Frontier Communications entered into the settlement to resolve complaints about internet speeds provided to its customers. The agreement, announced in December 2015, marked the largest, independently negotiated consumer protection settlement in West Virginia history.
West Virginia Attorney General Patrick Morrisey
“Much work remains and my office will continue to monitor Frontier’s strict compliance with our settlement,” Morrisey said in a statement. “This record-breaking agreement remains crucial to helping West Virginia reach her full potential and competing in this ever evolving digital environment.”
The agreement requires Frontier to invest at least $150 million in capital expenditures to increase internet speeds across West Virginia, lower monthly rates for affected consumers and contribute $500,000 to the state’s Consumer Protection Fund.
Frontier, to date, has spent $36.1 million in capital expenditures, funds which the company reports has increased internet speeds to 4,089 customers throughout West Virginia, according to the company’s most recent quarterly report filed with the Attorney General’s Office.
The AG’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.
The settlement specifically required Frontier to invest $150 million in addition to its $180 million in planned upgrades as part of the federal government’s Connect America Fund II.
The discounted monthly rate set bills for about 27,500 affected customers at $9.99 – a reduction expected to cost Frontier $6.25 million per year, which will shrink with time as the discount remains in effect until mandated improvements allow Frontier to increase existing download speeds to meet its advertisement.
On Aug. 7, a Charleston Gazette-Mail investigation revealed that at least $1.1 million in unused fiber was either ran to closing schools or county education buildings that receive their internet service through a different connection. It was part of a $41.5 million given to Frontier by the state as part of a $4 billion federal grant program to improve broadband through the country. Some of that fiber was used for less than a year, and much of it has never been used at all, according to the Gazette-Mail.
The newspaper also revealed an independent audit commissioned by the state but later shut down and withheld from the public by Gov. Earl Ray Tomblin's office, found that Frontier was using the federal funds to create an “unintended monopoly.”
Other Gazette-Mail investigations, state legislative audits and a federal investigator general report have shown the state wasted millions on routers that either sat in storage or were sent to small libraries and state agencies with no need for such equipment.
And, a recently unsealed federal lawsuit filed by Citynet claims Frontier and state officials defrauded the U.S. government by paying Frontier to install fiber that didn't meet the federal grant guidelines and for inflating invoices with $4.5 million of indirect costs. Frontier has denied all of the allegations and audit findings.