mass exodus of customers.  But not Frontier.

“The FiOS TV part of our business is actually a very small part of our business. It’s about three percent of our revenues,” said Banowetz.

But Frontier’s satellite package, pitched as an alternative, brings plenty of tricks, traps and other hidden fees inside the box.  In addition to signing a two-year service commitment with DirecTV, customers also have to sign a three-year “price protection agreement” with the phone company, which is another way of saying “contract.”  The total price adds up:

• Customers opting for Frontier’s “free TV” promotion will face a three-year contract term with a $400 early cancellation fee;
• Frontier’s satellite TV promotion has a three-year contract term with a $300 early cancellation fee;
• “Care and handling” fees amounting to $69.99 apply to the “free TV” offer;
• A $34.99 Frontier “video setup fee” applies to customers getting satellite service from the phone company;
• DirecTV requires customers to pass a credit check and sign a contract with a 24 month commitment;
• If you change any aspect of your programming package, you may forfeit the “free service” offered as part of the promotion.

In northwest Washington state, Frontier’s rate increases are alienating the company with one member of the state’s congressional delegation.

U.S. Representative Rick Larsen (D-Wash.) sent a letter to Frontier complaining about the huge rate hikes, telling the company it needs to find better alternatives for many of his constituents who cannot install a satellite dish.

“Folks in Northwest Washington are concerned about the future of cable service offered through Frontier Communications, and rightly so,” said Rep. Larsen. “I am calling on Frontier to offer consumers better and more affordable options for cable service in the region.”

Rep. Larsen’s letter to Frontier Communications:

Dear Mr. Mason:

I am writing to express concerns that I share with many of my constituents in Northwest Washington about Frontier’s plans for cable service in our region. The Everett Herald recently published an article, “Switch to a Dish or pay more, Frontier tells FIOS customers,” that highlights some of the problems that people in Northwest Washington have with Frontier’s announcement that it will alter the existing framework of its fiber-optic television service. Specifically, Frontier’s decision to offer its customers a choice between continuing with their current FIOS television service—with a rate increase of 46 percent or switching their cable television service to the satellite provider DirecTV.

I am concerned with Frontier’s decision to substantially raise its cable television rates for its existing customers in the Pacific Northwest. Last September, Frontier Communications Chief Executive Maggie Wilderotter was quoted in The Oregonian newspaper stating that Frontier would distinguish itself from larger cable companies by holding down prices for its customers. I find it troubling that less than six months later Frontier is dramatically raising its cable television rates.

Additionally, it is problematic that Frontier has not offered an adequate alternative to those customers who live in apartment complexes where the installation of satellite dishes is prohibited and therefore cannot take advantage of the option to switch their cable service to DirecTV. — Rick Larsen, United States Representative, Washington State, 2nd District

Stop the Cap! reader John says he has sent a letter to CEO Maggie Wilderotter protesting the rate hikes and imploring the company to find a programming co-op to join.  Smaller providers need not pay “rack prices” for cable programming.  Municipal providers, family owned companies, and small independent cable operators have enjoyed substantial programming discounts through group buying power.  Frontier apparently is trying to negotiate for video programming on its own, a fatal mistake that has brought on this month’s rate hike.

If you want to help educate Frontier about how to run their business properly, here is their contact information:

Frontier Communications Corporation
3 High Ridge Park
Stamford, CT 06905-1390
Phone: 203-614-5600
Fax: 203-614-4602
[email protected]

When writing or calling, don’t forget to tell them to abandon their Internet Overcharging schemes — no usage caps or limits on Frontier broadband, or you will take your business somewhere else.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WANE Fort Wayne Frontier Frustration 1-24-11.flv[/flv]

WANE-TV in Fort Wayne delves into Frontier Frustration as angry customers react to news of enormous rate increases.  (2 minutes)

WBTW's Marshall Staton snapped this picture of Frontier's oversized "donation" check, which was actually a payment made in lieu of taxes.

When is a charitable contribution not charity?  When it is made in lieu of paying taxes to a local community.

Frontier Communications milked publicity for its $300,000 check presented to Horry County, S.C., officials Friday, designated to help build the Myrtle Beach International Technology and Aerospace Park.

Frontier’s Ken Arndt, president of the company’s southeast region was on hand to deliver the super-sized check.

“Our contribution recognizes the County’s technological foresight and leadership,” Arndt said .  “Frontier is committed to offering the best in residential, business and enterprise communications to the communities it serves and will continue our community support as our business grows in Myrtle Beach and South Carolina.”

If Arndt graciously told Horry County officials it was nothing, he meant it.

Through the Rural Development Act, companies are allowed to make a contribution to the counties they serve instead of turning those funds over to tax collectors.

Horry County plans to break ground on the park in the spring, hoping to have the high-tech business park up and running by the fall.

[flv]http://www.phillipdampier.com/video/WOWK Charleston Frontier vs CityNet Pt 1 12-11-10.mp4[/flv]

DecisionMakers: Frontier vs. Citynet, Part One  (10 minutes)

Bray Cary

Bray Cary, who runs a Sunday news-talk-interview show on his network of West Virginia-based television stations, turned his attention back to the mediocre broadband picture across the state.  Once again, the “free market can do no wrong”-host showered attention and praise on Frontier Communications for their promises to improve West Virginia’s bottom-of-the-barrel rankings in broadband adoption, availability, and speed.  Only this time, one of his guests took him to school on why Frontier Communications is not the state’s broadband savior.

In this round, Cary invited Frontier’s senior vice president Dana Waldo and Citynet president and CEO Jim Martin to discuss where the state’s broadband is today and where it is going tomorrow.

The community of French Creek can't get Frontier broadband even after promising the company dozens of new broadband customers.

Cary wears his opinions on his sleeve, and he’s no fan of the Obama Administration’s broadband stimulus program, believing private companies will deliver West Virginia from its broadband doldrums. That’s wishful thinking Cary can afford as he browses the web from well-wired cities like Charleston.  But if you live in a community like French Creek in Upshur County, that talk isn’t going to get you broadband from Frontier or anyone else.  Stop the Cap! has heard from residents in the community who have delivered petitions from dozens of residents ready and willing to sign up for -any- broadband service, but Frontier hasn’t responded.

Martin opines that as long as stimulus money is available, using it to get the best bang for the buck could improve service for residents from the Panhandle to the Virginia border, instead of simply improving Frontier’s bottom line.

Cary did seem concerned that Frontier was ill-equipped to deliver service to all residents, regardless of cost.

Martin argues Frontier’s broadband network will do nothing to stimulate competition and bring better service.  Martin wants funds redirected into a robust middle-mile statewide backbone, preferably fiber-based, that is open to all-comers at reasonable wholesale pricing.  Citynet has been aggressively complaining about broadband stimulus grants in the state which seem to benefit a handful of companies and projects that don’t actually result in service to individual residents.

The reality is, Cary’s “free market” approach will not deliver service to tens of thousands of West Virginians who will never get wired because of “return on investment” requirements for service in the mountainous state.  Martin’s middle-mile mentality won’t bring access to the last mile, critical for wiring individual homes, either.  But one thing Martin does see that Frontier doesn’t — fiber is the future.

There is a third way to get service without waiting from Frontier’s 1-3Mbps service with an Internet Overcharging scheme or Martin’s middle-mile network that goes past your home but never stops there — petition your local government to empower itself and build a community-owned network that answers to residents, not to Frontier’s dividend-obsessed shareholders.

[flv]http://www.phillipdampier.com/video/WOWK Charleston Frontier vs CityNet Pt 2 12-11-10.mp4[/flv]

DecisionMakers: Frontier vs. Citynet, Part Two  (9 minutes)

Frontier used Time Warner Cable's usage cap experiment against them in this ad to attract new customers in the spring of 2009. Now they're no better.

Stop the Cap! reader Mike in Elk Grove, California reports his departure from Frontier Communications carried a goodbye kiss he’ll not soon forget: a $680 final bill made up primarily of early termination fees:

“I just got my Frontier bill after canceling (they canceled me because I ported my number to another provider),” Mike writes.  “The bill cycle was through 2/14/2011 (my contract ends on March 6, 2011).”

The bill was for $679.72.

More than 22 months into his 24 month contract, Frontier charged him early termination fees at the same rate he would pay if he departed 14 days into his term:

• High Speed Internet Loyalty Fee: $200
• Netbook Term Fee: $300
• California Unlimited Term: $200

The only reason his final bill was not higher is that he received some service credits for the partial month he was not their customer.

Needless to say, Mike is livid.  He is one of several Sacramento-area customers who received letters from Frontier threatening to terminate his Internet service if he did not reduce his usage.  When Mike ultimately decided to reduce his usage to zero and switch providers, Frontier dumped every termination fee it could find on Mike’s final bill.

But before Mike opens his checkbook, he (and any other customer gouged with early termination fees) should remember this:

Frontier cannot bill you early termination fees and expect to be paid when they unilaterally changed the terms of the contract.

From Frontier’s Terms and Conditions for High Speed Internet:

Our Right To Make Changes

UNLESS OTHERWISE PROHIBITED BY LAW, WE MAY CHANGE PRICES, TERMS AND CONDITIONS AT ANY TIME BY GIVING YOU 30 DAYS NOTICE BY BILL MESSAGE, E-MAIL OR OTHER NOTICE, INCLUDING POSTING NOTICE OF SUCH CHANGES ON THIS WEB SITE, UNLESS THE PRICES, TERMS AND CONDITIONS ARE GUARANTEED BY CONTRACT. YOU ACCEPT THE CHANGES IF YOU USE THE SERVICES AFTER NOTICE IS PROVIDED.

When Mike (among others) signed up for Frontier service, their broadband service did not carry any usage limits.  Frontier’s “price protection agreement” claims it will “lock in” your current price.  But Frontier violated their own contract when they sent letters to customers threatening to terminate their broadband service for using Internet service that had no specified usage limit and demanding they pay a higher price of up to $250 a month to continue service.  So much for “price protection.”

You are not obligated to accept Frontier’s unilateral action and can notify the company they have made a “materially adverse” change to your contract by specifying that you exceeded a never-defined usage limit (100GB), and that the company sought a price increase ranging from $99-250 to continue service with them.  If you exceeded 100GB a year ago, you would not have received this letter.  Today you will — and that is a change you need not accept.

Frontier defaulted on their obligations to you as a customer, and your recourse is to cancel the contract, penalty-free.

Frontier Communications’ outrageous term contract fees were precisely what got the company in hot water with the New York State Attorney General in 2009, and the company settled charges with refunds and waivers for those unjustly billed cancellation fees Frontier was not entitled to receive.  Apparently they have not learned their lesson.

Your response:

1. Send a registered, return receipt requested letter to Frontier notifying them under the terms of their own contract, you do not accept the changes outlined in their letter limiting your broadband service.  Your original contract with Frontier did not include a specified usage limit and now using more than 100GB results in a request to pay more or reduce usage.  That represents a “materially adverse change” in your agreement.
2. Under these conditions, you are exercising your right to depart, penalty-free, from your term contract with Frontier Communications.
3. Warn Frontier that any attempt to collect early termination fees or other cancellation fees will result in civil action appropriate to protect your credit rating and will trigger a complaint with the California Attorney General’s office.
4. Keep copies of all correspondence and record dates, times, and names of any representatives you speak with, as they will be helpful in any official investigations that follow.
5. Also be sure to proceed with the terms found on the back your Frontier bill to protest erroneous charges, preferably in writing.  You want a paper trail and you want to protect your credit rating from any adverse collection activity.

Mike has already contacted local media about his case, which is a smart idea.  Warning other consumers about the potential costs of doing business with Frontier is likely to only further deteriorate their reputation in the Elk Grove area.  Alienating and overcharging your customers is a great way to get them to share their story with as many people they can find, and that only makes a bad company look worse.

[flv width=”360″ height=”240″]http://www.phillipdampier.com/video/WROC Rochester Frontier Flagged for Not Telling Customers About Fees 10-5-09.flv[/flv]

WROC-TV Rochester reported back in October, 2009 that Frontier was on the hook for hundreds of dollars in refunds to some customers. (2 minutes)

Talk. Watch. Surf. Cancel. -- Major price increases on the way for Frontier FiOS customers in Indiana.

When is a rate increase not just a rate increase?  When it’s also “an attractive offer.”

Frontier Communications is getting heat from consumers in Fort Wayne, Ind., with news their Frontier FiOS TV bill will skyrocket $12-30 higher in the coming month.

To distract from the disaster-in-the-making, Frontier representatives are waving shiny keys to customers preparing to depart, trying to “upgrade” Indiana residents back to satellite TV.

Don Banowetz, president of Frontier’s Midwest division, told Fort Wayne customers he was personally excited by the satellite offer, because customers can get free programming services for the remainder of 2011, a $700 value according to Banowetz.

“It’s not just a price increase, it’s an offer — a quite attractive offer,” Banowetz told INC Now.

Frontier is also pitching a free 32-inch “web-capable” digital television for customers signing an extended length contract.

Frontier says these televisions are going to revolutionize the way Americans watch TV over the next five years, and they believe their offer will be well-received by customers.

Not so much.

"It's not just a price increase, it's an offer!"

“I’ll bet their letter will leave out the part about how Frontier rations the Internet to their customers,” writes Fort Wayne resident Irv, who has been closely following Frontier’s Internet Overcharging antics in the Sacramento area.  “Will the coin slot be on the top or side of their television, because after you start watching, you’ll have to start paying.”

Frontier has sent letters to customers in Minnesota and California demanding up to $250 a month for residential broadband access because they used the company’s DSL service “too much.”

“Who wants to sign a two or three contract with Frontier, raise your hands,” Irv asks.  “They have just destroyed their FiOS TV service in Indiana — my fingers couldn’t dial the cable company fast enough as I take my business somewhere else.”

Another Fort Wayne resident — Nick Behm, has been following Stop the Cap! ever since Verizon announced it was selling Ft. Wayne’s phone lines to Frontier.

“You guys had this company nailed — Indiana’s regulators should hire you folks and some other actual consumers to review these deals before they get rubber-stamped, because Frontier is going to put themselves out of business and risk landline service throughout our area,” Behm writes.  “How can you ruin a fiber service that sells itself?  Let Frontier run it.”

Neither Behm or Irv will be taking up Frontier’s offer, although Behm still has a term contract of his own — with Verizon.

“I am protected from Frontier’s cash grab for several more months, so at least I have time to prepare for the forthcoming cancellation — bye, bye Frontier.”

[flv width=”432″ height=”260″]http://www.phillipdampier.com/video/INC Now Ft Wayne New Charges for Frontier Customers 1-18-11.mp4[/flv]

INC Now delivers the bad (and according to Frontier – good) news to Fort Wayne, Ind., FiOS TV customers — your rates are going up as much as $30 a month.  (1 minute)