Frontier Weighs In On Phone, Internet Audit

Frontier Communications responded on Thursday to a recent audit regarding the quality of its landline phone service in West Virginia, which is regulated by the state Public Service Commission.

The audit, completed in March, found Frontier has lost thousands of phone and internet customers in the last decade, and roughly half of its experienced field employees are due to retire in the next five years. The audit also stated Frontier is not doing enough preventative maintenance on its more than 49,000 miles of infrastructure, which serves roughly 300,000 landline customers and 170,000 DSL internet customers.  

The commission called for an audit more than two years ago after complaints from Frontier customers and a union representing Frontier employees. According to staff for the commission, they received approximately 2,000 complaints related to Frontier’s landline phone service in the last year.

The commission eventually selected a third-party auditing firm for the job at the end of July 2019. Frontier sent the finished audit to the commission on March 18. 

In its Thursday response to the audit, Frontier addressed several — but not all — of the findings and recommendations auditors made.

According to Frontier, the audit did not “fully appreciate or adequately detail the reality of the difficulties” Frontier faces, including the “heavy burden” of operating in a “rural and difficult-to-serve” region. Frontier voluntarily acquired much of this area in 2010 from Verizon, agreeing at the same time to various additional reporting and service conditions set by the commission.  

Not only did Frontier request the commission impose similar conditions on other phone providers in the state, but it asked the commission to consider creating a fund to help Frontier and other companies “support the continued universal availability of affordable telecommunications services in West Virginia.”

Frontier filed for Chapter 11 Bankruptcy in the Southern District of New York on April 14.

Auditors stated they had a difficult time understanding the full financial picture of Frontier’s operations in West Virginia, because overhead costs like employee benefits are budgeted at a corporate level, along with major improvement projects that happen on the state level. 

Frontier rejected auditors’ recommendation to budget these allocations more locally, saying their process now is more efficient.

The company said it is prepared to implement other recommendations from auditors, to address backlogs in preventative maintenance work and to improve the company’s 25 worst performing areas in the state.

Frontier did not address a recommendation from auditors to plan for the mass retirement of experienced field employees, who are responsible for restoring service to customers during outages and other maintenance work, nor did Frontier address any of the auditors’ broadband related recommendations. 

It is unclear when the commission will address Frontier’s response, or the audit’s findings and recommendations. Other parties involved in the audit — including the Communications Workers of America, AFL-CIO, which requested the audit back in 2018 — have until May 20 to respond to Frontier’s response. 

Much of the information included in this article, including Frontier’s number of West Virginia customers and details about its infrastructure, originally had been redacted from the audit. In April, science and technology magazine Ars Technica found Frontier had improperly redacted a public version of the audit. 

The commission is still in the process of responding to a Freedom of Information Act request West Virginia Public Broadcasting submitted before the Ars Technica report, requesting access to the full Frontier audit. Although the redacted information has been made available by news outlets, Frontier was allowed to upload a newly redacted version of the report to the commission’s website.   

Emily Allen is a Report for America corps member. 

 

Frontier Files Bankruptcy, States No Changes To W.Va. Customers

West Virginia’s main landline phone provider filed for Chapter 11 bankruptcy late on Tuesday.

The request, filed by Frontier Communications in U.S. Bankruptcy Court in the Southern District of New York, is waiting on approval from a federal judge.

It’s unclear when, but eventually Frontier also will need the West Virginia Public Service Commission to approve the terms of whatever settlement the company reaches with its creditors.

Frontier runs two West Virginia subsidiaries and serves roughly 300,000 customers with its landline phone service, according to the recent findings of an audit the commission ordered in August.

That audit also finds Frontier was serving roughly 175,000 DSL internet customers in September 2019, whose service is not regulated by the public service commission but is provided along the same copper cable network that facilitates landline communications. 

Frontier notified the state it was filing bankruptcy in a letter on Wednesday, saying “the reorganization of Frontier through the bankruptcy process is expected to improve the company’s financial and operational status to the benefit of its customers.”

Both Frontier and the Commission have stated the bankruptcy announcement won’t change publicly regulated landline services and rates.

“All Frontier customers need to know that the bankruptcy filing will not affect their service,” said Commission Chairwoman Charlotte Lane in a written statement Wednesday. “The Commission will be closely monitoring this proceeding to ensure that West Virginians will not see any disruption of service.”

Frontier and its two West Virginia subsidiaries were recently the focus of a more-than-160 page focused management audit on the company’s capacity to manage a copper cable network for landline phones it acquired in 2010. According to the audit, that network is more than 49,000 miles long.

The West Virginia Public Service Commission ordered an investigation of Frontier’s management of its landline phone network in August 2018, after customers and a union representing Frontier employees requested an investigation. It selected an auditing firm, Schumaker & Company, a year later. The commission received that completed audit in March. 

Auditors found that the company has lost thousands of customers in the last decade as people have gotten rid of their landlines. That means the company lost money they would have used for maintaining landline phone infrastructure. 

The audit also states Frontier isn’t performing enough preventative maintenance on its aging infrastructure.

Many of these details — including specific customer numbers, and the length of Frontier’s network — were redacted in a public version of the audit Frontier contributed on March 26. A journalist for Ars Technica found last week the audit was improperly redacted.

The commission has shared it received nearly 2,000 complaints about landline phones from Frontier customers in the last year. 

The state was supposed to hear a formal response from Frontier to the audit by April 20. In a written statement to West Virginia Public Broadcasting, Allison Ellis, senior vice president of Frontier’s regulatory affairs said the company might seek a “short extension” for its response.

Emily Allen is a Report for America corps member. 

Alpha Liabilities Cause Concern for West Virginia Regulators

Just months after emerging from bankruptcy, Alpha Natural Resources has revealed $100 million in what it calls “unaccounted for obligations,” causing West Virginia regulators to worry that the burden puts the company at further risk of financial failure.

 

The Alpha disclosure, made in a recent bankruptcy court filing, has increased fears about there being adequate money available to complete proper reclamation on hundreds of Alpha mining permits across West Virginia, The Charleston Gazette-Mail reported.

 

The disclosure prompted a strongly worded objection from the West Virginia Department of Environmental Protection.

 

It also brought a related lawsuit by the DEP that threatens the possibility state officials could eventually block a half-dozen former top Alpha executives or affiliated companies from obtaining new coal-mining permits anywhere in the country.

 

In one recent court filing, DEP lawyer Kevin Barrett referred to the amount of Alpha’s unaccounted for obligations as “whopping.” Barrett said the issue “is devastating” and “seriously threatens” the reorganized company’s ability to perform its legal obligations to reclaim remaining mine sites.

 

“That’s a lot of money,” said DEP Secretary Randy Huffman. “We just felt like we needed to take some action.”

 

The DEP filed a legal complaint in U.S. Bankruptcy Court in Richmond, Virginia, against Alpha and against six former Alpha executives who are now running a new company that took over Alpha’s most valuable holdings as part of its bankruptcy reorganization.

 

The complaint seeks to void previous DEP agreements for which the state could not hold those former Alpha officials responsible if the reorganized Alpha ended up going belly up and leaving mines unreclaimed.

 

If the DEP’s request is granted, those six officials could be linked to any Alpha reclamation problems on the federal government’s “applicant violator system.” The so-called “AVS” is a system that aims to prevent companies or individuals with unresolved environmental violations or unreclaimed mine sites from getting new coal-mining permits.

 

The DEP’s action in the Alpha case is the latest move regarding growing concerns from environmental regulators, citizen groups and labor organizations that the historic downturn in the Appalachian coal market will leave behind billions of dollars in “legacy liabilities” that range from scarred land and polluted streams to financially strapped health care and pension programs and unpaid taxes.

 

In the Alpha bankruptcy, most of the company’s larger and more valuable properties — primarily in the western U.S. — were transferred during the court-approved reorganization to Contura Energy, a company formed by Alpha’s major lenders and now led by former Alpha CEO Kevin Crutchfield.

 

In a press release Friday, independent members of Contura’s board of directors said the DEP’s court filing included allegations the board believed “to be inaccurate and defamatory as they are made without any evidence whatsoever, with no basis in fact, and without merit.”

 

“The efforts of Alpha’s and Contura’s dedicated management teams continue to ensure the preservation of thousands of jobs and provide value to both companies’ diverse set of stakeholders,” the press release said. “We challenge any inference to the contrary. We intend to work with all parties to resolve these allegations and will vigorously defend the hard-earned reputations and integrity of management to the fullest extent.”

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