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PSC receives report on Frontier progress

CHARLESTON — It has been nearly a year since Frontier Communications emerged from bankruptcy and agreed to abide by the orders of the West Virginia Public Service Commission to improve its phone and broadband services. Frontier said Thursday it is on track to honor its commitment.

Members of the PSC held an informal status conference at its Charleston headquarters Thursday morning with representatives of Frontier to receive an in-person progress report from the phone and internet service provider.

Frontier Communications emerged from bankruptcy in May after filing for Chapter 11 bankruptcy protections in April 2020, eliminating more than $10 billion in debt and reorganizing into a different company.

The PSC accepted a settlement agreement in January between Frontier, PSC attorneys, the PSC’s Consumer Advocate Division and the Communication Workers of America union, including approving Frontier’s bankruptcy reorganization plan. The PSC also accepted the results from a focused management audit of the company.

The two PSC orders imposed strict conditions on Frontier to improve its copper-line phone and internet services, as well as expand its fiber broadband internet service. Under the joint stipulation agreement approved by the PSC, Frontier agreed to spend $200 million on capital improvements by Dec. 31, 2023, and to deploy fiber high-speed internet to at least 150,000 locations in the state by Dec. 31, 2027, with a $50 million annual spend.

In the PSC’s order, Frontier is required to send the PSC multiple reports, including how it plans to spend the $200 million, including monthly and annual tracking reports. But PSC Chairwoman Charlotte Lane thought it would be good to also bring in Frontier executives to hear directly about their progress in an informal setting.

“We just wanted to hear what plans they have been doing and how they’ve been upgrading service in West Virginia,” Lane said after Thursday’s meeting. “They were telling us how they were upgrading their fiber optics and dealing with landline service. We just wanted to have an update from company officials as to how they are trying to provide better service for their customers in West Virginia.”

Frontier has a 25-state footprint, but West Virginia is one of only two states where Frontier has a complete monopoly on phone service. Since emerging from bankruptcy, Frontier generated $6.6 billion in earnings at the end of the third quarter beginning in November. Of that, $2.6 billion is adjusted revenue.

Nationally, the company has 2.8 million broadband subscribers, with 160,000 broadband subscribers in West Virginia and 263,000 voice subscribers. As of the third quarter, Frontier built out 185,000 new fiber locations with 29,000 new customers nationally. In West Virginia, Frontier targeted 25,000 new fiber locations by the end of December and expects to meet that.

Allison Ellis, senior vice president for regulatory affairs at Frontier, explained that a fiber location is defined as a home connected to Frontier fiber or fiber on the pole that can be connected later if the home becomes a new customer.

“When we’re talking about fiber in our fiber commitment … we actually mean fiber to the premises,” Ellis said. “We mean that an individual household will be able to get a fiber connection into their home and an individual business will be able to get fiber into their business.”

West Virginia’s landline phone network will continue to use copper, but Frontier officials hope that by expanding fiber, customers will sign up for Frontier’s voice service that uses the fiber network. Right now, the fiber network is being overlaid on top of the existing copper network.

Much of the work in 2021 is focused on upgrading networks in Charleston, Clarksburg, Beckley, and Falling Waters in Berkeley County. Frontier officials believe that upgrading theses cities first will help generate new customers and new revenue that can be used to expand further out into rural areas. Frontier will use the same model in 2022, expanding to 14 cities.

Frontier will also be working on expanding service to unserved and underserved parts of the state. The company is one of nine internet service providers in the state part of phase I of the Federal Communication Commission’s Rural Digital Opportunity Fund program. RDOF Phase 1 awarded $362.1 million to West Virginia to expand high-speed broadband internet service to 119,267 unserved Census tracts in West Virginia over the next 10 years. Frontier was the largest recipient of RDOF dollars, winning $247.6 million.

Frontier officials also plan to apply for the various grant programs through the state Department of Economic Development funded by the $1.9 trillion American Rescue Plan Act for broadband expansion. The state will receive $136 million from ARPA for broadband. That state can also use part of $1.36 billion it received for broadband infrastructure.

West Virginia is also set to receive a minimum of $100 million for broadband expansion projects across West Virginia and unserved parts of the state through the $1.2 trillion Infrastructure Investment and Jobs Act.

Lane said they expect to have another informal status update hearing with Frontier again in six months.

“We were very pleased with what they have been doing,” Lane said.

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