Oregon regulator presses Frontier over its proposed FiOS video rate increases

Oregon's video regulator Metropolitan Area Communications Commission (MACC) wants a straight answer from Frontier Communications (NYSE: FTR) to why they are going to raise FiOS TV rates.

During the first week of January, Frontier announced that it would raise FiOS TV rates in the three states (Indiana, Oregon and Washington) where it operates FiOS service by 46 percent, from $65 to $95 a month.

Frontier initially promised MACC and regulators in the other states where it currently offers FiOS TV that they would not raise FiOS video rates before approving its acquisition of Verizon's (NYSE: VZ) rural properties. Initially, Oregon and Washington state regulators, including MACC, cited concerns over Frontier's ability to run a Fiber to the Premises (FTTP) network and a video service.

Besides asking in a letter to Frontier to explain why the rate hikes was why rate increases are so drastic, MACC wanted to know if it was Frontier's ultimate plan was to just sell DirecTV service.

MACC's question is pertinent because not long after it announced the rate increases, it said it would offer existing FiOS TV customers the opportunity to switch to DirecTV and get free service for a year. Many industry onlookers believe that Frontier's move, which it justifies by not having the leverage as larger video players to negotiate programming rates, is proof that the telco never wanted to be in the telco TV business at all.

However, Frontier had to do some quick backpedaling about its generous satellite consolation prize when it was revealed that DirecTV was not aware of the telco's plan, which it later clarified was only for triple play subscribers, while dual-play customers were eligible to get free satellite service for six months.

For more:
- The Portlander has this article
- see MACC's letter to Frontier

Related articles:
Does Frontier's rate hike signal that it wants out of the TV space?
Frontier to jack up FiOS video prices in Indiana, Oregon, Washington
Frontier's FiOS cable TV rates to skyrocket, effectively ending competition with Comcast
Frontier pledges support for FiOS customers