Verizon is purchasing Frontier. How will that affect customers in Wisconsin?

by The Badger Project, The Badger Project
October 10, 2024

The troubled internet and phone company has more than 130,000 customers in Wisconsin, many of them rural.

By Peter Cameron, THE BADGER PROJECT

Farewell, Frontier internet and phone service.

Last month, Verizon Communications announced plans to buy the, to put it mildly, widely-disliked company and its thousands of miles of copper and fiber optic telecommunication lines last month for $20 billion.

Frontier Communications has more than 130,000 customers in Wisconsin, many of them rural, and millions nationwide.

The question now is how they will be affected.

Frontier, which emerged from bankruptcy in the last few years, had a poor record of maintaining its infrastructure and providing internet and phone service, experts and customers say. Many of those customers live in rural areas with few telecommunications options.

The company finished near the bottom of a ratings survey of telecommunications companies by Consumer Reports, and the Better Business Bureau had given the company a grade of F.

In 2021, Wisconsin, five other states and the Federal Trade Commission sued Frontier on the basis that the company hadn’t delivered the internet speeds it advertised.

In 2022, the company agreed to make $15 million in improvements to its internet service in Wisconsin after an investigation by the state’s Department of Justice.

But will Verizon do a better job managing the infrastructure and providing the service than Frontier did?

“I'm not entirely sure whether this merger will be good, bad, or have no impact,” said Christopher Mitchell, director of the Community Broadband Networks Initiative, a Minnesota-based think tank supporting communities’ telecommunications efforts.

“Frontier was an awful company that made a show of pulling itself together, at least temporarily, likely in hopes of being acquired like this,” he continued. “Verizon doesn't have a history of investments in rural areas. So I just don't know what to expect.”

Verizon did not respond to multiple requests for comment.

One can look at history for clues as to what it might do.

“Prices usually stay the same for a while after a merger,” wrote Doug Dawson, a telecommunications consultant in his popular newsletter on the industry, “but eventually are brought into synch.”

That could mean higher prices for some internet speed packages and lower prices for others, he suggested.

Dawson noted he was “amused” by the fact that Frontier grew to its current size by buying cast-off copper wire networks, used for phone and snail-like internet, from Verizon. Now the company has purchased all that old technology back.

The main reason Verizon wanted Frontier is because of the company’s fiber optic network, Dawson said, which can deliver fast internet speeds, and higher prices.

Frontier declared bankruptcy in 2020. Since 2015, it has received more than $2 billion in federal funds to upgrade its internet service across the country, according to the FCC. More than $215 million of that was intended for internet projects in Wisconsin.

The federal government’s Bipartisan Infrastructure Law, supported by all the congressional Democrats from Wisconsin, and none of the Republicans, has provided billions of dollars to bring faster internet to unserved and underserved areas. So big money is available for companies, communities and co-ops to make upgrades. But that comes through a “very long and convoluted pipeline,” said Barry Orton, a telecommunications professor emeritus with UW-Madison and fierce critic of Frontier.

He and others have pushed to classify high-speed internet as a utility, and thus subject to more regulation including pricing controls from the government.

“Whether broadband remains on the path toward public utility status on the federal level depends on the results in November,” he said.

The Badger Project is a nonpartisan, citizen-supported journalism nonprofit in Wisconsin.

This article first appeared on The Badger Project and is republished here under a Creative Commons license.

This story was funded in part by a grant from the Jon and Martha Hove Donor Advised Fund at the Community Foundation of Dunn County.