Frontier will pay a $900,000 fine to Washington state after the attorney general's office found it has misled customers about internet speeds and charged them undisclosed fees.
The bulk of the $900,000 fine will go to former Frontier customers in Washington. Earlier this year, Frontier sold its broadband services in three states, including Washington, to Kirkland-based WaveDivision Capital in partnership with Searchlight Capital Partners for $1.35 billion. WaveDivision renamed Frontier Communications Northwest as Ziply Fiber.
On Wednesday, Washington Attorney General Bob Ferguson’s office said in a news release that Frontier did not adequately disclose fees when advertising and selling its products, and misled subscribers about internet speeds it could provide. Frontier’s unlawful deception impacted thousands of Washington consumers, according to the news release.
The legal agreement requires the company to be transparent with customers over fees in the future and stop the internet surcharges.
“Frontier is pleased to have this matter resolved," a Frontier spokesperson said in an email to FierceTelecom.
Ferguson's office started its investigation into Frontier Northwest in 2018 after receiving more than 600 complaints about the company. The investigation included reviews of Frontier Northwest’s website and advertising as part of the office’s "Honest Fees Initiative."
At its peak, Frontier Northwest served more than 165,000 internet customers, primarily in rural areas of Washington state. The attorneys general's office will set aside the majority of the $900,000 payment to provide restitution to the impacted customers.
"Broadband access is integral to our daily lives,” Ferguson said in a statement. “The current pandemic has only amplified its importance. Knowing the true cost and speed of our internet connection is essential to make an informed decision about a service that connects us to our work and to each other. Companies must be able to deliver what they promise, at the price they advertise.”
In a legal settlement that will be filed in Thurston County Superior Court, the attorney general’s office said the $900,000 must be paid by Frontier Northwest or its parent, Frontier Communications of Norwalk, Connecticut, pending approval by a bankruptcy court.
In April, Frontier Communications filed for bankruptcy to kick-start a prearranged $10 billion debt-cutting proposal backed by its bondholders.