After Years Of Scandal And Incompetence, US Telco Frontier Files For Bankruptcy

from the ill-communication dept

We've long explored how the nation's phone companies don't really even want to be in the residential broadband business. They routinely refuse to upgrade their networks despite millions in taxpayer subsidies, yet often lobby to ensure nobody else can deliver broadband in these neglected footprints either. US telcos have a bizarre disdain for their paying customers, delivering the bare minimum (slow DSL) at the highest rates they can possibly charge without a full-scale consumer revolt. It's not surprising, then, that many telco DSL customers are fleeing to cable, assuming they even have a second broadband option.

This dynamic often results in some absurd dysfunction. Like in West Virginia, where incumbent telco Frontier has repeatedly been busted in a series of scandals involving substandard service and the misuse of taxpayer money. The graft and corruption in the state is so severe, state leaders have buried reports, and, until recently, a Frontier executive did double duty as a state representative without anybody in the state thinking that was a conflict of interest. The company has since been under investigations from New York to Minnesota for failing to upgrade or even repair its aging network.

Not too surprisingly, this combination of apathy, incompetence, and corruption is not particularly sustainable. Last week, Frontier announced it would be exploring a bankruptcy sometime in March. That's thanks in no small part to $16.3 billion in debt it accumulated from buying Verizon's unwanted DSL networks in numerous states as part of a "growth for growth's sake" mindset that involved rampant expansion, and then neglecting the acquired territories. Shockingly, angry customers then fled to the exits, only compounding Frontier's problems:

"Frontier has been losing customers and reducing its staff. Its residential-customer base dropped from 4.15 million to 3.81 million in the 12-month period ending September 30, 2019, including a loss of 90,000 customers in the most recent quarter. Also in that 12-month period, Frontier's business-customer base declined from 422,000 to 381,000."

The bankruptcy comes on the heels of a similar bankruptcy filing by Windstream Communications. Windstream, too, engaged in a "growth for growth's sake" mindset that involved hoovering up government subsidies, acquiring network assets it refused to upgrade, then blaming everything but its own behavior as neglected customers fled for the exits. Once the debt is wiped from the books for both companies, the cycle will just start all over again thanks to US lawmakers that simply refuse to hold politically-powerful telecom giants accountable.

The failure of US telcos may not be great for residential broadband, but it's wonderful news for the nation's equally-despised cable companies, which have been quietly securing an even greater monopoly over broadband across countless US markets, meaning higher prices for everybody -- even if you've never paid a dollar to a US telco. The resulting climate of regulatory capture and muted competition is a major reason you all pay an arm and a leg for substandard service. And no, contrary to industry claims, 5G wireless isn't going to magically fix a corruption and competition problem few in tech or telecom want to seriously address.

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Filed Under: bankruptcy, broadband, competition, dsl
Companies: frontier communications


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  • icon
    Koby (profile), 22 Jan 2020 @ 7:14am

    The future

    I seem to remember Verizon offloading these sorts of "wireline"/DSL/copper wire services onto other carriers such as Windstream and Frontier a few years ago, because Verizon didn't want to maintain the lines. While it looks like Verizon made the right move, customers got screwed over because the new carriers neither wanted to maintain the service or offer competitive prices. Is there any hope in the future that with enough bankruptcies, the wireline/DSL could be priced downward enough that it falls into the hands of a non-monopolistic small carrier that would actually care about customers?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Jan 2020 @ 7:20am

    Verizon also offloaded some of their FiOS service to Frontier including a buildout in my neighborhood that completed just days ahead of their deal with Frontier. Surprisingly, their service has been rock solid compared to Comcast which we had before switching to FiOS as soon as it was available.

    But I'm in Washington state, not the more easterly problem areas. Any idea how this bankruptcy action will affect service on the west coast?

    reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    icon
    f651717 (profile), 22 Jan 2020 @ 7:28am

    Tell ALDI Survey

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 Jan 2020 @ 7:42am

      Re: Tell ALDI Survey

      I'm gonna go ahead and assume this is malicious spam. Never click random links that come from untrusted sources, don't name a trusted domain and include no explanation as to what you're about to click on.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Jan 2020 @ 7:45am

    Yeah, Richard Bennett was very quick to turn this into a "poor ISPs, how dare you leftist consumers try and demand for proper service!" tearjerker at Ars Techhnica.

    What a fucking moron!

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 Jan 2020 @ 8:25am

      Re:

      how dare you leftist consumers try and demand for proper

      Pretty much the standard talking points these days regardless of industry. Blame the customer rather than the substandard product or service.

      Of course there's an army of rugged individualists ready and willing to back them in bashing everyone for the sake of bashing everyone so why would anyone expect them to do anything different? Sadly the rugged individualists don't care, while simultaneously being just as vulnerable as the rest of us. And people want to know why the US is in a downturn.....

      reply to this | link to this | view in chronology ]

      • icon
        Wendy Cockcroft (profile), 23 Jan 2020 @ 5:12am

        Re: Re:

        "Rugged individualists" is a misnomer since they tend to be reliant on others -- which they will never admit.

        One of them once told me he was a self-made man, completely self-reliant. I asked him what he did for a living. He's a truck driver. The list of people he relies on to get his job done is long even if he was self-employed. He's not.

        The whole thing is a scam dreamed up by rich jerks to blame the poor for their poverty.

        reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 22 Jan 2020 @ 10:36am

    Odds.

    What are the odds, that the Telco's have not fully delivered on Rural access of much? That the only thing they do is fix what breaks and have not updated/upgraded much of anything, in over 30+ years??

    Updating main hubs is 1 things but doing nothing out at the nodes is abit lacking. When the internet hit this small town and dialup came around there were NOT enough lines JUST for this town. They had setup for 4-6% usage, at anytime no more then that percentage was used(thats a number from Portland Or, when the net hit).
    Cable and wireless had to get here first, NOT ATT.. Which is kinda strange as there are 2-3 older fiber cable running threw this town..

    reply to this | link to this | view in chronology ]

  • icon
    Steve Stone (profile), 22 Jan 2020 @ 11:48am

    No surprise to me.

    I live in a region served by Frontier. The lack of infrastructure maintenance is obvious even to the untrained eye. Rather than transfer trunk lines from broken phone poles when new poles are installed the area of the old poles holding cables and fiber are chainsawed into stubs that are lashed to the new poles for years. Some roadside cables hang low into brush for miles. Remote DSLAMS that once had battery backup for power outages have never had their batteries replaced, local power outages cause DSL and voice outages. Business and residential trouble tickets take weeks or months for truck rolls. Once the tech responds it might take 2 or 3 additional trouble tickets to get the problem corrected. Outside of town Frontier may offer 1.5mbps DSL speeds which compete against Spectrum's lower priced 200mbps offering. Sad to see it come to this. This is an industry wide problem.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Jan 2020 @ 3:48pm

    The headline is VERY misleading. It says that Frontier files for bankruptcy when the truth is that they are exploring a filing in March. Big difference.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 Jan 2020 @ 6:41pm

      Re:

      You're right. They are looking at filing before the ides of March, or they will simply be bankrupt.

      So misleading.

      reply to this | link to this | view in chronology ]

      • icon
        Wendy Cockcroft (profile), 23 Jan 2020 @ 5:16am

        Re: Re:

        Karl, can you fix the headline, please? How about:

        "After Years Of Scandal And Incompetence, US Telco Frontier Considers Filing For Bankruptcy"

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Jan 2020 @ 6:44pm

    I think they generally do this on purpose, just like those who do leveraged buyouts and then murder a company and sell off its corpse in parcels. As long as the right few people walk away with more cash than they ever rightfully earned.

    reply to this | link to this | view in chronology ]

  • icon
    sucrac (profile), 27 Feb 2020 @ 12:36pm

    spaceX

    as we speak, hundreds of low orbit satellites are going up this year from spaceX, amazon, etc which will provide a WIRELESS low cost broadband. at first, their clients will be airlines and cruiselines which need very remote access and can pay a premium for it and cell companies who need more bandwidth. the cell companies, by the way, have taken over some of the former tv frequencies for 5G cell data and that will reach saturation of the next few years. affordable broadband data from your wireless devices where most americans live will make it possible to completely cut all the cords and livestream snail races from kathmandu while at your local beach on your portables. both the cable companies and landline telecoms are on the verge of becoming obsolete, but it always takes the followers a while to finally make the transition, so it may take 10 years until they lose their last customers. in the next 5 years or so, the sky will be packed with low orbit satellites that provide direct unlimited broadband data service to customers from competing companies while also shoring up 5G cell bandwidth to every square inch of the country. i have unlimited data, including 50gigs at LTE before slowing during peak to 3G, for $50+tax. that's enough for many americans to go without cable or landline internet. as for tv, most americans are figuring out what you can't watch for free over the air is available for free streaming over the net (if you search for it), and very few people still have landline phones in their homes anymore. this article seems to be painting a bleak picture of cable company monopoly when the landline telecoms fall, but cable companies are also losing customers, and soon both cable and landline telecoms will be obsolete.

    reply to this | link to this | view in chronology ]


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