FCC approves bankruptcy plan for Frontier Communications
The Federal Communications Commission approved Frontier Communications’ plan to eliminate debt through bankruptcy, which shifts control of the Norwalk-based company to creditors.
This comes on the heels of a preliminary OK from Connecticut regulators, provided the company accelerates its rollout of broadband over fiber optic cable among other conditions.
Last month, Frontier hired a Vodafone veteran to lead it after a bankruptcy that was the result of debt it incurred in 2016 to take over Verizon Communications territories in Florida, Texas and California. The company entered the Connecticut market in 2014 with the $2 billion acquisition of the Southern New England Telephone operations run previously by AT&T.
Frontier was the eighth largest broadband provider in the United States entering October, according to Leichtman Research Group. It was one of just two carriers to see a decline in subscribers between July and September last year, along with with the newly renamed Lumen Technologies known previously as CenturyLink.
Following a 4 percent dip in revenue in the third quarter from three months earlier, sales were still on a slight downward trajectory in November, at less than 1 percent. With a $15.5 million loss in October and November, the company wiped out the profit it had achieved in the third quarter, with full fourth-quarter results having yet to be reported to a U.S. bankruptcy judge.
Frontier is eliminating more than $10 billion in debt
by issuing ownership stakes to lenders, leaving close to $7 billion in debt on the books. Frontier has received approval for its plan from 13 states, including New York.
Connecticut is one of four states that has yet to approve the company’s plan, with the state Public Utilities Regulatory Authority having signaled its intent to do so pending any final comments in the case. A Frontier
spokesperson said Friday that the company is still reviewing the draft.
PURA’s stipulations include commitments by Frontier to undertake no layoffs for two years and agree to keep its corporate headquarters in the state for that period; and to extend bigbandwidth fiber broadband to 100,000 locations by the end of 2024.
“Frontier has made promises that it will not alter any employee benefits or compensation — for existing or retired workers — and we will ask PURA in filings later this month to make that a firm condition of approval,” stated Connecticut Attorney General William Tong, in a statement forwarded by a spokesperson.
For most Connecticut households, Frontier remains the only viable broadband alternative to cable carriers that include Altice USA, Charter Communications, Comcast and Cox Communications. Verizon, AT&T and T-Mobile are in the early stages of rolling out 5G wireless transmitters that could, in time, represent a third major option for broadband to the home.
Frontier would also be required to survey Connecticut subscribers for their level of satisfaction with its services. PURA logged just over 150 complaints last year from Frontier customers, compared to more than 1,200 complaints against cable carriers.
PURA is scheduled to deliver its final decision on Feb. 3, five days in advance of its statutory deadline.