Frontier declares bankruptcy

by The Badger Project, The Badger Project
April 19, 2020

Telephone and internet company has 80,000 customer accounts in Wisconsin; “expects to continue providing quality service”

By Peter Cameron, THE BADGER PROJECT

Frontier Communications, the national phone and internet company that serves tens of thousands of people in Wisconsin, filed for Chapter 11 Bankruptcy on April 14.

The company “expects to continue providing quality service,” it said in a press release announcing the bankruptcy.

Frontier has customers in 29 states. In Wisconsin, it serves a territory of about 800,000 people, according to FCC data. Frontier has about 80,000 customer accounts in Wisconsin, company spokesman Javier Mendoza said.

The company has enough cash on hand to meet its ongoing obligations, it said in the press release.

Frontier has approximately $11 billion in unsecured debt, it said. The company hopes to reduce that by $10 billion in the bankruptcy proceedings.

In a Chapter 11 bankruptcy, the debtor usually proposes a plan of reorganization of its debt in order to keep its business going while paying creditors over time, sometimes at a reduced rate.

The U.S. Bankruptcy Court for the Southern District of New York, where Frontier has filed, has authorized the company to continue paying employee wages, healthcare and other benefits, Frontier announced April 16.

Barry Orton, a professor emeritus of telecommunications at the UW-Madison, didn't hold back when asked what the filing means for Wisconsin.

“Frontier’s Wisconsin customers can expect a continuation of poor service, foregone plant maintenance, and lack of planning for future rural broadband expansion,” Orton said in an email.

The state of Wisconsin is far behind the national average in terms of access to rural high-speed internet, according to a report from the state's Legislative Reference Bureau.

Frontier finished last out of 15 telecommunications companies in a ratings survey by Consumer Reports. The Better Business Bureau gives the company a grade of F.

The state of Connecticut, where Frontier is headquartered, announced an investigation into the company after receiving more than 1,000 complaints about things like customer service and costs. Other states have investigated the company as well.

Since 2017, the Wisconsin Department of Agriculture, Trade and Consumer Protection has received 249 complaints about Frontier, according to department spokeswoman Ti Gauger.

Earlier this year, Sen. Tammy Baldwin (D-WI) sent a letter to the CEO of Frontier, expressing concern about the company’s long delays in repairing rural Wisconsin phone lines. She also wrote to the Federal Communications Commission regarding the issue.

And since 2015, Frontier has received more than $300 million from the federal government to provide internet in rural areas of Wisconsin. In total, the company has received nearly $2 billion from federal and state government agencies to expand and upgrade its rural broadband service nationally.

Frontier said it plans to sell its business in Washington, Oregon, Idaho, and Montana to Northwest Fiber for $1.352 billion in cash at the end of April.

When asked if the company had any plans to sells its Wisconsin business, Mendoza replied in an email that "all the information available is in the current press releases." The press releases say nothing about Wisconsin.

The NASDAQ Stock Market will suspend listing Frontier stock, and the value will likely be “extinguished without consideration,” the company said.

The Badger Project is a nonpartisan, citizen-supported journalism nonprofit in Wisconsin. Cameron is the managing editor of The Badger Project. He can be reached at [email protected].

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