Don’t want blazing fast fiber optic broadband speeds?  Unhappy with fiber optic quality video and want to go back to putting a satellite dish on your roof?  If the answer to either question is “yes,” Frontier Communications has good news for you.

The phone company, which assumed control of a handful of communities formerly served by Verizon’s fiber-to-the-home FiOS network, has announced it will begin marketing DSL and satellite TV services to its fiber customers.

Frontier CEO Maggie Wilderotter told investors on a third quarter results conference call that FiOS broadband could be too expensive.

Wilderotter noted Verizon would not allow customers in a FiOS neighborhood to buy DSL service, which leaves budget-minded customers behind.

“Now, FiOS starts at like 50Mbps and it’s very expensive. It’s like $50 a month for a customer. So they left a whole host of customers behind from an affordability perspective who didn’t need that kind of capability on broadband.” Wilderotter explained. “We have just over the last 30 to 60 days opened up DSL in all of the FiOS markets to give the customer choice. So the customer can choose whether they want FiOS broadband or they want high-speed Internet service, typically, and in those markets we’re offering around 6 to 7Mbps.”

Time Warner Cable occasionally runs promotions helping customers break free from Frontier's multi-year service contracts.

Of course, Frontier FiOS starts at 15Mbps — not 50, and that costs $50 a month for standalone service.  For $99, ($89 in Verizon FiOS areas), customers can get broadband, cable TV and unlimited phone service.  Frontier’s “Turbo” DSL service is priced at $40 a month for up to 7.1Mbps service.

Wilderotter also noted their FiOS customers can also choose to skip fiber video and go with DirecTV.

“We think that customers should be able to choose what kind of video they want,” she said. “We have aggressive offers in the market for both DirecTV and for FiOS video, but in our vernacular, what we care about is keeping the customer, getting the customer to take more products and services from us and making sure the customer is happy with the choice.”

Wilderotter said Frontier is prepared to tolerate more congestion on its DSL circuits than Verizon permitted, which opens the door to potential traffic slow-downs down the road.

“We’ve opened up in many of these locations the opportunity to sell high-speed service up to 95% capacity on the equipment that we have out in the field. Verizon had set a parameter at 75%,” Wilderotter said.

The company continues to study whether Frontier FiOS is worth maintaining or expanding outside of the Verizon territories where it was originally constructed.

“We are still evaluating it from a financial perspective and a customer perspective, and from a cost perspective and a revenue perspective,” Wilderotter told investors. “In terms of what that does for us overall, what it does for churn, how much does it really cost to extend this capability in the markets that we’re in today — we think that analysis and evaluation will go on through the first quarter [of 2011] and then we’ll be able to make some [decisions] in terms of what we want to do with FiOS from an expansion perspective or a maintenance perspective.”

Frontier Communications CEO Maggie Wilderotter answered questions about broadband expansion and the impact of the fall elections on telecommunications policy in Washington. (11 minutes)
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Frontier's largely rural service areas provide a captive audience for the company's DSL broadband service.

In the near term Frontier has several plans to get more aggressive in the marketplace to meet its target goal of losing only 8 percent of their customers per year — a goal that illustrates legacy phone companies are still on a trajectory towards fewer and fewer customers:

1. Don Shassian, executive vice president and chief financial officer of Frontier reports expansion of DSL remains a top priority for Frontier.  The company is on track to deliver access to 300,000 additional homes by the end of the year.  Verizon delivered access to 64 percent of Frontier’s acquired territories.  Frontier wants to get that number up to 85 percent.  But part of that target is not just expanding service to unserved areas.  It’s also trying to win back customers lost to other providers through promotions and incentives.
2. Frontier plans to resume aggressive promotions in the coming weeks and months, including its “free Netbook” promotion, which provides a Netbook computer to new customers signing up for several packages of services, committing to remain with Frontier for at least two years.
3. Frontier intends to push “price protection agreements” on as many customers as possible.  Their “Peace of Mind” program locks customers into multi-year contracts with stiff cancellation penalties.  Wilderotter noted: “I think, as you know, in our legacy markets, 96% of all of our sales are on a price protection plan and we have close to 60% of our residential customers on a one-, two- or three-year price protection plans. That number is below 15% in the acquired markets. So we’re also driving for price protection plans with every sale that we’re doing in these new markets as well.”  Such contracts dramatically discourage a customer from disconnecting Frontier, because fees for doing so can exceed $300 in some cases.  Frontier has been heavily criticized by some customers and State Attorneys General for deceptive business practices regarding contracts.

Frontier continues to enjoy a lack of solid cable competition in its largely rural service areas.  Shassian reports Comcast competes with Frontier in only about 32% of homes in some areas, Time Warner Cable in about 23%, and Charter below 15%.  With reduced competition, Frontier often represents the only broadband option in town.

Frontier is also spending an increased amount of time coping with copper thefts, especially in West Virginia where the company is warning would-be thieves it will prosecute to the fullest extent of the law.

“Damage to our facilities can affect communications access in an emergency, increase company costs and consumer rates, and disrupt community phone and broadband connections,” said Lynne Monaco, Frontier’s Director of Security. “When network connections are severed by copper thieves, it endangers customers and emergency responders and poses significant risks of personal injury and property damage.”

Just last week, West Virginia state police solved another copper caper that disrupted service for some customers.

The Charleston Daily Mail reports:

Stephanie Burdette of Charleston was arrested in connection with a copper wire theft.

Trooper A.B. Ward from the South Charleston detachment went to the Fishers Branch area of Sissonville last Thursday afternoon when a Frontier worker discovered a section of the communications line missing. The worker found that 300-feet of the 400-pair line, valued at about $5,000, was missing, according to a complaint filed in Kanawha Magistrate Court.

A trooper who had worked on a similar investigation told Ward to check the home of Ervin “Tubby” Page, 49, where troopers had previously found evidence of wire burning. Ward went to Page’s home, described as a Goose Neck travel trailer parked next to the Guthrie Agricultural Center in Sissonville, and found three burn barrels about 50 feet in front of the trailer. One of them was on fire.

Page’s girlfriend Stephanie Marie Burdette, 25, of Cross Lanes, was at the scene when the trooper arrived. Ward spoke to her then checked out the barrels where he found aluminum wrap, which is used to cover the copper communications wiring, and pieces of copper cabling, the complaint said.

Frontier customers are encouraged to report any suspicious activity around telecommunications equipment and facilities by calling the company’s toll free security line 1-800-590-6605. Anyone witnessing a theft in progress should not confront the suspects but should immediately call 911 and then call Frontier. Vehicle and suspect descriptions are very useful. This is a community safety problem, and the cooperation of the public is critical.

[flv width=”500″ height=”395″]http://www.phillipdampier.com/video/WOWK Charleston Copper Thieves 11-15-10.flv[/flv]

WOWK-TV in Charleston covers Frontier’s difficulties with copper wire thieves across the state of West Virginia.  (1 minute)

Frontier Communications is continuing to suffer service outages and problems across many of their respective service areas.  Some of the most serious continue in West Virginia, especially in the northern panhandle region where emergency response agencies continue to complain about sub-standard service from the phone company that took over Verizon phone lines this past summer.

Hancock County officials report their T1 line that connects emergency dispatchers with the county’s dispatch radio system was out of service again early Wednesday evening.  This Frontier-owned and maintained circuit has suffered repeated outages over the past year, and the latest outage comes after company officials promised to inspect the 12,000 foot line inch-by-inch.  Once again, the county’s emergency agency is relying on help from nearby counties and a backup radio system to communicate with at least some of the area’s police and fire departments.

Outages of 911 service are not just limited to West Virginia.  Illinois Valley (Oregon) Fire District Chief Harry Rich was forced to rely on amateur radio operators and extra staffing in county firehouses to cope with a 911 system failure caused by Frontier service problems in late September.  Rich called a public meeting in late October with Cave Junction Mayor Don Moore, Josephine County Sheriff Gil Gilbertson and Josephine County Commissioner Dave Toler to discuss the implications of Frontier’s outage and what steps the region needs to take to mitigate future outages.

In Greencastle, Indiana a Frontier phone outage disrupted service for DePauw University and the Putnam County Hospital Oct. 20.  In Meshoppen, Pennsylvania an outage caused by a downtown fire on Oct. 24 left 1,200 homes in the community without telephone service for most of the day.  Frontier has also suffered periodic copper wire thefts, particularly in the Appalachian region where illicit sales of copper can bring quick cash for those addicted to drugs.  In Eastern Kanawha County, West Virginia, some 100 customers lost service for at least a day after thieves yanked phone cables right off the poles.

Sandman

In Minster, Ohio village officials have hired a law firm to sue Frontier Communications over a wiring dispute.  Village officials accuse Frontier of being intransigent over the removal of telephone lines from poles to bury them underground.  Village Solicitor Jim Hearn told the local newspaper utility companies should be responsible for the costs of installing underground wiring.

In Wenatchee, a community in north-central Washington state, Frontier’s general manager is going all out to try and assuage customers Frontier will provide better service than Verizon.  Steve Sandman went as far as to hand out his direct number to the local media, inviting residents with service problems to call.  It’s (509) 662-9242.

Sandman promises other changes for his customers, according to The Wenatchee World:

Sandman said all Frontier technicians will be fully trained in the installation of phones, internet and TV. No more modems sent through the mail for the customer to install by themselves, he said.

“We’ll be there on the premises for complete installation,” he said. “And, if the customer needs it, we’ll provide some fundamental training on how to turn on the computer, hook up to the internet and get started using online services. Or give advice on how to use the TV remote.”

But all of these issues pale in comparison to the all-out battle forming in the state of West Virginia over broadband stimulus money awarded to help Frontier extend fiber broadband service to local government and community institutions.  One of their biggest competitors, Citynet, has launched a well-coordinated attack on what it calls “a flawed plan that does nothing to provide faster Internet speeds or lower the majority of Internet costs for West Virginians.”

Frontier will spend $40 million of federal broadband stimulus money on a network that will deliver fiber-fast speeds only to government, educational, and health care institutions.

Martin

James Martin II, president and CEO of Citynet argues Frontier is building a state of the art fiber network very few West Virginians will ever get to use, from which it will profit handsomely delivering service to government entities with which it already has contracts.  For the rest of West Virginian homes and businesses, Frontier will deliver outdated DSL service delivering an average of 3Mbps service at a time when adjacent states are enjoying service 2-4 times faster.

Citynet argues funding would be better spent on a middle mile, open fiber backbone available for use by all-comers.  Martin notes West Virginia is one of the few states in the northeast and mid-Atlantic region almost completely bypassed by the core Internet backbone.  The only exception is a fiber link connecting Pittsburgh with Columbus, Ohio, which briefly traverses the northern panhandle of West Virginia.  Citynet’s perspective is that West Virginia cannot improve its poor broadband standing — 48th in the nation, unless it has appropriate infrastructure to tap into for service.

As an example, Martin points to the community of Philippi, served by fiber to the home cable TV and broadband service.  The community’s fiber network is capable of Lamborghini speeds between homes within Philippi. But the community can only afford a single 45 megabit DS-3 connection to the outside world, provided by Citynet for just under $8,000 a month.  That line is shared among every broadband customer in Philippi trying to get out onto the Internet. The result is that Philippi residents can only buy a broadband account with speeds up to 2Mbps for $60 a month on that all-fiber network. That’s equivalent to being forced to drive that Lamborghini on a dirt road.

Martin says if the broadband stimulus money was spent on constructing a statewide open fiber backbone, they could sell the community a 1Gbps pipeline for around $3,000 a month.

Philippi's fiber optic broadband is not so fast, thanks to a bottleneck between the community and the rest of the Internet

“West Virginia is at a crossroads,” Martin said in a prepared statement. “We can build a ‘middle-mile’ solution for high-speed Internet infrastructure and create jobs, or we can stick with the status quo and watch West Virginia fall behind once again. The outcome will determine our state’s economic growth for years to come.”

The state, according to Martin, is reneging on its promise to build a broadband network that will deliver improved service to institutional users as well as at least 700,000 homes and 110,000 business in the state.

Instead, the project would only serve 1,000 “points of interest,” he said. The state’s plan would limit Internet speeds and make broadband service unaffordable, Martin argues.

“If the state were to build a true middle-mile solution, then businesses and residential Internet customers would see a significant reduction in price, as well as an increase in quality, capacity and speed,” Martin said. “Regretfully, the state chose to support a plan that relies on outdated telephone lines and a monopoly.”

Of course, Citynet does have a vested interest in the outcome of the project.  As a provider specializing in selling bulk broadband lines, they would be a prime beneficiary of a government-backed middle-mile broadband network.  Citynet’s argument that funding should be spent primarily on that network ignores the reality few new entrants are likely to enter West Virginia’s rural broadband market, with or without the benefit of a robust broadband backbone.  One of the biggest flaws of broadband stimulus spending is that much of the money will never directly provide “last mile” access to individual consumers and businesses that want broadband service where none is available.

Citynet needs to acknowledge much of West Virginia’s broadband is going to come from the phone company or a local municipality that elects to build its own network.  While cable companies deliver service in larger cities and suburban areas, large swaths of the state will never be wired for cable.  In fact, West Virginia is poorly covered even by wireless companies who see little benefit building extensive cell tower networks in the notoriously mountainous areas of the state that serve few residents.  The only existing rural telecommunications infrastructure universally available is copper telephone wires.  Like it or not, Frontier Communications will be the biggest provider of broadband in rural West Virginia.  A fiber backbone network alone delivers minor benefits to those residents who either cannot connect at any broadband speed, or are stuck with Frontier’s current 1-3Mbps DSL service.

Still, Citynet’s campaign is a useful reminder that too many broadband stimulus projects direct most of their money to networks ordinary consumers and businesses will never access.  And so long as local governments, schools, and hospitals “get theirs,” they have little interest in fighting to share those networks with consumers and for-profit businesses.

Citynet produced two radio ads criticizing West Virginia’s allocation of broadband stimulus money, and Jim Martin appeared on a local radio show to explain to West Virginia why this issue matters. (Ads from 11/2010 — Interview with Jim Martin: September 16, 2010) (18 minutes)
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Ultimately, Verizon may get the last word, even after they abandoned the state’s landline customers.  Charleston, the state capital, has been selected as one of the early communities to receive Verizon Wireless’ new 4G LTE wireless broadband network, according to WTRF-TV:

Verizon subscribers in Charleston with devices that are 4G compatible will see changes within the next six to seven weeks. The whole city is expected to be covered by the network by mid-2011, according to company officials. From there, it will be expanded to cover Huntington, Parkersburg, Wheeling, Weirton, Beckley, Clarksburg, Morgantown, Fairmont and Martinsburg by 2013.

The company also plans to expand coverage along the entire Interstate 79 corridor from Charleston to Clarksburg.

The decision to include Charleston among the 39 metropolitan areas where Verizon would deploy its 4G network left many analysts of the industry scratching their heads, although they noted in online posts that Rockefeller chairs the Senate committee that regulates the telecommunications industry.

Should West Virginians find Verizon Wireless a suitable replacement for their landlines, Frontier may have bought themselves a pig in the poke.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/West Virginia Frontier 11-4-10.flv[/flv]

WTOV-TV covers the emergency services outage in northwestern West Virginia in two reports, WBOY-TV covers the Citynet-Frontier controversy, and WTRF-TV covers the arrival of Verizon’s LTE upgrade, starting with Charleston.  (7 minutes)

Frontier Communications continues to alienate customers up and down the state of West Virginia with more service outages, billing problems, and emergency 911 service interruptions.

This time, it’s the community of Marmet that suffered an outage the company described as “temporary.”  Service to the area’s Metro 911 emergency operations center was interrupted Monday and residents knew what to do when Frontier could not deliver landline service that works — they grabbed their cell phones.

In Dunbar, the funeral director at Keller Funeral Home noticed he stopped getting calls from local area customers after Frontier took over operations July 1st.  Michael McCarty told a Charleston television station Frontier initially blamed him for the problems, but later discovered malfunctioning switching equipment was at fault and forked over a $344 refund.  McCarty’s business probably took a bigger financial hit than that when potential customers could not get through — for months.

“People would call, but it wasn’t ringing here,” McCarty told the Charleston Gazette. “There really wasn’t much we could do but wait it out.”

Two dozen complaints about Frontier’s performance are still pending at the West Virginia Public Service Commission.  The state’s consumer advocate says Frontier’s service quality in the state is not improving.  Frontier blames Verizon’s aging and poorly maintained network for most of the problems.

But many of Frontier’s complaints, not just in West Virginia, are about unfair early cancellation fees, inaccurate billing, lost service orders, and lousy customer service.  Here’s a sample:

• “The customer service representative was extremely rude and angry. We called in response to the unfair cancellation fee of $250.00. Last week we were told that we had until 9/30 to opt for other phone service without a cancellation fee. Each representative gives different information. Small business were treated horribly by Verizon and now Frontier. After the rudeness, I will never bring my business service back to Frontier!”
• “I have fought this company for six months because every month they cannot get billing right. They are the absolute WORST I have ever dealt with. They charge for services not wanted. They charge late fees when none should have been charged and then didn’t remove them after admitting their mistakes. If you have any other choice, avoid Frontier like it’s a plague, because it is.”
• “They never processed my order to transfer my service. I called back 4 times in a week to get them to do their job. On the last day, I was left on hold for 2 hours in the morning and then 1.5 hours in the afternoon, only to be told I would have to wait another 3 days for a servicemen to come out. The wait times were nothing less than abusive.”
• “Horrible folks to do business with. Verizon sold my FiOS/Phone account to Frontier and soon afterward mysterious charges for “ID protect” etc. started appearing on my bill. Whenever I call their service, it loops and hangs up. I tried the option for “we will call you back” – when it calls back , it will give another number to call back, where you have to wait again. Can’t wait to get rid of them.”
• “Frontier recently bought out Verizon’s service in my area. The automated phone tree system goes in loops and hangs up on you. Furthermore, once I finally figured out how to get someone on the line (responding to every question the automated system asked with “operator”) and moved up to a supervisor… the supervisor got very short with me when I tried to cancel my service and then hung up on me. When I called right back, I got an automated message saying the offices were closed.”

Some enterprising Frontier customers have learned their hold times will be much shorter if they opt to speak with a Spanish-speaking operator.  “Many of the call centers are in Florida anyway, so you may get a bilingual operator no matter which language you choose,” writes our reader Danielle.  “I cut my hold times from over an hour to less than five minutes this way.”

Meanwhile, one of Frontier’s primary competitors in the state, Citynet, accused Gov. Joe Manchin’s office of wasting $126 million in taxpayer money that will benefit Frontier Communications far more than state residents starved for broadband.

Citynet CEO Jim Martin urged federal officials Wednesday to suspend the grant after the state defended plans to allocate a large amount of the grant exclusively to connect state agencies.

“The state’s response clearly highlights why the federal government needs to suspend the award until there are major modifications to the plan,” Martin said. “It is clear from the state’s letter that little will be done with the federal taxpayer funds to increase the availability of adequate and competitively priced high-speed infrastructure in West Virginia. The current approach will cost the state future job growth.”

Martin is upset that more than half of the grant, $69 million dollars, will be spent on Frontier’s behalf to construct a broadband network for the state government.  The agencies who get access will still have to pay Frontier market rates for high speed broadband access, despite the fact taxpayer dollars were spent to construct the network Frontier will operate.

Manchin

Citynet wants stimulus funding diverted to construct a “middle mile” broadband network that every telecommunications company can access at wholesale rates to deliver improved broadband services to residents and businesses, not just government buildings.

Martin says the Manchin Administration is making “blatantly false” claims that the stimulus money would deliver high-speed Internet to 700,000 homes and 110,000 businesses.  Unless those homes and businesses are stuffed into government agency buildings, it won’t.

According to Martin, all of the benefits will go to only two places — state agencies and Frontier’s pockets.

“It’s a political favor to Frontier,” Martin charged.

“The citizens of West Virginia deserve transparency and accountability from their public servants, and this is even more true given the magnitude and importance of the need for broadband enablement in our state,” Martin said Wednesday. “I was born and raised in West Virginia, and I am aware of the consequences this program could have for West Virginia in terms of job growth and competing for high-paying 21st century jobs.”

Perhaps the RV tour can also help customers cope with unauthorized cramming charges greeting many ex-Verizon customers on their first Frontier bills

Frontier Communications has themselves an RV and they’re sending it on a “Great Conversations Tour” with their newest customers in Ohio, Illinois, and Wisconsin.  The company tweeted its intention to visit “10 Cities, 7 Executives, 5 Days, 3 States,” all in one recreational vehicle.

On the agenda are promises the company intends to deliver their version of broadband to a larger number of customers.

“On average, these properties that we purchased from Verizon had 62 percent broadband accessibility, and we will be looking to take that to 85 percent in two years,” says John Lass, president of Frontier’s Central Region. “In our current properties, we are averaging 92 percent broadband accessibility.”

The broadband most of those customers will end up with will range from 1-3Mbps in rural areas, perhaps up to 6Mbps in more urban ex-Verizon service areas, but everything is dependent on the quality of the lines Frontier has to work with.

That increasingly poses problems for the company, who had to cope with yet another major service outage in Illinois — the second in a month, that knocked out phone and emergency services for 28,000 residents across eight counties in central and northwestern Illinois.

The landline service failure, originally thought to be a fiber cable cut, turned out to be a hardware failure in the company’s central office in the village of McLean.  The impact was immediate as cell phone customers could not reach Frontier lines and Frontier customers in many areas could not make long distance calls or reach 911.

Peoria’s Journal-Star reported businesses were particularly impacted by the outage:

Carol Hamilton, Washington Chamber of Commerce executive director, said city business owners reported problems making landline-to-cell phone and cell phone-to-landline calls. Landline-to-landline calls were going through.

“We actually started hearing about the phone problems Wednesday,” Hamilton said. “People were getting a busy signal, or were told the number they were calling was out of order when they tried to make a call. The problem didn’t affect our office until Thursday morning.”

Frontier’s equipment failure also knocked out the Logan County computer system, and the Woodford County Sheriff’s Department computer system. Residents in those counties were instructed to call Illinois State Police posts in Springfield and Metamora for emergencies.

One local resident noted this is why he doesn’t have a landline anymore.

Since Frontier can gas up its RV and tour the countryside, Stop the Cap! can take you on a virtual RV tour of our own to visit with some disgruntled Frontier customers.  Our first stop…

Unauthorized Bill Cramming Plague Leads to Lawsuit Against Frontier

Hal Greene was reviewing his monthly Frontier phone bills when he discovered his monthly charges shot up from $230 to $290.  The Pine Bush, N.Y., resident found $39.95 charges on each of this bills for something called “Enhance SVCS Billing Inc Long Distance Calls … IBA-Services.”  He had no idea what that charge was for, and he knew he didn’t authorize it.

The Times Herald-Record picks up the story:

He called the company, Enhanced Services Billing Inc., but the company wouldn’t refund his money. He called the phone company, Frontier, which blocked the charges moving forward, but Greene never got a refund.

He went online to research the company, and found countless complaints from other consumers about ESBI, an aggregator that purports to bill for services provided by third parties.

Greene also found the contact information for a law firm, Giskan Solotaroff Anderson & Stewart in Manhattan, that was looking into the company. He called and became the named plaintiff in a class action lawsuit against Frontier and ESBI.

“I was very angry because it was so surreptitious the way they snuck that charge in there, and they’re just kind of counting on stealthing it into the bill without you noticing,” Greene said.

The suit alleges that the defendants know they are collecting charges customers didn’t authorize. It seeks monetary and compensatory damages, attorneys’ fees and further relief “as equity and justice may require.”

Representatives of ESBI and parent company BSG Clearing declined to comment. Frontier also would not comment, said spokeswoman Brigid Smith.

Greene is a classic victim of bill cramming, a practice where phone companies allow third parties to bill for services on their phone bills, in return getting a major cut of the action.

Most customers find themselves victims of cramming when they complete “surveys” or sign up for free trials of unrelated services.  Other victims purchase products from websites that offer future discounts just for “previewing” shopping clubs or credit monitoring services.  Even obtaining a “free reward” like a magazine subscription, ringtone, or avatar image for use on a social networking website could come with a very expensive “gotcha” on your landline or mobile bill a month later.

IBA charged Greene $40 a month for dial-up Internet access and other services of dubious value.

In Greene’s case, his “gotcha” was IBA Services — Internet Business Advisors, which offers a very dubious package of dial-up Internet, web hosting, and discounts at office supply stores.  For that, customers pay $20-40 or more per month.  Greene was paying for it across multiple phone bills, each with their own charges.

IBA Services is an example of how anyone can set up a business and use billing services like ESBI to sit back and wait for the checks to arrive.  Unfortunately, too often those charges are unauthorized and crammed onto phone bills.  Critics charge phone companies have a financial incentive to look the other way, as they earn a substantial percentage of the charges as a commission.  Millions are waiting to be earned at your expense.

Of course, phone companies correctly say they are required to accept third party billing services.  But what they don’t tell you is that they are not required to continue to accept those with a track record of cramming.

Stop the Cap! looked into IBA and discovered the “company” is “located” at 980 9th Street, 16th Floor Sacramento, CA 95814.  That sounds like quite a prestigious address, considering it is located in Sacramento’s US Bank Plaza.  But the 16th floor is a mighty crowded floor considering the enormous number of companies calling it home.  Those firms range from IBA to a scam operation trying to collect “fees” on behalf of the state of California to “Medical Hair Restoration.”  (That latter firm might be useful if you’ve torn all of your hair out fighting illegitimate charges on your phone bill.)

Truth be told, 980 9th Street — 16th Floor is a “virtual office” address.  A company that specializes in the practice, Regus, maintains that address as a mail drop and short term meeting space location for countless companies looking to keep their actual locations (often a home) out of public records. Additionally, utilizing a professional mailing address through a London-based service is a wise move for enhancing both your privacy and your business’s reputation. It allows you to separate your personal life from your business dealings, which is essential in today’s environment. So you can easily get a prestigious and virtual London postal address for professional correspondence. Regus itself isn’t a questionable enterprise, but some of their clients are.

For $99, we could have an address at the US Bank Plaza as well.  Best of all, Regus throws in access to high speed Internet service as part of the package price — something IBA doesn’t even offer their own clients.

Greene’s anger is understandable considering anyone can get in on this action, peddling useless voicemail service, credit repair, ringtones, shopping clubs, and a myriad of other services carrying steep monthly fees, all conveniently billed to your monthly Frontier phone bill.

IBA’s “offices” are located on a floor offering “virtual suites” and mail-drop services to clients who want to avoid disclosing their real addresses.

When we called IBA Services’ toll-free number, we were connected with a generic “customer care” department.  The representative, who would only give her first name, told us at first she had no idea what company we were calling about.

“We handle customer service calls for many different providers,” Inez told us. “When customers call, we ask for their phone number which usually brings up what provider they are doing business with.”

When she learned we were not a victim customer, she refused to answer any further questions about the company she works for or how many customers call claiming they are being crammed.

For dozens of customers who have been in similar circumstances, bill cramming quickly evolves into buck passing.

“The best part of this entire scam is that when you call Frontier, Verizon, AT&T or other phone companies, they tell customers to call the crammer directly to get the charges off the bill,” says our reader Gene who was also a victim of Frontier cramming.  “When you call the crammer, they always say you must have authorized it because they don’t bill just anyone, so you need to call your local phone company to deal with the charges.”

Marte Cliff was a victim of bill cramming on her very first bill from Frontier Communications

When customers tell phone companies the crammers refuse to credit their account and stop the charges, many will agree to place a block on future 3rd party billing, but neglect to reverse the charges.  By now many exasperated consumers just give up and eat the cost, something crammers count on.

“Frontier is happy because they got a substantial percentage of that fee and the crammer gets to walk away with whatever money they earned before the consumer noticed,” Gene says.

Marte Cliff, a freelance copyrighter who blogs from Priest River, Idaho was one of millions of ex-Verizon customers who received their first bill from Frontier over this summer.  Hers included $14.95 in charges for an “e-mail bundle.”  Cliff was alarmed:

When I opened our first bill from the new provider it was about $15 more than my normal bill, so I went looking to see why. And I found a charge from a company called Email Bundle. Why?

There was a notice – for billing questions call 888-934-7750 to reach PayOne Billing, so I did. I got a recording that told me everyone was busy and that I needed to wait. Then I got a brief busy signal and a message saying I was being transferred… and then a “looped” recording telling me a web address over and over and over.

Obviously, PayOne billing was not going to answer my call.

So I called Frontier. After 10 minutes or so of recorded messages I finally made contact with a live person… who said I just wouldn’t believe how many people had called this week over the same issue.

While Cliff doesn’t blame Frontier and got her money back, she is concerned many new customers may find it easy to miss such add-on fees, assuming they are just the cost of doing business with their new phone company.

“My bill is the same every month because I pay a flat for unlimited long distance, but other people have long distance charges and their bill is different each month,” she blogged. “They might not notice a $15 discrepancy – especially if they’re running a business and have large phone bills. And especially not since phone bills are generally so convoluted that it takes a puzzle expert to figure them out.”

Billing Services Group does business as ESBI, among other names.

ESBI, responsible for billing Greene $40 for dial-up Internet, itself has a long sordid history, having been the target of a Federal Trade Commission investigation in 2001. The biller, part of the Billing Services Group, Ltd. (an offshore entity incorporated in Bermuda), has 120 employees in San Antonio.  BSG’s financial presentations to their investors go to new heights to diplomatically explain away their questionable business practices, such as this passage from one of their recent press releases:

Background of Enhanced Service Billings and the Company’s Action Plan

Historically, enhanced service billings have been susceptible to misunderstanding between the enhanced service provider and the consumer over such issues as charges and scope of service. As a result, enhanced services have typically involved a higher consumer inquiry or complaint rate than regular telephone usage charges, which, in turn, can precipitate negative perceptions about enhanced service billings.

The Company has taken proactive measures, including the implementation of certain procedures over the last year, to minimize the level of disputed charges in connection with enhanced services. These measures include:

• Submitting enhanced service charges to each LEC (local phone company) only after that LEC has expressly approved the billing of a particular service offering by a specific enhanced service provider;
• Authenticating all enhanced product sales through the Company’s Bill2Phone™ authentication engine;
• Company employees anonymously subscribing to random enhanced services offerings to assess the quality of service and accuracy of charges; and
• Actively monitoring the level of complaints received in respect of its customers’ enhanced service offerings.

If there are perceived irregularities in the authentication of orders, quality of service, accuracy of charges or the frequency of consumer complaints involving an enhanced service provider, the Company takes appropriate action, including, if necessary, termination of billing for that customer. Each LEC in the United States requires that providers of enhanced services comply with certain end user inquiry or complaint thresholds; that is, a maximum number of inquiries or complaints in any particular month and in each LEC region. As described above, the Company actively monitors the level of consumer inquiries and complaints in respect of its customers’ enhanced service offerings and believes that the level of such inquiries or complaints is, for every one of its existing 98 enhanced service customers, below the contractual thresholds required by, among others, the largest LEC in the United States.

BSG uses the United Way logo on its site.

ESBI calls their business practices “powerful and innovative.”  Gene calls them “underhanded and deceptive.”

“These are bottom feeders that try and protect their ill-gotten gains by incorporating in Bermuda and throwing some goodwill contributions to the San Antonio chapter of the United Way to make you feel they’re ethical,” Gene says.  “When the company’s own financial presentations warn investors their future revenue is at risk from telephone company crackdowns, their long term future is an open question.”

What is also remarkable is that ESBI scores higher than Frontier Communications with the Better Business Bureau.

“One has to wonder how a bottom feeder operation like ESBI/BSG managed to earn a “D” while Frontier scored a rock-bottom “F,” Gene wonders.

How You Can Protect Yourself

1. Scrutinize your phone bill carefully, especially if it has increased recently.  Pay special attention to sections labeled “Miscellaneous,” and the long-distance, 900-number, and “third-party” charge sections on your bill. Third-party charges are charges from anyone other than your phone company. Many phone companies are trying to switch customers to “out of sight, out of mind” electronic billing with automatic payments.  That makes it easy to ignore a bill you have to click a link to see until after the amount due is withdrawn from your checking account.  Not paying illegitimate charges keeps the money in your pocket — trying to get a refund from the phone company keeps it in theirs.
2. Demand the phone company place a “3rd party billing block” on your phone line.  Frontier calls this service “Bill Block.”  I have yet to encounter a worthwhile service that needs to bill customers using 3rd party phone bill charges, so why give them the chance to try?
3. Avoid pop-ups and other online ads that promise free services in return for sharing your phone or mobile number.  Chances are the freebies also come with sneaky add-ons that will cost plenty.
4. Do not enter surveys or contests that require a phone number.  If you are a winner, they should be able to contact you by mail.  Many of these contests also include fine print authorizing the promoter to start telemarketing you later, so the prize is rarely worth the aggravation.
5. Obtain a virtual phone number from a service like Google Voice.  It’s free. You can give out this phone number to those you are not sure about.  If a crammer tries to sign that number up for unauthorized services, they’ll encounter a roadblock.
6. If you are a victim, tell the phone company you want all of those charges reversed at once — they are unauthorized.  Do not accept their request to contact these companies yourself.  They are capable of reversing the charges, letting the billing agency protest the chargeback.  They rarely do, and you don’t have to waste your time dealing with “Inez” at “customer care.”

Finally, if you are victimized, contact the Federal Trade Commission by calling 1-877-FTC-HELP (1-877-382-4357) and file a complaint.

High speed Internet, snail slow refunds

Each time Frontier Communications gets mentioned on Stop the Cap!, we receive e-mail from disgruntled customers arriving to share their horror stories.  Since Frontier has now absorbed Verizon landlines in several states, that e-mail is only increasing.

Because so many messages arrive on different topics, we’ll be trying to share your stories with our readers based on the types of problems experienced.  Today, it’s the issue of refunds.

Stop the Cap! reader Alexia from Elk Grove, California writes:

Phillip, I want my money.  For four months, I have called, written, and called again to ask where my refund check from Frontier is.  We disconnected our service from Frontier back in May and our final bill had a credit of nearly $150 on our two landlines, DSL, and returned equipment.  Why so much?  Because we were quoted a final amount for our account and instead of using their auto-payment service, we mailed them a last check.  They withdrew that amount electronically from our checking account anyway, so we had double payments.

This isn’t just me.  My sister decided to disconnect her phone and will rely on her cell phone from now on, and she’s still waiting for her final credit balance to arrive back as well.

When you call Frontier, assuming you don’t get a busy signal or are left on hold, they seem very sympathetic and promise the refund has been processed and they are sending the check in the mail.  The Pony Express could have gotten the check to us by now.  My sister is waiting for $22 to be returned to her.

When I have canceled credit cards, utilities, and other services and have a credit balance, most of them include a check either in the final statement or in a letter that arrives within the month.  Not Frontier.  One representative claimed they don’t send refunds right away in case they discover additional charges they need to apply to an account.  What charges?  Are they hoping to find some?  We have not made a long distance call on our landline in years since getting a cell phone and I cannot imagine what other charges they are talking about.

What is the story here?

The check is in the mail

Stop the Cap! reader Jeff in Elko, Nevada had a similar problem:

My job transferred me to Reno in July and we canceled our service with Frontier and are still waiting for our last bill refund because we had a credit balance.  It was only around $8, but that was after I had to argue with them about a cancellation fee they tried to charge me and a fee for the DSL modem we returned to them.  They credited our account for both after talking to a supervisor but now it is a waiting game for the final refund check to arrive.  Every other company we canceled service with, right down to the propane people handled our final bill correctly.  Not Frontier.

Since moving to Reno, we signed up for AT&T service which turned out to be way better than the DSL we had with Frontier that went offline nearly every afternoon, so we’re fine saying goodbye to them.  Frontier has been in Elko for awhile now so I can only imagine what the Verizon customers are now dealing with.

In September, Frontier’s “the check is in the mail” excuse caught the attention of a Sacramento TV station’s consumer reporter.

Jeanne Pritchett Melendez of Elk Grove was also waiting for a refund check from Frontier for just over $15.

Back in May, Jeanne paid her Frontier phone bill ahead of time.  And when she canceled her service mid-month, her bill was pro-rated and she was promised her money back.  She called the company… Asking when her check would be sent. And every time, she says she was told, it’s on its way.  But after more than three months…

“I was very frustrated and I said, you know what, if I don’t have a check in the mail by Friday, I’m going to call Kurtis [Ming – CBS13 Consumer Reporter],” says Jeanne.

Melendez got her refund before our readers did, along with an explanation from Frontier about why refunds take months to arrive:

Frontier Communications Statement:

Frontier’s refund process is to refund the final credit balance on disconnected accounts within 2 to 3 bill cycles from the disconnect date to allow time for any additional credits or charges that need to be applied to the account. This process is to ensure that the customer receives an accurate refund check.

The customer’s account reflects that the service was disconnected on May 13, 2010. The May 22nd , June 22nd and July 22nd bills reflected a credit balance in the amount of $15.03. A refund check in the amount of $15.03 was processed on the account on August 9th. The customer will receive the refund check within 10 to 14 business days to the address on record.

The representatives are trained to alert the customer that it can take 2-3 billing cycles which is usually between 30-60 days. However in the case of Ms. Melendez’s account the disconnect notice was so close to the bill date that three bill cycles were required to process the refund.

— Stephanie Beasly, Communications Manager

This isn’t the first time Kurtis Ming has had to approach Frontier Communications about Sacramento area residents’ frustrations with the company.  Back in July, KOVR-TV ran a story about a Frontier customer who was paying a whopping $15 a month for Frontier’s Peace of Mind hard drive backup service he never got because he didn’t realize he had to download software to get the feature installed.  While that was not Frontier’s fault (and the company provided a credit to the customer for the service he never used), charging $15 a month for a service other customers are paying less to receive isn’t exactly fair either.

[flv]http://www.phillipdampier.com/video/KOVR Sacramento Frontier Service Problems 7-7 and 9-17-10.flv[/flv]

KOVR-TV in Sacramento ran two segments on Elk Grove-area customers having problems with Frontier Communications — one waiting for a refund and the other charged for a service he didn’t realize he had.  (4 minutes)