Sued by WI and fresh off bankruptcy, Frontier Communications asks state for $35M in grants
Frontier Communications is asking the state of Wisconsin for nearly $35 million in grants to help improve its internet service here.
It might be a tough request, considering Frontier declared bankruptcy in 2020 after receiving more than $180 million in federal funds from 2015 through 2020 to upgrade its internet service in Wisconsin.
The bankruptcy came after Frontier established a less-than-stellar reputation among Wisconsin residents, who for years have complained about the company’s tortoise-like internet speeds and frequent phone outages preventing customers from making emergency 911 calls.
Nationally, Frontier’s reputation also has taken hits.
It finishes near the bottom of a ratings survey of telecommunications companies by Consumer Reports, and the Better Business Bureau gives the company a grade of F. And states like Minnesota and Connecticut have investigated the company’s business practices.
Then, in May, Wisconsin, five other states and the Federal Trade Commission announced they were suing Frontier in a federal court in California, claiming the company failed to provide customers with the internet speeds Frontier originally promised. The company has about 80,000 customer accounts in Wisconsin, a company spokesman told The Badger Project last year.
“I hope the state will seriously consider the track record of companies to understand which ones have a long record of meeting the needs of residents and businesses,” Christopher Mitchell, director of the Community Broadband Networks Initiative, a Minnesota-based think tank supporting communities’ telecommunications efforts, said in an interview with The Badger Project.
“Frankly, Frontier’s record suggests it should not receive a single additional dollar from any government,” he added. “Local companies, communities, and cooperatives have proven to be much better at turning public subsidies into needed networks.”
Earlier this month, a federal judge dismissed Wisconsin and four other states from the litigation, but allowed the claims of the FTC and California to move forward.
In an email response to questions, Frontier spokeswoman Brigid Smith said, despite bankruptcy, the company has honored its obligations required by federal funding. She added that “Frontier has been awarded state broadband grant funding in numerous states and has fulfilled its grant obligations in all of them.”
And she said the company’s DSL internet speeds “have been clearly and accurately described in our marketing materials and disclosures.”
Frontier emerged from bankruptcy earlier this year and said in a press release it would upgrade millions of its internet accounts across the country to modern fiber optic cables from the old and slow copper phone wire.
Frontier is making its case to the Wisconsin Public Service Commission, which distributes the state’s grants for high-speed internet expansion. The PSC awards funding based on several criteria, including whether a project is in an area unserved or underserved by internet providers, PSC spokesman Jerel Ballard said.
The PSC also takes into account things like scalability, impact, matching funds, applicant capacity and performance, service affordability, economic development and public-private partnership, Ballard added.
To date, Frontier has received one $200,000 grant from the PSC for one project in the Wausau-area community of the Town of Weston, which included construction of a 10-mile fiber optic line. That grant was awarded in 2017.
Overall, Wisconsin has distributed about $72 million in broadband expansion grants to a number of internet providers and the state legislature continues to give the PSC more funding to expand the effort.
On top of the state program, Gov. Tony Evers announced in May he was setting aside $100 million in federal funds for high-speed internet expansion. The state received about $440 million in requests from telecommunications companies including Frontier.
Those requests also include a proposal from the Eau Claire-headquartered WIN Technology, which has a fiber optic network across much of Western Wisconsin and is owned by 31 independent telephone companies. WIN asked the state for more than $77 million.
Spectrum and TDS asked for about $39 million and $29 million, respectively.
The PSC said it will likely decide on this round of grant winners by the end of this month.
The Badger Project is a nonpartisan, citizen-supported journalism nonprofit in Wisconsin.