Federal Communications Commission Chairman Ajit Pai has rejected a request to have the FCC investigate Frontier Communications’ business practices in Minnesota, despite evidence that the company has failed to properly maintain its telecom network.
An investigation by the Minnesota Commerce Department already found that Frontier’s network has “frequent and lengthy” phone and Internet outages, that Frontier has failed to provide refunds or bill credits to customers even when outages lasted for months, that Frontier is guilty of frequent billing errors that caused customers to pay for services they didn’t order, and that it has failed to promptly provide telephone service to all customers who request it.
When we wrote about the investigation in January, Frontier said it “strongly disagrees” with the findings but did not dispute any of the specific allegations.
The Minnesota Attorney General’s office is investigating whether Frontier violated state consumer-protection laws, and the state’s two US senators asked Pai to have the FCC investigate as well. When Pai wrote back to the senators, he said that he has asked his staff to “monitor” the state investigation but made no commitment to have the FCC investigate, too. Pai’s response and the senators’ letter were posted on the FCC’s website this week.
“For a chairman who is so concerned with rooting out waste, fraud and abuse, it’s baffling that the commission tasked with overseeing billions of dollars in public money is declining to investigate the more than a thousand allegations of poor service by a company that receives that public money to provide those services,” US Sen. Tina Smith (D-Minn.) told Ars in a statement today. (The Minnesota investigation was based partly on more than 1,000 consumer complaints and statements.)
Frontier is receiving $283.4 million each year from the FCC’s Connect America Fund (CAF) between 2015 and 2020 to provide rural Internet service in parts of 28 states, including $27.6 million a year in Minnesota.
The buildouts are being financed by phone customers nationwide through universal service fees. Smith and Sen. Amy Klobuchar’s (D-Minn.) letter to Pai in March asked him to investigate “whether the company [Frontier] is in compliance with CAF funding requirements as designated by the agency.” The senators’ letter noted that “Frontier has received more than $100 million in federal funding over the last four years to improve broadband services in rural Minnesota,” and that the state investigation found that “Frontier may be underinvesting in its service areas for which it received federal subsidies to build out its broadband network.”
“We cannot allow companies who promise broadband to underinvest and mislead the public,” Klobuchar told Ars today. “The FCC has an obligation to hold companies accountable to ensure efficient and effective broadband deployment and services.”
Pai’s response to Smith and Klobuchar begins with some self-praise. “Since my first day as chairman, my top priority has been closing the digital divide and bringing the benefits of the Internet age to all Americans—in particular, rural Americans who deserve access to what I call digital opportunity,” he wrote.
Pai’s response to the senators never directly addressed the Frontier service problems, referring to them only as “the information from your letter.” Pai’s response focused mostly on whether Frontier is on track to meet its Connect America Fund requirement to bring Internet access to nearly 47,000 homes and businesses in Minnesota, without discussing whether Frontier is properly maintaining its network.
Pai noted that Frontier could face “penalties and/or enforcement actions” for not meeting Connect America Fund requirements. But he assured Smith and Klobuchar that “Frontier has reported to the FCC that it has met or exceeded each of its deployment milestones in CAF-eligible areas in Minnesota and annually submitted the required reports and certifications,” and that “the Minnesota Public Utility Commission has annually certified to the Commission that Frontier used the high-cost funds appropriately.”
To Pai, this apparently means that the FCC has no need to launch its own investigation. “Nevertheless, the FCC will remain vigilant to ensure that our rules are observed and taxpayer funds respected,” Pai wrote. “Accordingly, I have conveyed the information from your letter regarding the state commission’s investigation to our staff and have asked them carefully to monitor this development.”
Although Pai seems satisfied by the information Frontier provided to the FCC, Smith and Klobuchar had told him that Frontier’s filings to the FCC didn’t seem to be sufficient “to determine whether Frontier is meeting performance obligations.”
FCC Democrats object
The Republican-controlled FCC’s two Democratic members, Jessica Rosenworcel and Geoffrey Starks, criticized the commission’s inaction when contacted by Ars.
“This is unacceptable,” Rosenworcel said. “Any repeated pattern of interruptions, accompanied by service failures and billing problems deserves attention from the FCC. The agency should be getting to the bottom of what happened instead of making excuses for its failure to investigate.”
Rosenworcel noted that telecom service failures mean that “consumers are unable to reach family and friends, businesses are cut off from opportunities, and worse, public safety calls fail to go through.”
“We need to do more than just ‘monitor’ developments,” Starks said. “If a carrier is charging for services it never provided or neglecting its public safety responsibilities, the FCC has an independent responsibility to investigate and act immediately.”
While Smith and Klobuchar asked Pai to investigate whether Frontier is meeting its CAF requirements, that isn’t the only regulatory authority the FCC could use in this matter. Pai’s FCC deregulated broadband service nationwide when it repealed net neutrality rules, but the FCC still regulates landline phone networks such as Frontier’s as Title II common carrier services. This gives the FCC authority to ensure that Frontier treats consumers in a just and reasonable manner, and without discrimination in rates, practices, or offering of services.
We contacted Pai’s office yesterday and will update this story if we get a response.
Frontier’s long list of problems
The letter to Pai from Smith and Klobuchar detailed many problems with Frontier’s network and said that the state investigation “found that Frontier may have broken more than 35 state laws and regulations.” Here’s part of what they told Pai:
The [Minnesota Department of Commerce] investigation issued a report in January 2019, detailing circumstances where consumers incurred interruptions of service for months at a time, slow and insufficient repairs, and unauthorized or inaccurate billing errors. Some consumers were charged for a service never provided, experienced a disconnection of service without notification, and were not refunded for outages or erroneous charges. The complaints and report detail that customers were routinely left unable to reach 911 emergency services. Some of those customers, including elderly, disabled, or other particularly vulnerable individuals, required the use of phone service to monitor pacemakers or other urgent medical needs. Frontier further posed public safety hazards where inaction by the telecommunications provider left cables unburied, tied to trees or propane tanks, or crossing private decks, for months, and in some circumstances years. Furthermore, several customers detailed their frustrations when they paid for an advertised—or “up to”—speed that frequently failed to be delivered by the company. Many of these consumers in our state live in areas that do not have another service provider available to them.
The state agency’s report further alleged that Frontier “prioritize[d] repairing requests in more densely populated areas with greater profit margins,” the senators wrote. When the state sought information from Frontier, “repair tickets for rural and remote customers, which presumably would show lengthy repair times or outages in service, would be ‘lost’ or missing from records,” they wrote.
“The Department found Frontier’s record-keeping to be deficient, and raised the question of whether Frontier was illegally concealing its discriminatory behavior,” the senators wrote.
Smith and Klobuchar told Pai that state officials question whether Frontier has provided enough information to determine whether it is meeting its broadband-deployment obligations. They wrote:
In the report, the Department questions whether the information provided by Frontier to the Federal Communications Commission (FCC) proves sufficient for regulators to execute oversight of the company and to determine whether Frontier is meeting performance obligations. The report submitted by the Minnesota Department of Commerce concluded that “the information Frontier has submitted has been too minimal for the [Public Utilities] Commission to perform the duties delegated by the FCC, including the authority to investigate and make findings as part of the Commission’s obligation to certify to the FCC that the Connect America funds are used appropriately by Frontier.” The report recommends requiring Frontier to produce documentation of households where funding was used to serve previously unserved homes, and verify the service available to those newly served locations.
Since the FCC oversees the Connect America Fund program, “it has the obligation to hold companies who receive federal funding accountable to ensure efficient and effective broadband deployment and services,” Smith and Klobuchar told Pai.
“These are extremely serious allegations,” Starks told Ars. “They touch not only on basic service issues, like Frontier billing for services it never provided, but also on public safety issues, like exposed cables and customers being unable to reach 911—likely the most important call someone will make.”