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


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.