CHARLESTON — West Virginia Attorney General Patrick Morrisey's office has reached an estimated $160 million settlement with Frontier Communications over complaints involving Internet speeds provided to consumers.
The settlement, according to the AG's office, requires Frontier to invest at least $150 million in capital expenditures to increase Internet speeds across West Virginia and provide access to areas currently without high-speed service. It also lowers monthly rates for affected consumers and contributes $500,000 to the state’s Consumer Protection Fund.
Morrisey's office says the agreement is the largest, independently negotiated consumer protection settlement in state history.
Morrisey says the Frontier settlement, over a three-year period, will help provide high-speed Internet coverage to most remaining parts of unconnected, rural West Virginia.
“This agreement is a game changer for the Mountain State,” he said in a statement. “The settlement helps consumers receive the high-speed service they expected, while directing significant monies to help fix connectivity issues that consistently keep our state from achieving economic success.”
Morrisey’s office, between 2013 and 2015, received multiple complaints from customers paying for Frontier’s high-speed service, which advertised Internet speeds up to 6 megabits per second.
Many consumers advised their Frontier service was slow or did not meet expectations. The subsequent investigation found many customers expecting Internet speeds “up to 6 Mbps” frequently received speeds 1.5 Mbps or lower.
Frontier denied any allegation of wrongdoing and entered into the settlement to resolve disputed claims without the necessity of protracted and expensive litigation, according to the press release from Morrisey's office.
The settlement requires Frontier to invest at least $150 million in capital expenditures, over three years, to establish and maintain high-speed Internet across West Virginia.
That investment will be in addition to the $180 million in upgrades Frontier has planned as part of the federal government’s Connect America Fund II.
Morrisey said expect more work from his office on high-speed access, calling this settlement marks “just the beginning” of his office’s efforts on connectivity issues.
The settlement also requires Frontier to reduce its monthly rate for affected customers to $9.99 – a savings of $10 to $20 per month. The reduced rate will remain in effect until the mandated improvements allow Frontier to increase existing download speeds provisioned at 1.5 Mbps or lower to at least 6 Mbps.
According to Morrisey's office, eligible Frontier customers do not need to apply for the price credit. The company expects customers automatically will see the reduction within the next one or two billing cycles.
Frontier estimates about 28,000 customers will benefit from the rate decrease, in addition to any new customers provisioned at the slower speed. The reductions are expected to cost Frontier $6.25 million per year, although that number will shrink as improvements are completed.
“The reduced rate gives Frontier a strong incentive to raise speeds for these customers,” Morrisey said.
Another provision requires Frontier to pay $500,000 to the state’s Consumer Protection Fund. That payment will offset investigative and monitoring expenses in addition to helping defray the costs of transitioning consumers to higher Internet speeds.
Morrisey said no portion of the settlement will be diverted to reimburse outside law firms. Legal work regarding this matter was handled within his office, potentially saving the state hundreds of thousands to millions of dollars in legal fees.
Frontier also has promised to address service needs for other customers not included in the aforementioned group of 28,000 consumers, who are not receiving high-speed Internet that meets their expectations.
Morrisey said Frontier cooperated with his office and worked in good faith to structure the agreement.
“The only way we become more competitive with neighboring states and lift West Virginia out of poverty is through investments in the state’s infrastructure,” he said. “Through this settlement, we can begin to address the high-speed Internet challenges we face statewide.
“We have a strong consumer protection division with a record of delivering for our state’s citizens."
Frontier further agreed, as part of the settlement, to make no attempt at passing costs associated with the settlement onto consumers through any regulatory proceeding, including those before the state Public Service Commission.
Frontier also has established a website with additional information, www.frontier.com/WVinfo, and a customer service phone number at 888-449-0217.