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.
When the Grant County 911 center received a call about a house fire on Martin Road in late May, director Peggy Bobo Alt said it was already too late.
The family escaped, but they still lost their home. Standing on a now-empty lot months after the house burned down, Bobo Alt said the family was one of approximately 400 homes without landline phone service at the time of the fire.
Frontier Communications, which provides landline service to much of Grant County, confirmed the outage lasted from May 24 to May 29, after a bolt of lightning struck a cable in the area.
The family didn’t respond to requests to speak with West Virginia Public Broadcasting, but Bobo Alt said their story is one of the most powerful examples of her community’s problems with Frontier.
She should know — for years, Bobo Alt says she’s been submitting work requests to Frontier during widespread outages when her friends and neighbors’ phone lines are down. She’s been tracking outages from her office and relaying that information to her elected officials and the Federal Communications Commission, trying to find someone who will listen.
Credit Emily Allen / West Virginia Public Broadcasting
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West Virginia Public Broadcasting
A house on Martin Road in Grant County burned down in late May. Its family was unable to contact 911 via landline phone at the time of the fire.
“The truth is, this location is not near a fire station. But this is West Virginia! This is most of West Virginia, right here, where you see,” she said. “And with no way to call for help, you’re significantly delayed. … It’s just not right.”
Even after the Centers for Disease Control and Prevention reported last year that roughly half the state’s adults are wireless-only, cell service and internet options remain poor in rural West Virginia, leaving residents dependent on landline phones for their telecommunication needs.
Landlines are a state-regulated utility, by decision of the West Virginia Legislature. In August 2018, the West Virginia Public Service Commission initiated a general investigation on Frontier’s copper network for landline phones.
“Well, the Commission has been receiving increasing and more concerning complaints about Frontier over the last several years,” said Susan Small, Communications Director for the West Virginia Public Service Commission. “So they decided that they would initiate an investigation, and require Frontier to hire a private auditing firm to determine what the condition of the copper network was.”
Nearly a year had passed since the commission initiated its investigation, and Frontier had still not selected a firm the commission deemed acceptable.
On Thursday, July 25, the commission announced it had selected a firm for Frontier. Small called it an unusual move.
“This is an important issue,” she said. “It’s a very unusual kind of case. It’s not the commission’s preference to micromanage utility companies.”
That audit is set to begin immediately and will adhere to a six-month schedule set by the commission, including a preliminary summary due about four months in. The audit will examine the quality of service relating to the network, the adequacy of its staffing levels and whether Frontier is investing enough money in maintenance.
Commissioners agreed to initiate a general investigation on Frontier’s copper network nearly six months after receiving a petition from the Communications Workers of America, AFL-CIO, a union representing several Frontier employees working in West Virginia, including the technicians tasked with maintaining their employer’s copper network.
In the six months between the CWA’s request and the commission’s decision to pursue an investigation, hundreds of Frontier customers across the state sent letters complaining about the company’s landline service. Not only did these comments describe more frequent and longer-lasting outages, they also expressed dissatisfaction with the company’s response to landline failures.
Customers have told the commission it’s difficult to get in touch with the company when there are problems, solutions are usually only short-term and people say they feel Frontier is overcharging them.
Many also addressed similar problems customers are having with Frontier’s internet service. Internet is not a state-regulated utility, but the Grant County Economic Development Authority hopes to solve that issue with an economic feasibility study to attract new companies to the area.
Credit Emily Allen / West Virginia Public Broadcasting
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West Virginia Public Broadcasting
Penny Harman, who owns Harman’s Luxury Log Cabins in Cabins, Grant County, said it’s hard to operate a tourism business when her phone lines are down.
“What we have is wholly inadequate for this day and age,” said Tammy Kitzmiller, executive director of Grant’s EDA. “But the landlines — that service has been around long enough. The lines are here, the people have been paying their bills for years and years, and I would venture to say the service now is worse than it was ten years ago.
“We’ve got people that cannot call an ambulance when they need it, they cannot call a fire truck when they need it, they can’t call their neighbor to get assistance if they fall, they are just completely at the mercy of absolutely nothing, when they have no way to reach out from their homes.”
Being in a Tough Spot
The National Center for Health Statistics found in a wireless substitution study in 2017 that 52.7 percent of all adults in West Virginia are exclusively using wireless services, and 10.5 percent are mostly using wireless services.
With more West Virginians leaving their landlines for wireless networks, Frontier’s number of landline customers has notably declined in the past decade.
By the end of 2017, Frontier reported in documents to the Public Service Commission it had 385,832 access lines in West Virginia, 37 percent fewer than the 613,443 it had at the end of 2010, after acquiring more than 600,000 access lines from Verizon following a quality of service investigation onto the latter company in 2008 by the commission.
The same NCHS study, which aims to provide trends on how people use landline and wireless telephones throughout the U.S., reports 13.2 percent of the state’s adults use mostly landline service and 9.1 percent use landlines exclusively.
“Frontier provides service in the most rural areas of West Virginia where other providers choose not to invest to deliver service and where the challenges of remoteness are greatest,” said Allison Ellis, the company’s senior vice president of regulatory affairs, in an emailed statement on Monday.
There’s no denying Frontier has had to spend large sums of money on maintaining its copper network. When Frontier acquired the Verizon lines in 2010, it agreed to spend $30 million on the lines during the second half of 2010, $75 million in 2011, $63 million in 2012, and $63 million in 2013.
That isn’t to say Frontier hasn’t received any help — after volunteering to acquire the Verizon lines in 2010, Frontier had access to $72.4 million Verizon left in escrow solely for the maintenance of its former copper network.
“In acquiring the Verizon system, Frontier not only accepted the challenges of a declining landline customer base, it presented to the Commission a picture of how it could prosper and build that service,” commissioners wrote in a June 2019 order. “Unfortunately, the historic application of significant capital to a declining landline customer base has not seemed to ameliorate the adverse impact of that decline on customer service.”
People in Danger
Ronna Goldizen is a registered nurse, serving clients throughout an eight county area including Grant, Hardy and Pendleton counties.
Her clients are all homebound due to age or disabilities. Sometimes, the only socialization they get all day is over the phone she said, and sometimes the only way to report an emergency is through life alert buttons connected to the landline.
“Anytime it rains, I automatically go check these people,” Goldizen said. “Because I know anytime it rains, or it snows … we have no phone system.”
Late on a Wednesday night in July, Goldizen found the oxygen tank for one client, her grandfather-in-law, was malfunctioning. His phone lines were down.
Credit Emily Allen / West Virginia Public Broadcasting
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West Virginia Public Broadcasting
Grant County 911 Director Peggy Bobo Alt points out the areas where she believes the most recent landline outages have occurred in her county.
“Grand Pap’s oxygen wasn’t working. It took us an hour to get help, because I had to drive 22 miles to get cell service to call 911,” she said.
Goldizen said she got to his house around 11 p.m., and couldn’t call 911 until 1 a.m. She said he didn’t get to the hospital until 3 a.m.
When West Virginia Public Broadcasting spoke to Goldizen, the commission had not yet selected its audit firm, making the investigation it had announced almost a year ago seem in limbo.
“They need to really investigate this system,” Goldizen said. “What we’re paying … and the service we’re getting is ridiculous, and it’s not reliable. There’s people getting hurt because of it. There’s people that are in danger.”
Cabell County residents and businesses with landline phones can expect to see an increase on their phone bills.
The Herald-Dispatch reports that the Cabell County Commission voted Thursday to increase the landline tariff for residential and business lines in order to compensate for an anticipated $43,000 increase in next year’s medical insurance for emergency response employees.
The fee has been raised from $2.50 per month for residential lines to $7 and from $3 for business lines to $9.50.
The emergency response center has only two sources of revenue for their roughly $3 million budget — the fees on landlines and the $3 state fee on wireless plans.
Mike Davis, director of the county response center, says if the fee increase wasn’t passed, five employees would have to be let go.
