Frontier Communications will spend $160 million to settle a dispute with the state of West Virginia regarding allegations of false advertising and poor broadband performance.
In a document produced by the attorney general of West Virginia, styled as an assurance of voluntary compliance, state authorities gave the background: “Between 2013 and 2015, the attorney general received complaints from some Frontier customers receiving Frontier’s ‘up to’ 6 [megabit-per-second] service. Consumers complained that their Internet service was slow or failed entirely and that they had not received the service they thought they were going to receive. In response the attorney general initiated an investigation of Frontier’s advertisements containing the term ‘up to 6 Mbps.’ Following the attorney general’s investigation, the attorney general has agreed, as grounds for approving this assurance, to accept Frontier’s commitments to lower certain consumer prices and make additional investments in its network in West Virginia for the purpose of improving Internet speeds in the state.”
So what does that mean exactly?
The agreement specifies Frontier will pay the state $500,000 to help defray costs of the investigation; Frontier will drop its low-tier service fee (the 6 Mbps package) from between $20 and $30 down to $10 per month until it can actually provide the 6 Mbps; and Frontier will spend $150 million on capital improvements in West Virginia.
Frontier estimates there are some 28,000 rate payers covered by this agreement.
Frontier Communications is in the midst of purchasing Verizon Communications’ FiOS network, as well as other wireline assets, in California. In November, Frontier received a favorable ruling from the California Public Utilities Commission on the deal.
Frontier has already received approval from the Federal Communications Commission and the Justice Department to go ahead with the acquisition. In September, the FCC gave approval for Frontier to acquire Verizon wireline network assets in California, Texas and Florida for $9.9 billion. The ruling by the CPUC is still just a proposed decision. The rural carrier and other interested parties will now file comments before the final ruling comes down on or before Nov. 20, 2016.
