Tag Archives: frontiercommunications

AT&T delivers low quality service to low income Californians, but lavishes fiber on the rich

by Steve Blum • , , , ,

Att outages by hh income

AT&T provides the highest quality service in the highest income neighborhoods of California, and the lowest quality in communities with the least income, according to a network quality study done by the California Public Utilities Commission.

The study’s initial findings were released last year. The top line conclusion was that AT&T and Frontier Communications are deliberately choking off investment in ageing copper phone systems, particularly in rural areas – now-bankrupt Frontier because it had no money for upgrades; AT&T because it could get away with it.

Chapters of the study are being released piecemeal. Some of the details are startling. The final conclusions and recommendations chapter expands on the initial summary’s description of AT&T’s economic redlining strategy. The average annual income in places where AT&T has upgraded its systems to full fiber to the premise technology is $72,000, versus $61,000 where it’s left copper networks in place.

Although the number of AT&T service outages climbed everywhere over the seven years of the study, high income neighborhoods also have more reliable service. Customers whose household income averages $42,000 a year or less experience nearly twice the number of “out of service incidents” as those who make $88,000 a year or more.

The study concludes that AT&T is holding people in low income communities hostage to deteriorating copper-based service and milking them for all they’re worth…

Those areas with the lowest household incomes tend to have the highest trouble report rates, the longest out-of-service durations, the lowest percentages of outages cleared within 24 hours, and the longest times required to clear 90% of service outages…wire centers that have experienced the smallest [legacy copper phone service] drop-off rates have exhibited the poorest performance on all service quality metrics. Clearly, those communities that AT&T perceives as the most captive are afforded the lowest levels of attention by the company. Since, as we have also found, wire centers that have received fiber upgrades exhibit superior performance on all of the service quality metrics, the fact that these upgrades have favored higher income communities may well explain the apparent inverse relationship that we have observed as between household incomes and service quality overall.

Recommended solutions include tightening service quality standards – including treating small, rural facilities the same as large, urban ones – and increasing fines when those standards aren’t met. Although the study points to the CPUC’s cynical policy of allowing AT&T and Frontier to effectively pay fines to themselves as part of the problem, it doesn’t explicitly recommend changing it.

For more background documents, click here.

Meaningless fines lead to AT&T’s, Frontier’s deplorable quality in California

by Steve Blum • , , , ,

Verizon taft 2dec2014

A study of AT&T’s, Verizon’s and Frontier Communications’ telephone network quality conducted by the California Public Utilities Commission shows that overall performance is poor across California. Low income communities have worse service and more outages than high income ones, but it’s not particularly good anywhere

Maximum Customer Trouble Report Rates of 6%, 8% or 10% of switched access lines per month (based on wire center size) are unduely generous because failure rates as high as these can hardly constitute acceptable service quality.

The apparently overly generous standard adopted…for Trouble Reports per Hundred access lines is in stark contrast to the requirement…that 90% of all out-of-service conditions are to be cleared within 24 hours. In fact, with the exception of the unique situation extant during the months of February and March 2016, this requirement has never been met by either AT&T or by Verizon/Frontier either on a companywide or on an individual wire center basis.

Although AT&T and Frontier, which now owns Verizon’s wireline systems, face fines, in theory, in practice they don’t: the CPUC allows them to spend the money on system maintenance and upgrades. In theory, it’s supposed to be extra maintenance and upgrade spending, but the loose accounting standards the CPUC applies makes that requirement meaningless.

The study recommends that “fines imposed due to an ILEC’s failure to meet service quality standards should be high enough so as to have the same financial consequences as poor service quality under competitive market conditions”. It doesn’t say how high that should be, but Verizon’s “unique situation” proved that telcos can perform when real money is on the line…

Verizon had actually cleared 91.58% and 92.64% of [out of service] conditions “within 24-hours of receiving notice of the out of service condition” for the months of February and March 2016, respectively, thus seemingly meeting the…requirement as the Commission had directed to be achieved as a precondition for the closing [of the sale of Californian systems to Frontier]. Faced with a powerful $10.5-billion financial incentive to do whatever was necessary to meet this condition, Verizon managed to make it happen – perhaps by importing personnel from some of its other…operations outside of California. However, this two-month compliance…was clearly an anomaly. When Frontier filed its…report for the second quarter of 2016…it showed 24-hour completion percentages for April, May and June 2016 of only 42.92%, 20.85%, and 72.35%, respectively.

It’s time for the CPUC to disavow its cynical decision to allow AT&T and Frontier to keep the money they would otherwise have to pay out in fines.

For more background documents, click here.

“Virtual separation” of Frontier’s fiber systems could mean actual abandonment of rural Californians

by Steve Blum • , , , ,

San benito pole route 13apr2019

The gap between urban fiber haves and rural have nots could grow wider in California as a result of Frontier Communications’ bankruptcy settlement. Its reorganisation plan was filed with the California Public Utilities Commission yesterday, after receiving approval from the federal judge in New York overseeing the bankruptcy proceeding.

The plan turns ownership over to banks and financiers who hold billions of dollars of Frontier’s now worthless debt. A cryptic paragraph buried deep in the plan calls for Frontier to develop a “detailed” proposal for a “virtual separation” of “select state operations” where the new owners “will conduct fiber deployments” from other operations in those states which will be blessed with vague “broadband upgrades and operational improvements”.

Translation: if there’s a fast track to profits, we’ll install fiber, otherwise we’ll let the copper rot.

Verizon hung onto most of its long haul fiber when it sold its Californian telephone business to Frontier in 2016. Frontier got Verizon’s fiber-to-the-premise “FiOS” systems in southern California, mostly in relatively affluent communities. Since then, Frontier has applied for California Advanced Services Fund grants to deploy fiber in a handful of communities, while doing limited DSL upgrades in others.

This “virtual separation” of fiber worthy communities from those less fortunate was floated earlier in Frontier’s bankruptcy proceeding, provoking a sharp response from the union representing its employees in California and elsewhere and a Californian advocacy organisation. The Communications Workers of American and TURN asked the Federal Communications Commission to take a hard look at the deal…

The virtual separation appears to set up a structure through which Frontier could seek to capture the revenues from fiber deployments for investors, potentially depriving retail operations of necessary cash flows, personnel, and other resources…

The [FCC] must ensure that an entire class of customers does not remain on the wrong side of the digital divide based on Frontier’s strategic decision to limit its investment in certain communities where it remains as the only source of broadband Internet access.

As the plan approved by the federal judge reaffirms, Frontier and its creditors need CPUC permission to close the deal. That review is underway and remains on track to conclude early next year.

CPUC puts muni ownership option on the table, asks tough questions about Frontier’s bankruptcy plan

by Steve Blum • , , , ,

Frontier verizon pole santa barbara county 10oct2015

Frontier Communications didn’t get a bankruptcy fast pass from the California Public Utilities Commission. Instead, a ruling yesterday by commissioner Martha Guzman Aceves sets out a long list of issues that Frontier must address before its bankruptcy exit plan is approved by the CPUC, including its impact on customers and communities, and the role of local government in providing telecoms services.

A key question is whether the CPUC “should require that local or tribal governments have a right of first offer or a right of first refusal regarding any transfer or disposal of [Frontier’s] assets”. That’s assuming Frontier is unloading any assets, intentionally or otherwise. If both answers are yes, it’ll start a new chapter in California’s municipal broadband story.

As far as I know, it’s a first. The CPUC didn’t consider offering ownership to local governments during PG&E’s bankruptcy process, although it was a hot topic at the state capitol and among city and county leaders. But a major incumbent telephone company has never gone broke in California until now, and we’re at a point in history when the standard broadband monopoly business model – lavish investment in high revenue markets; poor or no service via rotting infrastructure in rural and low income communities – is causing real harm. It’s the perfect opportunity for the CPUC to rethink basic telecoms policy.

Other issues to be considered include whether the restructuring plan…

  • Benefits customers, communities, and state and local economies
  • Maintains or improves quality of service, quality of management and financial condition.
  • Is fair and reasonable to employees.
  • Affects broadband deployment, backhaul services or network infrastructure.
  • Affects fulfilment of California Advanced Services Fund obligations, among other commitments tied to subsidy programs.

None of this will please Frontier, which wanted the CPUC to unconditionally rubber stamp its bankruptcy settlement by the beginning of October. The schedule set out in yesterday’s ruling offers the possibility of a decision early next year, but not before Frontier bids for federal broadband subsidies in the Rural Digital Opportunity Fund auction toward the end of October.

Frontier says bankruptcy won’t change California service quality. CPUC must decide if that’s good news

by Steve Blum • , , , ,

Frontier Communications wants the California Public Utilities Commission to blindly bless its bankruptcy exit plan. Yesterday, it filed statements from two executives who argued that the financial restructuring and resulting change in ownership won’t have any effect on the more than two million Californians in its footprint.

“Service quality will at least be maintained”, Frontier’s head of lobbying and lawyering, Mark Nielsen said. That’s because “the restructuring will not alter Frontier’s day-to-day opertions”.

Yes, “opertions”. At least he’s being honest, albeit accidentally, about Frontier’s talent for quality control.

Nielsen claimed that “the economic benefits of the restructuring will flow to ratepayers through the operation of market forces”. In some areas of California, such as the densely populated cities in Ventura and Los Angeles County where it acquired fiber to the premise systems from Verizon in 2016, that may be true. But in much of its rural territory, Frontier operates as a monopoly wireline broadband provider. It’s in those communities where the CPUC required Frontier to upgrade broadband service, and where the results of its efforts – whatever those might be – haven’t been made public.

Rural broadband deployments are discussed in yesterday’s filing, but the numbers were blacked out in the publicly distributed version. Nielsen claimed that Frontier met its obligation to upgrade broadband service for hundreds of thousands of Californian homes through 2019, except for a specific requirement to reach 75,000 homes with low speed, 10 Mbps download/1 Mbps upload service. Frontier will “make up for the temporary shortfall”, Nielsen said, adding that the company is “on track” otherwise.

Carlin Adrianopoli, a consultant brought onboard during the bankruptcy proceeding as a strategic planning executive, gave an overview of Frontier’s restructuring plan. The attached copy of the plan filed with the bankruptcy court has all the excruciating details.

Requests for rubber stamp CPUC approvals are a typical opening gambit when utilities propose mergers or bankruptcy settlements. I don’t recall that PG&E did that – it was painfully obvious to everyone that something had to change and that the CPUC would play a key role. Frontier’s shortcomings are equally painful and equally obvious to its customers. They deserve the same attention and consideration that the CPUC extended to PG&E’s customers.

I make typographical errors too. If I ever need CPUC approval to get out of bankruptcy, I expect my literary sins will weigh heavily against me.

Frontier’s California outage complaint rate triple that of AT&T, electric companies

by Steve Blum • , , , ,

Cpuc complaints 15mar 13jun2020

Frontier Communication’s service outage problem is three times bigger than any other major California utility, judging by consumer complaints submitted to the California Public Utilities Commission during the covid–19 emergency. On a per customer basis the bankrupt telco’s wireline outage complaints were triple those of AT&T, and greater than Southern California Edison’s or Pacific Gas and Electric’s on an absolute basis, despite having fewer than half the number of customers as either of the two electric companies.

CPUC commissioners were briefed on utility customer complaints at their meeting last week. The presentation followed two landmark votes that declared broadband to be public utilities – one setting 25 Mbps download and 3 Mbps upload speeds as the “essential service quantity” of broadband and another requiring wireless companies to maintain “basic internet browsing” capability “during a disaster or commercial power outage”.

That’s an obligation that generally applies to Internet service, CPUC president Marybel Batjer said…

These are definitely difficult times and, as we all know, the pandemic has altered our lives in so many ways, as people are trying to adjust to what we’re calling this new normal. And I appreciate that the CPUC is making sure that residents are able to keep the lights on and more easily get access to the Internet, for work and for school. And we are committed to meeting our core responsibility of ensuring the safe delivery of our services that Californians so rely on to conduct their daily lives.

The CPUC received 49 complaints about unplanned service outages from Frontier customers between 15 March 2020 and 13 June 2020, which comes out to 22 complaints per one million customers. AT&T generated more outage complaints – 69 – but it has nearly five times as many wireline customers as Frontier. PG&E and SCE drew fewer unplanned outage complaints – 38 and 20, respectively – and fewer total complaints per one million customers.

Money – disconnections due to non-payment and payment arrangements – was the biggest source of complaints about PG&E. SCE caught the most flack for planned service outages, which would have been for maintenance – there haven’t been any public safety power shutoffs for wildfire prevention purposes so far this year.

Frontier’s sins make a longer stay in California bankruptcy purgatory more likely

by Steve Blum • , , , ,

Purgatory

A lukewarm reply to demands that the California Public Utilities Commission take a hard look at its post-bankruptcy plans makes it a good bet that Frontier Communications won’t get a green light in California until sometime next year. Last month several organisations, including the CPUC’s own public advocates office, protested Frontier’s request for quick and painless permission to hand control of its business in California to a new set of owners. Last week, Frontier responded.

Like the protests, Frontier’s reply runs through the long list of problems that the company has experienced, if not caused, in California. Allegations of poor service quality, disinvestment in rural and low income communities and non-compliance with obligations incurred during its acquisition of Verizon’s California systems “are subjects of generalised regulatory interest or matters of compliance unrelated to the proposed transaction or which are currently being considered—or which should be considered—in a separate proceeding”.

Except.

As it must, given the plain language of California public utilities laws, Frontier concedes that the CPUC “may evaluate the impacts of the transfer of control on California consumers, utility employees, and state and local economies”. Since bankruptcy is about rebuilding a company’s capital structure and overhauling its operating costs so that it doesn’t go broke again, it’s difficult to see why the commission can’t, if it so chooses, review Frontier’s investment plans in the local communities where it has monopoly control of the telecommunications marketplace or its ability to provide adequate and reliable broadband, telephone and, in some places, video service.

Another oxymoronic argument Frontier offers is that it should get the same free pass that the CPUC gave WorldCom following its bankruptcy in 2003, but shouldn’t be subject to the same harsh conditions imposed because of WorldCom’s “severe examples of consumer fraud”. Someone should check with Washington’s attorney general, who just laid a $900,000 fine on Frontier for “unlawful deception” resulting from charging customers more than advertised and selling them Internet service at speeds it couldn’t deliver.

Frontier is concerned that the CPUC will take longer to rule on its bankruptcy settlement than the federal government or other states. That would not be unusual. But if time is so short, Frontier shouldn’t have waited more than a month after its long expected bankruptcy filing to ask the CPUC to review it.

Frontier’s “pervasive lack of credibility” drives FCC’s rejection of its service claims; CPUC urged to ignore its “high level rhetoric and promises”

by Steve Blum • , , , ,

There’s rapidly increasing skepticism in San Francisco and Washington, D.C. of Frontier Communications’ corporate honesty. Frontier was blasted in two separate agency actions in recent days: the California Public Utilities Commission’s review of its post bankruptcy plans and the Federal Communications Commission’s broadband subsidy auction, as it prepares to distribute the Rural Digital Opportunity Fund.

Challenges filed by incumbent broadband providers, aimed at blocking federal subsidies in their captive rural markets, were largely dismissed by the Federal Communications Commission last week. After reviewing tens of thousands of challenges in California alone, the FCC issued its verdict and published a new list of census blocks eligible for RDOF subsidies. In unusually blistering terms, the FCC dismissed Frontier’s claims it was providing adequate broadband service in 23,000 U.S. census blocks…

Given the numerous and significant concerns in the record regarding the validity of Frontier’s filing, including its own admission that it had misfiled its June 2019 data and then misfiled (again) the data for its challenge, and inconsistent explanations for its challenge, we conclude that taken together there is a pervasive lack of credibility and accordingly deny Frontier’s challenge regarding its deployment and decline to exclude those blocks from consideration for eligibility.

Frontier’s facile attempt to convince the CPUC to approve whatever settlement comes out of its New York bankruptcy proceeding on the basis of faith in its selfless devotion to the interests of Californians was similarly slammed in protests filed this week by a major telecoms union – the Communications Workers of America (CWA) – and three advocacy organisations, and CPUC staff.

CWA and the three organisations – TURN, the Greenlining Institute and the Center for Accessible Technology – pointed to the major role that Frontier plays in California’s telecoms market, and said the CPUC…

Has a statutory obligation to conduct a full analysis of the impact of this transaction that goes beyond a high level public interest review and to require [Frontier] to provide the Commission with more than high level rhetoric and promises.

They cited, among other things, Frontier’s failure to live up to promises made when it acquired Verizon’s decaying copper telephone systems in California and questioned its willingness to meet obligations attached to state subsidies, including money from the California Advanced Services Fund.

The CPUC’s quasi-independent public advocates office also asked for a full review, citing Frontier’s “unsubstantiated claims” and demanding specific plans for “network infrastructure investments, service quality and reliability improvements, consumer protections, including pricing, and broadband deployment”.

Frontier’s wish for quick and cursory CPUC approval by October is a forlorn hope.

CPUC knows how to end taxpayer-funded middle mile fiber grabs. As it should

by Steve Blum • , , , ,

Connected central coast 625

It can be done right. As it has.

One of the challenges to broadband subsidy proposals submitted to the California Public Utilities Commission this week shows why open access middle mile fiber is a necessity for closing rural broadband gaps, and how the lack of it is a major barrier to improving Internet service in California.

Plumas Sierra Telecommunications, which is the telecoms arm of the Plumas Sierra Electric Cooperative, objects to Frontier’s request for money to pay for a building a middle mile fiber route to reach the towns of Herlong and Janesville in Lassen County. Plumas Sierra doesn’t object to spending California Advanced Services Fund (CASF) subsidies on middle mile fiber. It wants Frontier to make use of the CASF-funded middle mile fiber that it’s built, rather than using more CASF money to overbuild it.

Parsing Plumas Sierra’s objections illustrate a major problem with the way in which CPUC approves middle mile projects. Plumas Sierra claims that it “already provides wholesale services via its existing middle-mile fiber-optic infrastructure with high-quality and reasonable price levels”. Translation: we don’t lease subsidised dark fiber to competitors, but we will sell them higher priced services over it.

Frontier does the same thing. It received $11 million from CASF last year for a project to build 137 miles of middle fiber and upgrade DSL facilities in Lassen and Modoc counties. Dark fiber strands on that network are not available on the open market.

The result is a patchwork of taxpayer-funded middle mile routes scattered across rural California that private companies can use to extract monopoly profits – “rents”, in microeconomic terms. CASF rules allow broadband companies to indulge in this sort of rent seeking behavior at public expense.

There are exceptions, though. The CPUC recently imposed open access obligations on a middle mile project that it funded for the Karuk Tribe in Humboldt County, and six years ago it did the same for a route now owned by Crown Castle in Santa Cruz and Monterey counties. That project has been up and running for three years, and supports a growing ecosystem of independent broadband operations (see the image above).

The CPUC can change its open access middle mile policy on its own. Or perhaps the California legislature can be persuaded to do it. Senate bill 1130 is still alive at the state capitol. As presently written, it would make open access mandatory for any CASF-subsidised middle mile infrastructure. Either way, it needs to be done.

Frontier tells CPUC to rubberstamp bankruptcy deal because you’ll never know the difference

by Steve Blum • , , , ,

Horsefeathers

Why don’t you go home to your wife? I’ll tell you what, I’ll go home to your wife, and outside of the improvement she’ll never know the difference.

Groucho Marx as professor Quincy Adams Wagstaff in Horse Feathers.

Frontier Communications doesn’t want the California Public Utilities Commission messing about with the bankruptcy settlement that’s churning through a federal court in New York. So it’s asking the CPUC for fast and uncritical approval of a transfer of ownership to the banks and other lenders that will try to recoup what they can of the $11 billion in bad debt that’s being washed away. Those financial institutions will also appoint a new board of directors that will oversee Frontier going forward.

In an application filed last week, Frontier argued that it doesn’t need the kind of scrutiny the CPUC gave PG&E’s bankruptcy or T-Mobile’s merger with Sprint because nothing will change…

The reorganization will be seamless and transparent to consumers. It will not create any service interruption or change in services received by any California customer, nor will it result in any change in rates or terms of service. The Company will continue to provide the same services, at the same rates, under the same tariffs, terms, and conditions as it does currently. The California Operating Subsidiaries that will emerge after confirmation of the Plan will continue to fulfill duties to customers, honor capital commitments and build-out plans, and observe regulatory requirements to the same extent as that they do today.

But wait, there’s more. Not only will nothing change, but everything will get better, too…

The restructuring of Frontier’s balance sheet will free up resources that Frontier intends to use to maintain and improve the California Operating Subsidiaries’ networks and operations. This investment will directly benefit state and local economies by providing more resilient, reliable voice service and improved broadband-capable facilities.

Shaking off debt and restructuring via bankruptcy is intended to give a company a second chance at running a successful business and making good on promises made to present and future customers. It guarantees nothing, though. Frontier’s financial position before the bankruptcy was dire and, according to a CPUC study, the company was “in effect, disinvesting in infrastructure”, particularly in rural and low income communities.

The CPUC needs to tell Frontier what to do with its load of horse feathers.