Ann Burr, chairman and general manager of the Rochester division of Frontier Corporation, wrote a Letter to the Editor in this morning’s Democrat & Chronicle, claiming the company’s usage caps and limits were “rumors” and untrue.

Broadband usage won’t be limited

The popularity of the Internet continues to grow. Today, the average residential customer on Frontier’s network uses 1.5 gigabytes of bandwidth each month. A smaller percentage of heavy users may consume as much as 1,000 times that amount. All customers, urban and rural, should have choices based on their individual use. Beginning next year, Frontier will provide customers with tools to measure their bandwidth usage. We believe customers should be in control and pay only for the bandwidth they need. If a customer needs capacity for streaming video or simple e-mails, customers will have a choice of plans.

There are rumors that Frontier plans to limit bandwidth usage. That is not true. We do not limit or control bandwidth consumption. We believe in providing the best Internet experience with a dedicated line to each customer. Frontier customers want reliability, choice, and most of all, value for all of their Internet needs, large and small. We strive to bring innovative solutions to our customers every day.

ANN BURR
ROCHESTER

The writer is chairman and general manager, Frontier Communications of Rochester.

Burr should fully be aware her company is not the victim of some Internet rumor and smear campaign.   As StoptheCap! has documented since this summer, Frontier’s public relations crisis is one of their own making, starting with the company’s unreasonable definition of reasonable use at just 5GB per month, comparable to most mobile telephone data plans.   The company’s own acceptable use policies gave them the right to terminate accounts that exceeded their definition of reasonable use, not to mention what other costs may eventually be imposed for those that exceed that definition.

We will be publishing an expanded rebuttal to this letter here shortly.   A much more limited response may be published in the Democrat  & Chronicle.   Eager readers who don’t want to wait can simply click the Frontier category and review our entire collection of reports on Frontier’s debacle and see the ever-evolving positions of this company and decide for themselves whether Frontier is the victim, or their customers are.

BREAKING NEWS: Frontier Communications has modified their position on the 5GB usage cap yet again.   Your pushback on this unjustified 5GB monthly usage cap has continued to make a real difference in getting company officials to listen to reason.

Frontier’s website has been changed again, now deleting the portions of their DSL sales pitch which used to reference “5GB” of included access per month.   Additional changes have been made to their terms and conditions pages.   Still present in Frontier’s Residential Acceptable Use Policy is the language which defines their usage cap at 5GB per month, although they don’t formally call it that.   Instead, they consider 5GB to be a “reasonable” amount of usage, and reserve the right to terminate accounts that exceed it.   However, some other language has been introduced as Frontier backs off from implementing their cap formally:

The Company has made no decision about potential charges for monthly usage in excess of 5GB.

Company officials have repeatedly said they will not penalize customers who exceed the 5GB “reasonable” level they define in their Acceptable Use Policy, which is to be commended.   But as Frontier Communications has been continually modifying their position on the cap issue in general, both in comments to reporters and on their website, customers have no guarantees what they insist today won’t be much different tomorrow.

StopTheCap! calls on Frontier to do the right thing and remove this entire “5GB” section of their Residential Acceptable Use Policy altogether.   It is this language upon which the entire 5GB usage cap debacle was built, and Frontier can show its good faith by eliminating it from their website  if they truly want to put customers at ease.

We have also learned that Frontier has taken another piece of our advice: to launch a campaign to better educate and inform their customers about how bandwidth is utilized, and ways they can reduce their usage voluntarily.

StopTheCap! strongly believes that consumers are willing to review what they are doing with their Internet connections and will reduce usage voluntarily if they understood how certain applications can consume bandwidth even if they don’t seem to be running.   And it’s a win-win for customers who wonder why their Internet connection seems so slow without realizing someone in the house is running a torrent server 24/7, or has a computer infected with a virus that is churning out millions of spam e-mails without the owner even realizing it.

Treating your customers right means allowing them to  take advantage of the myriad of new applications and features a broadband experience can provide, without a draconian limit on that usage.   And customers have a responsibility to better understand what they are running on their computers.

There are several additional developments about Frontier’s 5GB usage cap, and we’ll be publishing a roundup of the latest news, including your comments and what company representatives have been telling you, shortly.

This remains a developing story.

Reuters reported this week that a wave of consolidation in the rural telephone marketplace is about to begin as telephone companies fight  continued declines in the telephone access line business.

The biggest target for a takeover?   “Frontier Communications,” says Stanford Group analyst Michael Nelson. “They’re really the only one that would move the needle significantly,” he said.

Frontier targeted for takeover?

Frontier, based in Stamford, Connecticut, is the nation’s fourth largest independent largely-rural telephone company, with 2.3 million telephone lines.

In the market for merger opportunities, and speculated to be looking  closely at Frontier, is Little Rock, Arkansas-based Windstream Communications.   Windstream, the nation’s second largest rural telephone company, announced it was aggressively interested in pursuing merger opportunities.

Little Rock-based Windstream Communications seen as likely suitor for Frontier Communications

Windstream’s takeover of Frontier is seen  by some industry observers as practically a done deal.  

Nelson sees a Frontier deal in about six months, costing Windstream $9 billion, including the assumption of about $4.6 billion in debt.

Big deals that maximize cost savings would make sense for Windstream, according to Jefferies analyst Jonathan Levine, who said closing even small deals require a lot of money and time as they involve reviews from the regulators of each state where the target companies have operations.

“I think they’re going to probably look at some of the larger players,”  Levine told the Reuters wire service.

Windstream's Broadband Promotional Pricing for 12 Months

Such a merger would likely leave Windstream in charge of the merged company.   Windstream has aggressively deployed broadband DSL services into their rural service areas, with speeds dependent on the infrastructure available in different areas.

Windstream has no plans to implement usage caps on broadband customers at this time, nor does it charge customers for company-supplied modems.   It is too early to speculate about the impact a merger would have on existing Frontier employees.   Windstream already provides customer and technical support from call centers in India and Georgia and has a track record of eliminating or reducing staff at  call centers formerly run by its acquisition targets.

Windstream's coverage area, providing local phone service in 16 states

Windstream was created primarily from the old Alltel network of local telephone companies, mixing in customers from VALOR/GTE Southwest, GTE Georgia, Standard Group, Aliant, and CT Communications.   From a series of acquisitions, it rebranded itself as Windstream Corporation in 2006, dropping the Alltel name.

Consolidation is expected to become a growing factor in the independent telephone company marketplace, as companies face significant challenges from cable systems and wireless phone companies.

The nation’s number three independent telephone company, CenturyTel of Monroe, Louisiana, may also be interested in  Frontier, and could spark a bidding war  for Frontier’s assets.    CenturyTel is also reportedly looking at  Iowa Telecom or Consolidated Communications as potential merger targets.

Only one independent telephone company, the nation’s largest, Embarq, spun off by Sprint-Nextel, is not likely to be in a position to begin a shopping spree.   Analysts report the company’s poorly positioned to embark on a merger adventure because of the company’s perceived lower value.   Analysts have urged Embarq to begin cost-cutting and improve earnings.

Frontier Communications stock has been progressively increasing in value since merger speculation began.   The company is currently trading at 12.72 per share.

Frontier to limit Internet usage

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p class=”storyheadline”>By Tom Grace
Cooperstown News Bureau
The Daily Star (8/16/08)  

Beware, downloaders: Frontier Communication Inc. plans to meter your Internet usage.

Company spokeswoman Karen Miller said Friday that the telecommunication firm plans to limit its customers’ free Internet usage to five gigabytes a month in 2009.

If you download more, you’ll pay more.

“As it stands now, five gigabytes will be free and there will be a tiered system for those who use more,” she said.

Miller said the company, which has many customers in Chenango County, is going to charge for usage “to make the heavy users pay their fair share.”

Asked if five gigabytes a month made one a “heavy user,” Miller said, “Our customers, on average, use 1.5 gigabytes a month.”

Those who use the Internet a lot are a source of concern because they force the company to spend money on its infrastructure to expand its capabilities, she said.

Frontier, a communications giant that operates in 24 states, is now notifying its customers of the coming change: Paying by the gigabyte.

One such customer is Elizabeth Ramsey of Treadwell, who has opted to drop Frontier’s DSL service in protest.

“Five gigabytes is ridiculous; it’s really a backdoor way of ending ‘Net Neutrality,”’ said Ramsey, a retired Time Warner employee.

Ramsey, who has no television, likes to use her computer to watch movies downloaded from the Internet.

“With five gigabytes, they’re limiting you to watching four two-hour movies a month,” she said. “And then, they’re going to charge you more, even though you’re already paying $88 a month for phone and Internet?”

Ramsey said she’s decided to downgrade to dial-up service and get her classic movies another way until the company relents and maintains the value of its DSL service.

The issue of limiting free Internet usage by American Internet service providers has led to the formation of consumers’ groups such as Stop The Cap, at www.Stopthecap.com, and international media coverage.

Read more…