Frontier's latest promotion promotes one price, but you'll pay considerably more thanks to profit-padding fees, surcharges, and taxes.

Frontier Communications is mass-mailing its latest DSL promotion to customers — a year of their fastest tier DSL service for just $20.10 per month.

Labeled “FrontierFast,” the promotion claims you will get a “groundbreaking value” on their fastest Internet service for $20.10 per month, with a Price Protection Plan and a $4.50 monthly modem fee.  Frontier says you will enjoy:

• Breakthrough speeds at an unbeatable price
• Dedicated, unshared connection that won’t bog down during peak hours
• Safe, secure Frontier Mail and a personal online portal powered by Yahoo!
• Free professional installation
• A three month free-trial of Peace of Mind Hard Drive Backup and unlimited technical support.

Sounds reasonable… until you explore the terms and conditions that are attached to it.  Frontier has created a minefield of tricks and traps designed to maximize their profits and make you jump through hoops to minimize your exposure to them.

Let’s explore:

1. The $4.50 monthly modem fee makes it $24.60 for 2010.  The modem fee is nothing more than profit-padding.
2. That “Price Protection Plan” is really a nice way of saying “contract term” committing you to sticking with Frontier broadband for one year, or face a $200 early cancellation penalty.
3. That “Peace of Mind” trial is anything but if you forget to cancel before the three free months are up.  If you don’t they’ll charge you an extra $9.99 a month for the service.  Forgot to cancel during the trial?  Then pony up a $50 cancellation fee if you want out.  At least the free trial is optional.  Do yourself a favor and opt out before Frontier opts-in your wallet.
4. The promotion is available to new customers only, and you are required to bundle it with phone service -and- pay installation fees for that phone line, if you don’t have one already.
5. Service is subject to availability, speeds are not guaranteed, and your credit will be checked before you get service.
6. Taxes and surcharges apply, and they do add up fast.  You can easily add an additional $10 when combining the modem rental fee with the other fees Frontier collects for various taxing authorities.
7. Don’t forget Frontier defines an appropriate amount of usage at just 5GB per month in their Acceptable Use Policy.

Broadband service shouldn’t have to come with a minefield of fine print and profit-padding fees and surcharges.  The out-the-door price should be published so customers can truly understand what they are getting into, before exposing themselves to those steep cancellation fees.  They should also not have to worry about a ridiculous 5GB limit in Frontier’s Acceptable Use Policy.

One of the promised benefits of permitting the Verizon-Frontier spinoff is that Frontier will bring more and better broadband service to areas Verizon has ignored for years.  The company has been running television ads in West Virginia promoting Frontier’s promised “next generation” of broadband.  But what does that mean?

[flv]http://www.phillipdampier.com/video/Frontier Verizon Deal Advertisement West Virginia.flv[/flv]

Frontier Communications is running this advertisement in West Virginia.

The West Virginia Consumer Advocate Division of the Public Service Commission brought in Trevor R. Roycroft, PhD., former Associate Professor at the J. Warren McClure School of Communication Systems Management, Ohio University, to examine the details behind the marketing and public relations push to promote the deal.

He was not impressed.

After an extensive review of confidential and public documents from Frontier, his conclusion was that Frontier’s DSL service is just plain bad, and for plenty of West Virginians who may only have one choice for broadband in the foreseeable future, being stuck with Frontier’s idea of broadband is particularly bad.

Indeed, Frontier’s idea of what defines “next generation broadband” would be true, if this was the year 1992.

“Frontier has made no commitment regarding improved broadband deployment in West Virginia. Frontier, while achieving higher levels of DSL availability in West Virginia, generally offers its broadband services at higher prices and provides lower quality than those associated with Verizon’s DSL. Frontier’s ability to increase broadband deployment in West Virginia will depend on the condition of the outside plant that it has acquired, which may negatively impact Frontier’s costs of deployment. Furthermore, Frontier must upgrade substantial numbers of customer locations outside of West Virginia, and West Virginia will be competing with this larger priority,” Roycroft writes in his testimony to the West Virginia Public Service Commission.

The infrastructure Frontier utilizes to deliver its broadband service is revealing even to those Frontier customers not directly impacted by this transaction.  Some of the documents Roycroft reviewed laid bare the nonsense the company has used to defend its Acceptable Use Policy language defining an “acceptable amount” of monthly broadband usage at just five gigabytes.  Company officials have said for more than a year that they were concerned about the growth of usage on their network, and its potential to slow service for other customers.  But company documents, included within the scope of Roycroft’s testimony, tell a very different story:

Frontier plans to increase its core backbone from its current level of 10 Gbps to a capacity of 20 Gbps (should the spinoff be approved). With regard to the capacity of its existing backbone, Frontier states:

Frontier expanded the backbone from OC 48 to 10 Gigabit Ethernet during the first half of 2009. Because of this network expansion we do not have peak usage for the past 12 months. No backbone link has peaked above 2.8 Gigabit/second or 28% of the capacity of a link since the augment was completed in 2009.

Thus, Frontier’s current backbone configuration appears to have excess capacity. With the expansion of its backbone network to 20 Gbps, the company’s current data traffic load results in about 14% of capacity being utilized at peak.

Potentially limiting customers to just five gigabytes of usage is so unjustified, in Roycroft’s analysis, its potential imposition on West Virginian customers should be a deal-breaker.

Roycroft ponders whether Frontier will invest enough resources to make sure capacity is not an issue. The only way Frontier’s network will show signs of strain is if the company makes a conscious decision not to sufficiently upgrade their network as they take on millions of new Verizon customers, or they dramatically underestimate the average Verizon customer’s usage.

Roycroft was also asked to evaluate whether Frontier’s claims of 90% broadband availability in its overall service area and 92% in its West Virginia territory rang true.

Roycroft writes that Frontier’s numbers don’t tell the whole story.  In five states, Frontier admits the percentages are notably lower, so no guarantee can be inferred for West Virginia based on Frontier’s talking points.

Frontier’s “Advanced” Broadband Network Is Hardly Advanced and Barely Qualifies As Broadband

Heavy criticism was leveled at Frontier for its “advanced” broadband service.  Roycroft compared Frontier DSL with several other providers and was unimpressed with the company’s broadband speeds.

Roycroft's table illustrates what's on offer from the competition

“Frontier’s advertised DSL speeds are generally much lower than those available from Verizon and other carriers. Based on a location-based search of Frontier DSL service offerings, it appears that Frontier’s most prevalent DSL speeds are 3 Mbps and 768 kbps (for download),” Roycroft said.

Frontier's DSL Speeds in Selected Cities

Although the expressed upload speed for Rochester should be listed at a higher rate (I managed around 512kbps myself), Roycroft is correct when he says, “it can be seen that outside of Rochester, NY, the DSL speeds associated with Frontier offerings cannot be considered ‘cutting edge.'”

Even while noting Rochester’s potential DSL speeds, real-world speeds are another matter entirely.

[flv width=”640″ height=”405″]http://www.phillipdampier.com/video/Real World Frontier vs Road Runner Speeds.flv[/flv]

One New York customer provided real world evidence of the significant differences in speed offered by Road Runner from Time Warner Cable and Frontier’s DSL (courtesy: 1ComputerSavvyGuy) (1 minute)

Frontier’s DSL offerings in West Virginia are of even lower quality. Frontier indicates that it offers three grades of DSL service in West Virginia:

Up to 256 kbps download/128 kbps upload;
Up to 1 Mbps download/200 kbps upload;
Up to 3 Mbps download/200 kbps upload.

These data transmission speeds, especially upload speeds, are at the very low end of commercial offerings that I have observed.

Comparing Verizon DSL vs. Frontier DSL Pricing & Gotchas, Contracts, and Internet Overcharging Schemes

Roycroft’s study found Frontier’s pricing significantly higher than Verizon for DSL service.

Frontier’s DSL prices, either with telephone service, or on a stand-alone basis, are significantly higher than are Verizon’s. For example, the entry-level Frontier plan has a nominal price that is 100% higher than Verizon’s.

However, when considering the per Mbps price, Frontier’s price is 160% higher. It is also notable that Frontier’s upload speeds are also low when compared to Verizon’s.  Consumers are increasingly relying on upload capabilities to share large files, such as videos. Overall, Frontier’s DSL products are low quality.

Comparing Prices

Roycroft also gave special attention to Frontier’s infamous 5GB Acceptable Use Policy, which he suggested was a major negative for West Virginia’s online experience.

Frontier indicates that it monitors network usage if “it receives a complaint of slow service or if it discovers that network bandwidth utilization is unusually high in a particular area.

Frontier was asked to identify any action taken against a customer associated with its acceptable use policy and, in response, the company stated that it has not “terminated a customer’s service based on exceeding the 5 GB threshold identified in the AUP.” However, the restriction on usage further raises the relative cost of Frontier’s service. Frontier indicates that consumers may face action by the company if they exceed the usage cap, thus indicating that the prices reflect both speed and volume. Verizon’s DSL service does not include a similar limit.

Frontier’s DSL pricing policies and usage restrictions will represent a significant negative impact on West Virginia consumers, should these policies be implemented in Verizon’s service area in West Virginia.

Even more importantly, Roycroft considered the argument for imposing such Internet Overcharging schemes as unwarranted.

“While DSL provides dedicated bandwidth to the customer in the last mile, DSL subscribers will share network capacity in the ‘middle mile.’ For example, shared data networks will carry consumer traffic from the telephone company central office to an Internet gateway. I believe that Frontier’s policy is more likely to reflect an unwillingness on Frontier’s part to invest in ‘middle mile’ Internet access facilities that would require capacity additions as customer demand increases, and choose to restrict customer usage instead of investing in the capacity needed to meet customer demand,” Roycroft writes.

“Furthermore, Comcast’s download-cap policy includes limits that are dramatically higher than Frontier’s. Comcast’s acceptable use policy identifies 250 gigabytes as the threshold at which Comcast may take action against a customer, which is fifty times the usage associated with Frontier’s policy,” he added.

Roycroft was also concerned about the many ‘gotchas’ that are part of Frontier’s marketing efforts which bring even higher prices to consumers choosing to have DSL service installed.

“To receive the services of Frontier’s technician, the consumer will incur a $134 fee unless the consumer signs up for a term service contract. Even with the term service contract, the customer must pay a $34 fee for the on-site set-up. Furthermore, the technicians that Frontier dispatches to new broadband customers’ homes are also sales agents. Thus, while it may be that these individuals can help with system set-up and the like, they also are part of Frontier’s overall up-selling strategy,” said Roycroft.

Frontier markets a variety of services to customers as part of their promotions and service offerings.  For instance, recent Dell Netbook promotions required customers to sign multi-year contracts for service, with an early termination fee up to $400 if the consumer chooses to cancel service.  Such promotions do not come out of the goodness of Frontier’s heart.  Indeed, such promotions provide even more revenue potential by pitching customers on its “Peace of Mind” services, which include computer technical support, backups, and inside wire maintenance for an additional monthly fee.

Customers don’t even qualify for many Frontier promotions unless they accept a bundled service package combining broadband with traditional phone service and a multi-year service contract.

Roycroft says West Virginia should demand modifications to Frontier’s proposal before it should even consider accepting it.  Among the changes:

• Frontier should be required to make broadband services available in 100% of its wire centers, and to 90% of its West Virginia customers by the end of 2013. Frontier should expand broadband availability to 100% of its customers by 2015.
• Frontier should be required to deploy and promote broadband services in West Virginia so that, by the end of 2013, at least 90% of its customers can achieve download speeds of 3 Mbps; 75% of its customers can achieve download speeds of 6 Mbps; and 50% of customers can achieve download speeds of 10 Mbps.
• To achieve these broadband objectives, Frontier should be required to exceed Verizon’s baseline level of capital investment by at least $117 million during the period ending December 31, 2013, or by an amount sufficient to meet the broadband objectives.
• Frontier should be required to offer broadband services at prices that do not exceed those currently offered by Verizon for 1 Mbps and 3 Mbps services, i.e., Frontier should offer services at Verizon’s advertised prices for 1 Mbps and 3 Mbps service (respectively, $19.99 per month and $29.99 per month) for a period of 24 months following the merger.
• Frontier should be prohibited from imposing its broadband “download cap” in West Virginia.
• Frontier should be required to provide individual written notice to its customers regarding the merger, and should notify customers of any change in services that result from the merger. Changes in billing format should also be clearly explained to customers, both in writing, and through a web-based tutorial.
• Frontier should be prohibited from migrating any Verizon customer to a Frontier plan that either increases the customer’s rates, diminishes the level of service, or has a materially adverse impact on any of the terms and conditions of the customer’s service. West Virginia customers should experience a rate freeze for a period of 24 months.
• Frontier should be required to allow former Verizon customers to take a “fresh look” at their purchases, including those customers who have term contracts with Verizon. All early termination charges should be waived for a period of 90 days following the merger, and the long distance PIC charge should also be waived for Verizon long-distance customers who select a long-distance provider other than Frontier.

Some Frontier Communications customers in western New York have been receiving notification that effective October 15th, the rental price of the ADSL modem Frontier provides customers increased $3.00 per month, from $3.99 to $6.99 per month.

Customers on a “price protection agreement” should not have seen this rental fee increase.  If you have, please let us know in the comments.

Frontier’s modem rental fee can often be avoided if you purchase your own DSL modem, assuming its compatible with Frontier’s system, and have them provision it for service.  Several of these modems appear regularly on eBay, sold by customers who ended up owning them after their term contracts ended with other providers.

One of the problems with Frontier’s DSL service is that the “out the door” price is significantly higher after taxes, fees, surcharges, and modem rental costs are factored.

Always insist on obtaining a total price, including all taxes and fees, before committing yourself to any ISP, particularly if a long term contract is involved.

Byron L. Harris heads the Consumer Advocate Division of the West Virginia Public Service Commission

Strong opposition to the proposed spinoff of Verizon service in West Virginia to Frontier Communications erupted Monday as the state Public Service Commission (PUC) published a flurry of written testimony filed with the state agency.

Some of the strongest criticism of the deal came from the state’s Consumer Advocate (CAD), an independent division of the PSC that represents residential utility customers.  Division director Byron Harris testified the deal carried “too many risks” for the state, and suggested Frontier failed to do its homework before considering the implications of the deal for nearly the entire state’s telephone system.  Harris added residents faced higher phone bills, early termination fees, little improvement in service, and was highly skeptical of Frontier’s promises to expand broadband service in the state, suggesting the company will not be in a financial position to offer acceptable “plain old telephone service,” much less broadband.

Harris testimony called on the Commission to reject the deal:

The proposed transaction poses too many risks for retail telephone customers in West Virginia from both a financial and an operational standpoint. The proposed transaction also poses too many risks for Verizon-WV’s wholesale customers and, ultimately, the tens of thousands of West Virginians served by these entities.

In his testimony on behalf of the CAD, Mr. Roycroft [one of two expert consultants hired to analyze the proposed sale] explains the operational difficulties that Frontier will face in assimilating the Spinco properties and operating systems. As Mr. Roycroft makes clear, the operational difficulties associated with a transaction as large as the one proposed are exacerbated by the fact that the proposed transaction – from an operational standpoint – actually involves two mergers in one:

1. The acquisition of the legacy Bell Atlantic network and OSS in West Virginia, and
2. The acquisition of the old GTE network and systems in 13 other states.

Mr. Roycroft details the multitude of risks that the proposed transaction presents for retail and wholesale telephone customers in West Virginia. Not only do customers face service and service quality risks, but they also face the risk of higher rates and/or other adverse terms and conditions of service such as early termination fees.

Mr. Hill points out, in his testimony, the many unrealistically optimistic financial projections Frontier makes in support of the proposed transaction. As Mr. Hill points out, Frontier’s projections rely too much on financial information that has been provided by the seller, Verizon, without independently verifying Verizon’s numbers. Frontier’s projections similarly rely on a number of assumptions about reducing access line loss, cutting operating expenses and capital expenditures, and realizing merger savings that would require Frontier to substantially reverse recent trends.

The fallout from the proposed merger not going well obviously affects retail and wholesale customers currently served by Verizon-WV and Frontier-WV as well. As discussed below, and in Mr. Roycroft’s testimony, Verizon-WV’s customers already have experienced sharp declines in their service quality, which is the predictable result of years of falling investment in the company’s telephone plant and workforce in West Virginia, as Verizon has focused its attention on other markets in other states and other service offerings, such as wireless service and video/Internet/telephone service provided via its FiOS offering (which is not offered in West Virginia).

The financial and operational risks associated with the proposed transaction jeopardize the combined company’s ability to maintain even current service quality in Verizon-WV’s service territory, let alone follow through on Verizon-WV’s obligation to improve that service quality going forward under the Plan.

Although the CAD obviously is (and has for some time been) concerned with the poor service quality currently provided to customers by Verizon-WV, the CAD believes that service is likely to get even worse under Frontier’s ownership. The proposed transaction will result in a post-closing Frontier that will not have the financial resources to be able to improve service quality for “plain old telephone service” – as voice-grade traditional telephone service is often called – in Verizon-WV’s service territory, much less to deploy broadband to the extent suggested in Frontier’s direct testimony.

Harris likened the deal to Frontier buying a used car from Verizon without knowing what’s under the hood.

“Frontier has essentially agreed to purchase a used car without first having the car examined by a mechanic. Without a thorough investigation of Verizon-WV’s plant, Frontier has no way of knowing whether its buying a pre-owned car that has had regular oil changes and proper tune-ups, or whether it is buying a clunker with a new paint job and a blown transmission. If Verizon-WV’s network has not been properly maintained (as the evidence seems to suggest), just like a car that hasn’t been properly maintained, getting it back to serviceable condition will be a very expensive proposition,” Harris testified.

Harris gave five specific reasons why the deal was bad for West Virginia:

First, Frontier has not done any in-depth analysis of the quality of the Spinco facilities that it is acquiring. This lack of analysis is disturbing on its face, as it would seem to be a fundamental area of inquiry for any prospective buyer. But the importance of this lack of meaningful review is magnified in West Virginia by the fact that Frontier knows, or reasonably should know, that Verizon-WV’s outside plant facilities in West Virginia are not in good shape. The Commission is well aware of the significant decline in service that Verizon- WV’s customers have experienced over the last several years. This decline is documented in the public record (in both the informal complaint records maintained by the Commission’s Staff, and in the record in proceedings related to Verizon-WV’s service quality docketed in the last few years). That record should have triggered a much more searching analysis by Frontier. This lack of analysis also impacts the overly optimistic assumptions that Frontier has used in its financial analysis of the transaction.

Second, Frontier’s overly optimistic financial projections increase the risk that the post-merger company will not be able to remedy Verizon-WV’s current poor service quality or to provide its promised broadband deployment. Verizon is obviously a larger and more financially sound company than Frontier. For a company such as Frontier which historically pays out greater dividends than its net income, the risk that the optimistic financial projections will not transpire is magnified.

Third, as of October 14, 2009, Frontier still had not determined how it will handle the additional call center volumes that will occur when the company acquires access lines in West Virginia.  Obviously, the proposed transaction would adversely affect the public if it is approved without a concrete plan to handle service calls from current Verizon-WV customers.

Fourth, similarly, no concrete plan has been put forth by Verizon for serving customers in West Virginia who are currently served out of central offices in Maryland. Again, the proposed transaction would adversely affect the public if it is approved without a concrete plan to serve Verizon-WV customers who are currently served from central offices in Maryland.

Fifth, current Verizon-WV retail customers face the prospect of increased rates and/or early termination fees as a result of having their current package or bundle service migrated to a similar package or bundle offered by Frontier. In discovery, Frontier has to date refused to identify the packages that will be offered to replace current Verizon-WV packages or to state at what price the packages will be offered to such customers. Verizon- WV customers with bundles that include Verizon broadband service also appear to likely face significant early termination fees of at least $120 if they elect not to transition or migrate to Frontier’s service after closing. This likelihood appears even greater when the companies’ obtuse response on this subject is considered. When the CAD asked whether Verizon-WV customers who elected not to remain with Frontier post-closing, would be charged any early termination fees, the companies merely stated that they will “honor the terms of their contracts with customers.” Obviously, “honoring” the terms of a contract that includes an early termination fee could very well mean enforcing that provision of the service agreement.

Hundreds of New York state residents were unfairly charged early termination fees that eventually brought Frontier to the attention of the New York Attorney General’s office, which obtained relief in the form of full refunds for affected New York residents.

Ironically, even though Verizon may seek to exit West Virginia’s landline telephone business, the company will continue to exist as a competitive player in the state — through Verizon Wireless, its mobile telephone division.  Verizon Wireless sent letters to customers urging them to terminate their home phone lines.  That will spell additional competition for Frontier Communications, as Stephen Hill testified, on behalf of the Consumer Advocate Division:

“Simplify your life and your budget by cutting the cord on your home phone today.”  It is reasonable to believe that such a letter coming from the company that had been a customer’s land-line phone service provider urging them to end that type of service and return to their former provider’s wireless service, would have an impact on Frontier’s ability to maintain that customer. The presentations to Frontier’s board of directors regarding the merger do not discuss potential competition from Verizon.

Perhaps the more troubling aspect of Verizon as a formidable competitor, however, is that, under the current post-merger plan, Verizon will continue to operate the billing and back-office functions of most of the local exchange operations sold to Frontier. Under such circumstances, Verizon becomes both a business partner and a competitor of Frontier-a situation that would put Verizon in an even greater competitive position than it would be otherwise (Le., if it weren’t also leasing operating systems to Frontier). Therefore, it is quite possible that, due to competition-in which Verizon is likely to play an important role-the reduction in the rate of revenue decline forecast for the future may not be realized. Instead, the rate of access line loss may accelerate from historical conditions, making the fbture financial picture for a combined Frontier/Spinco more tenuous than now forecast.

Strong opposition also came from other providers, some of whom who may be affected by the sale through wholesale agreements currently in place with Verizon, as well as from the Communications Workers of America (CWA).

Susan Baldwin, who served as Director of Telecommunications for the Massachusetts Dept. of Public Utilities, submitted testimony on behalf of CWA.  In her testimony she stated, “If the transaction goes awry, consumers will bear the consequences….Even if the transaction does not go awry, it will adversely affect consumers because Frontier’s financial constraints will prevent it from investing in the WV telecommunications infrastructure.” Baldwin strongly urged rejection of the proposed deal.

David Armentrout, on behalf of FiberNet stated, “Frontier lacks the requisite resources, experience, and incentive to comply with wholesale obligations it will take on …in West Virginia.”

Some companies waived their right to file direct testimony but asserted their right, along with the parties who did file today, to file rebuttal testimony in December.

Coming up… The truth about Frontier’s DSL products, network capacity, and why their 5GB Acceptable Use Limit is part of official testimony calling on the Public Service Commission of West Virginia to just say no to Frontier Communications.

Bray Cary, Host of Decision Makers

A network of West Virginia television stations spent 20 minutes this past Sunday airing a puff piece that could have been a video press release straight out of Frontier’s public relations department.  Decision Makers, a self-described “agenda setting” public affairs program ostensibly puts important people on the “hot seat” to answer “tough questions about where West Virginia is heading and how it will get there.”

Hardball this was not. Host Bray Cary, who also happens to serve as president and CEO of the television station group, presided over a one-sided softball tournament for Ken Arndt, Frontier’s new Southeast region chief in a 20 minute interview where the hardest question was likely posed off camera – ‘where would you like to do lunch?’

Decision Makers is seen across West Virginia on Cary’s statewide network of television stations — WOWK in Charleston-Huntington, WBOY in Clarksburg-Morgantown, WTRF in Wheeling and WVNS in Beckley-Bluefield.

The appearance of Arndt on the program comes the same week Frontier reportedly committed to purchasing significant advertising time on the stations, leading a Stop the Cap! reader who informed us about the program to ponder whether this Fluff-Fest was part of the ad deal.

Viewers on the public comment section for the show were unimpressed.

“I can’t believe Mr. Cary didn’t ask the Frontier guy any hard questions. It was like a 20 minute commercial for Frontier, is that what you get for buying advertising with the station,” asked one.  “I believe that we would all like to hear and understand Frontier’s direct response to challenging questions from an involved, and knowledgeable speaker. We need to hear more then a branding speech,” said another.

The interview was loaded with misleading and occasionally false statements, often coming from the program host, who served as presiding cheerleader.  You can watch the program’s two segments, and then take a look at our reality check (and if an all-consumer volunteer website can manage this, why can’t Mr. Cary?)

[Video No Longer Available]

Now that you’ve watched, let’s review the misleading statements, some made by Arndt, some by the host:

“You guys are serving 35% of West Virginia – that’s a third of the phones.”

Frontier may serve 35% of the landmass of West Virginia, but not 35% of the population, which is a very important distinction.  Verizon has the overwhelming majority of customers in the state, not the tw0-thirds this statement suggests.

“I guess the only guys fighting you all right now are the Communications Workers of America union workers.”

Ken Arndt - Frontier Communications

That, along with other dismissive comments made by Cary represent just how biased his interview was.  In many communities, citizens, businesses, utility commission staff, and yes – company workers are fighting this deal, because it’s bad news for every community facing a Frontier takeover.  Of course, Cary doesn’t have anyone on his program to refute his guest (or him for that matter.)

“From a timelime perspective, and we’re actually finishing our [broadband expansion] engineering plan right now — by December 15th, my expectation is within the first 18 months we will make a substantial increase raising that 60% (of Verizon broadband penetration) exponentially and making a large investment and bringing in the individuals — the engineering and construction talent to be able to get it done as quickly as possible.”

Frontier anticipates cutting $500 million in costs per year if the deal consummates, according to Bloomberg News. Job cuts at both Frontier and Verizon will create some of that savings, according to Maggie Wilderotter, Frontier’s CEO.  Customer service and field-technician jobs won’t be eliminated, she claims, but with a need for that level of cost savings, combined with the enormous debt Frontier will assume, where the resources to accomplish this expansion will come from is not explained.

Frontier’s broadband expansion targets so-called “middle-mile” expansion.  That was precisely what was done in Rochester.  Fiber optics are used to connect various central offices and some remote network extenders (known as DSLAMs) to try and extend DSL service into more distant areas further away from the central office.  DSL speed is highly dependent on distance.  The further away you get, the lower the speed you can obtain.  Frontier plans to install limited amounts of fiber linking their offices in hopes of providing DSL service in areas that do not have access to it currently.  Unfortunately, every indication is that Frontier’s DSL in most parts of West Virginia will provide a maximum of 3Mbps, if you’re lucky.  In communities like Rochester, DSL service is marketed at 10Mbps, but as I’ve experienced myself, that speed really turned out to be 3.1Mbps living less than one-half mile from the city line.

To many consumers, hearing talk about fiber optics may leave the impression they’ll have this type of connection in their home or business.  That’s highly unlikely.  Frontier fiber serves their own internal network.  Verizon FiOS serves you directly on a fiber optic cable.

‘In West Virginia in 2007 Frontier lost 2.7% of our access lines.  In Verizon’s footprint they lost 6.7%.  In 2008, Frontier’s lost just 2% while Verizon increased [their loss] to over 8%.  Frontier has put together unique packages that continually add value to landlines.  It’s through [Frontier’s] packaging, providing unique services and unique technologies [that the company limits losses].’

Frontier is in the enviable position of focusing on rural markets long bypassed by the phone company’s biggest threats: cable and wireless competition.  Verizon is not.  The real reason for the dramatic difference in line loss is that Frontier customers often have no other choices for telecommunications services.  In West Virginia, cable does not serve many rural communities, so there is no “digital phone” competition to worry about.  Mobile phones in the most mountainous regions of the state can offer problematic service if it’s the only phone you have.  Verizon, which does face relentless cable television competition, pays the price in greater line loss.  Rural West Virginia has a much higher population of elderly residents, who are usually the least likely to drop traditional phone service.  In fact, no state has a higher population of the rural elderly except Florida.

These factors afford Frontier more protection from line loss, not the so-called “unique services and unique technologies” the company only speaks about generally.

Arndt also responds to a question about Frontier’s plans for fiber and other forms of “telco-TV” such as that provided by Verizon FiOS.  After noting the company does plan to move forward on an extremely limited basis by finishing FiOS projects already under construction, Arndt signals Frontier believes its status as a simple reseller of DISH satellite service somehow provides a superior solution to telephone company provided television.

Not really.

Who needs Frontier to sign up for DISH?  Customers can sign up directly themselves.  The advantage of “telco TV” really comes from the construction of the network to support it.  Both AT&T and Verizon have built television-ready networks which not only compete with cable, but also give their customers more and better broadband choices that Frontier cannot and will not offer consumers.  Frontier tries to valiantly spin its copper cable future by saying satellite television offers a better service, but in reality, being a DISH Network reseller hardly is in the same class as FiOS or U-verse.

Residents in the affected areas need to consider whether they are tying themselves to a company that believes copper wire slow speed DSL is good enough for now and into the indefinite future, has no plans to directly compete with cable and other providers in delivering a wired telephone company cable service, will not build FiOS-like fiber optic networks in areas that one day could have been wired by Verizon, and will live with a company content with delivering “ubiquity” of service across all of its service areas, which in reality means large communities will suffer with lowest common denominator service, and rural communities will be lucky to get “good enough for you” broadband.

Arndt’s comments about fiber connectivity in selected portions of their service area refer mostly to multi-dwelling units and new housing developments where service was provided more cost effectively through a shared fiber connection.  That’s not FiOS either.

Color us unexcited about the prospect of Frontier’s ‘unique cable television via broadband service’ Arndt hints at.  That is almost certainly the new DISH set top box that can connect to your Frontier DSL service to stream on-demand television shows.  With Frontier’s 5GB Acceptable Use Policy for broadband, don’t expect to watch too much if and when they enforce the limit.

Among the most shameful segments of the 20 minute video press release Cary presides over is in the second half, when he asks and answers his own questions, spun in Frontier’s direction, about their ability to digest Verizon’s operations that dramatically dwarf Frontier’s current size and scope.  He’s even done “his research,” which suspiciously appears to be surfing through Frontier’s own talking points from their website and public relations efforts.  As far as Cary is concerned, Wall Street says they “like” the deal, and opposition to it is “a lot of noise.”

Arndt responds that the opposition to the deal comes because of FairPoint Communications, which he says failed because of the complexities of integrating their billing systems.  As Stop the Cap! readers already know, FairPoint’s troubles went well beyond computer integration problems.  Arndt’s reasoning is akin to saying New Orleans drowned in Hurricane Katrina because a storm sewer up the street was clogged.  More than 20 news reports on this site alone document the entire sordid story.  On every level, FairPoint failed New England for a range of reasons:

1. The enormous debt FairPoint was saddled with made it difficult for the company to spend the money necessary to maintain and grow their network and survive an economic downturn.  Frontier will also take on enormous debt during a challenging economy and claims it will spend millions to expand broadband service into rural areas where fewer potential customers mean a longer Return On Investment;
2. FairPoint’s acquisition of Verizon New England involved more customers than FairPoint served nationwide before the buyout.  The exact same thing is true of Frontier in this deal;
3. FairPoint’s earlier acquisitions were small, independent phone companies run with limited bureaucracy.  Verizon, and its predecessor Bell System businesses, have done things their own way for decades, making theoretical transitions doable on paper and chaotic in reality.  The exact same scenario exists with Frontier’s purchase of Verizon service areas;
4. Poor service, unresponsive and overwhelmed customer service centers, insufficient investment, and broken promises plagued FairPoint’s New England adventure from day one.  Frontier risks repeating FairPoint’s mistakes, putting customers with no other options for telecommunications service at serious risk.

Cary doesn’t have the insight or the interest in digging down into Arndt’s claims.  Maybe he forgot.  As far as Cary is concerned, everyone in West Virginia should just get familiar with the Frontier name.

Of course, actual consumers aren’t invited on Decision Makers.  Nor are any groups opposed to the deal.  But West Virginians and others can be “decision makers” and choose a different path for their telecommunications future.  They can get on the phone and call their state representatives and tell them to oppose the deal.  They can also contact the state utility commission and file their own comments telling them this deal isn’t worth the risk — three bankruptcies out of three earlier deals.

Even when playing this kind of softball, three strikes should mean you are out.