Having recently emerged from Chapter 11 with a promise to build more fiber to the premises (FTTP) networks, Frontier Communications (NASDAQ: FYBR) may now have another reason to wish it had committed to fiber sooner.
The U.S. Federal Trade Commission (FTC), joined by law enforcement agencies from six states, has filed a 50-page complaint against the service provider in the U.S. District Court for the Central District of California. The FTC alleges that Frontier did not deliver the DSL-enabled broadband service speeds it had promised its customers and charged “many” such customers for “more expensive and higher-speed service than Frontier actually provided,” in the words of an FTC release.
Frontier has denied the charges.
The FTC states that it files such complaints “when it has ‘reason to believe’ that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest.” Here, the FTC alleges that, since 2015, “thousands” of Frontier customers complained to the company and government agencies that they were not receiving the services levels for which they had paid.
The FTC alleges that Frontier violated the FTC Act and various state laws by misrepresenting the internet speeds it would provide and also engaged in unfair billing practices by charging consumers for a more expensive level of service than they actually received.
The commission notes that Frontier offers DSL-based services to approximately 1.3 million customers across 25 states. The states that joined the suit include Arizona, Indiana, Michigan, North Carolina, and Wisconsin as well as Los Angeles County and Riverside County on behalf of the State of California.
Frontier asserted that the suit is without merit and that they will respond with a “vigorous” defense. “The plaintiffs’ complaint includes baseless allegations, overstates any possible monetary harm to Frontier’s customers, and disregards important facts,” said the company in a statement.
According to Frontier, among those alleged facts are that the rural nature of many of the territories make them difficult to serve; that these rural services were warmly received when they were launched and continue to enjoy satisfied customers; and that the speeds for the different tiers of service were accurately described in the service provider's marketing materials.