More twists with Frontier as Minnesota attorney general's office opens another inquiry

As Frontier Communications told regulators Tuesday that it is improving service and mediating customer concerns, the state Attorney General's Office disclosed an investigation into whether the company had violated state consumer-protection laws related to its internet service.

The parallel filings to the Minnesota Public Utilities Commission (PUC) came in response to a scathing report in January from the state Commerce Department that alleged Frontier may have violated 35 Minnesota laws and regulations related to service quality.

Frontier, which is Minnesota's second largest wireless phone provider, said Tuesday that Commerce had over-generalized from a limited number of consumer complaints and argued that short of a settlement, a contested-case hearing was needed to resolve questions of fact raised by the state agency.

The Attorney General's Office, meanwhile, said it was investigating claims that customers were sold internet service that Frontier knew it could not provide.

"The attorney general has the authority to investigate potential violations of the state's consumer protection statutes, including those related to unlawful trade practices and consumer fraud," the filing stated. "Indeed, shortly after the [PUC] initiated this investigation into the service quality of Frontier, the [attorney general] opened its own investigation into the violation of these laws by Frontier."

In a statement Tuesday evening, Stamford, Conn.-based Frontier Communications said it anticipated the attorney general would file comments supporting the Commerce Department's report. The company said its response refuted many of Commerce's claims and conclusions.

"Frontier has elected [it is not required] to provide and make broadband service available in its service territory," the company said in response to the AG's comments on internet service. "Frontier today, and for years, has provided a service that allows customers to access the internet in numerous rural and hard-to-service areas across the state in which the cable TV and other providers have elected not to offer wireline internet service."

The company received more than $100 million in federal grants over four years to extend broadband to some of the communities.

With about 90,000 customers in Minnesota, Frontier operates under the Frontier brand as well as Citizens Telecommunications. Many of Frontier's customers live in rural northeastern and southern Minnesota, although the company's coverage extends to some suburban areas in the south metro.

The PUC regulates the company's phone service. After hearing consumer complaints, the commission last year initiated an inquiry to see if Frontier was in violation of any applicable customer service, service quality or billing practice requirements or standards.

Commerce investigated as a result and issued a report in January alleging problems at Frontier with poor service, bad record-keeping and a lack of investment in infrastructure. The state agency called the situation "extraordinary," saying some customers suffered outages of months or more. Commerce also cited what it called a "stunning" lack of investment by Frontier in its plant and equipment, and said the company was refusing to provide refunds for outages.

In its Tuesday response to the Commerce report, Frontier said more than 90 percent of the company's Minnesota customers had not experienced any service outage in the past year, and about 95 percent of customers reporting service outages had telephone service restored within 24 hours. That means only 443 of Frontier's approximately 79,000 telephone customers, the company said, experienced a telephone service outage of greater than 24 hours in 2018.

The company cited data about trouble reports, timely installations and "held orders" to argue Commerce had greatly overstated the breadth and severity of problems with telephone service. Frontier said it has improved training and technology for call-center workers, while noting that mediation sessions will begin March 15 to address customer concerns.

"Frontier recognizes the concerns and complaints of the customers who have participated in the public hearings and have filed complaints with the [PUC], and Frontier is committed to improving its customers' service experience," the company said in a filing with the commission. "Contrary to the department report, however, Frontier's Minnesota customers are not facing a widespread crisis or breakdown related to their telephone service. Rather, Frontier's telephone network is still highly reliable."

Frontier said a contested-case hearing — which would have more entities scrutinize the positions of both Frontier and Commerce — would let the company sort out the extent to which complaints stem from regulated telephone service vs. internet service. It also would give the company a chance to challenge the credibility of the department's analysis, conclusions and recommendations, Frontier said.

"These very frequent broad gaps between limited customer complaints and the sweeping conclusions in the department report cannot be resolved without a contested case," the company said.

In the end, the PUC will determine whether to take regulatory actions against Frontier. The Commerce report recommended that the commission require Frontier to refund or credit customers for service outages and unauthorized charges; add staff for better customer service; and increase investments in equipment and infrastructure.

As part of its inquiry, the PUC last year also referred the matter to the Office of Administrative Hearings (OAH), which held a series of public hearings. Between the hearings and messages sent directly to PUC, there were more than 1,000 complaints about Frontier as of January.