Frontier prepares for bankruptcy, regrets failure to install enough fiber:
As Frontier Communications moves closer to an expected bankruptcy filing, the ISP told investors that its troubles stem largely from its failure to invest properly in upgrading DSL to fiber broadband.
The presentation for investors, which is included in a Securities and Exchange Commission filing, said that "significant under-investment in fiber deployment and limited enterprise product offerings have created headwinds that the company is repositioning itself to reverse." Much of Frontier's fiber deployment was actually installed by Verizon before Verizon sold some of its operations to Frontier.
About 51 percent of Frontier revenue comes directly from residential consumers, with the rest mostly from wholesale and business customers. Frontier said the residential segment that provides most of its revenue "has the highest monthly churn," meaning that customers are leaving the company in large numbers. DSL-customer losses are expected to increase, Frontier said.
[...] In addition to not deploying enough fiber, Frontier has done a poor job maintaining its copper phone and broadband network. Investigations and complaints of chronic outages in New York, Minnesota, Ohio, and West Virginia have helped reveal the ISP's shortcomings.
Frontier’s Inner Secrets Revealed: ‘We Underinvested for Years’:
Communications has revealed to investors what many probably realized long ago — the independent phone company chronically underinvested in network upgrades and repairs for years, giving customers an excuse to switch providers.
[...] Frontier customers are disconnecting the company’s low-speed DSL service in growing numbers, usually leaving for its biggest residential competitor: Charter Spectrum. Frontier remains saddled with a massive and rapidly deteriorating copper wire network. The company disclosed that 79% of its footprint is still served with copper-based DSL. Only 21% of Frontier’s service area is served by fiber optics, after more than a decade of promised upgrades. Frontier’s own numbers prove that where the company still relies on selling DSL, it is losing ground fast. Only its fiber service areas stand a chance.
Previously:
(2020-01-23) CenturyLink, Frontier Took FCC Cash, Failed to Deploy All Required Broadband
(2020-01-21) Frontier, an ISP in 29 States, Plans to File for Bankruptcy
(2020-01-08) US Finally Prohibits ISPs from Charging for Routers they Don't Provide
Related Stories
US finally prohibits ISPs from charging for routers they don't provide:
Even by the low customer-service standards of the cable and telecom industries, requiring customers to pay a monthly fee for equipment they own is pretty rude. But that's exactly what Frontier Communications does to its customers, as we wrote in July 2019. Frontier customers who use routers they own themselves must still pay Frontier $10 a month in a "Wi-Fi Router" fee, even if the router they use is fully compatible with the service and requires no additional work on Frontier's part.
As Frontier's website says, its customers are forced to pay "a monthly lease fee for your Frontier router or modem—whether you use it or not." That statement makes it sound like Frontier automatically provides the device to all customers—but the customer in Texas we wrote about never received a router from Frontier and was still required to pay the fee.
In mid-2020, Frontier should be forced to change its ways. A US government spending bill approved by Congress and signed by President Trump last month includes new requirements for television and broadband providers.
A new "consumer right to accurate equipment charges" prohibits the companies from charging customers for "covered equipment provided by the consumer." Covered equipment is defined as "equipment (such as a router) employed on the premises of a person... to provide [TV service] or to provide fixed broadband Internet access service."
The companies may not charge rental or lease fees in cases when "the provider has not provided the equipment to the consumer; or the consumer has returned the equipment to the provider."
The new law is an update to the Communications Act and is scheduled to apply six months after passage, which would be June 20. The law gives the Federal Communications Commission an option to extend the deadline by six months if the FCC "finds that good cause exists for such an additional extension." As we've previously written, the FCC hasn't done much of anything to protect customers from bogus rental fees.
Arthur T Knackerbracket has found the following story:
Frontier Communications is planning to file for bankruptcy within two months, Bloomberg reported last week.
The telco "is asking creditors to help craft a turnaround deal that includes filing for bankruptcy by the middle of March, according to people with knowledge of the matter," Bloomberg wrote.
Frontier CEO Bernie Han and other company executives "met with creditors and advisers Thursday and told them the company wants to negotiate a pre-packaged agreement before $356 million of debt payments come due March 15," the report said. The move would likely involve Chapter 11 bankruptcy to let Frontier "keep operating without interruption of telephone and broadband service to its customers."
Frontier reported having $16.3 billion in long-term debt as of September 30, 2019.
-- submitted from IRC
CenturyLink, Frontier Took FCC Cash, Failed to Deploy All Required Broadband:
CenturyLink and Frontier Communications have apparently failed to meet broadband-deployment requirements in numerous states where they are receiving government funding to expand their networks in rural areas.
[...]Under program rules, the ISPs were required to bring Internet access to 80 percent of funded locations by the end of 2019 and must hit 100 percent by the end of 2020. While CenturyLink and Frontier apparently failed to hit the 80 percent requirement in a bunch of states, they could meet the final goal in time if they ramp up construction.
[...]The Connect America Fund, like the FCC's other universal-service programs, is paid for by Americans through fees on their phone bills.
As we wrote Monday, Frontier is reportedly planning to file for bankruptcy within two months.
[...]After reviewing and validating the data, Frontier and CenturyLink are scheduled to provide the FCC with final numbers by March 1.
Both Frontier and CenturyLink have histories of mistreating customers. Frontier's frequent outages and long repair times triggered an investigation and settlement in Minnesota, and New York state officials are also investigating Frontier.
[...]In December, CenturyLink agreed to pay a $6.1 million penalty after Washington state regulators found that the company failed to disclose fees that raised actual prices well above advertised rates. CenturyLink was also forced to stop charging an "Internet Cost Recovery Fee" in the state. The company still faces a class-action lawsuit involving customers from multiple states alleging billing fraud.
(Score: 3, Insightful) by Runaway1956 on Sunday April 05 2020, @10:30AM (12 children)
Invest in fiber, now, while you still have the chance. We, the American customers, won't hesitate to abandon your dumb asses when someone else offers us genuine broadband internet. You should be maintaining copper, only as a stopgap for putting in fiber, nationwide, right on out to the infamous "last mile". Better yet, start with all those "last miles", and work backward to connect us to the backbone.
(Score: 5, Insightful) by canopic jug on Sunday April 05 2020, @10:51AM (1 child)
Not really. Business schools train their students hard in how to profit off of a bankruptcy, and to keep two sets of books. I bet if you were ever to get hold of the real set of books, not the ones they show the government, they would show that Frontier Communications was carefully looted and set on a trajectory where bankruptcy was the only outcome. In the same bet, I suppose that the MBAs who did the looting are the same that are going to make bank on it going under.
The worst part is that the taxpayers already bought national high speed Internet through over $400 billion in subsidies over many years. The bill is paid, the infastructure was never delivered. Now, that money, like the cargo planes full of paletts of $100 dollar bills sent to Iraq, has just up and vanished. The difference here is that because we are not talking about cash there is a paper trail that authorities could follow if they so desired. They haven't so desired yet, and probably never will.
Money is not free speech. Elections should not be auctions.
(Score: 3, Insightful) by driverless on Monday April 06 2020, @09:01AM
Not even sure if you need to loot it, the business-school training of "maximise revenue while minimising investment in infrastructure" is enough to eventually kill any company that relies on infrastructure. It just happened a lot quicker with a telco because the infrastructure is subject to forced obsolescence (DSL -> fibre) while for water, power, and others you typically have to wait decades before the lack of maintenance causes it to fall apart. Even then, the failure is gradual so not so obvious.
(Score: 2) by takyon on Sunday April 05 2020, @01:07PM (4 children)
Rural areas are going to get Starlinked. Nothing to dig or string up.
There's no excuse for everywhere else. Better than 1 Gbps should be rolled out too. 2.5GBASE-T can be done on Cat 5e cables.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by fadrian on Sunday April 05 2020, @03:11PM (1 child)
Starlink will work fine for downloading files, email, and surfing the web. Satellite latency makes it useless for a lot of real-time things (which the web is ever more quickly moving to). Ya canna' break the laws of physics and all that.
That is all.
(Score: 5, Informative) by takyon on Sunday April 05 2020, @03:18PM
No.
https://en.wikipedia.org/wiki/Starlink [wikipedia.org]
Latency between New York and London is expected to be less than the undersea cable route, so there will be financial customers.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 0) by Anonymous Coward on Sunday April 05 2020, @07:38PM (1 child)
Did that Kool-Aid taste good? Was it Musk who handed it to you?
(Score: 2) by takyon on Sunday April 05 2020, @08:23PM
lol
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 4, Insightful) by Anonymous Coward on Sunday April 05 2020, @02:38PM (4 children)
Everything Frontier said was a lie. Buying up existing copper networks, usually from Verizon, was their main business model. The whole point was to buy the networks, invest as little as possible in either maintenance or upgrades, and milk them for as much profit as possible before the whole thing fell apart. They are now at the "fall apart" stage of the model.
They never had any intention of installing fiber in any of these areas. They might have done so in a handful of places to give them plausible deniability for the inevitable bankruptcy filing.
(Score: 5, Informative) by canopic jug on Sunday April 05 2020, @03:23PM (2 children)
Looks that way. The whole thing may have been a scam as it looks like they racked up as much debt as they could and faked demand using growth through acquisitions while customers left, and service never entered the picture.
Presumably there's more where that came from, as well as some good stuff about Frontier in its SEC filings [sec.gov]. With around $400 billion gone over the last few decades and nothing to show for it [irregulators.org], it seems that there hasn't been even the least bit of government oversight or any other form of accountability.
Money is not free speech. Elections should not be auctions.
(Score: 0) by Anonymous Coward on Sunday April 05 2020, @03:55PM
oversight: investment lampreys that are experts at turning around moribund (their term) companies are extracting cash quickly from the business? check. there is nothing else to see here.
(Score: 3, Interesting) by zocalo on Sunday April 05 2020, @04:24PM
UNIX? They're not even circumcised! Savages!
(Score: 0) by Anonymous Coward on Sunday April 05 2020, @06:50PM
usually from Verizon
Verizon screwed them. I saw the deals they were making. VZ screwed everyone on those deals. But mostly the taxpayer. Looks like we get it again.
(Score: 1, Insightful) by Anonymous Coward on Sunday April 05 2020, @02:43PM
This isn't necessarily about choosing modem technology. (cable versus dsl versus optical )
DSL can provide good service if you take some care in picking and grooming the copper it runs over.
Optical and cable won't work either if you don't maintain the path to the customer.
Providing great service requires being willing to create an organization that can support the customer.
For access, that includes supporting the path to the customer.
(Score: 0) by Anonymous Coward on Sunday April 05 2020, @04:59PM
How are those wiretaps in the Kennewick, WA CO treatin' ya?
(Score: 4, Informative) by pipedwho on Sunday April 05 2020, @09:29PM (4 children)
And this is why Australia is screwed. A previous Labour government decided to spend big on a National Broadband Network based on fibre to the home for everyone. It was going to cost billions. Then the big money decided building infrastructure and taxing big natural resource exports to pay for it was not good for their fat pocketbooks. With the media in their pocket, they set up a media storm demonising the Labour government to have a Neo-liberal government elected. These Neo-libs are generally against infrastructure spending and all about privatising everything by selling cheap to their buddies.
So now we have an NBN that is a half arsed mish mash of copper to the home with fibre to a node on the street/local area. This has cost considerably more than the original projection and has all sorts of technical issues due to the use of pre-existing non-maintained aging copper cabling. It's also a mixed bag of unnecessarily complicated infrastructure that adds a number of additional failure points. So not only is it unreliable, but it's also non-performant.
In the end we have expensive internet that is barely usable, not-upgradable to full fibre, and will have a huge ongoing maintenance cost as the copper lines progressively fail.
It sounds to me that our whole country is in the same boat, and has made the same realisation as the article talks about. Basically our current government has made the same obvious mistakes as the company in the article, and so we now have the same problem of expensive, unreliable, relatively slow and non-upgradable internet.
(Score: 0) by Anonymous Coward on Sunday April 05 2020, @09:44PM
Dont worry the free market will sort it out /sarc
(Score: 1) by petecox on Monday April 06 2020, @12:53AM (2 children)
When the NBN came to our street, they queried why we were of the few that had never installed Uncle Rupert's Foxtel. And so an HFC cable was connected to the street, with a theoretical max of 2Gbps. i.e. the existing 'cable modem' infrastructure. Although it's capped to 100Mbps due to the back end.
With almost every suburban street, if not house, connected to foxtel already it just goes to show this "copper to the node" was complete nonsense.
(Score: 2) by deimtee on Monday April 06 2020, @05:43AM (1 child)
When NBN came to my street, they disconnected both the POTS line and the Foxtel/Optus cable (it's still hanging from the power poles though) and forced everyone onto VOIP phones and whatever variant of ISDN they are running on the 'new' copper.
The speed is about the same as my cable internet was, but the reliability is much lower. Outages are common, and now the landline doesn't work if either the power OR the internet go out. And if the internet is down, quite often the mobile phone system goes down too.
If you cough while drinking cheap red wine it really cleans out your sinuses.
(Score: 1) by petecox on Monday April 06 2020, @09:44AM
Ah, our street was the Telstra cable underground - seems they're discontinuing the overhead Optus one.
(Score: 3, Funny) by Mykl on Monday April 06 2020, @01:27AM
...brought on by those Net Neutrality Communists.
If only Ajit Pai and the FCC had been able to clear a path for Frontier earlier through the removal of the last vestiges of Telecoms regulation, then I'm sure they would've thrived.
I hope you're all happy!
(Score: 2) by meustrus on Monday April 06 2020, @03:52PM
Here we have another failure of shareholder capitalism to produce consistent profits. They should have invested more, but didn't because it would have hurt profits in the short term. The system defeats itself.
If there were justice, this failure would help lead to a general restructuring of corporations to avoid this problem. That will depend on how many people really care about the numbers and how many people are just playing a game of chicken with the less savvy investors.
If there is no justice, and corporations keep buying up all the assets and seeking rent to enrich their executives and shareholders instead of building the company, those chicken-players will one day face the guillotine.
If there isn't at least one reference or primary source, it's not +1 Informative. Maybe the underused +1 Interesting?