Column: Frontier still struggling to put Verizon takeover issues to rest
It’s been six months since Frontier Communications assumed control of Verizon’s land-line operations in California, including phone, Internet and FiOS TV services. And the company is still struggling to recover from all the outages, disruptions and screw-ups amid one of the bumpiest telecom takeovers ever.
Frontier’s Facebook page bears witness to consumers’ ongoing frustration. Nearly every day, Frontier posts something innocuous about pop culture, and nearly every day the company’s posts are swarmed with angry comments from customers who are unhappy with their service.
On Thursday, for instance, Frontier’s page was topped with a “fun fact” about tennis star Serena Williams enjoying gymnastics. “I don’t care,” a customer replied. “I do, however, care that your Internet goes out constantly for hours on end on a daily basis.”
Melinda White, Frontier’s regional president, continues to say that even a single disgruntled customer is one too many. But she also maintains that things actually are going really well.
“All the system issues have been resolved,” White told me.
That’s not what I’m hearing.
Los Angeles resident Bianca Pinkerton said she suspended her Verizon phone, Internet and TV services in March because she had to move out of her apartment and stay with a friend. Then Frontier took over and inexplicably turned all her services back on, even though she was no longer at the address.
When Pinkerton, 33, found a new place to live in July, she discovered that she’d been billed about $1,400 over the last few months. She said she immediately contacted Frontier and explained the situation.
“They admitted it was an error and told me to ignore it,” Pinkerton said. “But the bills kept coming. I called them back and they again said it wasn’t a problem and I should ignore it.”
According to Frontier, she now owes more than $1,700. A company spokesman told me Thursday afternoon that there was “an error in the original cancellation order” and that the problem now has been resolved.
Nevertheless, Pinkerton said she’s worried that her credit score has been damaged and remains frustrated that Frontier took so long to fix things.
It’s a sentiment I’ve heard again and again since the takeover — consumers feeling like they’ve gotten nowhere in dealing with a company they never intended to do business with in the first place.
“I never wanted Frontier but what choice do I have?” said Century City resident Greg Bodell, 60, who added that it’s only been within recent days that he finally got a technician to his house who was able to resolve problems he was having with his FiOS TV service.
“My only other choice is Spectrum, and I don’t want them,” he said, referring to the cable service offered by Charter Communications, which has taken over Time Warner Cable. “It’s like the election. I don’t like either of my choices.”
A spokeswoman for the California Public Utilities Commission said 2,131 complaints about Frontier’s takeover of Verizon’s lines had been received as of Sept. 24. By comparison, AT&T had just 151 outage-related complaints during the same period.
Frontier spent $10.5 billion acquiring Verizon’s land-line assets in California, Texas and Florida. The deal followed Frontier spending $2 billion in 2014 on AT&T’s land lines in Connecticut and about $8 billion in 2010 on Verizon’s land-line operations in 14 other states.
The company’s business model consists primarily of snapping up wire-line assets that the mobile-focused big boys no longer want and then trying to make a go of them. But as the financial website the Motley Fool observed last week, this doesn’t make Frontier a strong competitor for people’s business.
“This is a case where the company may be too big to be small and too small to be big,” the site concluded. “That may doom Frontier to being an alternative choice to better-funded rivals with more to offer consumers.”
Just look at the three months since the Verizon takeover: Frontier reported a loss of $80 million on revenue of just $2.6 billion. The much larger AT&T reported profit of $3.4 billion on revenue of $40.5 billion.
Frontier’s chief executive, Dan McCarthy, suggested after the latest earnings were announced that the company’s finances would now improve. He said there were “some lingering small things” to deal with, but nothing as dire as experienced earlier.
Still, all those takeovers have left the company saddled with almost $17 billion in long-term debt. It recently replaced its chief financial officer and last week said it will lay off 250 mid-level managers nationwide.
White insisted that “we absolutely are large enough to compete with larger providers.” She blamed issues with FiOS on routine software problems common to all telecom companies, noting that “Verizon didn’t invest in this network for a very long time.”
“These issues are older than us,” White said. “It’s been very frustrating for some customers. But I think largely they are very happy that we have taken accountability and made ourselves available, very accessible.”
I suspect more than a few customers would disagree with her — and can do so by emailing White at [email protected]. I also think that, like Avis rent-a-car once upon a time, Frontier needs to try harder.
To compete statewide with the likes of Charter, Comcast and AT&T, Frontier needs to dazzle consumers with price and quality. As Charter raises rates of former Time Warner Cable customers, now would seem to be a particularly ripe opportunity.
Where, for example, is Frontier’s so-called skinny bundle of TV channels that nearly every other pay-TV provider is rolling out at a lower price than traditional bundles? Frontier doesn’t have one, at least not yet.
“You can be sure there’s a lot of discussion about skinny, not just in the industry but also at Frontier,” White said.
Not good enough.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to [email protected].
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