Gee, I guess customers really do want faster broadband says Frontier CEO

by Steve Blum • , , , ,

Internet service tiers above the Californian minimum of 6 Mbps download speeds are increasingly popular among customers served by Frontier Communications. That’s one of the nuggets from the company’s quarterly earnings report and conference call on Tuesday. New CEO Daniel McCarthy said that 44% of customers who signed up for either new or upgraded Internet service in the first three months of the year opted for higher speeds. That’s up from 40% in the last three months of 2014, and about two and half times the rate that Frontier saw a couple of years ago.

That’s significant for a couple of reasons. First, it’s quantitative confirmation of a trend that the FCC recognised earlier this year when it raised the federal minimum broadband service standard to 25 Mbps down and 3 Mbps up. Second, it refutes what former Frontier CEO Maggie Wildrotter said last year about customers being happier with lower speed service at lower costs. It might be true that most of Frontier’s broadband subscribers are happy today with the next download tier up – 10 to 12 Mbps – but that satisfaction is far from universal and is likely to be short lived.

McCarthy also talked about Frontiers pending purchase of Verizon’s copper and fiber business in California

We are working on functional gap identification and remediation. Our team remains confident in our ability to complete the conversion and integration in the timeframe we have identified. We have begun the approval process, filing applications with regulatory authorities at the federal and state level.

Frontier’s ability to manage and upgrade Verizon’s decaying copper system in California will be a critical issue as the California Public Utilities Commission’s review of the deal moves forward.