Serving Northern St. Louis County, Minnesota

Commerce: Check Frontier’s service claims in Ely

More questions after media report reveals the company has received over $100 million in broadband grants

Marshall Helmberger
Posted 3/13/19

REGIONAL— Officials with the Minnesota Department of Commerce are recommending that the state’s Public Utilities Commission investigate whether Frontier Communications has lived up to commitments …

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Commerce: Check Frontier’s service claims in Ely

More questions after media report reveals the company has received over $100 million in broadband grants

Posted

REGIONAL— Officials with the Minnesota Department of Commerce are recommending that the state’s Public Utilities Commission investigate whether Frontier Communications has lived up to commitments it has made to state regulators to improve broadband access to its Minnesota customers. And it has pointed to Ely as a good test case for such an inquiry.

Those recommendations are included in a 529-page report issued in January in response to an ongoing investigation of the company by the state’s Public Utilities Commission. The Timberjay has previously reported on other findings and recommendations in the report.

The questions about the company are back in the news as the Star Tribune recently reported that Frontier has received over $100 million in federal grants intended to improve rural broadband in Minnesota, even as it has come under fire from customers around the state for sub-standard Internet quality, continual billing errors, and shoddy maintenance of its telecommunications infrastructure. Those funds were intended to subsidize improvements in Internet service, but DOC officials say it’s unclear if the funds have been used effectively due to Frontier’s poor documentation.

The PUC ordered the DOC investigation last spring in response to reporting by the Timberjay in late 2017 that highlighted the poor service quality provided by Frontier and its local affiliate, Citizens Telecommunications, or CTC-Minnesota, in northern St. Louis and Lake counties. The DOC investigation revealed that similar problems are widespread among customers in Frontier’s service territory in Minnesota.

Frontier and CTC, operate in the state under what’s known as an Alternative Form of Regulation, or AFOR, as opposed to the more traditional regulatory rules which are tied to return on investment. As part of approval of an AFOR plan, companies must make certain commitments regarding service quality. As part of approval of its AFOR plan in 2015, Citizens committed to upgrading Internet speeds in Ely, Ranier, and several other communities, to as high as 40 megabytes per second (mbps).

But has the company delivered on that promise? State regulators say that Frontier has provided too little documentation to know the answer. That’s why they want the PUC to require that Frontier document whether it’s kept its word— and it suggests starting that investigation in Ely. DOC investigators, in their January report, recommend that Frontier be required to submit the following information:

1) The number of residential and business customers it has in Ely.

2) The number of customers that have a Frontier Internet service product.

3) The number of customers, including the names and addresses, that receive download speeds of nearly 40 mbps. The DOC suggests that state officials should contact a test sample of the names to confirm the information provided by Frontier.

4) The number of customers in Ely who are receiving service at a minimum of 10 mbps download and one mbps upload.

DOC officials are recommending that all of the communities cited in Frontier’s AFOR plan eventually be surveyed. “But it may be more practical to select a single exchange, such as Ely— as there is more evidence from Ely customers concernig service quality, due to the location of a Commission’s public hearing. The PUC held a public hearing on Frontier in Ely last September, one of several held around the state to take testimony from Frontier customers.

Federal funding

Frontier has received considerable financial government assistance, through grants, to help it meet the commitments it has made in Minnesota. While those grants, under the Connect America program, are federally-funded, the state DOC is obligated to report to the Federal Communications Commission on how effectively recipients of federal broadband funds are using those dollars in Minnesota. But, again, Frontier’s limited record-keeping has made that determination difficult, according the DOC report.

During 2017, CTC-Minnesota spent a total of $16.6 million in federal grant funds, but provided only the barest description of what those funds were used for. According to the DOC report, CTC-MN reported only that $11.6 million was spent on Connect America projects, $2 million on relocation and replacement for road work, $1.2 million for station connections, $371,600 for expansion of DSL and broadband capacity, and $292,000 for expansion of distribution facilities.

Under the federal grant program, recipients of the funding are required to meet certain standards of Internet reliability and speed, such as a speed of 10 megabytes per second download and one mbps upload. But whether Frontier has been able to provide that minimal level of service to customers, and to how many, is unclear. “Frontier has provided insufficient information to determine whether the unserved households that received service funded by Connect America are in fact offered service at those Internet speeds,” note the DOC investigators in their report.

DOC officials are recommending that the PUC require Frontier to submit a list of households, including names, email addresses, and phone numbers, where federal funds were purportedly used to serve previously unserved households. In addition, the DOC is recommending that Frontier should be required to submit a statement specifying the Internet access service now available to each household. “This requirement should continue for as long as there is any question on whether Frontier is meeting its obligations to receive [federal] funds,” the report concludes.

Next steps uncertain

The PUC has yet to make a decision on how to proceed given the findings from the DOC, and a subsequent response by Frontier as well as the state’s Attorney General. The AG’s office is recommending that some of the complaints filed against Frontier, that more appropriately fall under the AG’s consumer protection role, should be transferred to the AG’s office where they could be included in an ongoing investigation into Frontier.

Meanwhile, Frontier has taken exception to the findings and recommendations issued by the DOC and is urging that the matter be referred to a contested case hearing for further proceedings.

It’s not clear when the PUC might make a decision on any of the recommendations it has received in the case. On Monday, it issued a request for more comments on next steps in the process. The comment period ends April 12.

Visit mn.gov/puc, select Speak Up! to find this docket, and add your comments to the discussion or email your comments to consumer.puc@state.mn.us.

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