CPUC Must Ensure Frontier Improves After Reorg, Says Commissioner
Frontier Communications’ bankruptcy reorganization must not be “status quo for customers” but instead become “the moment when they started getting the service they deserved and are paying for,” California Public Utilities Commissioner Martha Guzman Aceves said Wednesday at a livestreamed…
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virtual workshop. The telco’s CPUC application in docket A.20-05-010 “can only be approved if the commission can ensure -- not just aspire to or hope for, but ensures -- that a reorganized Frontier provides the best service to everyone in its service territories,” she said. California law requires the commission to determine if the deal will maintain or improve service quality, but Guzman Aceves is “disappointed that Frontier seems to be focusing on maintenance rather than improvement,” she said. “I’m deeply concerned that Frontier intends to prioritize fiber investments ... in those parts of its service territory that are already highly profitable” and not in more expensive areas. “If that happens, the digital divide will get wider.” Frontier is the only provider in large portions of rural, low-income areas and had service-quality problems, Guzman Aceves said. Since 2014, Frontier met the state’s metric to repair 90% of outages within 24 hours in only a few months, she said: “I am very concerned that Frontier is not providing high-quality, reliable and reasonably priced service to many of its customers, and that many of those customers have no other options.” Frontier Senior Vice President-Regulatory Affairs Allison Ellis agreed the 24-hour metric is a challenge but noted the company followed rules to invest twice the amount of applicable fines for failing to meet that standard and is on track to spend $6.8 million once the CPUC approves its proposed resolution to 2019 failures. Frontier General Counsel Kevin Saville reminded the commission that restructuring lets Frontier “remain viable and continue to operate communications services as an alternative option to California consumers,” as well as help the company better respond to “unanticipated economic events such as COVID-19.” Denial or delay will reduce competition and hurt the public interest, he said. The CPUC shouldn’t treat Frontier’s application like other transaction reviews, where regulators can weigh the existing entity against the proposed new company, said the carrier’s outside attorney Patrick Rosvall of Cooper White. “In this situation, Frontier has an opportunity to shed a level of debt that would be crippling going forward.” Frontier earlier got OK from U.S. Bankruptcy Court for the Southern District of New York, plus several states. Reorg remains under review by others and federally (see 2009210055).