Frontier Seeks Rate Increase, Focuses on Transaction Obligations, Access Revamp in 2011
Frontier Communications, which took over Verizon’s lines in 14 states last July, is set to increase rates for its FiOS video products due to rising cost, executives said in an interview. Broadband deployment and other Verizon transaction obligations as well as access revamp will be Frontier’s priorities this year, they said.
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The increase, depending on the service plan, could add $12 to $30 to the monthly bill for new customers and those not under contract, starting Feb. 21. As part of the transaction with Verizon, Frontier bought the FiOS properties in Oregon, Washington and Indiana, said Steve Crosby, a senior vice president. Forty-two local franchises were transferred from Verizon, he said. The increase pertains only to video service. Internet and phone service will be unaffected, he said. The telco has notified local franchising officials of the change, Crosby said.
The increase was due to the increasing cost of content, and the cost of running and maintaining the FiOS video product, Crosby said. He also cited battles between cable operators and content providers. An alternative is the DirecTV satellite service, Crosby said. Frontier customers who add video service, or move from FiOS to DirecTV, will get free satellite TV service for the rest of 2011, he said.
Frontier, which operates in 27 states, will focus this year on a fair amount of reporting and monitoring compliances and requirements coming out of the Verizon transaction, said Ken Mason, a vice president. A big piece of that is broadband deployment, he said. The company meets with regulators on a regular basis, he noted. Access and Universal Service Fund revamp are two other priorities this year, Mason said. “We have a number of states engaged in access and Universal Service Reform” and there are numerous state proceedings as well, including Pennsylvania, Oregon and Washington, he said. USF is different on a state-by-state basis, while on the access revamp side, there has been some movement to bring intrastate rates down to interstate levels, he said. It’s easier to deal with some low-hanging fruit like traffic pumping and phantom traffic issues as part of an overall access revamp, he said. Frontier is monitoring several states which are looking at some level of regulatory relief, Mason noted.
Meanwhile, the telco is moving forward with the broadband stimulus project in West Virginia, despite service provider CityNet’s claim that the project isn’t the best way to improve access for the unserved and underserved, Mason said. At issue is a $126 million federal broadband stimulus grant to the state for Frontier to extend broadband service to over a thousand anchor institutions with more than 2,400 miles of fiber lines. Citynet has urged the NTIA and the state’s Broadband Deployment Council to suspend the project. Frontier is focusing on deployment and working with local officials, Crosby said.