Tag Archives: frontiercommunications

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.

We’re doing better than Bangladesh, so give us money, telcos tell U.S. senate

by Steve Blum • , , , ,

India utility pole

Telephone companies don’t appear to having the same success cable companies have had with broadband promotions during the covid–19 emergency. The head of telco’s primary Washington, D.C. lobbying front organisation asked a U.S. senate committee on Wednesday to “keep providers on sound financial footing” and urged the use of existing, incumbent-friendly federal programs to distribute subsidies directly to them.

California’s two major telephone companies – AT&T and Frontier Communications – aren’t offering service at the 25 Mbps at $15 or less per month covid–19 benchmark set by California Public Utilities Commission president Marybel Batjer. AT&T has a 10 Mbps or less for $10 offer for low income customers, while bankrupt Frontier tops out at 12 Mbps for $20 for legacy copper customers.

As lobbyists do, USTelecom CEO Jonathan Spalter told of the hardships his clients face and lavished accolades upon them for persevering nonetheless. That list includes AT&T and Frontier, as well as Verizon, Centurylink and lots of small telephone companies. But not major cable companies. When Spalter spoke about their performance during the emergency, though, it was more like damning with faint praise…

Even as traffic has at times soared more than 25 percent higher than pre-crisis levels, the performance of our networks remains seamless for our nation’s citizens. Indeed, according to one recent study, “[o]f the top 10 countries in the world by population, the U.S. is the only [country] that recorded no download speed degradation on average in the month of April.”

So who are AT&T, Frontier and friends beating? China, for one, which is the world’s most populous country. Not far behind is India – both countries have more than a billion residents. It’s a long drop to third place, which belongs to the U.S. with 333 million people. The remaining seven are in the 100 million/200 million range: Indonesia, Pakistan, Nigeria, Brazil, Bangladesh, Russia and Mexico.

Yes. Our broadband networks are holding up better than their’s.

Telcos struggle as subscribers dump legacy video and copper subscriptions

by Steve Blum • , , , ,

San benito pole route 13apr2019

It’s been a bad couple of weeks for big wireline telcos. Frontier Communications’ bankruptcy led the parade of dismal news. In a filing with the Securities and Exchange Commission made a couple weeks ahead of going into bankruptcy, Frontier pinned the blame for its problems on its legacy copper business and the less-than-lucrative rural customers who depend on it. But that was no surprise.

AT&T’s and Verizon’s troubles weren’t exactly a shock, either. Some business lines, like video and copper-based broadband service, have been fading for some time. The covid–19 emergency accelerated that trend. In the first three months of 2020, AT&T lost 897,000 video subscribers and nearly 300,000 DSL customers. Even though its broadband business added 209,000 fiber subs, it still saw a net loss of 73,000 broadband accounts overall. Verizon lost 84,000 FiOS video subs, while gaining 59,000 fiber broadband customers.

AT&T gained wireless subscribers in the first quarter, while Verizon lost some, blaming the store closures forced by the covid–19 lockdown. The real numbers to watch, though, will be the results of the now big three mobile operators in the second quarter. By July, we’ll know if the shift to in-home mobile network-enabled hotspots is significant.

Both companies “withdrew financial guidance”, which means they’re not willing to make any predictions about how shareholders will fare over the next few months.

AT&T’s captain is jumping ship. In a move that’s been long expected, CEO Randall Stephenson will hand off to COO John Stankey in July. Stankey has been working for AT&T for 35 years. He’s been running Warner Media since AT&T took it over, and is in charge of launching HBO Max, which is a streaming video service that’s supposed to compete with the likes of Netflix and Disney. That would be difficult for any executive, but for someone with no history and no apparent friends in the entertainment business, and who spends a lot of time talking about things like “headcount rationalization” – AKA firing people – it would be a miracle.

California must take Frontier’s bankruptcy as seriously as PG&E’s

by Steve Blum • , , , ,

Frontier Communications filed for bankruptcy protection last night. In a statement posted on its website, the company said it was washing away $11 billion in debt, out of a total of $22 billion owed to creditors, much of it the result of its purchase of Verizon’s legacy wireline telephone systems in California. The statement has the usual blah-blah-blah about its hope to “continue providing quality service”, but according to a story on Bloomberg by Allison McNeely, Frontier will “hand control to its unsecured creditors, according to people with knowledge of the matter”.

That, along with a number of immediate steps such as securing additional financing, is now up to a federal judge in New York, where the company filed its Chapter 11 petition.

Frontier has more than two million wireline customers in California, most of whom were acquired from Verizon in 2015. At the time, Frontier was seen as the better alternative, particularly in rural California where Verizon had allowed legacy copper systems to rot on the poles. Some had never been upgraded to the point where they could provide any kind of broadband service. The California Public Utilities Commission approved the deal, with conditions that included broadband upgrades and the expectation that Frontier would fulfil its promises to focus on improving wireline infrastructure throughout the state.

That didn’t happen. A CPUC study last year found that Frontier (and AT&T) was “in effect, disinvesting in infrastructure overall, and [the disinvestment is] most pronounced in the more rural and low-income service areas”. The neglect was charitably attributed to Frontier’s financial condition, which was dire enough then, but the company had already established a pattern of broken promises, ranging from a botched Verizon cutover to a wireless bait and switch. The CPUC opened an investigation into some of Frontier’s shortcomings late last year, but fining the company for its bad conduct four years ago will do little to keep broadband and phone service running in California, let alone upgrade its decaying rural systems.

When PG&E filed for bankruptcy last year, the CPUC rightly went into emergency mode and, along with governor Gavin Newsom and the California legislature, has been an active player in the complex process of remaking the state’s largest energy utility and protecting its customers. Frontier’s final crash warrants the same level of attention, and rural Californians deserve the same level of protection and respect.

Frontier’s slow video streaming platform is too fast for most of its California copper customers

by Steve Blum • , , , ,

Outer limits intro

Fewer than half of Frontier Communications’ legacy copper, i.e. DSL-only, homes in California can watch more than one high definition stream at a time on its chosen video streaming platform, Philo. More than a quarter can’t even watch one HD stream, and 14% will get jerky, low quality video, if they can get anything at all. That’s my conclusion after crunching Frontier’s most recent (as of 31 December 2018) broadband availability figures, and comparing them to Philo’s bandwidth requirements and the actual performance estimates used by other streaming services.

The first clue that Frontier is trying to dumb down customer expectations instead of providing modern broadband speeds is that Philo doesn’t offer 4K quality video, which is the 2020 consumer video standard. Philo’s service is limited to 1950s standard definition (SD) and 1990s high definition (HD) video formats. Philo’s website provides a helpful guide to the bandwidth needed to watch those streams…

13 Mbps – Recommended for reliable HD streaming, even with multiple streams or other devices using the same network.

7 Mbps – Stream one HD video. If multiple devices are streaming or using the network at the same time, there may be buffering issues.

3 Mbps – Stream SD quality video.

Under 3 Mbps – Video quality is reduced. Philo may load slowly or rebuffer.

Frontier, like other Internet service providers, advertises its broadband speeds as “up to” a particular level. Netflix discounts advertised speeds when advising its customers. It recommends they subscribe to a service advertised at 25 Mbps download speeds in order to watch 4K video, which streams at 15 Mbps. Applying that Netflix discount to Philo’s recommendations for its lower quality service results in:

  • 22 Mbps – multiple HD streams.
  • 12 Mbps – single HD stream.
  • 5 Mbps – SD stream.
  • Less than 5 Mbps – SD streams will be slow and jerky.

Frontier reports it advertises either 1 Mbps, 6 Mbps, 12 Mbps or 25 Mbps download speeds to the 1.3 million housing units in California it serves with DSL-only broadband service. It also claims to provide fiber to the home (FTTH) service to 1.6 million Californian homes at 100 Mbps download speeds. And there’s a significant number of homes that are in Frontier’s telco monopoly territory that can’t get any kind of broadband service from Frontier. The analysis below just looks at the homes that can get Frontier service via DSL, but not FTTH:

Frontier philo video service by county 31dec2018 data

Siskiyou and Tehama counties lose out completely on family style, high definition video viewing – 12 Mbps is the best it can deliver via DSL there. More than a quarter – 26% – of Frontier’s Tuolumne County DSL homes can’t watch Philo video at all or, if they can, it’s poorer quality than the original mass market television standard that was set more than 60 years ago.

Charter continues fight against broadband upgrades in low income California communities

by Steve Blum • , , , ,

Monopolising low income communities and soaking residents for expensive television and broadband service packages seems to be a key element in Charter Communications business strategy, and it’s continuing its fight against broadband subsidies that might break that stranglehold.

Even in places where it has twice challenged broadband grants, and twice lost.

Charter wants to block two broadband infrastructure projects – one in Santa Cruz County and one in Kern County – approved by the California Public Utilities Commission for subsidies from the California Advanced Services Fund (CASF) last year. It’s also trying to stop a similar grant for broadband facilities in a public housing community in Shasta County.

To qualify for a CASF infrastructure subsidy, an applicant has to show that a proposed location lacks broadband service at (achingly slow) 6 Mbps download and 1 Mbps upload speeds. Last year, Cruzio applied for a grant to build fiber to the premise infrastructure in several mobile home communities in the Soquel/Capitola area of Santa Cruz County. Frontier Communications proposed a DSL upgrade project for mobile home residents in the Kern County town of Taft.

Charter, who likewise applied for and received CASF grants to extend broadband service to mobile home communities in Ventura and Riverside counties, challenged Cruzio and Frontier, but was only partially successful. When those projects were presented to commissioners for a vote, Charter tried to re-litigate its opposition, but again failed in the attempt.

So it filed appeals – applications for rehearing – against the Cruzio and Frontier projects, along with a similar protest of a $36,000 grant for WiFi in a Redding public housing community that it had also unsuccessfully challenged.

At a minimum, Charter’s appeals will delay all three projects, at least for some weeks. Longer term, its scorched earth tactics at the CPUC will, as I wrote last year, have a baleful effect on the CASF program, which is already hamstrung as a result of cable and telco lobbying in Sacramento. That’s a win for Charter and its fellow monopoly-model broadband players, and a big loss for low income and rural Californians.

The Central Coast Broadband Consortium assisted Cruzio with its Equal Access Santa Cruz grant application, and I was a part of that effort. I’m not a disinterested commentator. Take it for what it’s worth.

Investment analysts say AT&T, Frontier, others padded bottom line with FCC broadband subsidies

by Steve Blum • , , , ,

The Federal Communications Commission is scheduled to vote today on a new ten year, $20 billion broadband subsidy program called the Rural Digital Opportunity Fund (RDOF) that will mostly benefit rural communities. The proposal on the table would set the U.S. minimum broadband standard at 25 Mbps download and 3 Mbps upload speeds. That’s a lot better than California’s pathetic standard of 6 Mbps down/1 Mbps up, and a significant improvement over the 10 Mbps down/1 Mbps up minimum that the FCC established for the Connect America Fund II program (CAF II), which RDOF will replace.

According to a story in FierceTelecom that cites research by MoffettNathanson, it appears that major telcos pocketed some of the CAF II subsidies they received over the six years of the program, which began in 2015 and ends this year. CenturyLink was the big winner with more than $3 billion total, but AT&T and Frontier Communications weren’t far behind…

Other top beneficiaries of CAF II awards include AT&T, which has received $428 million per year [$2.6 billion total] since 2015; Frontier, which has received $332 million per year [$2.0 billion] during the same time frame; and Windstream, which has received $175 million per year. In exchange for the free government money, the recipients agreed to deploy broadband service with at least 10 Mbps downstream and 1 Mbps upstream to specific rural locations. MoffettNathanson reports that the CAF II money that the incumbents received was typically more than the cost of the network builds, so the telcos ended up with extra money to pad their bottom lines.

Based on availability reports and statements by the companies, it appears that AT&T and Frontier minimised capital investment and, consequently, minimised service levels – they were required to upgrade their systems to the point that 10 Mbps down/1 Mbps up speeds were possible, but the de facto service standard they had to meet was only 8 Mbps down/800 Kbps up.

RDOF represents a second chance for the FCC to get broadband subsidies right. This time around, the plan is to conduct reverse auctions, and not simply award money to incumbent, monopoly model telcos on the basis of an arcane formula. We’ll have some idea later today what the FCC did with the draft decision that was circulated three weeks ago, and we’ll probably see the final version in the next few days.

CPUC begins process of holding Frontier to account for service outages, but it might be too late

by Steve Blum • , , , ,

Nearly four years after the fact, Frontier Communications is being held to answer for the fumbled cutover of Verizon wireline customers it acquired in 2015. Last month, the California Public Utilities Commission formally opened an investigation into the widespread reports of dead lines and customer service meltdowns that went on for weeks after Frontier closed on its purchase of Verizon’s decaying copper telephone systems and somewhat more modern fiber to the home FiOS territories in California. On top of that, according to the CPUC’s order instituting investigation (OII), Frontier disclosed customer information it was supposed to keep confidential…

Starting April 1, 2016, Verizon transferred (a process it refers to as cutover of services) its California voice, internet, and video services to Frontier. The cutover caused two issues: (1) Many Frontier customers experienced service outages or interruptions between April to June 2016 to their voice, internet, and video services; customers also experienced poor customer support from Frontier in resolving such issues; and (2) during the same period, Frontier published customers’ address records that were designated as blocked from publication in online and printed directories.

As a starting ante, the CPUC order proposes a $2.5 million fine for Frontier, for the unlisted information disclosures alone. And that number could go up, and additional fines for the outages could be imposed, as the CPUC investigation proceeds. Those fines aren’t the sort of debt that Frontier can easily wash away in the bankruptcy filing it’s planning to make in March, according to reports.

The OII is the beginning of a process that will run for a year or two. By the time it’s finished, Frontier could have completely new owners and management, or it might even be out of California altogether. The reports say Frontier wants to reorganise under chapter 11 of U.S. bankruptcy law, which allows for the possibility of keeping the company in one piece, but doesn’t guarantee it.