California May Impose Lots of Conditions for Frontier to Exit Bankruptcy

Frontier and other stakeholders have filed a joint motion with the California Public Utilities Commission asking the PUC to approve Frontier’s emergence from bankruptcy, subject to certain conditions. And there are a lot of conditions, including a requirement for Frontier to invest $1.75 billion in its California network over a four-year period.

Perhaps the most consequential condition is a commitment by Frontier to grow its fiber footprint in California. The carrier is agreeing to grow its fiber footprint by at least 350K locations in the state.

Stakeholders involved in the filing include the Communications Workers of America, District 9; The Utility Reform Network (TURN) and the Public Advocates Office at the California PUC.

The filing includes a proposed settlement agreement, to which Frontier and the stakeholders have agreed. Conditions of the settlement agreement include:

• A commitment from Frontier to make $1.75 billion in capital expenditures over four years to maintain and enhance its California network, at least $222 million of which will be devoted to service quality and network enhancements projects to enable the company’s incumbent local exchange carrier (ILEC) operations to meet PUC standards.
  
• Frontier agrees to deploy fiber-to-the-premises to at least 350,000 locations in its California service territory over the next six years, including 150,000 in areas where Frontier estimates an internal rate of return lower than 20%.
  
• Frontier also reaffirmed its remaining broadband deployment commitment from a 2015 agreement related to its acquisition of Verizon lines in the state that called for the company to augment broadband speeds up to 25/3 Mbps for 400,000 households by 2022.
  
• The company will actively participate in the PUC’s California Advanced Services Fund program to advance broadband deployment in unserved and underserved areas.
  
• The company will dedicate at least $11.6 million in capex over four years to deploy broadband to at least 4,000 locations within tribal lands and will strive to deploy speeds higher than 25/3 Mbps.
  
• The company will continue to offer its two existing low-income broadband plans at the same or higher speeds required by the FCC Lifeline program at prices equal to or lower than current rates through December 31, 2023.
  
• Frontier will not increase residential rates for copper-based standalone voice services, fiber-based standalone basic voice service, copper-based broadband services or copper-based voice/broadband bundles through December 31, 2021.
  
• Frontier will “maintain its level of employee technician staffing and increase this number” to meet service standards.
  
• The company also will keep 10 identified call centers operational through December 31, 2023.
  
• The company will use an independent expert survey consultant to conduct semi-annual customer satisfaction surveys to enable the company to identify actions to improve customer satisfaction.
  
• The company also commits to providing a wide range of reports.

The California PUC filing is available at this link.

In a December 2020 update, Frontier indicated it has gained approval from 12 states for its restructuring plan. The company also said it expects to exit bankruptcy during the first quarter of 2021. Frontier filed for bankruptcy in April 2020.