Tag Archives: frontier

Frontier pays a price for its California meltdown

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Frontier Communications’ cutover problems when it took control of Verizon’s wireline systems in California, Texas and Florida were costly, in terms of broadband subscribers and overall revenue. On Frontier’s third quarter earnings call earlier this week, company executives said that they saw a net loss of 100,000 broadband customers in the three states between April and June, and lost another 75,000 from July through September.

In revenue terms, though, the biggest hit in California and the other two states came from phone and video customers: total revenue was down $55 million in the third quarter, compared to the second, with video services accounting for $24 million and phone service for another $20 million.

The losses were attributed to the problems Frontier had in transferring call center operations from the Philippines back to the U.S., as well as tighter credit management. During the first few months, Frontier gave customers considerable slack in making payments, but as the transition was completed normal credit practices came into play.

Looking ahead, Frontier CEO Dan McCarthy said that 300,000 homes in three states will get broadband service upgrades in the next 90 days. Frontier is in the process of upgrading legacy DSL systems it acquired from Verizon, which typically max out at 6 Mbps download speeds, to modern DSL technology with claimed download speeds of 50 Mbps. No mention was made of upload speeds.

Those 300,000 homes represent about 12% of the new subscribers that Frontier picked up in the three states.

McCarthy also said that by the end of the year, 170,000 homes will get broadband upgrades (or broadband service for the first time in many cases) in areas subsidised by the Federal Communications Commission’s Connect America Fund program. Another 90,000 homes that are adjacent to those areas, but aren’t eligible for the subsidies, will also be upgraded. He wasn’t clear on whether those homes were specifically in California, Florida and Texas, though.

Frontier complaints drop as it fixes California FTTH problems

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Hundreds of fiber-to-the-home customers crashed and burned when Frontier Communications took over ownership of Verizon’s wireline networks in California last April. Phone, Internet and television service was disrupted, apparently because the customer data Frontier received from Verizon was faulty. The problems were compounded by a temporary call center that was drafted in to help Frontier get through the transition period.

The company’s position is they’re in business as usual mode now, and preliminary data from the California Public Utilities Commission appear to back it up.

The CPUC met in Long Beach last week, ground zero of Frontier’s meltdown. Of the 30 or so members of the public who signed up to speak at the meeting, only one man used his time to lambaste Frontier. That’s one indicator that things are getting better – more people made the trip to Sacramento last May to complain to legislators, when the troubles were at a peak.

The available stats also show marked improvement. More than 500 people filed complaints about Frontier with the commission in April, and more than 600 in May. By June, that number was down to a quarter of that level and it continued to drop in July and August. In September, only 62 complaints were received, which does look like business as usual – Frontier expects to handle 50,000 service issues in a normal month, according to regional president Melinda White, speaking to lawmakers in May.

The flood of problems was concentrated on the FTTH systems that Frontier acquired from Verizon, and “there was no similar widespread service disruptions for the rest of the service territory using traditional voice service over copper lines during this transition period”, communications division director Michael Amato told commissioners. The communities hardest hit were Camarillo and Santa Monica, and a cluster of cities around Long Beach, including Lakewood and Huntington Beach.

Frontier gets California subsidy to upgrade Shasta County service

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A thousand homes in the rural Shasta County community of Shingletown will be getting faster DSL service from Frontier Communications, as a result of a $546,000 subsidy from the California Advanced Services Fund (CASF) that was okayed by the California Public Utilities Commission at its meeting last week. According to the resolution approving the grant

Frontier submitted an application for CASF funding to build 64,950 feet of fiber cable from the Shingletown, California central office to six digital loop carrier sites…The sites under this grant are currently served by broadband over copper facilities to DSLAM’s served from the Shingletown central office in Shasta County. The existing bandwidth is not capable of providing more than 3 Mbps download speeds and 768 Kbps upload speeds, and must be upgraded to a new technology (ADSL2+ with bonding) to meet the grant speeds. To upgrade to this using this combination of technology, the existing DSLAMs must be Ethernet-capable and the central office must have sufficient bandwidth coming into it…Customers within 7,200 feet of the DSLAM will be capable of receiving speeds of 25 Mbps download and up to 2 Mbps upload and those within 10,000 feet will be capable of receiving 10 Mbps download and up to 1.5 Mbps upload speeds.

When this project was first proposed for a CASF subsidy, I described it as middle mile infrastructure, and as such said it should be subject to the same kind of open access requirements the CPUC has imposed on independent projects it’s funded. Frontier objected to that characterisation, saying it was for upgrades to its last mile distribution network. After looking at it more closely, I agree – it’s a last mile build. The new fiber will all be downstream of the central office, and the average run will be about two miles. Fair enough.

Broadband gaps to fill, but willingness to do so in northeastern California

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Many homes will still be without broadband service in northeastern California, even after upgrades paid by the federal Connect America Fund (CAF-2) program are complete. That’s mostly because the census blocks deemed eligible for the subsidies by the Federal Communications Commission are limited – many thousands of unserved homes are outside of those areas – but also because the FCC doesn’t necessarily require that all homes in a given census block be served.

I ran an analysis for the California Center for Rural Policy (CCRP), ahead of a meeting with Frontier Communications executives and supervisors from the six counties – Lassen, Modoc, Plumas, Shasta, Siskiyou and Tehama – in the region. It was organised by CCRP and the California Emerging Technology Fund (CETF) and held in Redding on Thursday. It was a follow up to the agreement negotiated between Frontier and CETF, during the regulatory review process that led to approval of Frontier’s purchase of Verizon’s wireline telephone systems in California.

The subsidised census blocks in Frontier’s service territory are concentrated in Modoc, Lassen and Shasta counties. Once the CAF-2 funded census blocks are built out – the deadline is the end of 2020 – there will still be about 1,500 homes without access to wireline broadband service. In those blocks alone. Pulling back and looking at the entire six county region, including AT&T’s territory (but not areas served by small rural phone companies), there will be more than 30,000 homes without access, with about a third of those in Plumas County.

One approach to fixing the problem is to build more middle mile fiber deeper into the region, to make last mile build outs less expensive and boost capacity all around. I ran that analysis too. A Digital 395-scale project – 500 miles, say, of dark fiber through a strategic corridor at a $100 million-plus cost – could, for example, boost wireline broadband availability in Modoc County from the current 36% to 74%, and from 56% to 81% in Lassen County.

There are other ways to approach it, particularly when there’s an incumbent telephone (or cable) company that’s willing to address the problem. As Frontier was in last week’s meeting. The company has a stated policy of working with local communities – doing more than just giving money to a softball team, as one exec put it – and so far, they’re living up to it. The problem of connectivity in northeastern California isn’t solved yet – that’ll take years – but at this point everyone involved is pushing toward a real solution. That alone is a refreshing change.

Tellus Venture Associates presentation, Northeastern Broadband Meeting with Frontier Communications, 23 June 2016

Broadband gets lowest satisfaction rating of any industry in latest survey

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Consumers are a wee bit happier, on the average, with Internet service providers, but that’s not to say happy, according to the latest American Customer Satisfaction Index (ACSI) telecommunications company rankings. Overall, Internet service providers get an average score of 64 (out of 100), up one point from 2016. It is the lowest industry average of all those ranked by ACSI. Subscription TV companies – there’s quite a bit of overlap, of course – are nearly as bad on the average, getting 65 out of 100. By comparison, mobile phone companies get a 71, and consumer electronics manufacturers and full service restaurants share the top spot at 82.

Verizon’s fiber to the home customers are the happiest of all, rating their satisfaction at 73, up five points from last year. From there, though, it is bleak. AT&T drops five points to 64, Comcast is three points better at 59 and Frontier slides five points to the bottom of the ISP rankings at 56. The survey was completed before Frontier took over 2 million Verizon customers in California.

That also means it happened before Charter, Time Warner and Bright House merged together. All three companies are up from last year, scoring 63, 66 and 67 respectively. It’ll be interesting to see how the new combined company rates in 2017. ACSI cautions that “mergers tend to cause customer satisfaction to deteriorate, at least in the short term”.

Consumers are the least satisfied with their ISP’s customer service, choice of plans and delivered speed, including video streaming quality; all those factors rate 69 out of 100 or worse.

Bad Verizon data led to Frontier’s customer call tsunami, legislators told

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Oops.

The problems Frontier Communications had as it took over ownership and operating control of wireline phone systems belonging to Verizon were chewed over in a California assembly committee hearing yesterday. Melinda White, president of Frontier’s west region, told committee members that the service outages experienced by some customers were primarily due to three causes:

  • Corrupt data in the customer records imported from Verizon’s system.
  • Records that said some customers’ equipment had one serial number when in fact it had another.
  • The need to train ex-Verizon employees on Frontier’s systems.

The mismatched equipment serial numbers seemed to be the trigger for most of the ensuing cascade of problems. Serial numbers are important because that’s how a central operating system – like Frontier’s – talks to individual pieces of equipment at customers’ homes and authorises them to receive particular services.

When Frontier cut over from Verizon’s platform, its central operating system connected with each customer box on the network and, in the vast majority of cases, smoothly took over control. But in few thousand cases – out of a total of 2 million new customer accounts – that message never got through. A similar problem occurred when the relatively small amount of corrupt data was fed into the system.

The result was several thousand customers were left without one kind of service or another – phone, Internet and/or TV – all at once. Which generated an unexpected flood of calls to Frontier’s customer service line.

White said that Frontier had planned for a large call volume, but not on the scale and with the degree of problems that they actually received. The plan was to bring in extra Frontier employees and use Verizon’s existing call center in the Philippines to handle calls while the ex-Verizon employees were being trained on the new system. There weren’t enough experienced Frontier employees to answer the phone, and the problems were beyond what the offshore call center could handle. White said they would have had the same problem if the ex-Verizon employees were on the phones, because they didn’t have the necessary system-specific training either.

At this point, White said, there are about 200 customers without phone service as well as others with Internet and TV problems, but “in ten days we’ll have all of the backlog cleaned up and we’ll move into business as usual mode”.

The rest of the hearing pretty much followed the standard script for such things. Members of the audience got up one by one and either excoriated or praised Frontier’s corporate citizenship, a representative from the California Public Utilities Commission explained the bureaucratic intricacies involved, and the committee members – including a couple of guest assembly members with particular axes to grind – exhibited their customary 20-20 hindsight.

The committee chairman, Mike Gatto (D – Los Angeles), also used the hearing as a platform to promote his plan to abolish the CPUC and turn its job over to other state agencies. I can’t say much was accomplished, although there was good information to be had.

California lawmakers need sharper thinking, reality check on telecoms policy

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Not everyone is 99 and 44/100% pure.

No one expected zero problems when Frontier took over Verizon’s telephone systems in California last month. At least no one who understands that big telecommunications companies are complicated and not particularly predictable. It’s a lesson that California lawmakers should take to heart, as they consider allowing AT&T to replace wireline service with cell phones at will.

Frontier added about two million customers to its existing 200,000 subscriber base in California, scattered across 150 telephone exchanges that range from the best infrastructure in the state – FiOS-brand fiber to the home – to the worst. Really, the worst. Many of Verizon’s rural systems were never even upgraded to 1990s style DSL.

When the cutover happened, the complaints started rolling in. At the time, it was hard to tell whether it was due to significant problems, or just social media blowback from people who thought their particular troubles were the most important thing in world. It turns out it was a little bit of both.

The Los Angeles Times ran a good story on the transition. Some problems were due to glitches that happens all the time but you don’t notice until it happens at the same time something else changes, and then the two events are forever welded together in your mind. A squirrel chewing through cable or a car hitting a pole doesn’t make the news unless it happens on the day a new company takes over.

Some were clearly Verizon’s fault, and there was little Frontier could do about it ahead of time. Poor record keeping resulted in Verizon turning over mismatched lists of equipment lists and customer accounts, which prevented Frontier from reauthorising some services immediately, such as pay per view movies.

Frontier fumbled too, according the Times. An auxiliary call center was activated in the Philippines, but it wasn’t able to handle the flood of customer service calls that came in.

Best guess, according the Times, is that about 10,000 customers experience one glitch or another during the cutover, some more serious than others. Out of two million, that’s not horrible on a percentage basis but it can look like a crisis when you’re on the receiving end of the complaints, as state and local officials have been for the past few weeks.

So it’s no surprise that politicians are jumping into the game. Assemblyman Mike Gatto (D – Los Angeles), the chair of the assembly utilities and commerce committee, is holding a special hearing next week to look into it. I don’t know if he’ll learn much that’ll be of any use for Frontier customers – most of their troubles are behind them. But if it makes him less naive about accepting AT&T’s bland assurances about plans to get out of the copper wire business, it would be a good thing for everyone.

California says adios to Verizon, bienvenido to Frontier

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Work in progress.

As of Friday, two million Californians have a new telephone company. Frontier Communications wrapped up the paperwork and took title to Verizon’s wireline telephone systems in California, Florida and Texas…

The acquired businesses include approximately 3.3 million voice connections, 2.1 million broadband connections, and 1.2 million FiOS video subscribers, as well as the related incumbent local exchange carrier businesses. New customers will begin receiving monthly bills starting in mid-April.

“This is a transformative acquisition for Frontier that delivers first-rate assets and important new opportunities given our dramatically expanded scale,” said Daniel J. McCarthy, Frontier’s President and Chief Executive Officer. “It significantly expands our presence in three high-growth, high-density states, and improves our revenue mix by increasing the percentage of our revenues coming from segments with the most promising growth potential.”

Frontier already has a couple hundred thousand subscribers in California, the result of buying up smaller rural telephone systems. Many of Verizon’s copper systems fit that description, too. Combine that experience with the fact that Frontier doesn’t have a high margin wireless business to build, and it should mean a marked improvement in attitude and service for current customers.

The bulk of Frontier’s new friends, though, are in the urban and suburban southern California systems Verizon took off of GTE’s hands. Many of those have been converted to FiOS-brand fiber to the home service, that currently supports symmetrical 100 Mbps service and is upgradeable to more. Good for them. Verizon’s Californian copper customers are in poorer condition – not a single system meets the California Public Utilities Commission’s minimum 6 Mbps download and 1.5 Mbps upload standard, and many can’t support broadband at any speed. There’s work to be done.

Frontier asks for CASF subsidy for Shasta County middle mile project

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A grant application for a $546,000 subsidy from the California Advanced Services Fund was filed last week by Frontier Communications. It’s proposing to build a 12-mile fiber middle mile system in Shasta County, with the goal of injecting more bandwidth into existing DSL facilities that serve 1,200 homes in the Shingletown area…

These sites are currently fed with Ethernet over copper technology and the existing bandwidth is not capable of providing more than 3 Mbps download speeds and 768 Kbps upload speeds. The existing DSLAM’s at these sites are Ethernet capable and the fiber feed will allow for the use of ADSL2+ bonding technology.

The public version of Frontier’s proposal characterises it as a last mile project, but that’s not correct. It’s a classic middle mile build, with no indication that any last mile connections to homes or businesses will be otherwise upgraded.

It’s an increasingly common, and welcome, model in rural California. The California Public Utilities Commission approved a grant for Frontier last year, to boost speeds in Petrolia in Humboldt County via a beefed up microwave link, and it’s considering middle mile fiber proposals from Siskiyou Telephone and Ducor Telephone in Siskiyou and Tulare counties respectively.

I hope the CPUC looks favorably on all these grant requests, but it should also include open access requirements, as it has with middle mile subsidies it’s given to non-telcos. That means making dark fiber available on published terms to competitive Internet service providers and other customers that are big enough to make use of it. It might or might not mean much as a practical matter in communities as remote as Shingletown, but it’s an important public policy principle that justifies giving taxpayer dollars to private telecoms companies.

Anza FTTH project approved for funding by CPUC

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The Anza Electric Cooperative will get $2.7 million from the California Advanced Services Fund to build a fiber to the home system throughout its service area in western Riverside County. The California Public Utilities Commission approved the grant at its meeting on thursday. According to the resolution

This project is economical and provides a wide benefit. The CASF per-household subsidy is $710 per household (based on 3,751 households that will have access). This state subsidy, when compared to previous subsidies provided through the CASF program for fiber projects, is low. The number of households that Anza proposes to pass would be the fourth largest CASF last-mile project in terms of households served and the area served in terms of square miles would be the highest for all approved CASF last-mile projects.

Only one protest was received, from a resident served by the co-op who didn’t like the project. She was one of only a few who felt that way, though: according to the co-op, 91% of voting members – i.e. customers – said yes to the project when the question was put to them.

As it stands, the Federal Communications Commission will be giving a competing subsidy to Frontier Communications – something like $1.6 million, by my rough estimate – to upgrade the decaying Verizon system in the area to provide DSL service at 10 Mbps down/1 Mbps up levels. By contrast, the Anza co-op will offer symmetrical fiber-based service, starting at 50 Mbps for $50 per month. The CPUC’s resolution doesn’t mention the conflict, but it doesn’t really need to do so: the FCC’s rural standard doesn’t meet Californian minimums which require at least 1.5 Mbps upload speeds as well as 6 Mbps down.