The U.S. Federal Trade Commission (FTC) is seeking to slap Frontier Communications with an $8.5 million fine in response to allegations the operator misled consumers about the speeds offered by its DSL internet service. The regulator also wants to force Frontier to deploy fiber to 60,000 locations in California over the next four years.
The move is a follow up to a lawsuit the FTC filed against Frontier in May 2021, which accused the operator of overcharging customers and failing to deliver the internet speeds it promised to consumers. The proposed enforcement order, which was unanimously approved by the commission, must be signed by a judge from the U.S. District Court for the Central District of California to take effect.
A Frontier representative told Fierce the FTC’s announcement comes after it entered into a settlement agreement with the agency on March 11. However, the representative reiterated the company believes the FTC’s complaint included “baseless allegations and disregarded important facts” and stressed the deal stipulates that Frontier admitted no wrongdoing.
“We settled the lawsuit in good faith to put it behind us so we could focus on our business — that's in the best interest of all our stakeholders, and especially our customers,” the representative said.
According to the FTC, the $8.5 million fine includes civil penalties and costs incurred by the Los Angeles County and Riverside County District Attorneys’ offices in California. It also includes $250,000 which will be distributed to customers in the state impacted by Frontier's alleged practices.
But the FTC’s order would also require Frontier to take a number corrective actions. For instance, it would force the company to discount the bills of customers in California who are unaware they’ve been receiving service that is slower than advertised speeds. It would also compel Frontier to deploy fiber internet to 60,000 homes in California over the next four years, which would cost an estimated $50 million to $60 million.
The operator is already in the midst of an expansive fiber build, aiming to cover 10 million locations by the end of 2025. Frontier executives have previously pointed to California as one of several high-priority states for upgrades, though it is unclear exactly how many locations it is planning to cover there.
Other items in the order would require Frontier to substantiate its speed claims at the customer level; prevent the operator from signing up new DSL customers in congested areas incapable of supporting sufficient speeds; and require it to notify existing customers who are receiving slower-than-advertised DSL speeds and permit them to change or cancel their service at no charge.