Frontier’s bankruptcy causes no disruptions

Telecommunications company Frontier Communications, which operates phone, cable and internet in part of the Lehigh Valley, says it’s business as usual for customers, despite the company’s filing for bankruptcy protection.

The Norwalk, Connecticut-based company filed April 14 for Chapter 11 protection in U.S. bankruptcy court and is working on a restructuring plan to reduce its debt by more than $10 billion. In a Chapter 11 filing, a company is allowed to reorganize its finances while business operations continue.

Frontier said it will meet its ongoing obligations and that the debt-reducing proposal is backed by the company’s bondholders.

Under the agreement, “we can now focus on executing our strategy to drive operational efficiencies and position our business for longterm growth,” Frontier President and CEO Bernie Han said in a statement.

The company also said it has more than $700 million cash and has received commitments for $460 million in debtor-in-possession financing. But the company, which reported 2019 revenue of $8.1 billion, also showed a loss of approximately $5.9 billion, and it posted losses in each of the last four years.

A company spokesman did not respond to a request for comment.

Frontier, a mostly rural provider, was once known as Commonwealth Telephone Enterprises Inc. before it was bought around 2007 by Citizens Communications Co. Frontier at the time served about 35,000 households in the greater Lehigh Valley area. Commonwealth had operated since 1897.

Frontier’s service area includes Coopersburg, Bangor and Pen Argyl, as well as Uhlerstown and Ferndale in Bucks County, and Pocono Lake and Saylorsburg in Monroe County. The company had about 87,000 residential customers as of 2018, according to a state Public Utility Commission report, down from about 95,000 a year earlier. The PUC is listed as a creditor in the bankruptcy.

Ed Mooney, vice president of Communications Workers of America, which represents Frontier workers, said the company failed to invest appropriately in communications technology over the years due to its struggling financial picture. However, Mooney said the union anticipates that the additional capital will lead to improvements. He said union workers remain under a contract.

“We are hoping they get into and out of bankruptcy in a rapid fashion so they can begin to reinvest in the network and provide high-quality, high-speed internet and phone service,” Mooney said.

Frontier, which has operations in 29 states and about 18,000 workers, previously said it intends to proceed with the sale of its Washington, Oregon, Idaho and Montana operations and assets to Northwest Fiber for $1.35 billion.

And while Frontier’s bankruptcy was not directly related to the coronavirus pandemic, various media reports say uncertainty over the impact of COVID-19 on the economy boosted pressure on companies such as Frontier that were already dealing with creditors.

A meeting of creditors is scheduled for June 11 in bankruptcy court, according to information on Frontier’s website. Most creditors must approve Frontier’s reorganization plan.

Morning Call reporter Anthony Salamone can be reached at 610-820-6694 or asalamone@mcall.com.