Frontier exceeds federal expectations but understates Californian obligations

Frontier Communications put out a puzzling press release yesterday. What should have been a celebration of good news, was instead a mish-mash of misdirection and lawyerly evasions that raised more questions than it answered.

The good news is that Frontier has upgraded broadband availability for 39,000 of the 90,000 rural Californian homes it promised the Federal Communications Commission it would serve with a minimum of 10 Mbps download and 1 Mbps upload speeds, in exchange for $228 million in subsidies. That means it reached 43% of the total by the end of 2017, which is better than the 40% benchmark it’s required to hit.

Well done.

But the press release’s headline says that Frontier expanded broadband service to more than 275,000 homes. Which sounds like a lot. It also kinda sounds like those customers didn’t have any Frontier broadband service to begin with. But it doesn’t actually say that.

What it does say is that “100,000 additional households” should have been reached by the end of last year, but since federal securities law requires this sort of public statement be truthful – otherwise, executives could end up in prison – the press release doesn’t quite say it happened. The release says Frontier “is expanding” rather than “has expanded” broadband service. The tense of the verb is a get out of jail free card.

A good explanation for the press release’s weirdness can be found in the hundreds of pages of testimony, settlement contracts and, ultimately, the California Public Utilities Commission decision that allowed Frontier to buy Verizon’s wireline phone systems in 2015. That decision requires Frontier to either upgrade or extend new service to 827,000 Californian locations by 2022. Those are mostly residences, but some businesses are included too. The total breaks down further, into medium speed (25 Mbps down and 2 Mbps down), low speed (10 Mbps down/1 Mbps up), and abysmal speed (6 Mbps down/1 Mbps up) upgrades and extensions. Yesterday’s press release kinda skipped those details.

It also neglected to mention that six counties it’s required to specifically address – Modoc, Shasta, Lassen, Plumas, Siskiyou, and Tehama – haven’t been touched. Or at least that’s the way it reads – none are on its list of 15 counties where upgrades and extensions have been completed. Or rather, are being completed.

So what Frontier is really saying is that it’s hit 33% of its ultimate mandate in California and it hasn’t accomplished anything yet in the most remote corners of its service area, where the hard work will be.

Frontier beat its first hurdle of 40% completion of federally subsidised broadband builds by the end of 2017. It has to hit 60% this year, 80% next year and 100% by the end of 2020, when it also has to have reached an additional 100,000 previously unserved households. With comparable speeds. Of the rest, 400,000 upgrades/extensions need to be done by the end of 2022 and 250,000 have a less well defined deadline.

All Frontier says about that is “details will be reported to state regulators in coming months”. We can only hope those details will be shared with the public, too.

CPUC decision granting [Frontier Communications] application [to buy Verizon systems] subject to conditions and approving related settlements, 3 December 2015