Frontier Communications misled thousands of customers about the prices it charges and about the speeds its broadband network can provide, Washington State Attorney General Bob Ferguson's office has found.
The state's investigation of Frontier's business practices found evidence of the telecom "failing to adequately disclose taxes and fees during sales of cable, Internet, and telephone services; failing to adequately disclose its Internet Infrastructure Surcharge fee in advertising; misleading consumers by implying that the Internet Infrastructure Surcharge and other fees are mandatory and/or government-related fees; and misleading consumers as to Internet speeds it could offer, and failing to deliver speeds and service as advertised."
The findings are described in a settlement that will force Frontier Communications to pay a $900,000 fine and force the new owner of Frontier's network in Washington state to change its business practices. Among other things, the settlement requires Frontier's current owner in Washington to stop charging the $3.99-per-month Internet Infrastructure Surcharge. The company "neither admits nor denies the State's findings." The settlement still needs court approval before it can take effect.
The offending business practices began before Frontier Communications' May 2020 sale of its operations in Washington, Oregon, Idaho, and Montana to Northwest Fiber, also known as Ziply Fiber. The settlement document refers to the company as both "Frontier Communications" and "Frontier Northwest." The company has about 165,000 Internet customers in Washington state, mostly in rural areas.
Frontier Communications itself still operates in 25 other states; the company filed for bankruptcy in April.
Under the pending settlement, Frontier Northwest "is ordered to clearly and conspicuously disclose all fees," Ferguson said in an announcement yesterday. "To resolve Ferguson's investigation, Frontier Northwest is also required to be transparent about its available Internet speeds. The Attorney [General's] Office will set aside the majority of the $900,000 payment to provide restitution to impacted customers." The proposed settlement was filed in Thurston County Superior Court.
Customers who were overcharged need to wait a bit before getting refunds, as Ferguson's office said it "will announce details of the claims process when they are finalized."
Ferguson previously forced CenturyLink to pay a $6.1 million penalty after finding that the company failed to disclose fees that raised actual prices well above the advertised rates. That settlement forced CenturyLink to stop charging its so-called "Internet Cost Recovery Fee" in the state.
Investigation began in 2018
Ferguson began investigating Frontier in 2018 after receiving more than 600 complaints and "focused on Frontier Northwest's failure to adequately disclose fees during sales of cable, Internet and phone services since 2016," Ferguson's announcement said. "For example, the company charged as much as $3.99—nearly $50 per year—for an 'Internet Infrastructure Surcharge,' without adequately disclosing the surcharge in its advertising."
After the settlement is approved, Frontier Northwest will be required to clearly disclose the following to customers in Washington state: