Minn. Keeps Frontier Reorg OK; CPUC Conditions Get Kudos
The Minnesota Public Utilities Commission won’t reconsider approving Frontier Communications’ bankruptcy reorganization. Though two commissioners promised continued investigation, the PUC voted 5-0 Thursday to deny petitions by the Minnesota Commerce Department and unions citing better promises to other states (see 2101070027). On the West Coast, consumer and local government advocates praised the California Public Utilities Commission’s proposed OK.
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The telco might have to leave its Minnesota entities in bankruptcy, while moving forward in the rest of the country, if the PUC reconsidered, Frontier General Counsel Kevin Saville warned commissioners at the virtual hearing: "We don't have time to negotiate a settlement.” Informal talks occurred but weren’t productive, said Minnesota Assistant Attorney General Richard Dornfeld.
PUC Chair Katie Sieben said she understood how reconsideration could disrupt Chapter 11 emergence. Communications Workers of America and others should continue raising concerns in the commission’s Frontier service-quality docket (18-122), she said. Sieben pressed Saville on union concerns about staffing and training.
“We’re going to keep watching them,” said Commissioner John Tuma, noting he doesn’t think the commission has authority to require fiber deployment. The agency will soon launch an investigation of the carrier’s “virtual separation,” said Tuma. The probe should also include questions about the company missing Connect America Fund Phase II FCC deadlines, he said. "I don't know if this company is committed to Minnesota.”
Frontier is open to a fresh probe in the service-quality docket after it exits bankruptcy, Saville said. Just don’t attach it to the bankruptcy docket (20-504), because that would put a “cloud” over the approval order that might threaten the company’s ability to emerge from Chapter 11, he said. Frontier plans to exit immediately after the CPUC votes March 18, he said.
“Past mismanagement and neglect of their customers” requires more investment and stronger commitments to workers, said CWA Local 7270 President Mark Doffing. CWA asked the PUC to adopt some Pennsylvania requirements because Frontier’s network in each state is about the same size. The phone company probably will divert resources to other states where it made promises, said Doffing. “We deserve the same assurances so Frontier won't once again leave us behind.”
Denying reconsideration is "a missed opportunity to impose accountability on Frontier," Doffing said in a statement. CWA supports opening "a new investigation that will provide much needed oversight on Frontier’s business plan in Minnesota following the company’s emergence from bankruptcy," he said.
The state commission's decision pleased Frontier, which "remains committed to Minnesota and to fulfill the obligations to provide quality telephone service" from a January 2020 service quality settlement, a spokesperson emailed.
The CPUC plans to vote March 18 on conditionally approving the reorg, said a Feb. 12 proposed decision in docket A.20-05-010. It would adopt settlement agreements between the carrier and the California Emerging Technology Fund; the Yurok Tribe; and CWA, The Utility Reform Network (TURN) and CPUC Public Advocates Office. The commission added other possible conditions, including an enforcement mechanism and a municipal government clause.
TURN supports the CPUC clearing the proposed decision with the agreed-to commitments, said Managing Director-San Diego Christine Mailloux. The proposal “correctly finds that the package of settlement agreements supports a public interest analysis and that these conditions are necessary, in part, because Frontier’s initial application did not go far enough to demonstrate how this restructuring would benefit California consumers.”
The carrier is reviewing the CPUC proposal, its spokesperson said. "We look forward to a final approval that will enable Frontier Communications to emerge from Chapter 11 restructuring as a sustainable business better positioned to provide benefits and quality services to our customers, employees, partners and the communities we serve."
California is the last state OK needed. The FCC cleared the deal in January (see 2101140032).