After Going Bankrupt For Underinvesting In Fiber, Frontier Communications Pretends It Has Seen The Light

We've long discussed how if you really want to understand how the highly monopolistic U.S. broadband industry really works, you should look at regional phone monopoly Frontier Communications. Especially in states like West Virginia, where the company has spent decades lagging on fundamental fiber upgrades, or DSL and phone repairs under a regime of regulatory capture that never holds them accountable for fiber under-investment, outright ripping off taxpayers, or failing to adhere to even basic quality standards.

After more than a decade of this dysfunction - including a completely bungled acquisition of some unwanted Verizon phone, DSL, and fiber customers - the company went bankrupt in 2020.

There were a lot of reasons for this, including terrible customer service, an unwillingness to repair its aging phone and DSL lines, taking on growth for growth's sake" merger acquisitions of dying phone networks it couldn't really afford, and having just a seeming disdain toward its paying, often captive customers who lack competitive alternatives. Filings to the SEC also acknowledged something the company denied for years: its refusal to meaningfully upgrade its aging network to fiber was a big part of its unraveling.

Two years later the company is on an image-reclamation effort to portray itself as more cutting edge. That included an announcement this week that the company would be offering 2 Gbps fiber for $150 a month network wide." Of course, by network wide" the company actually means locations that already have fiber, not the millions of Frontier customers still stuck on aging DSL lines:

We're thrilled to become the first and only major ISP to deliver network-wide 2 Gig internet service, as we unleash the power of our fiber network," said Nick Jeffery, President and CEO of Frontier. Today is proof that Frontier is doing what customers want and cable can't-bringing faster speeds and greater value to consumers as we Build Gigabit America."

Many news outlets were happy to parrot the company's network wide" rhetoric in headlines without really discussing the company's long history of fiber deployment failures in any meaningful detail. The goal for Frontier is to try and get folks to forget it spent a decade fighting competition and shirking on network upgrades as it tries to slow defections to dominant cable providers like Comcast. Other recent company press releases herald the ISP's transformation into a fiber first" company, noting that it deployed fiber to an additional 638,000 locations in 2021. That's not nothing, but in a country where 20-40 million still lack broadband of any kind, it's not revolutionary either.

The problem here is several fold. One, many phone companies underinvested in fiber because Wall Street is generally only interested in short term profit gains; prolonged, expensive fiber deployments have always been despised (they still are), and companies are simply responding accordingly. That's not going to magically change just because Frontier claims to have seen the light. Monopoly service sucks, prices are high, and upgrades are spotty in part because Wall Street wants regional monopolies to exploit limited competition to raise rates, cut customer service, and engage in mindless acquisitions for growth to deliver quarterly returns.

So if you don't actually tackle the lack of competition in Frontier markets (read: unchecked monopolization), or the regulatory capture (read: state and federal corruption) that protect apathetic telecom giants, there's no real reason to believe that Frontier has fundamentally changed. And because U.S. broadband maps continue to suck, state and federal regulators still don't have the tools necessary to determine if a company like Frontier is even telling the truth about fiber deployments in the first place.

This all opens the door to a trend I affectionately call fiber to the press release," where a telco makes a bunch of fiber deployment promises nobody independently verifies, and the press happily parrots them. Customers in many markets then call their local telco to sign up for 2 Gbps fiber," only to find it's still not available. Rinse, wash, repeat.